Wrap Text
Unaudited Interim results for the six months ended 30 June 2016
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: IE00B97C0C31
("Kibo" or "the Company")
Unaudited Interim results for the six months ended 30 June 2016
Dated 27 September 2016
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO) the mineral
exploration and development company focused on coal, gold, nickel, and uranium projects in
Tanzania, is pleased to announce its unaudited half year results for the period ended 30 June
2016.
Highlights from the Chairman, Christian Schaffalitzky's statement:
- Key feasibility studies on the Mbeya Coal to Power project completed with strongly
positive results;
- Agreement reached with SEPCO III granting it sole bidder status for the MCPP EPC
contract for refund of 50% of development costs incurred by the Company to date;
- Agreement reached to convert Sanderson loan of GBP1.5m into a 2.5% equity interest in
the MCPP project company demonstrates confidence in the project;
- Recent appointments of reputable advisors and agreement with GE International has
given renewed momentum to MCPP as it approaches financial close;
- Plans well advanced to spin-out Imweru gold project into a new AIM & JSE listed
company, Katoro Gold Mining Limited, raise funds and commence mine development.
Chairman's Statement
Dear Shareholder,
I am pleased to present our accounts for the six-month period ending 30 June 2016 and report
on significant progress on our Mbeya Coal to Power ("MCPP") and Imweru gold projects. I
outline a summary of the principal operational and corporate developments during the period
below.
Operations - MCPP
The Company's primary focus was on advancing the various component feasibility studies and
stakeholder negotiations required to finalise the Integrated Bankable Feasibility Study ("IBFS")
for our flag ship Mbeya Coal to Power Project ("MCPP"). We made excellent progress on all
fronts resulting in the completion of a number of key technical studies and progress with
associated activities as follows:
- Detailed engagement with TANESCO and the Government of Tanzania on terms for the
negotiation of a Power Purchase Agreement;
- Consolidation of the MCPP Coal licence block by the acquisition of 3 new licence
areas;
- Completion of a Mineral Resource re-statement on the Mbeya coal deposit which
showed an 10.42% increase in the total resource over the previous estimate;
- Completion of the Definitive Power Feasibility Study and the Definitive Mining
Feasibility Study;
- Appointment of consultants to complete Environmental and Social Impact Assessment
("ESIA") and completion of Phase 1 of the ESIA (scoping study) which also included
implementation of a water availability study; and
- Initiation of EPC bid process for the construction of the project.
I am delighted with the strongly positive results from the key studies finalised during the period
which have continued to de-risk the MCPP by demonstrating improved financial, technical and
operational metrics and so enhancing its prospects for a successful financial close and
commencement of project construction.
I note that momentum on the MCPP has continued to gather pace during the third quarter 2016
with a highlight being the new agreement we recently signed with international China based
EPC contractor, SEPCO III. This agreement grants SEPCO III the right to be the sole EPC
bidder for the construction of the MCPP power plant in exchange for it refunding 50% of the
development costs incurred by Kibo to date on the project. We have already received the first
tranche of US$1.8 million of the development costs from SEPCO III. The awarding of the EPC
contract to SEPCO III will be contingent on it meeting the strict bid proposal specification laid
down by Kibo and its power plant consultants Tractabel Engineering Ltd and agreement being
reached with Kibo on the balance of the development costs to be refunded. The agreement with
SEPCO III was achieved as a result the outstanding results received from the power and mining
feasibility studies completed during the first half of 2016. The agreement is an
acknowledgement of the advanced development stage achieved with the MCPP and the
recognized quality of the project. Consequently, the tender process for awarding the EPC
contract to construct the power plant is now warranted and has begun.
I also note the recent appointment of UK law firm Norton Rose Fulbright as legal advisors on
the MCPP, the Memo of Understanding signed with US industrial conglomerate GE
International for the provision of technical services and assistance with bringing the project to
financial close and the appointment of Absa bank as financial advisors. These appointments
further reflect the increased momentum we now have behind this much needed energy project
in southern Tanzania.
Operations - Imweru
Apart from reaching the major developmental milestones on the MCPP discussed above, we
also initiated a major initiative on our Imweru gold project during the first half of 2016 in order
to release value for shareholders in this exciting gold project. We are well advanced in our
plans to spin-out this project into a new AIM and JSE listed company, to be called Katoro Gold
Mining Limited ("Katoro") and raise sufficient finance to develop a gold mine with an initial
production target of 50,000 oz. gold per annum within 12 to 18 months. While initially we had
reached heads of agreement, with Australian private company, Lake Victoria Gold, to include
its adjacent Imwelo project in Katoro, subsequent issues that came to light during our due
diligence review on Imwelo has meant that we will not now proceed with amalgamating the
two projects. Instead we will replace Imwelo with our Lubando gold project areas
("Geita East") which together with Imweru will be the initial projects in Katoro.
Imweru and Lubando together have a combined gold resource of approximately 700,000 oz. at
1-2 g/t. We plan to commence mine development at Imweru where there is an existing
JORC-compliant Mineral Resource of 14.9 Mt @ 1.1 g/t (550,000 oz. Au) and for which we have
already commenced a Mining Feasibility Study. The first part of this study, a Preliminary
Economic Assessment, was completed during 2015 and established the potential of Imweru to
warrant a mine development with a mine life of 7-10 years and the potential to expand the
resource and extend the mine life by another 6 years. Lubando, located 70km east of Imweru,
has a NI43-101 compliant Mineral Resource of 2,593,710 tonnes at 2g/t (168,300 oz. Au) and
together with adjacent Geita East projects properties at Busolwa and Pamba offer the
opportunity for further gold exploration and resource expansion that may lead to a mine
development being warranted in the longer term.
Operations - Other Projects
We have kept work to a minimum on our other projects at Haneti (nickel-PGM), Morogoro
(gold) and Pinewood (uranium) during 2016 to date as we focus resources on our coal and gold
development projects. Haneti remains drill ready to test initial nickel-PGM targets established
from earlier exploration. We continue to engage with Metal Tiger plc, our joint venture
partners on the Morogoro and Pinewood projects on the best way to extract value from these
projects and a number of initiatives are currently under consideration.
Corporate
The increased funding requirement of the Company to maintain momentum behind the MCPP
during the period was satisfied with an innovative loan arrangement with Sanderson Capital
Partners. The loan has proved to be a successful alternative to direct placings in the market in
minimising shareholder dilution and maintaining shareholder value in the MCPP pending
completion of the IBFS and financial close. The loan of GBP 1.5 million, arranged in March
2106, was drawn down in five tranches of GBP 300,000 each over a period of six months
(March-August inclusive). A total of 15,060,418 Kibo shares were issued at prices of between
4p to 5.25p in settlement of loan arrangement and drawdown fees over the loan term. I am
pleased to reflect on the re-negotiated terms for the payback of the loan which we recently
announced on the 1st September and which converted the loan to a 2.5% equity interest in the
MCPP for a conversion fee of GBP150,000 in Kibo shares. These attractive terms demonstrate
confidence by Sanderson in the project and also minimise dilution of your shareholding in
Kibo.
In addition to the shares issued during the January - June period pertaining to the Sanderson
loan discussed above in the amount of 12,902, 943 shares, a further 9,614,613 shares were
issued by the Company in settlement of an earlier Sanderson loan and as payment for technical
and corporate services to the Company. The total number of shares thus issued during the first
six months of 2016 was thus 22,517, 556 shares at prices of between 3.7p and 5.25p.
The Company also received re-payment of GBP522,800 in January 2016 being the delayed receipt
of the final proceeds from its February 2015 placing with Hume Capital Securities plc (funds
were locked down following Hume going into administration in March 2016).
In conclusion, I would like to thank our board and management for their on-going work under
the direction of CEO Louis Coetzee where we have again seen major critical milestones
reached on the MCPP since the start of the year.
Christian Schaffalitzky
Chairman
Unaudited Interim Results for the six months ended 30 June 2016
Unaudited condensed consolidated interim Statement of Comprehensive Income
For the six months ended 30 June 2016
6 months to 6 months to 12 months to
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue 4,184 - 44,181
Administrative expenses * (1,458,100) (851,620) (1,791,358)
Exploration Expenditure (866,967) (248,203) (1,454,216)
Reversal of Impairment - - 3,182,240
Bargain purchase on acquisition of - 185,698 -
subsidiary
Operating (loss)/ profit (2,320,883) (914,125) (19,153)
Investment and Other Income 480 234 196,315
(Loss)/ Profit before tax (2,320,403) (913,891) 177,162
Tax - - -
Loss for the period (2,320,403) (913,891) 177,162
Other comprehensive income:
Exchange differences on translating 46,378 69,704 16,366
of foreign operations, net of taxes
Total comprehensive (loss) / profit (2,274,025) (844,187) 193,528
for the period
(Loss)/ Profit for the period
attributable to (2,320,403) (913,891) 177,162
Owners of the parent (2,320,403) (913,891) 177,162
Non-controlling interest - - -
Total comprehensive (loss) income (2,274,025) (844,187) 193,528
attributable to
Owners of the parent (2,274,025) (844,187) 193,528
Non-controlling interest - - -
Basic (loss)/ earnings per share (0.007) (0.0029) 0.001
Diluted (loss)/ earnings per share (0.007) (0.0029) 0.001
Headline loss per share (0.007) (0.0036) (0.010)
*Administrative expenditure for the interim period ended June 2016 includes GBP947,418 relating to
financing activities specific to the borrowings raised throughout the current period.
Unaudited condensed consolidated interim Statement of Financial Position
As at 30 June 2016
6 months to 6 months to 12 months to
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 3,449 27,394 7,182
Intangible assets 17,596,105 14,413,865 17,596,105
Total non-current assets 17,599,554 14,441,259 17,603,287
Current assets
Trade and other receivables 56,718 844,143 550,692
Cash and cash equivalents 107,086 835,227 189,435
Total current assets 163,804 1,679,370 740,127
Total assets 17,763,358 16,120.629 18,343,414
Equity
Called up share capital 13,470,787 13,191,116 13,210,288
Share premium 26,495,318 25,791,441 25,782,519
Treasury shares (44,464) - (44,464)
Translation reserve (338,241) (331,281) (384,619)
Share based payment reserve 514,279 510,978 514,279
Retained deficit (23,861,789) (23,143,417) (21,541,386)
Total equity 16,235,890 16,018,837 17,536,617
Liabilities
Current liabilities
Trade and other payables 327,468 75,209 306,797
Current tax liability - 26,583 -
Borrowings 1,200,000 - 500,000
Total current liabilities 1,527,468 101,792 806,797
Total equity and liabilities 17,763,358 16,120,629 18,343,414
Unaudited Condensed Consolidated Statement of Changes in Equity
Share Share Treasury Share Foreign Total Retained deficit Total
Capital Premium shares based currency reserves
payment translation
reserve reserve
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 30 June 2015 (unaudited) 13,191,116 25,791,441 - 510,978 (331,281) 179,697 (23,143,417) 16,018,837
Profit / (loss) for the year 1,091,053 1,091,053
Other comprehensive income (loss) - (53,338) (53,338) (53,338)
exchange differences
Share options and warrants expired or (510,978) (510,978) 510,978
cancelled during the period
Share options issued during the current 514,279 514,279 514,279
period
Proceeds of share issue of share capital (25,292) (8,922) (34,214)
Issue of treasury shares 44,464 -44,464
Balance at 31 December 2015 (audited) 13,210,288 25,782,519 (44,464) 514,279 (384,619) 129,660 (21,541,386) 17,536,617
Profit / (loss) for the year - - - - - - (2,320,403) (2,320,403)
Other comprehensive income- exchange - - - 46,378 46,378 - 46,378
differences on translating of foreign
operations
Share options issued during the current - - - - - - - -
period
Proceeds of share issue of share capital 260,499 712,799 - - - - - 973,298
Balance as at 30 June 2016 13,470,787 26,495,318 (44,464) 514,279 (338,241) 176,038 (23,861,789) 16,235,890
(unaudited)
Unaudited condensed consolidated interim statement of cash flow
For the six months ended 30 June 2016
6 months to 6 months to 12 months to
30 June 30 June 31 December
2016 2015 2015
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
(Loss) / Profit for the period before taxation
(2,320,403) (913,891) 177,162
Adjusted for:
Foreign exchange loss 46,378 69,704 16,366
Depreciation on property, plant and equipment 3,683 699 21,685
Investment income (480) (234) (2,890)
Bargain purchase from business combinations - (185,698) (193,425)
Loss on disposal of subsidiaries - - 5,762
Impairment of Goodwill recognised - - 20,057
Non-cash items - - 29,554
Movement on exploration activities - 248,203 -
Share based payments 973,348 - 596,287
Reversal of impairment - - (3,182,240)
Operating income before working capital (1,297,474) (781,217) (2,541,236)
changes
(Increase)/ Decrease in trade and other 493,974 (832,587) (539,135)
receivables
(Decrease)/ Increase in trade and other payables 20,671 (138,314) 66,691
Cash flow from business combination - 161,367 -
Net cash outflows from operating activities (782,829) (1,590,751) (3,013,680)
Cash flows from investing activities
Expenditure on exploration activities - (248,203) -
Net cash flow from acquisition of subsidiaries - - 61,492
Net cash used in investing activities - (248,203) 61,492
Cash flows from financing activities
Proceeds from issue of share capital - 2,487,500 2,453,286
Proceeds from borrowings 700,000 - 500,000
Investment Income 480 234 2,890
Net cash proceeds from financing activities 700,480 2,487,734 2,955,176
Net increase in cash and cash equivalents (82,349) 648,780 2,988
Cash and cash equivalents at beginning of 189,435 186,447 186,447
period
Cash and cash equivalents at end of period 107,086 835,227 189,435
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended 30 June 2016
1. General information
Kibo Mining Plc ("the Company") is a public limited company incorporated in Ireland. The
condensed consolidated interim financial statements consolidate those of the Company and its
subsidiaries (together referred to as the "Group"). The Company's shares are listed on the AIM of
the London Stock Exchange and the Alternative Exchange of the JSE Limited (ALTX). The
principal activities of the Company and its subsidiaries are related to the exploration for and
development of coal and other minerals in Tanzania.
2. Statement of Compliance and Basis of Preparation
The condensed consolidated financial statements are for the six months ended 30 June 2016, and
have been prepared using the same accounting policies as those applied by the Group in its
December 2015 consolidated annual financial statements, which are in accordance with the
framework concepts and the recognition and measurement criteria of the International Financial
Reporting Standards (IFRS and IFRC interpretations) issued by the International Accounting
Standards Board ("IASB") as adopted for use in the EU ("IFRS, including the SAICA financial
reporting guides as issued by the Accounting Practices Committee, IAS 34 - Interim Financial
Reporting, the Listings Requirements of the JSE Limited, the AIM rules of the London Stock
Exchange and the Irish Companies Act 2015.
The condensed consolidated interim financial results are prepared in accordance with the going
concern principle under the historical cost basis as modified by the fair value accounting of certain
assets and liabilities where required or permitted by IFRS in the EU.
These condensed consolidated interim financial statements do not include all the notes presented
in a complete set of consolidated annual financial statements.
The comparative amounts in the consolidated financial statements include extracts from the
Company's consolidated annual financial statements for the period ended 31 December 2015.
These extracts do not constitute statutory accounts in accordance with the Irish Companies Acts
2015. All monetary information is presented in the presentation currency of the Company being
Pound Sterling.
3. Operating (loss)/ profit
Administrative expenditure for the interim period ended June 2016 includes GBP947,418 relating to
financing activities specific to the borrowings raised throughout the current period (2015 financial
period GBP51,000).
4. Loss per share
Basic, dilutive and Headline loss per share
The basic and weighted average number of ordinary shares used in the calculation of basic
earnings per share is as follows:
6 months to 6 months to 12 months to
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Loss for the year attributable to equity
holders of the parent (2,320,403) (913,891) 177,162
Weighted average number of ordinary
shares for the purposes of basic and
dilutive loss per share 338,524,702 305,438,536 316,986,334
Basic loss per share (0.007) (0.0029) 0.001
Dilutive loss per share (0.007) (0.0029) 0.001
6 months to 6 months to 12 months to
Reconciliation of Headline loss per share 30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Loss for the year attributable to equity holders (2,320,403) (913,891) 177,162
of the parent
Impairment of Goodwill - (185,698) 20,057
Loss on disposal of subsidiaries - - 5,762
Bargain purchase from acquisition of - (193,425)
subsidiaries
Reversal of Impairment of Intangible Assets - - (3,182,240)
Headline loss per share (2,320,403) (1,099,589) (3,172,684)
Weighted average number of ordinary shares 338,524,702 305,438,536 316,986,334
for the purposes of headline loss per share
(revised)
Headline loss per share (0.007) (0.0036) (0.010)
Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary
shares in issue during the period and is based on the earnings attributable to ordinary shareholders,
after excluding those items as required by Circular 2/2015 issued by the South African Institute of
Chartered Accountants (SAICA).
5. Called up share capital and share premium
Authorised ordinary share capital of the company is 1,000,000,000 ordinary shares of EUR0.015 each
and 3,000,000,000 deferred shares of EUR0.009 each.
Detail of issued capital is as follows:
Number of
Ordinary Nominal Share Treasury
shares Value Premium Shares
GBP GBP GBP
Balance at 31 December 274,238,757 12,591,750 23,903,307 -
2014
Shares issued in period (net 56,689,957 618,538 1,879,212 (44,464)
Balance at 31 December 330,928,714 13,210,288 25,782,519 (44,464)
2015
Shares issued in period (net 22,517,556 260,499 712,799 -
Balance at 30 June 2016 353,446,270 13,470,787 26,495,318 (44,464)
6. Segment analysis
IFRS 8 requires an entity to report financial and descriptive information about its reportable
segments, which are operating segments or aggregations of operating segments that meet specific
criteria. Operating segments are components of an entity about which separate financial
information is available that is evaluated regularly by the chief operating decision maker. The
Chief Executive Officer is the Chief Operating decision maker of the Group.
Management currently identifies two divisions as operating segments - mining and corporate.
These operating segments are monitored and strategic decisions are made based upon them
together with other non-financial data collated from exploration activities. Principal activities for
these operating segments are as follows:
30 June 2016 Mining and 30 June 2016
Exploration Corporate (GBP)
Group Group Group
Revenue 4,184 - 4,184
Administrative cost - (1,458,100) (1,458,100)
Exploration expenditure (866,967) - (866,967)
Investment and other income - 480 480
Profit/ (Loss) after tax (862,783) (1,457,620) (2,320,403)
30 June 2015 Mining and 30 June 2015
Exploration Corporate (GBP)
Group Group Group
Revenue - - -
Administrative cost - (851,620) (851,620)
Exploration expenditure (248,203) - (248,203)
Investment and other income 234 185,698 185,932
Tax - - -
Profit/ (Loss) after tax (247,969) (665,922) (913,891)
30 June 2016 30 June 2016
Mining Corporate (GBP)
Group Group Group
Assets
Segment assets 17,751,867 11,491 17,763,358
Liabilities
Segment liabilities 198,790 1,328,678 1,527,468
Other Significant items
Depreciation 3,683 - 3,683
31 December 2015 31 December
Mining Corporate 2015 (GBP)
Group Group Group
Assets
Segment assets 17,816,927 526,487 18,343,414
Liabilities
Segment liabilities 139,905 666,892 806,797
Other Significant items
Depreciation 21,685 - 21,685
7. Unaudited results
These condensed consolidated interim financial results have not been audited or reviewed by the
Group's auditors.
8. Dividends
No dividends were declared during the interim period.
9. Board of Directors
There were no changes to the board of directors during the interim period, or any other
committee's composition.
10. Subsequent events
No significant events have occurred in the period between the reporting date and the date of this
report.
27 September 2016
By order of the board:
Christian Schaffalitzky Chairman (Non-Executive)
Louis Coetzee Chief Executive Officer (Executive)
Noel O'Keeffe Technical Director (Executive)
Andreas Lianos Chief Financial Officer (Executive)
Lukas Maree Non-Executive Director
Wenzel Kerremans Non-Executive Director
Company Secretary: Noel O'Keeffe
Auditors: Saffery Champness
71 Queen Victoria Street
London EC4V 4BE
Broker: Beaufort Securities Limited
131 Finsbury Pavement
London EC2A 1NT
United Kingdom
UK Nominated Adviser: RFC Ambrian Limited
Level 28, QV1 Building
250 St Georges Terrace
Perth WA 6000
Corporate and Designated Adviser: River Group
211 Kloof Street
Waterkloof
Pretoria, South Africa
Date: 27/09/2016 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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