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")

22 September 2016

Kibo Signs Financial Advisory Mandate Letter with ABSA / Barclays

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focused mineral exploration and development Company, is pleased to announce that it has signed an advisory engagement letter (the "Mandate") with Absa Bank Limited / Barclays Bank Limited (the "Advisor") laying out the scope of work and terms under which it will act as new financial advisor to the Company on the Mbeya Coal to Power Project ("MCPP" or the "Project").

The scope of work in the Mandate requires the Advisor to assist in delivering the Project to a successful Financial Close by completing amongst others, the following:

• develop a financial model for the Project with the assistance of the Company and its technical advisors and partners;

• assist the Company in the negotiation, review and finalization of all agreements pertaining to the MCPP including, inter alia, the power purchase agreement, EPC-agreement, O & M agreement and grid connection agreement; and

• develop a comprehensive and optimum funding structure for the project in cooperation with the Company and its advisors, and to implement it by soliciting and negotiating with potential lenders and/or equity providers sufficient funding on optimal terms to bring the project to successful Financial Close.

The Company has been successful in negotiating a minimal cash retainer fee in return for granting the Advisors equity call options of 3.5% of the total share capital of Mbeya Development Company Ltd (the "Project Company") ("Advisor Options"). The terms of the Advisor Options will be formalized in an option agreement within three months of the commencement date of the Mandate. The option agreement will provide for shares to be issued ("Call Option Shares") and the Advisor Options to be held in trust until the exercise date. It will also include a provision for the Advisors to be issued further shares to maintain its holding at 3.5% in the event of further share issues in the Project Company. The exercise date of the Advisor Options will be no earlier than 18 months after completion and commissioning of the Project., The option agreement will include a mechanism for release of the rights of the Advisor to the Call Option Shares on the exercise date, subject to payment of an amount equal to the value of the Call Option Shares calculated on the exercise date. The valuation of the call options will be calculated based on to the Net Present Value of the Project.

The Mandate also provides for the Company, at its sole election, to suspend payment of the retainer fee for one month or longer in the event of project delays. The Company will have the right to exercise this right twice during the period in which the Mandate is in force.

Louis Coetzee, CEO of Kibo Mining, said: "We are extremely pleased with having ABSA / Barclays on board as the new financial advisor to the MCPP on the terms outlined above. ABSA / Barclays will replace our existing financial advisor, Standard Bank for the very important financial close phase of the MCPP. We are glad to report that the transition to ABSA will be seamless and will not result in any delay or additional budget cost towards completion of the Integrated Bankable Feasibility Study for the project. We are looking forward to benefitting from ABSA / Barclays' impressive record in bringing projects similar to the MCPP to successful financial close.

The fact that ABSA / Barclays are prepared to take an equity stake in the MCPP in lieu of the standard cash retainer fee, on completion of the project, not only helps with our cash flow in the short to medium term, but also demonstrates its strong confidence and belief in the project.

Together with our recently announced agreement with SEPCO III, appointment of Norton Rose Fulbright as legal advisers to the MCPP and MOU with GE, the addition of ABSA / Barclays to our team of advisors and partners represents another key step in moving the project towards successful financial close."

About ABSA / Barclays

Absa Bank Limited (Absa) is a wholly owned subsidiary of Barclays Africa Group Limited, a JSE listed company which is currently 50.1% owned by the UK's Barclays Bank Plc. ABSA's corporate and investment banking business has successfully provided advice and structured finance to a number of major energy projects across Africa in recent years for both governments and private developers. 

Contacts  

Kibo Mining - Notes to editors

Kibo Mining is listed on the AIM market in London and the AltX in Johannesburg. The Company 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 300 MW mouth-of-mine thermal power station, the Mbeya Coal to Power Project ("MCPP"), previously called Rukwa Coal to Power Project ("RCPP"), with an established management team that includes Standard Bank as Financial Advisor. Kibo is undertaking a Coal Mining Definitive Feasibility Study and a Power Pre- Feasibility Study for the Mbeya project with an integrated Bankable Feasibility Study report for the MCPP to be released in the near term. On 25 August 2016, Kibo signed an Agreement with China based EPC contractor SEPCO III granting it the right to become the sole bidder for the EPC contract to build the power plant component of the MCPP in exchange for SEPCO III refunding 50% of the development costs incurred by Kibo to date on the project. Kibo has already received the first tranche of this funding in the amount of US$1.8 million on the 5th September 2016

The Company also has extensive gold focused interests including Lake Victoria Goldfields and Morogoro projects. At Lake Victoria, the Company has 100% owned projects with a 550,000 oz. JORC compliant gold Mineral Resource at the Imweru Project and a 168,000 oz. NI 43-101 compliant gold Mineral Resource at the Lubando Project. The Company is currently undertaking a Definitive Feasibility Study on its Imweru Project.

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 plc.

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

The Company's 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 attracting significant recent investment in coal and uranium. The Company has a positive working relationship with the Tanzanian government at local, regional and national levels and works hard to maintain positive relationships with all communities where company interests are held. The Company recognizes the potential to enhance the quality of life and opportunity for Tanzanian citizens through careful development of its projects.

Updates on the Company's activities are regularly posted on its website www.kibomining.com

Johannesburg TBC

22 September 2016

Corporate and Designated Adviser

River Group