| Fri 7 Oct 2011, 8:13 | | KBO - Kibo - Operational Update |
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KBO
KBO
KBO - Kibo - Operational Update
Kibo Mining Plc
(Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B61XQX41
("Kibo" or "the Company")
Operational Update
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO, AltX: KBO) the mineral
exploration and development company focused on gold and nickel projects in
Tanzania, is pleased to provide an operations update. The Company has more
than doubled its licence area in Tanzania to over 18,000 square kilometres in
the last six months gaining a strategic position in both the Lake Victoria
Goldfields and the emerging gold districts of eastern Tanzania. This has
necessitated a major re-organisation of its operations in Tanzania to meet the
demands of exploring and managing a large geographically dispersed licence
portfolio effectively. This re-organisation is now complete and field
exploration programmes have re-commenced.
Summary Highlights
- the Board has approved a GBP5.3M exploration programme to evaluate the
Lake Victoria, Haneti and Morogoro projects;
- Stage 1, with a budget of GBP1.3M, is now being implemented. Gold and
nickel are the primary targets;
- the Company has completed the integration of its exploration office and
staff with Mzuri Exploration Services ("MXS"). This will increase its
capacity to implement fully supported contemporaneous multi-project field
programmes;
- the Company has received the final results from metallurgical testing at
the Golden Horseshoe Reef deposit (the "GHR") which indicate high gold
recoveries; and
- negotiations are underway with Tanzanian Royalty Exploration Corporation
Limited ("TREC") and a financial institution to allow the Company to
immediately exercise its option over the Itetemia and Luhala projects and
to work on securing debt and equity financing to advance mine development
at the GHR.
The Company is progressing on two fronts:
(a) exploration to evaluate its large ground holding and focus on priority
areas to quickly define target areas for Stage 2 drilling; and
(b) evaluation of whether it can bring forward the immediate exercise of its
option over the Itetemia and Luhala projects and proceed with developing a
mine on the the GHR deposit which has a JORC-compliant mineral resource of
422,000 oz. of gold.
The exploration is underway as are negotiations of the terms of its agreement
with TREC for immediate exercise of its option on Itetemia and Luhala and with
a financial institution to secure debt financing for the development of the
GHR.
Noel O`Keeffe, CEO of Kibo commented:
"The Board is pleased to provide this operational update following a period of
corporate and operational re-structuring during 2011 to meet the demands of a
significantly expanded exploration property foot print in Tanzania.
We are excited by the exploration opportunities offered by our expanded
licence portfolio both in the gold prolific Lake Victoria Goldfield and the
newly emerging areas in eastern Tanzania. Now that field programmes have re-
commenced, we look forward to updating the Shareholders on a regular basis as
exploration results emerge.
We will also update Shareholders on the results of our on-going negotiation
with TREC and a financial institution which will allow the Board to make a
definitive decision on its plans for Itetemia and Luhala".
Tanzanian operations overview
The Company has appointed Dar es Salaam based MXS to manage its field
programme implementation and tenement portfolio. Kibo`s Tanzanian employees
have been integrated into the MXS operational structure where they will
continue in their previous roles providing geological and financial management
for Kibo`s operations. MXS provide strong project and financial management, IT
and government liaison skills which will be crucial to Kibo`s success as one
of the largest licence holders in the country.
The Board has approved a GBP5.3M exploration programme (Table 1) to be
implemented in two stages over a 3 year period. Stage 1 has commenced with the
mobilisation of field teams for a GBP1.3M work programme to be implemented
over the next 7 months on the Lake Victoria, Haneti and Morogoro projects.
These projects encompass a substantial land area in excess of 18,000 square
kilometres and the programmes will concentrate on the most prospective
licences prioritised by a combination of geological setting, proximity to
existing deposits and areas of anomalous geochemical results from previous
surveys. The programmes will be conducted by three exploration teams assigned
to ensure contemporaneous progress on all projects and staffed by the
Company`s existing employees with recruitment of additional personnel as
required. The field teams will be under the direct supervision of MXS
Exploration Manager, Bertie Peppler, a South African geologist with
significant Tanzanian experience.
Table 1: Kibo Exploration Budget 2011 -2014
Project Sub-project Stage1 Stage 2 Total
Budget Budget
GBP GBP GBP
Lake Mahangu 141,000 1,180,000 1,321,000
Victoria
UN Road 57,000 500,000 557,000
Geita East 57,000 110,000 167,000
Geita West 57,000 80,000 137,000
Geita North 57,000 140,000 197,000
Central 57,000 130,000 187,000
Haneti 450,000 700,000 1,150.000
Morogoro Morogoro South 200,000 600,000 800,000
Morogoro North 200,000 600,000 800,000
(Dodoma Block)
Total 1,276,000 4,040,000 5,316,000
The field teams will operate from the Company`s exploration office in Mwanza
which is convenient to the Lake Victoria project and from temporary
exploration camps which are being established in the Morogoro-Dodoma area to
facilitate work on the Morogoro and the Haneti projects.
Maps and more detailed descriptions of the projects are available on the Kibo
website (http://kibomining.com/en/home) under the "Project" sub-menu and
within the Venmyn Competent Person`s Report (Corporate /Documents sub-menu)
which forms part of the Pre-Listing Document prepared for the Company`s
admission to the JSE in June this year. This link should be consulted to
accompany the summary of the Company`s near-term exploration plans discussed
below.
Haneti
Field exploration at Haneti will follow up on the anomalous nickel values
obtained to date from soils, pitting and trenching in the Kwahemu, Yobo,
Mihanza and Mwaka hill areas east of Haneti Village. Previously reported
results include 93m at 0.4% nickel from Mwaka Hill and an open soil anomaly
with values of 0.1% to 0.3% nickel at Kwahemu Hill. The programme will focus
on establishing the depth, composition and nickel concentrations in the
laterite profiles preserved on these hills by extension of previous soil
sampling grids, pitting, trenching and RAB drilling. Ground EM surveying over
Mihanza and Mwaka Hill will also be carried out in order to more accurately
assess nickel sulphide targets for drilling. Results emerging from work on
these areas will be used to set the technical specifications for an aerial
geophysical survey which is planned to locate additional nickel sulphide drill
targets within the 80 kilometre long Haneti-Itiso Ultramafic Complex.
The work proposed for Haneti provides for a focused follow up programme in an
area which the Company has been exploring over the last few years and which
will now receive the more sustained field programme that it warrants. The
Dutwa laterite deposit (African Eagle Resources), and the nickel sulphide
Kabanga (Barrick/Xstrata) and Nachingwea (Continental Nickel) deposits in
Tanzania provide strong evidence for the prospectivity of Haneti for similar
styles of mineralisation.
The southern and western part of the Haneti project is prospective for gold
mineralisation as evidenced by Shanta Gold`s Singida deposit (approx. 1M oz.
at 1.5 grams per tonne) located just outside the western border of the
project, artisanal gold mining activity within the westernmost project
tenement and evidence from recent geological mapping by the Company for the
extension of the gold hosting Londoni Greenstone Belt south-eastwards into the
southern part of the Haneti block. The Company is awaiting the issue of
prospecting licences on two long outstanding Letters of Offer for the two
westernmost Haneti tenements.
Lake Victoria
Work on the Lake Victoria project will focus on areas where previous
reconnaissance soil, stream and regolith sampling has produced anomalous gold
values. The areas selected for initial follow up occur within the Mhangu sub
project tenement block. Specific work activity on these areas will comprise
detailed infill soil sampling, pitting, further regolith mapping and
geological mapping. Concomitant with the work on these priority areas,
geological appraisal of the remaining large number of licences within the
other sub-project tenement blocks is on-going in order to streamline the
portfolio and generate a pipeline of projects for systematic detailed sampling
and definition of drill targets. The Stage 1 budget for Lake Victoria and
Morogoro does not provide for drilling expenditure which is contingent on
encouraging results emerging from the first pass surveying. Operational
flexibility will allow for early drilling of gold targets where warranted.
The primary objective of stage 1 exploration on the Lake Victoria project is
to follow up on areas of high gold-in-soil anomalies from licences within the
Mhangu block in order to establish robust targets for drilling and most
expenditure is allocated to this block which is adjacent to significant gold
deposits at Nyanzaga (4.1 M oz. gold resource), Kitongo (300,000 oz. gold
resource) and Kibo`s option property Luhala (112,000 oz, gold resource).
Expenditure on the other sub-project blocks will be directed towards first
pass geological evaluation by prospecting and mapping on licence areas that
have not been field checked and infill soil geochemical surveys in areas
showing regional gold anomalism from previous surveys.
Morogoro
Kibo`s Morogoro project is located in one of the most exciting new non-
traditional gold exploration area to emerge in Tanzania in the last few years.
The Company holds, licences, offers and applications covering an area of
almost 9,000 square kilometres separable into two regional blocks, Morogoro
South and Morogoro North (Dodoma Block). The geology of these areas differs
from the Lake Victoria area further north in that higher grade metamorphic
rocks such as gneisses, granulites and marbles dominate.
Morogoro South comprises tenement areas south and west of the regional town of
Morogoro covering approximately 4,900 square kilometres. The Company`s initial
exploration focus will be on a regional geological structure, the Ruvu Nappe,
located circa 30 km southwest of Morogoro. Previous reconnaissance geological
mapping and stream sediment sampling have revealed gold mineralisation
associated with this structure along 45 kilometres of its length and both
artisanal hard rock and placer gold mining is on-going. Stage 1 field
exploration in this area will comprise regional stream sediment sampling,
prospecting and geological mapping to resolve areas for follow-up geophysical
surveying, trenching and drilling. A large anorthosite body approximately 25
kilometres west of the Ruvu Nappe, is possibly indicative of nickel-PGM
mineralisation potential in this region and will also be prospected and
sampled during the field programme. Company licence applications and offers in
the western part of the Morogoro Block cover part of a copper mineralised
province with numerous copper occurrences and some artisanal copper
production. Data on the detailed geology and copper mineralisation styles will
be compiled as they also represent an excellent mineral exploration
opportunity for the Company in this region.
Morogoro North (Dodoma Block) comprises mineral tenements east of Dodoma
covering approximately 4,000 square kilometres adjacent to Government
designated artisanal gold mining blocks. Gold mining within these blocks is
from quartz reefs within high grade gneisses and granulites of high
metamorphic grade. These reefs extend on to Company licences and applications
where some artisanal mining is on-going. The detailed geology and gold
mineralisation in these areas has not yet been thoroughly evaluated but the
data that is available is consistent with geology and mineralisation styles
similar to those present at the Canaco Resources, Magambazi gold deposit some
50 kilometres to the northeast. Stage 1 field exploration at Morogoro North
will comprise detailed infill soil sampling and mapping on prospecting
licences around the villages of Gairo, Kilama and Berega where gold-in-soil
anomalies from previous reconnaissance sampling occur.
Metallurgical Testing of the GHR Deposit
Metallurgical test work was carried out by Mintek in South Africa on four
samples of the GHR ore recovered from artisanal pits at the site. The samples
were carefully selected to represent oxidised, transitional and fresh ore
types and dispatched to Mintek in Johannesburg in accordance with Kibo`s
quality procedures for secure transport of mineralised material for testing.
The test work carried out by Mintek comprised chemical analyses, excess preg-
robbing leaching, diagnostic leaching and gravity concentration tests. The
results from the key excess preg-robbing leaching tests are summarised in the
table below.
Table 2 Results of Metallurgical Testing of the GHR Ore Samples
Sample No Ore Gold Cyanide Lime Gold
Type Head Consumpti Consumpt Recovery
Grade on (NaCn ion (CaO (%
(grams in kg/t) in kg/t) Dissoluti
per on)
tonne)
IMET-01 Oxidise 7.48
d
Direct 0.22 3.76 93.8
Cyanidation
Carbon 0.48 3.76 94.3
-in leach
IMET-02 Transit 7.38
ional
Direct 0.37 2.26 94.4
Cyanidation
Carbon 0.62 2.25 95.4
-in-leach
IMET-03 Fresh 5.93
(minor
sulphid
e)
Direct 0.63 1.51 89.6
Cyanidation
Carbon 0.89 1.51 89.7
-in-leach
IMET-04 Fresh 10.95
(massiv
e
sulphid
e)
Direct 1.32 15.12 93.5
Cyanidation
Carbon 1.53 15.12 93.9
-in-leach
The high gold recoveries and low reagent (cyanide & lime) consumptions
obtained from these tests indicate that all ore types at the GHR are amenable
to conventional cyanide and carbon-in-leach extraction. The diagnostic
leaching tests also confirmed that all ore types can be expected to yield high
recoveries from carbon-in-leach processing with recoveries of 94.03%, 94.02%,
89.26% and 94.53% obtained for samples IMET-01 to IMET-04 respectively. The
gravity recovery test work (Knelson gravity concentration tests) showed
recoveries in the primary concentrate of 20.4%, 26%, 16.4% and 32.2% for
samples IMET-01 to IMET-04 respectively and these value are sufficiently high
to consider a cost efficient gravity gold recovery circuit prior to cyanide
treatment in the design of an ore processing flow sheet.
This metallurgical testing at the GHR is part of the evaluation process that
the Company has been undertaking to assist with a decision as to whether to
proceed with a development plan for the GHR. A favourable decision is
contingent on the outcome of negotiations with TREC and development funding
being available as discussed in the next section.
Itetemia & Luhala
The Company believes that in order to undertake further work on the Itetemia
and Luhala projects, it needs to exercise its option and vest its interest in
the properties. Kibo is currently in discussion with TREC, from whom it holds
its interest in Itetemia and Luhala under a 2007 Option & Royalty Agreement,
to re-negotiate terms of the Agreement to allow the Company to accelerate the
exercise of this option. Exercise of the option is particularly relevant for
the GHR, which Kibo believes can be developed quickly. Simultaneously with
discussions with TREC the Board is also in negotiations with a financial
institution to provide debt finance to develop the GHR.
Upon completion of these negotiations the Company will be in a position to
make a decision on the development of these properties. Meanwhile no
significant expenditure will be incurred on the projects. The Company`s near
term focus will be on the exploration in advancing the projects at Lake
Victoria, Haneti and Morogoro which it considers to have excellent discovery
potential for significant mineral deposits.
Review by qualified person
Enquiries:
Noel OKeeffe +353 (0)91 Kibo Mining Chief
384562 plc Executive
Officer
John Simpson +44 (0)207 Daniel Stewart Nominated
7766550 & Company Plc Adviser
Andreas Lianos +27 (0)83 River Group Designated
4408365 Advisor
Nick Bealer +44 (0)207 Cornhill Broker
7109612 Capital Ltd (Corporate
Broking)
Andrew Frangos +44 (0)207 Cornhill Broker
7109610 Capital Ltd (Corporate
Finance)
Matt Beale +44 (0)796 Forthbridge Public
6389196 Consulting UK Relations
Updates on the Company`s activities are regularly posted on its website
www.kibomining.com
Pretoria
7 October 2011
Designated Advisor
River Group
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