9th Nov 2015 09:25
LONDON (Alliance News) - Kibo Mining PLC on Monday said it has appointed Tractebel Engineering to conduct the definitive feasibility study for the power aspect of the Mbeya coal-to-power project in Tanzania.
Tractebel will begin work on the study immediately, and Kibo said the "favourable" commercial terms under the agreement will relieve pressure on cashflow and short-term funding "considerably" as 55% of the cost of the study will be due only once the study has been completed, with most of this 55% in turn only due once the company has reached financial closure on the project.
The Mbeya project will be comprised of two elements. The first is the coal mine element which will provide production for the second element, which is a power station to generate electricity. Tractebel is only completing the study for the power aspect of the project.
Kibo previously had appointed MinXcon to conduct the feasibility work for the mining component of the project, and SEPCO III as its preferred engineering, procurement and construction contractor.
Tractebel is a wholly-owned subsidiary of Engie, which was formed by the merger of Gaz de France and Suez back in 2008. The French government adopted the Engie name back in April 2015.
"The commercial terms on which Tractebel was engaged will furthermore relieve pressure on Kibo's short term cash flow requirements and funding needs substantially. This will in turn potentially enable Kibo to complete the definitive feasibility studies for both the mine and the power plant and to advance the [project] up to bankable feasibility study without the need to give away any of Kibo's equity in the [project], of which the company still owns 100%," said the miner.
Kibo shares were up 4.7% to 4.97 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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