Review the provided excerpts from 2015 Annual Report for Kibo Mining PLC (in particular the discussion of the mining component of the MCPP) and respond to the following questions.

1) Based on the PAYBACK PERIOD analysis, does this seem to be an attractive investment opportunity? Based on the payback period provided and values for estimated sales and margins, what is the approximate equity investment necessary for this project?

2) Based on the NET PRESENT VALUE (NPV) analysis, does this seem to be an attractive investment opportunity? What appear to be the pertinent information items for the NPV analysis?

tenement holdings in order to focus resources on those areas the Company Uganda AN believes offers the best opportunities Kampala Kenya Kisumu Dadaab for exploration success. Entebbe Nakuru Migol Olenguruones Nairobi Lake Victoria (Gold) Kitt Mbeya Coal to Power Project (MCPP) Project Area 2015 saw further progress for the 250 to Rwanda Bukavu Butare Company on completion of an Arusha Mating Integrated Bankable Feasibility Study Burundi Imweru (Gold) Project Usange Mombasa (IBFS) on the MCPP. The MCPP is the 450.00 Company's flagship project located in Kigoma Hanet (NICU-PGM) kazuramimba Project southern Tanzania, 70 kilometres north Kalemie Dodoma Zanzibar of the regional town of Mbeya. Over 650.00 O Tanzania Dar es Salaam the last couple of years Kibo has made steady progress towards developing Mboya (Coal) Ruaha National Park Morogoro (Gold) Project Area this key component of Tanzania's 850.0 Mboya Coal to Power Project Project developing energy infrastructure, which Abeys Pinewood (Uranium) will address present and expanding Project Area electricity requirements. Kibo enjoys 1050 00 Kasama Chinsai Canned strong Government support for the Mansa Jumpi Mchoral Tunduru zuzu project, which has already been pashil 440 Niassa National included in the country's National kllornetres 3460 80 3680.00 Reserve 3880.00 40ED Energy Strategy. Regional Distribution of Kibo's Projects within Tanzania KIBO MINING PLC ANNUAL REPORT AND ACCOUNTS 2015 VIKIBOMINING investigating in detail four mining options modelled to further characterise the coal properties to ensure from this earlier report. These options comprised they are appropriate to the power station design. different combinations of free dig mining, use of The results from the geotechnical drilling were Surface Miner, crushing, no crushing, owner operated announced in January 2016 and confirmed that the and contract mining. The results demonstrated further final pit slope angles modelled for the mine design are improved technical and financial parameters across all well within safety requirements and in fact provided options as follows: a further opportunity to optimize pit design. The results of the metallurgical testing were also extremely . Modified terrace mining method applicable with positive and confirmed that the coal quality was well overburden stripping by free dig and coal seam within technical specifications required by the power mining using continuous surface miner eliminating plant design, and suitable as a long-term fuel source the need for explosives; to power the Mbeya Power Plant. Significantly the test results showed that the coal's ash and sulphur . Processing limited to de-stoning of raw coal product content was at similar levels to coal used for thermal with no washing required which significantly reduces environmental impact of run-off and associated power generation in Southern Africa, and suitable for treatment to keep sulphur dioxide emissions well environmental mitigation costs; within international emission standards. The drilling . River diversion shown not to be required with also provided additional data to assist with a re- consequent lesser environmental impact on site statement of the Mbeya Coal Resource, and this re- area; statement has recently been published (April 2016). This has seen Increase in total Mineral Resource from . Annual estimated coal revenues of approximately $48 million at all in cost margins of *49% to 62% 109.23 million tonnes (Mt) to 120.793 Mt representing generating profit margin of between US$24 million* a 10.42% increase over the previous Mineral Resource to US$ 27 million; with 91% of the resource now in the Indicated and Measured categories. . Capital Investment of US$38 million* to $73 million, NPVs of US$211* million to US$244 million (discount Based on an integration of all feasibility study reports rate of 5.5%) and payback period of 2.6* to 3.65 available to the end of the third quarter 2015, Kibo years and; announced the results of a financial optimisation study on the mining component of the MCPP in October . IRR of 54% for preferred option. 2015. This work was completed in collaboration with its appointed mining DFS consultant Minxcon Projects. "These first figures refer to the preferred mining option selected from the four considered in the PFS. The following updated financial metrics based on the preferred surface miner contractor option with optimal Following the positive outcomes of the Mining PFS, gearing (70% debt/30% equity), mine life of 28 years the Company immediately commenced the first phase and lending rate of LIBOR +5% for the project were of the Mining DFS. The major part of this comprised obtained: a geotechnical drill programme primarily designed to test ground conditions within and around the planned . Annual estimated coal sale revenues of US$48.4 open pit location. The drill programme also doubled as million based on an annual coal production of 1.48 a means to obtain coal samples for metallurgical testing million tonnes; VII KIBO MINING PLC ANNUAL REPORT AND ACCOUNTS 2015KIBOMINING . All-in cost margin ranges from 47.9% to 48.1%. appointment of Tractebel Engineering ("Tractebel"), Applying the aforementioned all-in cost margin, a Europe based international engineering services Kibo interprets that annual earnings before interest company (part of Engie Group) to conduct the power and tax ("EBIT") of between US$ 23.5 million to US$ PFS following a tender process. The commercial 23.6 million will be generated; arrangement negotiated with Tractebel allows Kibo to . Applying a real discount rate of 5.51%, the best defer the majority of fees to a staged schedule starting estimated Net Present Value ("NPV") of free cash when the PFS is complete and ending when the MCPP flow to equity ranges between US$ 214 million and reaches financial close. US$ 219 million; Another important preparatory work stream for input . Equity IRR (leveraged) range between 131% and to the MCPP IBFS during 2015 has been on-going 146%, with a Project IRR of 54%; negotiations with relevant Tanzanian Government . Cash return on capital invested ranging between Departments and Utilities on the framework and terms 726% and 732%; and of reference under which a Power Purchase Agreement and Grid Connection Agreement will be concluded. . Project Payback Period before loan of 2.6 years A noteworthy development in this regard was the announcement of a Memorandum of Understanding The financial profile of the mining component of the ("MOU") between the Company and TANESCO MCPP summarised above shows improvement over (Tanzania's state owned electricity supply company) previous estimates, and makes it an attractive option in January 2016. This MOU lays out the mutually for project level loan financing at competitive rates, particularly given the high IRR and short payback period. agreed principles within which a Power Purchase Agreement ("PPA") for the MCPP will be negotiated. In April 2015 the Company announced a Joint The mutually agreed PPA will form a key input for both the power DFS and the final IBFS in determining the Development Agreement ("JDA") with China based EPC commercial framework under which the linked mine contractor, SEPCO III, a major international power plant and power plant will operate. This MOU was followed construction contractor. Under the terms of the JDA, SEPCO Ill will co-fund completion of the DFS during 2015 by a recent meeting between Kibo management and Tanzania's Minister of Energy & Minerals which senior and have the option to participate as a minority equity holder and sole EPC contractor to the project during representatives from key parastatal stakeholders (TANESCO, National Development Corporation and the follow-on construction phase which is scheduled to State Mining Corporation) in the project also attended. be completed by the end of 2019. This JDA which was The Minister reiterated his support for the MCPP as finalised in July 2015 represents a strong independent an important part of the Government's strategy to endorsement of the MCPP as an attractive energy address the country's power deficit and instructed all investment by a major global player in the thermal coal attendees to work pro-actively with Kibo to advance plant construction field. the project. In conjunction with advancing the mining component of the MCPP DFS, the Company has also made significant progress on the power plant component during 2015 following the completion of a power PFS study in late 2014. In late 2015, Kibo announced the KIBO MINING PLC ANNUAL REPORT AND ACCOUNTS 2015 VIIIMag Satellite Regional Airport License Legend N Power Line License Application License Offer lasts Chala 17530.08 - -+ Railway Line License Current mage Came urbawanga take Brains Mbeya Coal to Power Project Unanda Resource & Proposed Power Plant location 550.00 Nesdo 9530 00 -hadumfa Ugangs Lapcha Kasam 100 760 00 9340.00 Moeta kilometres Location of MCPP. Regional Infrastructure and Kibo tenement status at 31 December 2015