JOHANNESBURG (miningweekly.com) – Dual-listed Kibo Mining is set to develop its currently idled uranium assets, in Tanzania, through a 50:50 joint venture (JV) partnership with Metal Tiger.
The binding memorandum of understanding (MoU) inked this week with Aim-listed Metal Tiger would allow Kibo to pull the Pinewood portfolio out of care and maintenance and restart active exploration work during 2015.
The portfolio, comprising 43 licences, offers, applications and tenders, boasted a combined surface area of 9 033 km2 between the regional capitals of Iranga, Mbeya and Songea.
“This is a significant step for the company, recognising the increasing interest in the uranium sector, as demonstrated recently by the sharp increase in the price of the commodity,” Kibo CEO Louis Coetzee said.
Under the terms of the MoU, Metal Tiger had 90 days to complete its due diligence process, with both parties required to complete and sign a binding JV agreement.
Metal Tiger, which would buy 50% of Kibo subsidiary and Pinewood owner, Kibo Uranium, for a consideration of £1, was required to spend $800 000 on project costs, licence renewal fees and other maintenance costs, estimated at $100 000 a year, and an agreed exploration work programme over the next three years, to maintain its 50% stake in the JV.
Metal Tiger’s stake would shrink to a 10% free-carry should the $800 000 mark not be reached. Anything less than a $300 000 expenditure during the period would see Metal Tiger's total JV interest revert to Kibo.
Further, Metal Tiger agreed to acquire ten-million shares in Kibo for 1.5p apiece, with Metal Tiger’s investment of £150 000 securing it a beneficial 3.67% interest in Kibo.
Coetzee said the transaction followed on a number of successes achieved by Kibo in recent months, including the start of a feasibility study at the Rukwa coal mine, with Phase 1 of Stage 1 of the mine’s prefeasibility study (PFS) already complete.
The full PFS on the Rukwa 300 MW power plant was expected to be completed by the end of November, while a preliminary economic assessment on the Imweru gold project was set for completion in early December.
“We anticipate significant further news flow across our project portfolio in the coming weeks in what is building into an exciting period for the company and investors,” Coetzee said.