| Tue 8 May 2012, 9:00 | | KBO - Kibo Mining Plc - Detailed Cautionary Announcement |
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KBO
KBO
KBO - Kibo Mining Plc - Detailed Cautionary Announcement
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")
DETAILED CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the Company has entered into negotiations as more
fully explained below, which if successfully concluded may have a material
effect on the price of the Company`s securities. Accordingly, shareholders are
advised to exercise caution when dealing in the Company`s securities until a
full announcement is made.
Strategic Joint Venture proposed on Haneti Nickel Project
* Kibo signs Memorandum of Understanding to pursue a strategic joint venture
with Brazilian industrial conglomerate Votorantim for the further
exploration of its Haneti properties.
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO), (JSE: KBO), the Tanzania
focused mineral exploration and development company, is pleased to advise that
it has agreed to record a Memorandum of Understanding ("MOU") with Brazilian
VOTORANTIM METAIS PARTICIPACOES LTDA, a member of Votorantim Group,
("Votorantim") to pursue negotiations forthwith with a view to entering into a
definitive joint venture agreement in respect of its Haneti properties
("Haneti") prospective for nickel and other base and precious metals as soon as
practicable (the "Joint Venture").
Proposed Transaction Framework
The Joint Venture, if concluded and implemented, would see Votorantim initially
contributing exploration expenditures of GBP 0,5 million until December 2013.
The earn-in phase comprises total investments up to GBP 2,7 million during a
period of 3 years in an mutually agreed work program budget on Haneti to earn a
50% interest (the "Initial Period"), where after the parties will continue to
contribute equally to the Joint Venture.
During the first stage of the program, the Joint Venture will be unincorporated
and the Company will be the operator of the Joint Venture and its exploration
work program. Votorantim will however have an option to take over the management
of the work program and call for the transfer of the Haneti properties to a
joint venture company ("Newco") that will be owned equally by the Company and
Votorantim. Votorantim shall be entitled to operate the Joint Venture from 31
December 2013 until the end of the Initial Period, where after the board of
directors of Newco shall appoint the operator.
It is the intention of the parties to direct the work program towards
establishing a JORC compliant mineral resource at Haneti during the Initial
Period, where after the Joint Venture will consider the further development of
the project on the merits of the exploration results achieved.
About Votorantim
Votorantim is one of the largest corporate conglomerates in Latin America, with
a 94-year history. Votorantim Group`s activities are focused on key sectors of
the economy that demand capital intensive and high scale production processes
such as cement, mining and metallurgy (aluminum, zinc and nickel), steel mill,
pulp, concentrated orange juice, and energy self-generation. In the financial
market, the Group trades through Votorantim Finance and, through its New
Business segment, we operate with a Venture Capital and Private Equity fund. In
2011, the Company`s net revenues totaled R$ 23.7 billion, of which R$ 5.8
billion consists of exports. Cash generation (EBITDA) amounted to R$ 5.3
billion, whilst investments reached R$ 4.3 billion in operating improvement and
expansion. Votorantim Industrial is rated Investment Grade by the three major
rating agencies in the world - Standar & Poor`s, Fitch Ratings and Moody`s. In
March 2012 Fitch Ratings upgraded the foreign and local currency ratings of
Votorantim to "BBB". This recognition is due to Votorantim`s leadership in the
markets it serves, its management model, governance policies and transparency.
Rationale
Commenting on the MOU, Kibo CEO Louis Coetzee said:
"In the announcement of the Company`s strategic acquisitions of Tanzanian energy
assets Mzuri Energy Limited and Mayborn Resources (Pty) Ltd on 2 April 2012 it
was pointed out that Tanzania as an African investment destination is, in our
opinion, steadily moving up the priority ladder of a number of major
international industrial groups in Asia and the Americas. Votorantim`s decision
to make Tanzania one of the countries into which it invests its considerable
resources of capital and skills would support this view.
This is an ideal opportunity for Kibo to develop a close working relationship
with our colleagues at Votorantim in the base metals space to the benefit of
our respective shareholders and the people of Tanzania. This step represents
the next natural development in the broader strategy of the Company to build
a multi-commodity exploration platform comprising more advanced exploration
projects that can be taken more swiftly up the value curve by collaborating
with respected industry veterans with a proven understanding of their chosen
fields of operation.
We expect to continue developing this progressive approach to our business over
time"
Enquiries:
Louis Coetzee +27 (0)83 2606126 Kibo Mining plc Chief Executive
Officer
John Simpson +44 (0) 161 831 1512 Zeus Capital Limited Nominated Adviser
Andreas +27 (0)83 4408365 River Group Corporate Adviser
Lianos and Designated
Adviser (AltX)
Nick Bealer +44 (0)207 7109612 Cornhill Capital Ltd Broker (Corporate
Broking)
Matt Beale +44 (0)7966 389196 Fortbridge Public Relations
Updates on the Company`s activities are regularly posted on its website
www.kibomining.com
General Background & Strategy
Kibo is a public company registered in Ireland (company number 451931). Its
registered office is Kibo Mining plc, Suite 3, One Earlsfort Centre, Lower Hatch
Street, Dublin 2, Ireland. Kibo was established in early 2008 to explore and
develop mineral deposits in Tanzania, East Africa and was admitted to AIM on 27
April 2010 and AltX in South Africa on 30 May 2011.
The Board of Kibo is composed of experienced professionals spanning mineral
exploration, mine development, mining finance and financial control of public
companies. It is supported by well trained and motivated Tanzanian staff that
operates from Kibo`s exploration offices in Dar es Salaam and Mwanza.
The mineral assets of the Company comprise three existing and two newly acquired
projects in Tanzania - Haneti (nickel, platinoid elements and gold), Morogoro
(Gold) and Lake Victoria (Gold) which give Kibo access to over 18,000 km2 of
early stage exploration licences in Tanzania`s premier gold mining region, the
Lake Victoria Goldfield and within the newly emerging gold exploration regions
in eastern Tanzania.
The Company has recently also acquired, subject to certain suspensive closing
conditions and approvals, coal and uranium exploration projects as publicly
announced on 2 April 2012 in accordance with its multi-commodity exploration
strategy.
Kibo`s objective is to enhance Shareholder value through acquisition,
exploration and development of mineral assets in Tanzania. This objective will
be pursued primarily through active exploration, particularly drilling on its
current projects and by using the Company`s experience in Tanzania to acquire
further quality mineral projects on competitive terms that can be quickly
evaluated and taken to the next stage of development. Kibo will undertake
continual risk assessment of its projects and take whatever actions it believes
are necessary to ensure that these risks are mitigated.
Pretoria
Dated: 08 May 2012
Corporate and Designated Advisor
River Group
Date: 08/05/2012 09:00:01 Produced by the JSE SENS Department.
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