20th Jul 2016 07:19
LONDON (Alliance News) - Kibo Mining PLC Wednesday said nine out of the ten companies that have been approached about potentially offering services to the Mbeya project have taken up the offer and expressed their interest in securing the operations and maintenance agreement that is up for grabs.
Kibo said the "positive reaction" demonstrates the "strong confidence" that is held in the Mbeya coal-to-power project in Tanzania after only one company turned down the opportunity due to "capacity constraints".
Kibo is developing the project in two parts, one focused on the mining element which will produce coal to feed the second part that revolves around a power plant to feed energy into the domestic market.
The miner launched a process to allow pre-selected companies to express their interest in securing the operations and maintenance agreement for the development in order to "assess the appetite of the market".
The agreement covers the operation and maintenance of the two 150.0 megawatt coal-fired power plants that will produce electricity from the coal taken from the Mbeya mine.
"We are delighted to note that the response to our invitation for expressions of interest, from leading international operations and maintenance providers, indicated a strong market interest in the Mbeya project, but also confirmed the robustness of the project based on the willingness of prospective O&M contractors to commit for the entire life of plant [of] 25 years," said Chief Executive Louis Coetzee.
Kibo conducted separate definitive feasibility studies for the mining and power plant elements of the development and is merging them together to create one bankable feasibility study for the entire project.
"As we diligently continue with the last remaining work required to finalize the integrated bankable feasibility for the Mbeya project, we are in parallel finalizing the definitive agreement with Lake Victoria Gold Ltd to amalgamate our Imweru gold project with Lake Victoria Gold's Imvelo gold project. Further progress updates with regard to both initiatives will follow shortly," he added.
Kibo's Imweru project is also in Tanzania and the company previously signed a memorandum of understanding with Lake Victoria Gold to consolidate the Imweru and Imwelo gold projects, but that suffered a minor two-week delay earlier this month.
The two projects, which are adjacent to each other, will be combined into one company called NEWCO.
Kibo shares were down 0.4% to 5.60 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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