MEL Acquisition (3719A)

TIDMKIBO

RNS Number : 3719A

Kibo Mining Plc

02 April 2012

KIBO MINING PLC

Acquisition of controlling interests in strategic energy assets in Tanzania

   --          Kibo to acquire control of a JORC compliant 129mt thermal coal resource; and 
   --          Kibo to acquire control of licenses prospective for uranium. 

Dated: 2 April 2012

Introduction

The Directors of Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO), the Tanzania focused mineral exploration and development company, are pleased to advise that the Company has, subject to conditions precedent set out below, acquired controlling interests in two portfolios of strategic energy assets in Tanzania. These consist of a coal asset in the form of the Rukwa Coal Project near Mbeya and a portfolio of additional licences prospective for both uranium and coal. The Company has entered into definitive agreements with Mzuri Energy Holdings Limited ("Mzuri") for the acquisition of a minimum of 51% of all the issued share capital of Mzuri Energy Limited ("MEL") and with Mayborn Resources Investments (Pty) Ltd ("Mayborn") for the acquisition of a minimum of 51% of all the issued share capital of Mayborn.

Transactions

Kibo will acquire no less than 51% of MEL, through its wholly owned subsidiary Morogoro Gold Limited ("Morogoro") by means of the issue of new shares in Kibo at an issue price of GBP0.03 per new Kibo share. The total number of consideration shares will be determined by the formulae set out below. If Kibo acquires 100% of both MEL and Mayborn, the maximum number of new shares will be 790,297,740.

   --    Mzuri is a private company incorporated in the Republic of Cyprus. 
   --    MEL is a private company incorporated in Canada. 
   --    Mzuri Coal is a private company incorporated in the Republic of Cyprus. 
   --    Mbeya Uranium is a private company incorporated in the Republic of Cyprus. 
   --    Rukwa Coal is a private company incorporated in the United Republic of Tanzania. 
   --    Mayborn is a private company incorporated in the Republic of South Africa. 

Mzuri owns, or will on closing own, 22,415,004 (or approximately 40%) of the issued and outstanding shares of, and all claims on shareholders' loan accounts against MEL;

1. MEL holds 100% of the issued and outstanding shares of and all claims on shareholders loan accounts against Mzuri Coal Limited ("Mzuri Coal") who in turn holds 100% of the issued and outstanding shares of and all claims on shareholders loan accounts against Rukwa Coal Limited ("Rukwa Coal").

2. MEL also holds, or will on closing hold, 100% of the issued and outstanding shares of and all claims on shareholders loan accounts against Mbeya Uranium Limited ("Mbeya Uranium").

Rukwa Coal owns two prospecting licenses in the Mbeya region of the United Republic of Tanzania on which it has established a JORC compliant inferred and indicated resource, of at least 129,000,000 tons of thermal coal.

Mbeya Uranium, through its subsidiaries, is either the owner or the applicant in respect of the prospecting licenses in respect of mineral properties which it has contributed to an unincorporated joint venture with Mayborn.

Rationale

Commenting on the transactions, CEO Louis Coetzee said:

"Through these acquisitions the Company increases its foothold in Tanzania, a region that is on the radar of a substantial number of investors and major industrial groups in Asia and North America.

The acquisitions provide our shareholders with exposure to a large portfolio of energy assets. This is part of a broader strategic decision by the Company to combine aggressive exploration within Kibo's current portfolio with the active pursuit of suitable acquisitions to build and develop a multi-commodity exploration portfolio of more advanced exploration project opportunities in addition to our current gold and base metal work programs.

"We expect to benefit from a number of synergies across the expanded portfolio and to increase the potential for Kibo to make commercial discoveries in this highly prospective region. We look forward to keeping shareholders updated on both our exploration and acquisition activities."

Consideration for the transactions:

Kibo will acquire:

(i) a minimum of 51% and up to the entire issued share capital of MEL for a purchase price per MEL Share calculated as GBP20,408,932 divided into the total number of MEL Shares issued and outstanding as at the Closing Date in consideration for the issue and allotment of ordinary shares of EUR0.01 each in the capital of Kibo at an issue price of GBP0.03;and

(ii) a minimum of 51% and up to the entire issued share capital of Mayborn for a purchase price per Mayborn Share calculated as GBP800,000 divided into the total number of Mayborn Shares issued and outstanding as at the Closing Date in consideration for the issue and allotment of ordinary shares of EUR0.01 each in the capital of Kibo at an issue price of GBP0.03.

Conditions Precedent

The acquisition of MEL and Mayborn are subject to the following material conditions precedent:

-- Sufficient MEL Shareholders having accepted the MEL Offer so that upon Completion, Kibo will own no less than 51% of the MEL Shares (calculated on a fully diluted basis); and

-- Sufficient Mayborn Shareholders having accepted the Mayborn Offer and all Mayborn Shareholders having waived any pre-emptive rights in respect of the Mayborn shares so that upon Completion, Kibo will own no less than 51% of the Mayborn Shares; and

-- The London Stock Exchange plc admitting the Consideration Shares to trading on AIM and the announcement of its decision in accordance with rule 12 and 13 of the AIM Rules;

   --    The JSE Limited admitting the Consideration Shares to trading on the JSE; 

-- The approval of the Nominated Advisor and the Designated Advisor of Kibo having been obtained in writing in respect of the matters for which their respective approvals may be required in accordance with the AIM Rules and the JSE Listings Requirements;

-- The receipt by the Kibo board of an independent, JORC or SAMREC compliant competent persons report, and the Fairness Opinion in respect of the value of the Mineral Assets; and

   --    The passing of the Resolutions at a forthcoming GM. 

Enquiries:

 
 Louis Coetzee    [phone]    Kibo Mining plc       Chief Executive 
                                                                     Officer 
 John Simpson     [phone]      Zeus Capital        Nominated Adviser 
                   1512                 Limited 
 Andreas Lianos   [phone]    River Group        Designated Advisor 
 Nick Bealer      [phone]   Cornhill Capital    Broker (Corporate 
                                        Ltd                         Broking) 
 
 Matt Beale       [phone]   Fortbridge           Public Relations 
 

Updates on the Company's activities are regularly posted on its website www.kibomining.com

General Background & Strategy

Kibo is a public company registered in Ireland (company number 451931). Its registered office is Kibo Mining plc, Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2, Ireland. Kibo was established in early 2008 to explore and develop mineral deposits in Tanzania, East Africa and was admitted to AIM on 27 April 2010 and AltX in South Africa on 30 May 2011.

The Board of Kibo is composed of highly experienced professionals spanning mineral exploration, mine development, mining finance and financial control of public companies. It is supported by well trained and highly motivated Tanzanian staff that operates from Kibo's exploration offices in Dar es Salaam and Mwanza.

The mineral assets of the Company comprise three projects in Tanzania - Haneti (nickel, platinoid elements and gold), Morogoro (Gold) and Lake Victoria (Gold) which give Kibo access to over 18,000 km(2) of early stage exploration licences in Tanzania's premier gold mining region, the Lake Victoria Goldfield and within the newly emerging gold exploration regions in eastern Tanzania.

Kibo's objective is to enhance Shareholder value through acquisition, exploration and development of mineral assets in Tanzania. This objective will be pursued primarily through active exploration, particularly drilling on its current projects and by using the Company's experience in Tanzania to acquire further quality mineral projects on competitive terms that can be quickly evaluated and taken to the next stage of development. Kibo will undertake continual risk assessment of its projects and take whatever actions it believes are necessary to ensure that these risks are mitigated.

This information is provided by RNS

The company news service from the London Stock Exchange

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