JOHANNESBURG (miningweekly.com) – Aim- and Alt-X-listed Kibo Mining has agreed to a three-week extension for the determination of the final development amount still due by China-based contractor Sepco III as part of a redefined agreement for the progression of Kibo’s Mbeya coal-to-power project (MCPP), in Tanzania.
The agreement, which was signed in August, allowed Sepco III to earn the right to become the sole bidder for the engineering, procurement and construction (EPC) contract to build the power plant component of MCPP in return for refunding 50% of the total development costs on the project incurred by Kibo to date.
A new deadline of October 14 will replace the initial September 22 deadline by which the parties would need to agree on the final development cost amount, the total refund amount and the payment due date.
This followed both parties’ underestimation of the amount of work involved in undertaking an independent audit of the development costs incurred over several years.
“In spite of a diligent effort made so far to get this done in time, the time allowed for this work proved to be inadequate,” Kibo said in an update to shareholders on Friday.
Kibo and the project’s definitive feasibility study consultants Tractebel Engineering will meet with Sepco III in Qingdao, China, on October 14 to assess and review Sepco III’s progress in preparing the EPC bid for the power component of the MCPP.
“Kibo is very pleased with Sepco III’s performance to date under the revised agreement announced on August 25, with all work streams related to the preparation of the EPC bid currently on or slightly ahead of schedule,” added Kibo CEO Louis Coetzee.
A delay in finalising this element of the agreement was not going to affect either party’s commitment and willingness to continue in parallel with the preparation and finalisation of the EPC bid, he said.
The agreement will see Sepco III awarded the EPC contract in December, subject to its bid proposal meeting the EPC specification defined by Kibo and Tractebel, along with several other conditions.
Sepco III’s first payment of $1.8-million was made on September 5.