AMN - TANZANIA: Mbeya Coal to Power study completed

Kibo Mining,the Tanzania focused mineral exploration and development company, has completed the Mining Definitive Feasibility Study (MDFS) for the Mbeya Coal to Power Project (MCPP).

The MDFS comprised the optimisation of the mine design, a detailed mine design based on the results from the restated Mbeya Coal Resource (RNS dated 11 April 2016) and the final coal requirement for the Mbeya power station as stated in the Power Definitive Feasibility Study (PDFS). Results from the MDFS correlate accurately with those of the prefeasibility study (MPFS) and have reconfirmed the Mbeya coal mine as a robust project with strong financial and commercial indicators. Key results from the MDFS are the following:

-          IRR 69.2% (15% improvement from 53.9% stated in the MPFS)

-          Payback period 2.4 years (7% improvement from 2.6 years stated in the MPFS)

-          Peak funding requirement $17 Million (reduced by 54% from that identified in MPFS)

-          Power station coal requirement over the life of the plant was reduced by 23% from that identified in the MPFS, bringing about significant environmental and cost benefits.

The mining method developed for the Mbeya coal mine ensures that all coal seams can be mined with great accuracy, which guarantees that coal is delivered to the power plant at a reliable and consistent calorific value (CV).

The reliability in receiving coal at a consistent CV was critical for the power plant design to ensure optimal fuel efficiencies. The MDFS mining method made it possible to design a power station that required significantly less coal for the same output i.e. 1840 GWh/y. Although this will result in a linear reduction of revenue for the coal mine, this is more than recovered in cost savings for the power plant which is most sensitive to fuel costs. The most important gain from the efficiencies and effectiveness of the mining method is however in the notably reduced overall environmental impact of both the mine and the power station.

Kibo Mining CEO Louis Coetzee says: “We are delighted with the results of the MDFS, which have confirmed, and in various areas improved on the positive prefeasibility study results. Figures from the MDFS report confirm that the Mbeya coal mine (as the mining component of the MCPP) is a robust project in every aspect. Project fundamentals are significantly better than originally at the end of the Concept Study in 2014.

“We are particularly pleased with the improved IRR of 69.2% and the significantly improved environmental impact. The significance of the mining method that was developed for the Mbeya coal mine cannot be underestimated. This method not only eliminated one of the two biggest environmental risks for the MCPP, that is eliminating the need to wash the coal, but also reduced the coal requirement by 23%, which means substantial cost savings for both the mine and the power plant. It will also result in a corresponding reduction in emissions. Considering that these two elements are fundamental to the fundability of the MCPP, we could not have hoped for better results from the MDFS.

“The total coal requirement of the Mbeya power plant over the life of plant is stated as a probable reserve in the MDFS, meaning that the power plant can rely on an upfront guaranteed fuel supply for its entire life span. The two key work streams required for the completion of the MCPP Integrated Bankable Feasibility Study (IBFS) are now complete and we are now focussed on completion of the final work on the IBFS”.

Kibo Mining is focused on exploration and development of mineral projects in Tanzania, and controls one of Tanzania's largest mineral right portfolios. Tanzania provides a secure and stable operating environment for the mineral resource industry and Kibo Mining therein.

Kibo Mining holds a thermal coal deposit at Mbeya, which has a significant NI 43-101 compliant defined resource, and is developing a 250-350 MW mouth-of-mine thermal power station, the MCPP, with an established management team that includes Standard Bank as Financial Advisor. The development of the MCPP is with China-based EPC contractor SEPCO III.

The company also has extensive gold focused interests including Lake Victoria Goldfields and Morogoro projects. At Lake Victoria, it has projects with a 550,000 oz JORC compliant gold Mineral Resource at Imweru project and a 168,000 oz NI 43-101 compliant gold Mineral Resource at the Lubando project in which the company holds a 90% attributable interest. It is currently undertaking a DFS on Imweru.

Kibo also holds the Haneti project on which the latest technical report confirms prospectivity for nickel, PGMs, gold and strategic metals including lithium.

Kibo Mining further holds the Pinewood (coal & uranium) project where the company has entered into a 50/50 Exploration Joint Venture with Metal Tiger.

Finally, it also holds the Morogoro (gold) project where the company has also entered into a 50/50 Exploration Joint Venture with Metal Tiger.

The projects are located in the established and gold prolific Lake Victoria Goldfields, the emerging goldfields of eastern Tanzania and the Mtwara Corridor in southern Tanzania where the Government has prioritized infrastructural development.

www.kibomining.com

News courtesy of International Mining