Financial close of the Mbeya coal-to-power project (MCPP), part of the Tanzanian government’s National Energy Strategy, and advancement of the exploration process at Haneti nickel project, are likely to start at the end of the first quarter of 2016, says Tanzania-based mineral explorer and developer Kibo Mining.

“Given the market circumstances, we will focus our resources on our flagship project and will work on enhancing what we have. We will seek out new opportunities as and when the situation allows,” Kibo Mining CEO Louis Coetzee tells Mining Weekly.

He believes that focusing on Kibo’s current projects will enable the company to build momentum and position itself for “further potential corporate dealings in the future”.

Coetzee notes that the development of the MCPP at Kibo’s Mbeya coal project, in south-western Tanzania, which will eventually result in the construction of a 300 MW mouth-of-mine thermal power plant, is progressing well.

Kibo notes that its strategy for Mbeya is closely aligned with the interests of the Tanzanian government, which has an urgent requirement for new sources of power to support its rapid growth. “The country currently has less than 1 000 MW out of the 2 000 MW it requires, and with a projected [gross domestic product] growth rate of 7% a year in the medium term (an International Monetary Fund projection), it is facing increasing power generation undercapacity to meet its economic development needs.”

Coetzee highlights that the MCPP’s definitive mining feasibility study (DMFS) is in the second phase, while the project’s definitive power feasibility study is under way. Both are expected to be completed by the end of the first quarter of 2016.

Engineering group Tractebel was appointed in November 2015 to conduct the definitive feasibility study and to continue, thereafter, as owner engineer during the MCPP’s power component development phase.

Moreover, Coetzee says negotiations with Tractebel were affable and that the terms agreed upon relieve pressure on Kibo’s short-term cash flow, noting that “a significant portion, about 55% of the cost, is payable close to or at financial close”.

The first phase of the DMFS, the metallurgical sampling programme, was completed in October 2015, with the results of the metallurgical sampling programme expected in January.

Kibo and its DMFS consultant Minxcon Projects used the geotechnical drill programme to obtain sample material for both the geotechnical analysis as well as metallurgical analysis, which resulted in significant savings. Though, Coetzee notes that if the programmes had remained separate, it would also have impacted significantly on the DMFS timeline.

The geotechnical drill programme comprised eight holes, accurately angled and directed at strategic positions to penetrate the pit hanging wall at varying depths, totalling 820 m. This was required to confirm ground conditions in and around the final pit position, determine slope angles and aid in pit design.
Coetzee notes that, with regard to the MCPP, “everything is still on schedule and we should start with the bankable feasibility study within the first quarter of 2016”.

Haneti, Morogoro and Pinewood
Kibo received airborne geophysical data interpretation in July for its Haneti project, in central Tanzania, which indicated that nickel sulphide prospective rocks were significantly more extensive than previously thought, and has identified more drill targets.

The company hoped to start drilling last year, but will start Haneti’s drill programme, which is subject to funding, “as early as possible”. Haneti comprises tenements for nickel, platinum-group elements and gold.

Exploration at Kibo’s joint ventures (JVs) with Aim-listed metals investor Metal Tiger – the Morogoro gold project and the Pinewood uranium project, in the east and south of Tanzania respectively – are also under way.

Morogoro’s soil sample analysis has reaffirmed the priority target of the exploration programme and has resulted in plans for detailed soil geochemistry, exploration pits and a ground magnetic survey.

Work on Pinewood started in October 2015 and comprises a review and update of the historic technical reports to assist in designing and implementing the field exploration programme.