Kibo completes Botswanan Power Project

Kibo completes Botswanan Power Project

Kibo Mining has announced that, it has completed the acquisition of an 85% interest in the Mabesekwa Coal Independent Power Project (MCIPP).

The MCIPP is located 40km east of the village of Tonata and 50km southeast of Francistown, Botswana’s second largest city. Kibo envisages it as a coal-based integrated mine-mouth power plant, with potential for incorporation of a solar component as part of the further studies to be conducted by Kibo.

Mabesekwa consists of a 300Mt subset of the current in situ 777Mt coal resource, and while the 300Mt acquired has now been precisely delineated with boundary coordinates, a competent person’s report inclusive of a new coal resource statement under SAMREC guidelines for the 300Mt subset has not yet been completed.

This project located in Botswana complements Kibo’s Mbeya Coal to Power Project (MCPP) in Tanzania and is in line with the company’s broader strategy to position itself as a strategic regional energy company focused on tackling the acute power shortage, particularly in Southern Africa. As part of the terms of the acquisition, Mashale Phumaphi has joined the company as a non-executive director.

Phumaphi is the founder and managing director of Shumba Energy. Focused on funding and developing energy projects in Africa, he was formerly part of the corporate finance team of a London-based natural resources corporate finance and issuing house. In addition to conducting investment analysis and research, he has raised debt and equity finance for projects in the Americas, Europe and Africa.

The 36-year-old began his career as an engineer with Debswana based on Jwaneng Mine in Botswana. Phumaphi holds a Master of Engineering degree from the University of Sheffield, is a member of the United Kingdom Society of Investment Professionals (UKSIP) and is a member of the London based Association of Mining Analysts (AMA).

Louis Coetzee, CEO of Kibo Mining says, “I am delighted to announce the completion of the acquisition of the MCIPP, which both strengthens and diversifies our African energy portfolio in line with our stated strategy. Ideally located in Botswana, which has one of the best credit ratings in sub-Saharan Africa, and like much of Africa suffers from acute energy shortages, the MCIPP has notable similarities with our MCPP in Tanzania.”

Under the terms of the agreement, Sechaba, a subsidiary of Shumba Energy, has been issued with 153 710 030 new ordinary shares in Kibo at an issue price of GBP0.061, being the volume weighted average price at which the ordinary shares in Kibo have traded on AIM for the 30 trading days immediately preceding the transaction completion date.

The consideration shares rank pari passu with the existing ordinary shares in the company, representing 27.13% of the enlarged share capital and consequently Sechaba will be a Substantial Shareholder of the Company. Furthermore, Sechaba, which has retained a 15% interest in the MCIPP, will gain a seat on Kibo’s board of directors, with Mashale Phumaphi appointed as Sechaba’s nominated director.

“These synergies will enable us to capitalise on our institutional knowledge and contacts in the industry as we pursue rapid development of both projects in tandem. I also welcome Mr Phumaphi’s appointment to the board; his extensive corporate finance and technical experience will make him a valuable addition to our team,” Coetzee adds.

In accordance with instructions from Sechaba, the Consideration Shares were issued as per the table below:

Application has been made for the consideration shares to be admitted to trading on AIM and the JSE AltX markets. Trading in the consideration shares is expected to commence on AIM and the JSE on or around Friday 6th April 2018. Following Admission, the Company will have 566 611 454 shares in issue and this figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change to their interest in, the company under the FCA's disclosure guidance and transparency rules.

As part of the transaction, Kibo has first right of refusal over any energy projects that Shumba may pursue over the next six years. Additionally, Shumba will be granted first right of refusal on any coal export projects that Kibo may pursue over the same period. The MCIPP enjoys strong institutional investment support through Shumba’s shareholder base.

Sechaba will retain the benefit of the following modest royalties from MCIPP should it go into production:

  • USD 0.50 from revenue received per metric tonne of coal sold from the area covered by the MCIPP coal resource; and
  • US 0.225 cents from revenue received per kilowatt hour produced and sold by any power plant owned by Kibo Energy (Botswana), the entity holding the MCIPP in Botswana or using coal procured from the area covered by the MCIPP coal resource

“Finally, I would like to offer my sincere gratitude for all the hard work done, in a short timeframe, by the teams at both Kibo and Sechaba and I look forward to regularly updating shareholders on our progress as we look to advance both projects and build value for all stakeholders,” Coetzee concludes.


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