10th Mar 2015 09:21
LONDON (Alliance News) - Kibo Mining PLC Tuesday said it has received "positive findings" from the integrated pre-feasibility study for the Rukwa coal-to-power project in Tanzania, which has confirmed "the robust nature" of the project.
The integrated study consolidated the coal mining and power generation technical reports into one single project report, which confirmed the project is "robust at key consolidated financial, technical and operational levels," Kibo said.
"Completion of the integrated pre-feasibility study marks a significant stage for the project, drawing together the technical findings from the coal mining and power generation elements, into a consolidated report," said Chief Executive Louis Coetzee.
Kibo also said the report has shown there is significant upward scalability for the size of the power station and length of life, as well as the potential for additional coal use opportunities.
Kibo said there are additional coal resources available from Rukwa, to potentially expand the power station to more than double the current design size and plant life, adding it could also be used in alternate energy conversion technologies such as coal to liquids.
The report reiterated that the project has a revenue range between USD8 billion to USD8.5 billion over a 25 year life span, with an indicative pre-tax equity internal rate of return above 23%. The indicative post-tax payback, excluding government concessions and incentives, will be between seven and a half to nine years, it said.
"Completion of this stage of the Rukwa coal-to-power project feasibility work considerably enhances the inherent value of the project and is an important factor in finalising commercial partner discussions," said Coetzee.
"We would reaffirm to investors that our commercial negotiations continue actively. We are managing this process carefully, with our main focus being the conclusion of a joint development agreement at the earliest possible opportunity," he added.
Kibo shares were down 7.3% to 4.75 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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