Tanzania: Miner Seeks Second Joint Venture Project in Tanzania

Posted on : Thursday, 22nd January 2015

 KIBO Mining and fellow London-listed miner Metal Tiger are set to deepen their relationship through a joint venture at gold prospect Morogoro in Tanzania.  

Metal Tiger recently became a shareholder in Kibo when it acquired half of shares of its Pinewood uranium deposit in Tanzania. The two companies are now closing on a deal that will see Metal Tiger take 50 per cent of the Morogoro South gold exploration portfolio of 18 licences and assorted applications and tenders that cover 1,400 sq km.

Subject to completion of due diligence by 20 February, the memorandum of understanding if Metal Tiger pays US$800,000 in licence fees and exploration costs over the next three years it maintain its holding in Morogoro South at 50 percent.

Kibo will also issue Metal Tiger with warrants over 10mln shares exercisable at 9p each, a price that rises to 19p if the shares rise to 27p. Louis Coetzee, Kibo's chief executive, said: "When established, this JV will mean that all five of the company's projects will be active and operational, which puts the company in a superb position.

"We are also pleased to agree the warrant component of the JV, including the key price escalator clause. "The working arrangement with Metal Tiger has already seen £450,000 cash with no expenses, injected directly into Kibo Mining in the last 7 weeks.

"This additional cash has further strengthened our financial position which is extremely helpful as we engage with third parties to conclude commercial transactions on our projects."

Morogoro South is in the Goldfield emerging within 90Km of the city of Morogoro.Kibo's flagship project is the combined Rukwa coal mine and power station project in Tanzania. Shore Capital said that while it does not regard Morogoro portfolio as particularly prospective, further exploration wouldn't hurt.

The fact that licence payments and exploration will be funded by Metal Tiger is a good thing for Kibo, it added.