Dated: 09 December2014
Kibo Mining plc (“Kibo” or the “Company”) (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company, is pleased to announce the findings from Phase 1, Stage 1 of the Company commissioned Definitive Mining Feasibility Study (DMFS), concerning the mining element of the Rukwa Coal to Power Project (RCPP). The Executive Summary of the DMFS Phase 1, Stage 1 Report is available on Kibo’s website at www.kibo.energy.
Key highlights
– Four alternative options identified for project development with the project financially feasible for all of the options investigated;
– Annual estimated coal sale revenues of between US$39million and US$43million assuming annual sales 1.6m tonnes;
– All-in Cost Margin ranges from 38% to 45%. Applying the aforementioned All – in Cost Margin, Kibo interprets that an annual margin of between US$14.8 million to $19.4 million will be generated;
– Applying a real discount rate of 5.7% the best estimated Net Present Value ranges from US$116million to US$141million.
Louis Coetzee, CEO of Kibo Mining, said “We are delighted to deliver this DMFS update to investors. The report is highly significant in numerous areas but notably in respect of the All-in Cost Margin range of 38% to 45%, which is significantly above the 25% level considered “healthy” for this type of project.
We are also delighted with the estimated Net Present Value range of US$116million to US$141million, which demonstrates the value of just one component of Kibo Mining’s assets.
The All-in Cost Margin and Net Present Value ranges are particularly impressive given the very prudent assumptions applied. This is evidenced by the use of coal pricing significantly below the current market price reflecting the robust economies of this project as well as the prudent initial DMFS assumptions. As a result, this represents a base case valuation for the project.
Furthermore, we would note that this valuation, pertaining as it does to the coal mining element of the RCPP, is solely in respect of an input (i.e. coal supply) to power generation. The power element is expected to be considerably more substantial in terms of operational revenues and its proportionate significance in respect of the economic potential of the RCPP.
We expect receipt of the final Power Pre-Feasibility Study shortly and will update investors on the report and its findings when received.”
Download Full Report
[ott_teaser btn_text=”Download” btn_icon=”icon-right-big” btn_url=”https://kibo.energy/wp-content/uploads/Final-RNS-Rukwa-DMFS-P1-S1-Report-FindingsV3.0-08-12-2014.pdf” btn_target=”_blank”]Rukwa Definitive Mining Feasibility Study – Phase 1, Stage 1 Report Findings[/ott_teaser]