20th Apr 2015 10:13
LONDON (Alliance News) - Kibo Mining PLC's shares shot up early Monday as it said it has signed a joint development agreement with Chinese engineering and construction company SEPCO III for the Rukwa coal-to-power project in western Tanzania.
Shares in Kibo were trading up 66% at 7.67 pence in mid-morning trade on Monday.
The news also boosted shares in Metal Tiger PLC, Kibo's partner on the project. Shares in Metal Tiger were up 13% to 0.9899 pence on Monday.
Kibo, a Tanzania-focused mineral explorer and developer, said SEPCO III will contribute up to USD3 million towards completing remaining definitive feasibility study work by October. When it is finished, the Rukwa project will be transferred into a special purpose vehicle in which Kibo will hold a minimum equity position of 85%.
Under the agreement, Kibo is able to part dispose of its interest in the special purpose vehicle, generating cash which can be used to fund any ongoing project cost contribution.
Kibo said that financial close for the project is expected by December, with construction mobilisation starting during the first quarter of 2016. Construction work is expected to start in the second quarter of 2016, with completion and first power delivered into the grid by the first quarter of 2019.
"Engaging with a highly respected engineering, procurement and construction partner adds technical capability for project delivery, providing considerable reassurance for all stakeholders," Kibo Chief Executive Louis Coetzee said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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