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")

25 August 2016

Kibo Signs New Agreement with SEPCO III on the Mbeya Coal to Power Project Securing Cash Payment and Avoiding Equity Dilution

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 a new Agreement (the "Agreement") with major international China based EPC contractor, SEPCO III. The Agreement establishes a re-defined contractual relationship between SEPCO III and the Company (together "the Parties") by which SEPCO III can earn the right to become the sole bidder for the EPC contract to build the power plant component of Kibo's, Mbeya Coal to Power Project ("MCPP"). This Agreement supersedes and replaces the existing Joint Development Agreement currently in force between the Parties (first announced on 20 April, 2015). The principal terms and conditions of the Agreement are:

· SEPCO III to refund Kibo for 50% of the total development costs incurred by Kibo on the MCPP to date ("Development Costs"), with a fixed first tranche in the amount of US$1.8 million to be paid in cash to Kibo, no later than 30 August 2016;

· SEPCO III and the Company to mutually agree by no later than 22 September 2016:

o The final amount that constitutes the Development Costs;

o The final amount to be refunded to Kibo; and

o The date at which the residual refund amount (i.e. final amount to be refunded less the initial US$1.8m first tranche) will be payable to Kibo.

· Conditional on Kibo receiving the first refund tranche of US$1.8 million and mutual agreement being reached between the Parties on the refund payment balance due, SEPCO III will be formally appointed sole bidder and will be required to submit an EPC bid proposal to Kibo by 22 October 2016. This bid must meet the EPC-specification laid down by Kibo and Tractebel Engineering (MCPP Definitive Power Feasibility Study consultant) for the construction of the MCPP thermal power plant. This EPC-specification requires the EPC-bid to, amongst others, be competitive against an international benchmark determined by Tractebel in respect of elements such as price, technical standards, operational, management and financial capability and capacity. The final bid must also comply with international good practice and standards and will in the final instance be subject to acceptance by Kibo and its financial advisors appointed to the MCPP;

· Subject to SEPCO III's bid proposal meeting the EPC-specification as determined by Kibo and Tractebel Engineering, SEPCO III will be formally awarded the EPC contract by Kibo, no later than 23 December 2016;

· SEPCO III will no longer earn any equity in the MCPP and all payments made to Kibo under the Agreement, will be a cash refund for historical development cost associated with the development of the MCPP;

The Agreement provides for summary termination in the event of any of the listed conditions not being met, specifically in terms of missing any of the agreed timelines. In particular, if the Parties cannot agree on the total amount deemed to comprise the Development Costs by the 22nd September 2016 (bullet point 2 above) or do not complete signing of an EPC contract by the 23rd December 2016 (bullet point 4 above), the Agreement will terminate.

Louis Coetzee, CEO of Kibo Mining, said: "We are extremely pleased that we have been successful in negotiating a new agreement with SEPCO III on favorable terms that ensures the Company continues to hold a 100% interest in the MCPP and still leaves Kibo with full and absolute control over the further development of the project.

Under the terms of the Agreement, the Company will benefit from a near term cash injection which the Company can use at its sole discretion and which will be of great assistance with the further development of the MCPP. It also provides for a further cash payment to be made to Kibo, subsequent to the initial tranche of US$1.8m as partial reimbursement of the shareholder funds spent to date on the project. 

The Agreement reflects recognition of the increased value of the MCPP by SEPCO III, following completion of the Mining and Power Definitive Feasibility Studies earlier this year and provides for the project to benefit from the experience of a large EPC contractor with a proven track record of successful thermal power plant construction in a number of countries. The Agreement also significantly enhances the MCPP's ability to attract serious investors on competitive terms and significantly strengthens Kibo's position in the commercial negotiations related to the MCPP, specifically in relation to the development of the power purchase agreement for the project.

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 250-350 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 20th April 2015, Kibo signed a Joint Development Agreement for the completion of the Definitive Feasibility Studies and development of the MCPP 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, 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

25 August 2016

Corporate and Designated Adviser

River Group