Wrap Text
Unaudited Interim results for the six months ended 30 June 2017
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 2017
Dated 26 September 2017
Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO) the mineral exploration and
development company focused on coal, gold, and nickel projects in Tanzania, is pleased to announce its
unaudited half year results for the period ended 30 June 2017.
Highlights from the Chairman, Christian Schaffalitzky's statement:
- Kibo wins Innovation Project Development Deal of the Year 2017 at recent General Electric
awards ceremony;
- Reaffirmed strong Tanzanian Government support for the MCPP in the midst of on-going energy and
mining sector reforms;
- ESIA and Mining Licence Application (MCPP) at advanced stage in certification/approval
process;
- MOU to govern the future development of the MCPP in general and PPA in particular submitted
by TANESCO to the Attorney General for review and final execution copy expected shortly;
- Successful divestment of Imweru & Lubando gold projects to recently AIM listed Katoro Gold
PLC in which the Company retains an initial 57% interest; and
- Extended drill programme at Imweru by Katoro completed ahead of schedule and within budget.
ESIA and PFS at advanced stage of execution.
Chairman's Statement
Dear Shareholder,
I am pleased to present our accounts for the six-month period ending 30 June 2017 and report on steady progress
on our flagship Mbeya Coal to Power ("MCPP") project in particular. A testament to this progress is the recent
award of Innovative Development Project Deal of the Year 2017 to Kibo for the MCPP by General Electric at
its awards ceremony in early September. During the period, we also successfully completed a reverse takeover
transaction with Opera Investments on our Imweru and Lubando gold projects. This transaction was concluded
in May with the divestment of these projects to AIM-listed Katoro Gold PLC in which Kibo holds an initial 57%
equity interest. I outline a summary of the principal operational and corporate developments during the period
below.
Operations - MCPP
The first half of 2017 ("H1 2017") has witnessed on-going governmental changes within the energy and mining
sectors in Tanzania that have presented some challenges to the Company as it seeks to conclude negotiations on a
Power Purchase Agreement ("PPA") and other prerequisite government approvals to commencing Financial
Close on the MCPP. In January, the Tanzanian state power company TANESCO underwent management,
restructuring and tariff reviews as part of the on-going reform of the energy sector in the country while at the end
of June, major legislative changes to the mining sector were enacted. The full practical implications of these
changes still have to emerge. However, I believe that the robust financial, technical and operational fundamentals
of the MCPP are more than capable of tolerating these energy and mining sector reforms and in some cases, may
actually benefit from them. This view is shared by the Tanzanian government which has recently reaffirmed its
support for the MCPP as it sees it as a potential major contributor to addressing the deficit in the country's power
generating capacity as well as providing the focus for much needed socio-economic development in southern
Tanzania.
In the above context, the Company continued to push ahead on a number of fronts with regard to the continued
development of the MCPP during H1 2017. The completion of the Integrated Bankable Feasibility Study
("IBFS") and acceptance by the relevant Tanzanian authority of the Environmental & Social Impact Assessment
("ESIA") were achieved during January. Final certification for the ESIA is now awaited and we understand that
this is at an advanced stage in the approval process. With an eye to developing a diversified internal market for its
coal product, the Company signed an MOU with local cement producer, Mbeya Cement to develop a strategic
regional collaboration and reciprocal supply of materials agreement. In summary, this commits the companies to
explore business collaboration whereby Kibo will supply Mbeya Cement with coal, fly ash and power for its
cement plant while Mbeya Cement will supply cement for the construction of the Mbeya coal and power plants.
The companies also committed to collaborate on seeking adequate supply of limestone for their respective
operations and to explore how they could work together with regional development partners to maximize the
socio-economic benefits of their operations for the region. In regard to the latter, I am pleased to report that we
undertook a first step in March where we handed over two new classrooms to villages close to our operations in
the Songwe Region, which Kibo funded as part of our on-going operation to refurbish the local schools in
conjunction with local authorities.
The conclusion of a PPA with the Tanzanian Government is the remaining substantive agreement that the
Company seeks to conclude in order to commence Financial Close on the MCPP. In view of the recent
management, structural and policy changes within both TANESCO and the Ministry of Energy & Minerals
("MEM"), Kibo management engaged in extensive talks with these government agencies during June and I am
pleased to say we have received written reconfirmation of the Tanzanian Government's continued commitment
to the project and to its expedited development. These talks were followed up by meetings with all government
stakeholders in the project at which an agenda and schedule to work on those specific development aspects of the
MCPP that are dependent on negotiation of all outstanding agreements and approvals with the Tanzanian
Government were agreed. These included inter alia, final ESIA certification, the Mining Licence approval and of
course, the PPA. Encouragingly, the MEM also confirmed that the pending changes in mining policy and
legislation (since enacted) would not adversely affect the Company's operations.
Progress on negotiation with the Tanzanian Government gained significant momentum during July with the
holding of a second round of meetings at which the MEM officially instructed TANESCO to prepare a final MOU
that will govern the future development of the MCPP in general and PPA in particular for submittal to the Attorney
General for review. This MOU has now been submitted and we are expecting to be provided with a final agreed
copy for execution shortly. Additionally, no further queries on the ESIA and the Mining Licence application were
received and the certification/approval process is progressing smoothly.
A welcome result from the recent progress on the MCPP is the receipt by the Company of several formal
expressions of interest from major international infrastructure investors in making an equity investment in the
MCPP. This interest clearly represents increasing confidence in a near-term positive outcome from our
engagement with the Tanzanian authorities and in our ability to successfully bring the MCPP to Financial Close.
Operations - Imweru & Lubando (Katoro Gold PLC)
During H1 2017, the Company successfully concluded its reverse takeover transaction with Opera Investments
("Opera"), whereby Opera acquired Kibo's Imweru and Lubando gold properties for 61 million Opera shares
representing a valuation of GBP3.66 million. Opera was renamed Katoro Gold PLC ("Katoro") and was admitted
to AIM on the 23 May 2017 accompanied by a share placing which raised proceeds of GBP1.5 million for further
development of the Imweru Mineral Resource. Kibo retains an initial 57% interest in Katoro.
The divestment of Imweru and Lubando to Katoro represents the culmination of a process that commenced in
early 2016 as part of the Company's strategy to enhance shareholder value in its gold projects in northern Tanzania
by transferring them to a gold focused company to plan for the near-term funding of the development of a gold
mine at Imweru. Field work commenced at Imweru immediately after AIM admission and I am pleased to report
that the initial drill programme of 31 holes for a total of 3,410 metres has now been completed ahead of schedule
and includes an additional 1,400 metres of drilling to what was originally planned. Work on the completion of an
ESIA at Imweru is also progressing well and Phase 1, certification of the scope of the study by the relevant
Tanzanian authority, was concluded. The results from the extended drilling programme and from Phase 2 of the
ESIA (in progress) will enable Katoro's technical team and consultants to prepare an initial Pre-Feasibility Study
("PFS") (already at an advanced stage) and subsequently a full Mining Feasibility Study at Imweru in a timely
manner. We understand from Katoro that the dispatch of drill samples to laboratories in Tanzania & South Africa
for assay, geotechnical and metallurgical testing is in process under the new Tanzanian mining rules. While this is
a bit more cumbersome than previous, it is pleasing that no major delays are being incurred. Readers should go
to Katoro's public disclosure for full details of Katoro's progress.
Operations - Other Projects
During H1 2017 we have completed a major rationalization of our commodity licence portfolios in Tanzania
which, in addition to the divestment of the Imweru and Lubando projects to Katoro, also included the
relinquishment of our non-core gold licences in northern Tanzania, our Morogoro gold licences in eastern
Tanzania and our Pinewood uranium licences (by mutual agreement with JV partner Metal Tiger) in southern
Tanzania. Within Kibo we now just retain our MCPP (coal & power) and Haneti (nickel-PGM) projects. The
licence relinquishments are a response both to the stricter enforcement regime and increased costs associated with
holding early stage mineral licences in Tanzania and the requirement to focus resources on the MCPP and on
Katoro's gold portfolios at Imweru and Lubando.
Corporate
As part of the Placing that accompanied the Admission of Katoro to AIM in May, Kibo subscribed for GBP50,000
which brought its total equity interest in the company to 57%. The Company also changed its Irish & UK share
registrar during the period to Capita Securities Limited and changed its registered office address, the latter
corresponding with a name and address change of its Irish solicitors. We also welcome St. Brides Partners Ltd as
our new principal investor and media relations advisors following their recent appointment by the Company.
The Company did not issue any equity by way of fund raises during the H1 2017 and the only equity issued was
an additional 277,768 shares at 4.75p shares to settle a GBP13,194 invoice for geological contract services. The
Company continued to avail of the discounted loan facility up to an amount of USD2.94 million extended to it by
Sanderson Capital Partners. Funds availed of under this facility will be repaid from the USD3.7 million payable
to Kibo by SEPCO III at financial close on the MCPP under the terms of a 2016 agreement, subject to any
renegotiation of payments terms between Kibo and Sanderson that may occur in the interim.
In conclusion, I would like to thank again our board and management for their on-going work under the direction
of CEO Louis Coetzee and their unwavering commitment to bring the MCPP to fruition where progress is being
steadily made notwithstanding some recent on-going changes and challenges in the Tanzanian energy and mining
sector.
Christian Schaffalitzky
Chairman
Unaudited Interim Results for the six months ended 30 June 2017
Unaudited condensed consolidated interim Statement of Comprehensive Income
For the six months ended 30 June 2017
6 months to 6 months to 12 months to
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue 1,001 4,184 18,039
Administrative expenses (1,730,200) (1,458,100) (1,653,152)
Exploration Expenditure (634,141) (866,967) (1,716,967)
Capital raising fees - - (1,648,004)
Operating (loss)/profit (2,363,340) (2,320,883) (5,000,084)
Investment and Other Income - 480 1,414.668
(Loss)/Profit before tax (2,363,340) (2,320,403) (3,585,416)
Loss for the period (2,363,340) (2,320,403) (3,585,416)
Other comprehensive income:
Exchange differences on translating 50,148 46,378 99,128
of foreign operations, net of taxes
Adjustment arising from change in - - 1,527,515
non-controlling interest
Total comprehensive (loss)/profit (2,313,192) (2,274,025) (1,958,773)
for the period
(Loss)/Profit for the period
attributable to (2,363,340) (2,320,403) (3,585,416)
Owners of the parent (1,900,505) (2,320,403) (3,611,496)
Non-controlling interest (462,835) - 26,080
Total comprehensive (loss) income (2,313,192) (2,274,025) (1,986,288)
attributable to
Owners of the parent (1,850,357) (2,274,025) (1,984,853)
Non-controlling interest (462,835) - 26,080
Basic loss per share (0.005) (0.007) (0.010)
Diluted loss per share (0.005) (0.007) (0.010)
Unaudited condensed consolidated interim Statement of Financial Position
As at 30 June 2017
6 months to 6 months to 12 months to
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 11,085 3,449 9,107
Intangible assets 17,596,105 17,596,105 17,596,105
Total non-current assets 17,607,190 17,599,554 17,605,212
Current assets
Trade and other receivables 117,453 56,718 50,633
Cash and cash equivalents 1,946,688 107,086 382,339
Total current assets 2,064,141 163,804 432,972
Total assets 19,671,331 17,763,358 18,038,184
Equity
Called up share capital 13,607,630 13,470,787 13,603,965
Share premium 27,327,791 26,495,318 27,318,262
Other reserves 2,156,726 (44,464) -
Translation reserve (235,343) (338,241) (285,491)
Share based payment reserve 514,279 514,279 514,279
Retained deficit (24,722,536) (23,861,789) (23,625,367)
Attributable to equity holders of the 18,648,547 16,235,890 17,525,648
parent
Non-controlling interest (1,032,591) - (1,435)
Total Equity 17,615,956 16,235,890 17,524,213
Liabilities
Current liabilities
Trade and other payables 343,312 327,468 146,380
Provisions - - 115,663
Borrowings 1,712,063 1,200,000 251,928
Total current liabilities 2,055,375 1,527,468 513,971
Total equity and liabilities 19,671,331 17,763,358 18,038,184
Net Tangible Asset Value 0.04 0.04 0.04
Shares in issue 364,254,364 353,446,270 363,976,596
Unaudited Condensed Consolidated Statement of Changes in Equity
Share Share Treasury Share Merger Control Foreign Retained Non- Total
Capital Premium shares based Reserve Reserve currency deficit controlling
payment translation interest
reserve reserve
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 30 June 13,470,787 26,495,318 (44,464) 514,279 - - (338,241) (23,861,789) - 16,235,890
2016 (unaudited)
Profit/(loss) for the (1,291,093) 26,080 (1,265,013)
year
Other comprehensive 52,750 52,750
income - exchange
differences
Adjustment arising 1,527,515 (27,515) 1,500,000
from change in non-
controlling interest
Allotment of treasury 199,867 44 464 244,331
shares
Proceeds of share issue 133,178 623,077 756,255
of share capital
Balance at 31 13,603,965 27,318,262 - 514,279 - - (285,491) (23,625,367) (1,435) 17,524,213
December 2016
(audited)
Profit / (loss) for the (1,900,505) (462,835) (2,363,340)
year
Other comprehensive 50,148 50,148
income- exchange
differences on
translating of foreign
operations
Adjustment arising 41,808 2,114,918 803,336 (568,321) 2,391,741
from acquisition of
subsidiary
Proceeds of share issue 3,665 9,529 13,194
of share capital
Balance as at 30 June 13,607,630 27,327,791 - 514,279 41,808 2,114,918 (235,343) (24,722,536) (1,032,591) 17,615,956
2017 (unaudited)
Unaudited condensed consolidated interim statement of cash flow
For the six months ended 30 June 2017
6 months to 6 months to 12 months to
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
(Loss)/Profit for the period before taxation
(2,363,340) (2,320,403) (3,585,416)
Adjusted for:
Foreign exchange loss 48,236 46,378 124,884
Depreciation on property, plant and equipment 2,420 3,683 8,228
Investment income - (480) (1,815)
Provisions (115,663) - 115,663
Liabilities settled in shares 357,002 973,348 1,648,004
Operating income before working capital (2,071,345) (1,297,474) (1,690,452)
changes
(Increase)/Decrease in trade and other (66,820) 493,974 500,059
receivables
(Decrease)/Increase in trade and other payables 196,961 20,671 (160,417)
Net cash outflows from operating activities (1,941,204) (782,829) (1,350,810)
Cash flows from investing activities
Purchase of property, plant and equipment - - (9,029)
Net cash flow from acquisition of subsidiaries 2,045,418 - (1,000)
Net cash used in investing activities 2,045,418 - (10,029)
Cash flows from financing activities
Repayment of borrowings - - (200,000)
Proceeds from borrowings 1,460,135 700,000 1,751,928
Investment Income - 480 1,815
Net cash proceeds from financing activities 1,460,135 700,480 1,553,743
Net increase in cash and cash equivalents 1,564,349 (82,349) 192,904
Cash and cash equivalents at beginning of 382,339 189,435 189,435
period
Cash and cash equivalents at end of period 1,946,688 107,086 382,339
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended 30 June 2017
1. General information
Kibo Mining Plc ("the Company") is a public limited company incorporated in Ireland. The
condensed consolidated interim financial results 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 results are for the six months ended 30 June 2017, and have
been prepared using the same accounting policies as those applied by the Group in its December
2016 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.
These condensed consolidated interim financial statements do not include all the notes presented in
a complete set of consolidated annual financial statements, as only selected explanatory notes are
included to explain key events and transactions that are significant to obtaining an understanding of
the changes throughout the financial period, accordingly the report must be read in conjunction with
the annual report for the year ended 31 December 2016.
The comparative amounts in the consolidated financial results include extracts from the consolidated
annual financial statements for the period ended 31 December 2016.
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. The Group's principal accounting policies and assumptions have been applied
consistently over the current and prior comparative financial period.
3. Use of estimates and judgements
Preparing the condensed consolidated interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expenses. Actual results may differ from these
estimates.
In preparing these condensed consolidated interim financial statements, significant judgements
made by management in applying the Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated financial statements as at and for the
year ended 31 December 2016.
Exploration and evaluation expenditure
The Group's accounting policy for exploration and evaluation expenditure results in the
capitalisation of certain intangible mineral resources which are identified through business
combinations or equivalent acquisitions. This policy requires management to make certain estimates
and assumptions as to future events and circumstances, in particular whether an economically viable
extraction operation can be established based on the separately identified mineral resources. Any
such estimates and assumptions may change as new information becomes available. If, after having
capitalised the intangible mineral resources under the policy, a judgement is made that recovery of
the intangible asset is unlikely, the relevant capitalised amount will be written off to the income
statement.
4. Adoption of new and revised standards
As from 1 January 2017, the Group adopted all changes to IFRS, which are relevant to its operations.
The adoption did not have a material effect on the accounting policies of the Group.
The following Standards, Amendments to Standards and Interpretations have been issued but are
not yet effective for annual periods beginning on 1 January 2017. The Board of Directors is currently
evaluating the impact of these on the Group.
- IFRS 15 - Revenue from contracts with Customers (1 January 2018);
- IFRS 9 - Financial Instruments, measurement, recognition and disclosure (1 January 2018);
- IFRS 16 - Leases single lease accounting model (1 January 2019).
5. Operating (loss)/ profit
Administrative expenditure for the interim period ended June 2017 includes GBP864,051 relating
to the acquisition of Katoro Gold PLC and June 2016 includes GBP947,418 relating to financing
activities specific to the borrowings raised throughout the period.
6. 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
2017 2016 2016
GBP GBP GBP
Loss for the year attributable to equity
holders of the parent (1,900,505) (2,320,403) (3,611,496)
Weighted average number of ordinary
shares for the purposes of basic and
dilutive loss per share 364,254,364 338,524,702 351,080,645
Basic loss per share (0.005) (0.007) (0.010)
6 months to 6 months to 12 months to
Reconciliation of Headline loss per share 30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Loss for the year attributable to equity holders (1,900,505) (2,320,403) (3,611,496)
of the parent
Adjustments - - -
Headline loss per share (1,900,505) (2,320,403) (3,611,496)
Weighted average number of ordinary shares 364,254,364 338,524,702 351,080,645
for the purposes of headline loss per
share (revised)
Headline loss per share (0.005) (0.007) (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).
7. Called up share capital and share premium
Authorised ordinary share capital of the company is 1,000,000,000 ordinary shares of €0.015 each
and 3,000,000,000 deferred shares of €0.009 each.
Detail of issued capital is as follows:
Number of Share
Ordinary Share Share Treasury Premium
shares Capital Premium Shares Shares
GBP GBP GBP GBP
Balance at 31 330,928,714 3,953,213 9,257,075 (44,464) 25,782,519
December 2015
Shares issued in 33,047,882 393,677 - 44,464 1,535,743
period (net of
expensed for cash)
Balance at 31 363,976,596 4,346,890 9,257,075 - 27,318,262
December 2016
Shares issued in 277,768 3,665 - - 9,529
period (net of
expensed for cash)
Balance at 30 June 2017 364,254,364 4,350,555 9,257,075 - 27,327,791
8. 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 2017 Mining and 30 June 2017
Exploration Corporate (GBP)
Group Group Group
Revenue 1,001 - 1,001
Administrative cost - (1,730,200) (1,730,200)
Exploration expenditure (634,141) - (634,141)
Investment and other income - - -
Profit/(Loss) after tax (633,140) (1,730,200) (2,363,340)
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
Tax - - -
Profit/(Loss) after tax (862,783) (1,457,620) (2,320,403)
30 June 2017 30 June 2016
Mining Corporate (GBP)
Group Group Group
Assets
Segment assets 18,633,859 1,037,473 19,671,331
Liabilities
Segment liabilities 231,831 1,823,547 2,055,375
Other Significant items
Depreciation 2,420 - 2,420
31 December 2016 31 December
Mining Corporate 2016 (GBP)
Group Group Group
Assets
Segment assets 18,015,412 22,772 18,038,184
Liabilities
Segment liabilities 111,376 402,595 513,971
Other Significant items
Depreciation 8,228 - 8,228
9. Intangible assets
6 months to 6 months to 12 months to
Composition of Intangible assets 30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Mbeya Coal Project 15,896,105 15,896,105 15,896,105
Lake Victoria Project 1,700,000 1,700,000 1,700,000
17,596,105 17,596,105 17,596,105
Intangible assets are not amortised, due to the indefinite useful life which is attached to the
underlying prospecting rights, until such time that active mining operations commence, which will
result in the intangible asset being amortised over the useful life of the relevant mining licences.
Intangible assets with an indefinite useful life are assessed for impairment on an annual basis,
against the prospective fair value of the intangible asset. The valuation of intangible assets with an
indefinite useful life is reassessed on an annual basis through valuation techniques applicable to the
nature of the intangible assets.
10. Cash and Cash Equivalents
6 months to 6 months to 12 months to
Cash and cash equivalents available for 30 June 30 June 31 December
utilisation against the following projects 2017 2016 2016
GBP GBP GBP
Mbeya Coal to Power Project 451,056 107,086 382,339
Imweru & Lubando 1,495,632 - -
1,946,688 107,086 382,339
10. Borrowings
6 months to 6 months to 12 months to
Amounts falling due within one year 30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Short term borrowings 1,712,063 1,200,000 251,928
1,712,063 1,200,00 251,928
The borrowings relate to the unsecured interest free loan facility from Sanderson Capital Partners
Limited which was repayable either through the issue of cash or ordinary shares in the Company.
On 1 September 2016, the Company renegotiated the settlement terms where Sanderson Capital
Partners Limited agreed to convert the full loan amount outstanding (GBP1.5million) into a 2.5%
equity interest in the Mbeya Development Company Limited which is a 100% held subsidiary of
the Group, and holds 100% interest in the Mbeya Coal to Power Project.
The financing arrangement with Sanderson stems from the contingent consideration receivable from
SEPCO III on financial close of the MCPP project, which has been advanced by Sanderson at a 20%
discounting factor, repayable through cash, or shares at the choice of Sanderson on achievement of
financial close of the MCPP project.
11. Financial instruments
6 months to 6 months to 12 months to
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Financial assets - carrying amount
Loans and receivable held at amortised cost
Trade and other receivables 117,453 56,718 50,633
Cash and cash equivalents 1,946,688 107,086 382,339
2,064,141 163,804 432,972
Financial liabilities - carrying amount
Financial liabilities held at amortised cost
Trade and other payables 343,312 327,468 146,380
Borrowings 1,712,063 1,200,000 251,928
2,055,375 1,527,468 398,308
The Board of Directors considers that the fair values of financial assets and liabilities approximate
their carrying values at each reporting date.
12. Corporate transactions
During the interim period, the Group conclude the agreement entered into with Opera Investments
PLC, where Kibo Mining PLC would dispose of its entire interest in Kibo Gold and its subsidiaries
(Reef Miners & Savannah Mining) for GBP3,660,000 and subscribe for an additional GBP50 000
shares in Opera, settled through the allotment of 61,000,000 shares in Opera Investments PLC
(renamed Katoro Gold Mining PLC), resulting in the Group obtaining 57% of the interest in Katoro
Gold Mining PLC, and retaining a 57% interest in the Kibo Gold group of companies. Completion
of the transaction resulted in divestment of the Groups interest in the Kibo Gold and its subsidiaries
operations to 57% indirectly, which in accordance with IFRS 10 is recognised as a transaction with
owners in their capacity as owners.
As the operations of Katoro Gold Mining PLC on acquisition do not constitute a business, the
acquisition method in accordance with IFRS 3 is not applied. Kibo Mining PLC controls the
operational activities of the subsidiary through management, as well as ownership, thus the assets
and liabilities of Katoro Gold Mining PLC on acquisition were recognised at their respective book
values from date control was obtained, and the difference between the purchase consideration and
the book values of the investments were recorded directly in equity through the control reserve.
The recognition and measurement application of these corporate transactions may be subject to
change should additional information avail itself within the re-measurement period.
12. Unaudited results
These condensed consolidated interim financial results have not been audited or reviewed by the
Group's auditors.
13. Dividends
No dividends were declared during the interim period.
14. Board of Directors
There were no changes to the board of directors during the interim period, or any other committee's
composition.
15. Subsequent events
No significant events have occurred in the period between the reporting date and the date of this
report.
16. Going concern
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.
17. Commitments and contingencies
There are no material contingent assets or liabilities as at 30 June 2017.
26 September 2017
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
JSE Designated Adviser: River Group
211 Kloof Street
Waterkloof
Pretoria, South Africa
26 September
Johannesburg
Designated and corporate Adviser River Group
Date: 26/09/2017 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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