Kibo Energy Regulatory News (KIBO)

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: IE00B97C0C31

('Kibo' or 'the Company')

Dated: 03 April 2018

Kibo Mining Plc ('Kibo' or the 'Company')

Completion of Botswanan Power Project Acquisition and Appointment of Director

Kibo Mining plc (AIM: KIBO; AltX: KBO), the multi-asset Africa-focused energy and resource company, is pleased to announce that, further to the RNS dated 30 November 2017, it has completed the acquisition of an 85% interest in the Mabesekwa Coal Independent Power Project ('MCIPP') ('the Acquisition'). 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, Mr. Mashale Phumaphi has joined the Company as a Non-Executive Director.

Overview

· All share deal with Sechaba Natural Resources Limited ('Sechaba') completed, which sees Kibo acquire an 85% interest in a strategic integrated power project in Botswana

· Highly synergistic with flagship MCPP in Tanzania, providing considerable benefits: economies of scale in equipment, execution, project finance and strategic partnerships

· Robust market dynamics given large energy deficit in Botswana

· Advanced project - Scoping Study highlights 30-year Life of Mine with a maximum capacity of 600MW (4x150MW) based on a coal delivery rate of 3.2Mtpa

· Strong backing by institutional investors through Shumba Energy Limited's ("Shumba") investor base

· Significant additional benefits to the agreement include Kibo's first right of refusal to participate in any energy projects that Shumba may pursue over the next six-years

· Consistent with Kibo's business model and provides further endorsement of the Company's ability to develop nationally important energy projects on a regional scale

· Appointment of Mr. Mashale Phumaphi as Non-Executive Director

Louis Coetzee, CEO of Kibo Mining said: "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. 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. 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."

Acquisition

Under the terms of the agreement, Sechaba, a subsidiary of Shumba Energy Limited (BSE:SHUMBA) ('Shumba'), has today been issued 153,710,030 new ordinary shares in Kibo ('Consideration Shares') 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 Mr Mashale Phumaphi appointed as Sechaba's nominated director.

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 ('Admission'). 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. Notably, the MCIPP enjoys strong institutional investment support through Shumba's shareholder base.

Furthermore, 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 Ltd (Botswana), the entity holding the MCIPP in Botswana or using coal procured from the area covered by the MCIPP coal resource

Other material terms include:

· Kibo to use reasonable commercial endeavours on reasonable commercial terms and on an arm's length basis to free-carry Sechaba for the reasonable funding requirements of the MCIPP until financial close of a project financing, after which Sechaba may be diluted

· For a period of one year after Completion, Sechaba and Mr. Phumaphi is subject to lock up and orderly market arrangements for any sale of Consideration Shares, with a maximum disposal of 5% in any calendar month permitted

· Sechaba may distribute up to 50% of its Consideration Shares in specie to its shareholders (currently another subsidiary of Shumba) on condition that the recipient(s) comply with the lock up and orderly market arrangements or distribute the Consideration Shares in specie to Shumba, who must immediately distribute the Consideration Shares in specie to its own shareholders

· Warranties, representations and undertakings typical of a transaction of this nature

Mabesekwa Coal Independent Power Project

The MCIPP is located c.40km east of the village of Tonata and c.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 insitu 777Mt Coal Resource ("Mabesekwa Coal Resource") (see RNS dated 30 November 2017), and while the 300Mt acquired has now been precisely delineated with boundary coordinates, a Competent Person's Report ("CPR") inclusive of a new Coal Resource statement under SAMREC guidelines for the 300Mt subset has not yet been completed. An internal Kibo estimated compiled based on data derived from data provided by Shumba is set out below in Table 1 and Table 2. Coal Resources under the SAMREC guidelines will be provided in a future update once the CPR noted above is completed. Notable synergies between the projects provide considerable benefits, including economies of scale in equipment, execution, project finance and strong existing MCPP strategic partnerships. MCIPP already has water and land use permits and environmental certification in place. Furthermore, a Pre-Feasibility Study on the coal mine has been completed, as has a Scoping Study, which highlight the power plant having a maximum capacity of 600MW (4x150MW) based on a coal delivery rate of 3.2Mtpa and a Life of Mine of over 30 years.

Table 1: Mabesekwa 300Mt resource statement (Kibo Internal, dated 10th February 2018, 100% basis)

Table 2: Mabesekwa 300Mt resource statement (Kibo Internal, dated 10th February 2018, 85% basis)

Technical Notes:

® Minimum Seam thickness cutoff = 1.0m

® Dry Ash Free Volatile cut-offs (insitu raw qualities) = 26%

Director Appointment

Mr. Mashale Phumaphi aged 36, Meng, IMC

Mr. 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. He began his career as an engineer with Debswana Diamond Company based on Jwaneng Mine in Botswana. Mr. 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).

The following are details of all current and former directorships in the previous five years held by Mr Phumaphi

Mr Phumaphi will hold a 2.44% beneficial interest in the securities of the Company after the issue of the Consideration Shares.

Mr Phumaphi entered into a letter of appointment with the Company to act as a Non-Executive Director on 03 April 2018 with effect from the closing of the Acquisition. The appointment is for a period of 12 months and thereafter will continue until 30 days' written notice of termination is given by either party, and also subject to the articles of association of the Company ("Articles") and immediate termination upon the occurrence of certain defined events typical of an agreement of this nature. Mr Phumaphi may also terminate his position immediately upon written notice of a conflict of interest or he otherwise feels he may wish to resign, however no payment of any compensation will be payable by the Company in these circumstances. Mr Phumaphi will receive an annual fee of €15, 000.00 payable monthly in arrears and he will be indemnified to the extent lawfully possible under Articles, and provided, to the extent that the Company has directors' and officers' liability insurance, such cover. Mr Phumaphi is subject to confidentiality obligations and provisions relating to conflicts of interest.

There are no further details to be disclosed under Rule 17, Schedule 2 paragraph (g), or Schedule 4 of the AIM Rules in relation to Mr. Phumaphi.

**ENDS**

For further information please visit www.kibomining.com or contact:

Notes to editors

Kibo is a multi-asset resource development and energy company with a long-term goal of becoming a leading power producer in Sub-Saharan Africa. The Company aims to tackle the acute power deficit which is severely hindering economic development in the region.

Kibo's flagship asset is the Mbeya Coal to Power Project ('MCPP') in Tanzania, which comprises the Mbeya Coal Mine, a 1.5Mt p/a mining operation, and the Mbeya Power Plant, a 300MW mine-mouth thermal power station. The Mbeya Coal Mine has a defined 120.8 Mt NI 43 101 thermal coal resource. A Definitive Feasibility Study has been conducted on the project which underpinned its value and confirmed an initial rate of return of 69.2%. The 300MW mouth-of-mine thermal power station has long term scalability with the potential to become a 1000MW plant. The completed full Power Feasibility Study highlighted an annual power output target of 1.8GW based on annual average coal consumption of 1.5Mt. An Integrated Bankable Feasibility Study report for the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an initial 25-year mine life, post tax equity IRR between 21-22%, debt pay-back period of 11-12 years and a construction period of 36 months.

To assist in the execution of this critical power project of the MCPP, Kibo has assembled an international team of advisors and partners including Engineering Procurement and Construction ('EPC') contractors and financial teams that are assisting in the advancement and development of the MCPP. These include ABSA/Barclays as Financial Advisor, China based EPC contractor SEPCO III, General Electric, Tractebel Engineering (Power), Minxcon Consulting (Mining) and legal advisors Norton Rose Fulbright.

Kibo also has an 85% interest in the Mabesekwa Coal Independent Power Project ('MCIPP'), a nearly identical power project in Botswana. The project consists of 300Mt subset of the current in-situ 777Mt Coal Resource and has water and land use permits and environmental certification in place. A Pre-Feasibility Study on the coal mine has been completed, as has a Scoping Study, which highlight the power plant having a maximum capacity of 600MW (4x150MW) based on a coal delivery rate of 3.2Mtpa and a Life of Mine of over 30 years.

Johannesburg

03 April 2018

Corporate and Designated Adviser River Group

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

Review by Qualified Persons

The information in this announcement that relates to the Mabesekwa Coal Resource is taken from a report by CD van Nieker Director and Principal Geologist with the firm GEMECS (Pty) Ltd. Mr van Niekerk is a Professional Natural Scientist with the South African Council for Natural Scientific Professions (SACNASP), Registration No. 400066/98 and a Fellow Member of the Geological Society of South Africa. He has relevant experience and technical qualifications to be a "Qualified Person" for reporting Coal Resources to the SAMREC Standard and for the purposes of the AIM Rules for Companies.

The information in this announcement that relates to the resource statements (Table 1 & 2) is taken from a report compiled by Kibo's technical team in collaboration with Michael Breed, B Eng (Min.), M Eng (Proj. Man.), MMC, Pr.Eng., FSAIMM, senior engineer with Minxcon Consulting (Pty) Ltd. 

The Company's Technical Director, Noel O'Keeffe,B.Sc.(Hons) Geology P.Geo and a member of the Institute of Geologists of Ireland, a director of Kibo and a Qualified Person within the meaning of SAMREC and the AIM Rules for Companies has reviewed the resource report and the references to them in this announcement.

Glossary of Technical Terms