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KIBO MINING PLC - Shareholder and Trading Update, change of year end

Release Date: 12/12/2012 11:05
Code(s): KBO     PDF:  
Wrap Text
Shareholder and Trading Update, change of year end

Kibo Mining Plc
(Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B61XQX41
(“Kibo” or “the Company”)


Dated: 12 December 2012



           SHAREHOLDER AND TRADING UPDATE, CHANGE OF YEAR END


   •   Completion of the 100% acquisition of Mzuri Gold Limited and Mayborn Resources
       Limited which re-position Kibo as a major multi-commodity mineral explorer and developer
       in Tanzania;

   •   Negotiation of JV Agreement with Asian Conglomerate progressing well based on a re-
       negotiated MOU which will see Kibo assume full operational control for the Rukwa coal
       development;

   •   Promising exploration results from completion of Stage 1 exploration projects at Lake
       Victoria, Haneti and Morogoro have defined a number of drill targets for near term testing
       in 2013;

   •   Proposed JV agreement with Votorantim on the Haneti project nears finalisation with
       mutually agreed work programme to the value of $0.8M (£0.5M) to commence early in
       2013. Work programme includes budget for drilling on initial targets based on work carried
       out by Kibo to date.

Kibo Mining plc (“Kibo” or the “Company” (AIM: KIBO; AltX: KBO), the mineral exploration and
development company focused on gold nickel, coal and uranium projects in Tanzania is pleased to
provide shareholders with the following Shareholder and Trading Update on the position of the
Company as at the end of September 2012. The Company also wishes to announce that it has changed
its financial year-end to December 31 (from 30 September) in order to align the Company’s year-end
with the year-ends of its newly acquired subsidiaries (together, the “Group”).


Louis Coetzee, CEO of the Company, commented today:

The acquisitions of Mzuri Energy Limited and Mayborn Investments (Pty) Limited, which were
formally completed on 1 October 2012, have added significant coal and uranium assets to Kibo’s
Tanzanian commodity portfolio and re-position the Company as a major operator in the Tanzanian
mineral exploration and development space. We look forward to unlocking the value in our enviable
ground position in Tanzania which I believe has already begun with the promising results emerging
from our exploration programmes implemented during the period. This release provides an update on
the activities of the expanded Kibo Group.

General

Activities during the first six months of the period under review were reported in the Company’s
previous Interim Half Year Results covering the period to 31 March 2012. The most significant item
was the announcement of an agreement to acquire a minimum of 51% interest in a Canadian company,
Mzuri Energy Ltd (“MEL”) and 100% interest in a South African company, Mayborn Resource
Investments (Pty) Ltd (“Mayborn”). We are pleased to report that on the 1st October 2012, these
acquisitions were formally completed to the extent that Kibo acquired 100% of both companies. These
acquisitions have brought with them substantial Tanzanian coal and uranium assets which, together
with the company’s existing large gold and base metal portfolio, re-position Kibo as a major multi-
commodity mineral explorer and developer in Tanzania.

We would like to welcome our new Shareholders to Kibo following the MEL and Mayborn
acquisitions together with our new Board members, Cecil Bond and Bernard Poznanski who were
appointed during the reporting period. Both gentlemen bring a wealth of global experience in the
mineral exploration and mining sector to the Company would also like to thank William Payne who
resigned from the Board during the period for his invaluable contribution to the development of Kibo
to date.

Exploration

In conjunction with our busy schedule on the corporate activity front during the period, we also
completed our Stage 1 exploration programme on our Lake Victoria, Morogoro and Haneti projects.
The results of this work were reported in our Operational Update dated 21 June 2012 (released at the
same time as our last Interim Report) and more recently in an Exploration Update dated 14 November
2012. The exploration results demonstrate the significant progress that we have made to date in
fulfilling our exploration objectives of defining a number of drill ready targets for testing across all
projects during Stage 2 exploration, which will now commence in 2013. We are particularly pleased at
the results emerging from our work at Haneti (nickel, gold and PGMs) and Morogoro South (Gold)
where we have defined robust drill targets in these non-traditional but increasingly attractive
prospective regions of Tanzania.

At Haneti, our exploration team has been working closely with Votorantim during the period on
planning the next phase of exploration. As previously reported, Kibo has an MOU in place with
Votorantim, a major Brazilian industrial group with significant experience in nickel exploration and
mining. A full JV Agreement (“JVA”) is in the late stage of finalisation, which requires Votorantim to
expend £2.7M over a three-year earn-in phase to earn a 50% interest in the project. A schedule of
exploration activities, which includes drilling of initial targets, has been agreed and an initial $0.8m
(£0.5m) exploration programme will commence in early 2013 following signing of the JVA, which we
anticipate will be complete before the end of 2012.

Corporate

On the 11th May 2012, Kibo suspended trading in its shares on AIM and the JSE in order to facilitate
the acquisitions of MEL and Mayborn. These transactions were deemed to constitute a reverse
takeover of the company under AIM and JSE regulations. On the 15th August 2012, with the
publication of a Re-Admission Document and Notice of EGM, trading in Kibo shares recommenced
on AIM and the JSE. On the 6 September 2012, at an EGM, Kibo Shareholders approved the 100%
acquisitions of MEL and Mayborn and trading in the enlarged share capital of the company
commenced on the 7th September 2012. The acquisitions were formally completed on the 1st October
2012. Kibo is now integrating these companies and their significant asset portfolios in to the Group
which we believe, together with our existing gold and base metal assets puts us in an excellent
position to generate value for shareholders over the next few years. Kibo has already attracted interest
from a major Asian Conglomerate (“AC”) in our flagship 109 million tonne (JORC-compliant Inferred
Mineral Resource), Rukwa coal deposit and an MOU is in place for the development of a coal mine
and associated mouth-of-mine coal fired power plant. Negotiations to finalise a comprehensive JV
Agreement with the AC are proceeding well and are now based on a re-negotiated MOU, which will
see Kibo assume full operational control to advance the Rukwa coal project.

Global markets have been volatile during the period under review and this trend has continued on
towards the end of 2012. A general theme has been a flight from higher risk investments and like
many of our peers in the junior exploration sector we have not been immune from this trend. It is
worth noting that only one new AIM IPO came to the market during the 2nd and 3rd quarters of 2012
and equity funds raised on AIM during these quarters of £96m and £84m respectively were the lowest
quarterly amounts since Q3 2004 (Ernst & Young, Mining Eye reports for Q2 & Q3 2012). In this
environment our share price has performed poorly and we believe its current level does not reflect the
inherent value in the company given the quality of our mineral assets, our multi-commodity focus and
our operational capacity in Tanzania. Weak market conditions have also impacted on our ability to
raise funds and the support of the Mzuri Group Ltd (“Mzuri”), our largest shareholder is much
appreciated during the period. Mzuri fully subscribed to a £750,000 Placing in February 2012 and this
has allowed us to make significant progress on our early stage exploration programmes in Tanzania
(refer Exploration section below). As we near the end of 2012, securing further funding to advance our
exploration and development programmes is proving challenging. However, we are confident that we
can succeed based on our recent achievement in securing attractive mineral assets, joint venture
partners and demonstrating exploration progress on our licences.

In view of the challenging funding environment and in order to expand our funding options, we took
the opportunity during the period to put in place a standby equity distribution agreement (“SEDA”)
with YA Global Masters (SPV) Ltd. I am confident that this facility will be a useful addition to our
funding options as we progress, particularly within the context of an improving market and increased
trading in the Company’s shares.

Change of Year End and Summary Financial Information to 30 September 2012

In order to align the year ends of the various companies within the expanded Kibo Group following
the MEL and Mayborn acquisitions, Kibo has decided to change its financial year-end from 30
September to 31 December. As such, the next audited accounts for the Company will be prepared for
the fifteen months to 31 December 2012. These accounts will include the full consolidation of the
acquisitions of MEL and Mayborn as fully described in the re-admission document dated 15 August
2012 and the Reverse Take-Over approved by shareholders on 6 September 2012.

As an interim update, a summary of key financial information on the Company and the Group to 30
September 2012 is provided in this release. This financial information has been extracted for
information purposes only from Kibo’s management accounts for twelve months ended 30 September
2012 and includes pro forma consolidated information on MEL and Mayborn, whose acquisitions
were not formally completed until 1 October 2012. The financial information does not constitute
interim financial statements as defined under International Financial Reporting Standards, however it
should be read in conjunction with the audited consolidated financial statements of the Group for the
year ended 30 September 2011, which were prepared under International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”) as well as the Re-admission document
dated 15 August 2012.

On a pro forma consolidated basis including MEL and Mayborn, the unaudited cash balance of the
Group as at 30 September was approximately GBP400 000. This includes cash and cash equivalents of
Kibo on 30 September, was GBP169,169 with balance coming from MEL and Mayborn.

The Group had no income for the period and expenditure by Kibo totalled GBP 555 691 of
expenditure which equates to a loss per share of 0.14 pence per share calculated on the weighted
number of ordinary shares of 409,699,183 before the acquisitions of MEL and Mayborn (the
“Acquisitions”) as discussed above. In addition, MEL and Mayborn had expenditure of approximately
USD500 000 during the period from 31 December 2011 (the date of its last accounts) to 30 September
2012, including exploration expenditure of approximately USD250 000.

The intangible assets of Kibo before taking into account the Acquisitions discussed above and more
fully disclosed in the Re-admission document, was GBP 5,522,066.

The current assets of Kibo were GBP 1.9 million which includes capitalised prepayments related to
the Acquisitions totalling GBP1.7 million, these costs will be expensed on consolidation of the
Acquisitions on 1 October 2012, the effective date of the Acquisitions.
Group current liabilities were GBP2.5 million, which include approximately GBP1.6million of costs
relating to the Acquisitions. These costs represent substantially all of the costs associated with the
Acquisitions and they will be brought into the Consolidated Statement of Comprehensive Income in
the financial statements to 31 December 2012 from the effective date of acquisition, being 1 October
2012. The Group has no long term liabilities.

Kibo’s authorised share capital is 3,000,000,000 ordinary shares of 0.01 euro each. The issued number
of shares at September 30, 2012 (before the Acquisitions) was 415,129,511. The Acquisitions of MEL
and Mayborn, which were approved by shareholders in September and formally completed on 1
October 2012, were financed through the issue of 706,964,400 ordinary shares of €0.01 at a value of
2.5 pence each. This expanded the issued share capital of Kibo to 1,122,093,911 ordinary shares.

Enquiries

  Louis Coetzee    +27 (0)83 2606126       Kibo Mining plc      Chief Executive Officer

  Stuart Laing     +61 8 9480 2506         RFC Ambrian          Nominated Adviser
                                           Limited

  Andreas          +27 (0)83 4408365       River Group          Corporate Adviser and
  Lianos                                                        Designated Adviser (AltX)

  Matthew          +44 (0)207 7968829      Northland Capital    Broker (Assistant Director,
  Johnson                                                       Corporate Finance)

  Nick Bealer      +44 (0)207 7109612      Cornhill Capital     Broker (Corporate Broking)
                                           Ltd

  Matt Beale       +44 (0)7966 389196      Fortbridge           Public Relations

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
Company suspended itself from AIM during the period 11 May to 14 August 2012 to facilitate
two corporate acquisitions that significantly increased its mineral assets in Tanzania. It was re-
admitted to AIM and the JSE on 15 August 2012 and shareholder approval for the acquisitions was
obtained the 6th September 2012 at an EGM. The acquisitions were formally completed on the 1st
October 2012.

The Board of Kibo is composed of professionals whose experience include mineral exploration,
mine development, mining finance, tax, law, mergers and acquisitions, and financial control of
public companies. It is supported by a competent and motivated Tanzanian staff that operates from
Kibo's operations office in Dar es Salaam.

The mineral assets of the Company now comprise five projects in Tanzania - Haneti (Nickel, PGE
and Gold), Morogoro (Gold), Lake Victoria (Gold), Rukwa (Coal) and Pinewood (Coal &
Uranium) which give Kibo access to 38,000 km2 of early stage exploration licences in
Tanzania's premier gold mining region, the Lake Victoria Goldfield, within the emerging gold
exploration regions in eastern Tanzania and uranium & coal regions in south-western Tanzania.

The acquisitions of Mzuri Energy and Mayborn have added the advanced Rukwa thermal coal
project and the Pinewood uranium exploration project to Kibo’s portfolio of mineral projects in
Tanzania.
The Rukwa and Pinewood projects will provide Kibo shareholders with exposure to an
attractive portfolio of strategic energy assets in Tanzania. Importantly, they are situated within
and close to the Mtwara Corridor, an area where the Tanzanian Government has committed to
significant infrastructure development and which has seen recent multi-million dollar investment in
coal and coal-fired power stations and uranium exploration.

The Rukwa project is substantially more advanced than Kibo’s existing exploration projects, with a
significant Mineral Resource of thermal coal already defined. This provides nearer term
development and commercialisation potential, complementing the earlier stage existing projects
held by Kibo. This is further supported by the memorandum of understanding that has already
been entered into with a major Asian conglomerate for the development of a coal mine and mine-
mouth coal-fired power plant based on the Rukwa project.

In addition, the Pinewood project encompasses a significant ground holding of prospective Karoo
sequence sedimentary rocks. These sediments are attracting considerable interest from international
companies exploring for uranium and coal mineralisation following some notable discoveries in
recent years.

Kibo's objective is to build shareholder value in a sustainable manner. This objective will be
pursued primarily through active exploration of its own projects and by using the Company's
experience in Tanzania to acquire attractive exploration and development assets on competitive
terms that can be moved swiftly up the value curve by using the company’s own skills base whilst
also seeking to benefit from strategic collaborative relationships with industry leaders who have
special skills and competencies within their chosen fields of focus. Kibo will undertake continual
risk assessment of its projects and take whatever actions it believes are necessary to ensure that
these risks are mitigated.

QUALIFIED PERSON STATEMENT
CERTIFICATES OF QUALIFICATIONS
To accompany the report dated 19th April 2012 and entitled “Independent Technical Report for the
Rukwa Coal Project, Mbeya Region, United Republic of Tanzania”.
   1. I am responsible for preparing the aforementioned independent technical report (or“ITR”);
   2. I am a Director and Principal Geologist with the firm GEMECS (Pty) Limited (“GEMECS”)
       with an office at Visiomed Office park, 269 Beyers Naude Drive Randburg Johannesburg,
       South Africa;
   3. I am a graduate of the University of the Free State (former University of The Orange Free
       State) Bloemfontein, , Pietermaritzburg with a BSc Degree in Geology (1972). I graduated
       with a Master of Science (MSc) at the University of the Free State (1976). I have practised
       my profession continuously since 1975;
   4. I am registered as a Professional Natural Scientist (Geological Science) with the South
       African Council for Natural Scientific Professions (SACNASP), Registration No 400066/98.;
   5. I am a Fellow Member of the Geological Society of South Africa (FGGSA);
   6. I have not received, nor do I expect to receive, any interest, directly or indirectly, in the
       Rukwa Coal Project.
   7. As of the date of this certificate, to the best of my knowledge, information and belief,this
       updated ITR contains all scientific and technical information that is required to be disclosed
       such as to make this ITR complete and not be misleading in any way;
   8. I have read National Instrument NI 43-101 and Form NI 43-101F1 and by reason of my
       education and past relevant work experience, I fulfil the requirements to be a “Qualified
       Person” for the purposes of National Instrument 43-101. This ITR has been prepared in
       compliance with National Instrument 43-101 and Form 43- 101F1;
   9. I as a Qualified Person, am independent of Mzuri Energy Limited and Rukwa Coal Limited
       as defined in 1.4 of National Instrument 43-101
   10. I have personally inspected the Rukwa prospecting areas located in Mbeya District,Tanzania
       during a site visit conducted in June 2010. I visited the property for a period of 2 days.
   11. Until my site visit during June 2010 I had no previous involvment in the Rukwa Coal
       Project.
   12. GEMECS was retained by Rukwa Coal to prepare an updated independent technical
   13. report for this project in accordance with National Instrument 43-101. The preceding report
       is based on our review of project files and information provided by Rukwa and discussions
       with personnel of Rukwa;

Dated the 19th day of April 2012
CD van Niekerk Pr.Sci.Nat.
Director and Principal Geologist


12 December 2012

Johannesburg

Corporate and Designated Adviser
River Group

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