KIBO MINING PLC - Condensed Consolidated Annual Financial Results of for the year ended 31 December 2017

Release Date: 14/06/2018 09:00
Code(s): KBO
 
Wrap Text
Condensed Consolidated Annual Financial Results of for the year ended 31 December 2017

Kibo Mining Plc
(Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on AIM: KIBO
Share code on the AltX: KBO
ISIN: IE00B97C0C31
("Kibo" or "the Company" or together with its subsidiaries "the Group")

Condensed Consolidated Annual Financial Results of for the year ended 31 December 2017

Dated: 14 June 2018

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the mineral exploration and
development company focused on gold, nickel and coal and projects in Africa, is pleased to release its
condensed consolidated annual financial results for the year ended 31 December 2017. The Company's
Annual Report, which contains the full financial statements accompanying this announcement, is in
the process of being prepared for dispatch to shareholders. A copy of this Annual Report will also be
available from the Company's website at www.kibomining.com. Details of the date and venue for
this year's AGM, will be announced on posting of the Annual Financial Results.

Highlights from the Chairman, Christian Schaffalitzky's statement:

2017 was a challenging year for Kibo as we pushed ahead with our efforts to complete a Power
Purchase Agreement (PPA) for our flagship Mbeya Coal to Power Project (MCPP) amid significant
upheavals and changes in the Tanzanian mining policy and regulatory environment. As might be
expected, these events have impacted on our anticipated time line to finalise a PPA with the Tanzanian
Government and complete Financial Close on the project. I am delighted to reflect that despite these
delays, at the end of 2017, the Tanzanian Government reconfirmed in writing its strong support for the
MCPP as an important component of its national energy strategy and undertook to expedite finalisation
of the PPA. As you are no doubt aware this commitment was backed up when we signed a
Memorandum of Understanding (MOU) with TANESCO (the Tanzanian state electricity company) in
February 2018 as a preparatory step to finalising a PPA. Management is now in advanced negotiation
with TANESCO on the finalisation of the full PPA.

Kibo Mining's main achievements in 2017 were:

 -  The publication of the MCPP Integrated Bankable Feasibility Study (IBFS) at the start of 2017.
    This was the culmination of 3 years' work by Kibo and the most important milestone in the
    development path for the project to date;
 -  Full environmental certification for both Mbeya Coal Mine as well as Mbeya Power Plant;
 -  The completion of the divestment of our resource-based gold assets, Imweru and Lubando, in
    northern Tanzania to AIM listed Katoro Gold PLC in which we retain a 56.7% interest; and
 -  The terms of the forward payment facility agreed in December 2016 with Sanderson Capital
    Partners were mutually revised in September 2017 allowing for an extension to the drawdown
    schedule and part re-payment of funds already drawn by the issue of a convertible loan note to
    Sanderson which it immediately converted to Kibo shares.

Condensed Consolidated Financial Results for the year ended 31 December 2017

Condensed Consolidated Statement of Comprehensive Income

                                                                           Year              Year   
                                                                          ended             ended   
                                                                    31 December       31 December   
                                                                           2017              2016   
                                                                        Audited           Audited   
                                                                            GBP               GBP   
Revenue                                                                       -            18,039   
Administrative expenses                                             (1,871,697)       (1,653,152)   
Capital raising fees                                                  (908,543)       (1,648,004)   
Exploration expenditure                                             (1,741,018)       (1,716,967)   
Operating loss                                                      (4,521,258)       (5,000,084)   
Investment and other income                                               1,445         1,414,668   
Loss from ordinary activities before tax                            (4,519,813)       (3,585,416)   
Taxation                                                                      -                 -   
Loss for the period                                                 (4,519,813)       (3,585,416)   
Other comprehensive gain:                                                                           
Exchange differences on translation of foreign operations                16,985            99,128   
Adjustment arising from change in non-controlling interest                    -         1,527,515   
Other Comprehensive gain for the period net of tax                       16,985         1,626,643   
Total comprehensive loss for the period                             (4,502,828)       (1,958,773)   
Loss for the period                                                 (4,519,813)       (3,585,416)   
Attributable to the owners of the parent                            (3,712,707)       (3,611,496)   
Attributable to the non-controlling interest                          (807,106)            26,080   
Total comprehensive loss for the period                             (4,502,828)       (1,986,288)   
Attributable to the owners of the parent                            (3,689,196)       (1,984,853)   
Attributable to the non-controlling interest                          (813,632)            26,080   
Loss Per Share                                                                                      
Basic loss per share                                                    (0.010)           (0.010)   
Diluted loss per share                                                  (0.010)           (0.010)   
Headline loss per share                                                 (0.010)           (0.010)   


Condensed Consolidated Statement of Financial Position
                                                                  
                                                                    31 December       31 December   
                                                                           2017              2016   
                                                                        Audited           Audited   
                                                                            GBP               GBP   
Assets                                                                                              
Non-Current Assets                                                                                  
Property, plant and equipment                                             7,650             9,107   
Intangible assets                                                    17,596,105        17,596,105   
Total non-current assets                                             17,603,755        17,605,212   
Current Assets                                                                                      
Trade and other receivables                                              59,046            50,633   
Cash                                                                    766,586           382,339   
Total current assets                                                    825,632           432,972   
Total Assets                                                         18,429,387        18,038,184   
Equity and Liabilities                                                                              
Equity                                                                                              
Called up share capital                                              14,015,670        13,603,965   
Share premium account                                                28,469,750        27,318,262   
Control reserve                                                       2,097,442                 -   
Share based payment reserve                                             556,086           514,279   
Translation reserve                                                   (268,506)         (285,491)   
Retained deficit                                                 (26,534,653) (      (23,625,367)   
Attributable to equity holders of the parent                         18,335,789        17,525,648   
Non-controlling interest                                            (1,383,388)           (1,435)   
Total Equity                                                         16,952,401        17,524,213   
Liabilities                                                                                         
Current Liabilities                                                                                 
Trade and other payables                                                266,218           146,380   
Borrowings                                                            1,210,768           251,928   
Provisions                                                                    -           115,663   
Total Current Liabilities                                             1,476,986           513,971   
Total Equity and Liabilities                                         18,429,387        18,038,184   
   

Condensed Consolidated Statement of Changes in Equity

                                 Share        Share   Treasury        Total   Share based       Foreign       Control      Total        Retained         Non-         Total   
                               Capital      premium     shares        share       payment      currency       reserve                    deficit  Controlling                 
                                                                    capital       reserve   translation                 reserves                     Interest                 
                                                                                                reserve                                                                       
All figures are stated in          GBP          GBP        GBP          GBP           GBP           GBP           GBP        GBP             GBP                        GBP   
Sterling                                                                                                                                                                      
Balance as at 31            13,210,288   25,782,519   (44,464)   38,948,343       514,279     (384,619)             -    129,660    (21,541,386)            -    17,536,617   
December 2015                                                                                                                                                                 
Loss for the year                    -            -          -            -             -             -             -          -     (3,611,496)       26,080   (3,585,416)   
Adjustment arising from                                                   -             -             -             -          -       1,527,515     (27,515)     1,500,000   
change in non-                                                                                                                                                                
controlling interest                                                                                                                                                          
Other comprehensive                  -            -          -            -             -        99,128             -     99,128               -            -        99,128   
income - exchange                                                                                                                                                             
differences on                                                                                                                                                                
translating foreign                                                                                                                                                           
operations                                                                                                                                                                    
Proceeds of share issue        393,677    1,335,876               1,729,553             -             -             -          -               -            -     1,729,553   
of share capital                                                                                                                                                              
Allotment of treasury                -      199,867     44,464      244,311             -             -             -          -               -            -       244,311   
shares                                                                                                                                                                        
                               393,677    1,535,743     44,464    1,973,884             -        99,128             -     99,128     (2,083,981)      (1,435)      (12,404)   
Balance at 31               13,603,965   27,318,262          -   40,922,227       514,279     (285,491)             -    228,788    (23,625,367)      (1,435)    17,524,213   
December 2016                                                                                                                                                                 
Loss for the year                    -            -          -            -             -             -                        -     (3,712,707)    (807,106)   (4,519,813)   
Adjustment arising from                                                                       (302,117)     2,097,442  1,795,325         803,421    (568,321)     2,030,425   
acquisition of subsidiary                                                                                                                                                    


Other comprehensive                  -            -          -            -             -       319,102             -    319,102               -      (6,526)       312,576   
income - exchange                                                                                                                                                         -   
differences on                                                                                                                                                                      
translating foreign                                                                                                                                                                 
operations                                                                                                                                                                         
Share options issued                 -            -          -            -        41,807             -             -     41,807               -            -        41,807   
during the current period                                                                                                                                                           
Proceeds of share issue        411,705    1,151,488          -    1,563,193             -             -                        -               -            -     1,563,193   
of share capital                                                                                                                                                                    
                               411,705    1,151,488          -    1,563,193        41,807        16,985     2,097,442  2,156,234     (2,909,286)  (1,381,953)     (571,812)   
                                                                                                                                                                                   
Balance at 31               14,015,670   28,469,750          -   42,485,420       556,086     (268,506)     2,097,442  2,385,022    (26,534,653)  (1,383,388)    16,952,401   
December 2017                                                                                                                                                          


Condensed Consolidated Statement of Cash Flow

All figures are stated in Sterling

                                                                         31 December        31 December   
                                                                                2017               2016   
                                                                             Audited            Audited   
                                                                                 GBP                GBP   
Cash flows from operating activities                                                                      
Loss for the period before taxation                                      (4,519,813)        (3,585,416)   
Adjustments for:                                                                                          
Foreign exchange gain                                                        249,437            124,884   
Depreciation on property, plant and equipment                                  2,738              8,228   
Investment income                                                                  -            (1,815)   
Share based remuneration to directors                                        260,000                  -   
Deal cost settled in shares                                                  155,539                  -   
Movement in provisions                                                     (115,663)            115,663   
Liabilities settled in shares                                                      -          1,648,004   
Deemed cost of listing                                                       206,680                  -   
                                                                         (3,761,082)        (1,690,452)   
Movement in working capital                                                                               
(Increase)/ Decrease in debtors                                              (8,413)            500,059   
Increase/ (Decrease) in creditors                                            119,838          (160,417)   
                                                                             111,425            339,642   
Net cash outflows from operating activities                              (3,649,657)        (1,350,810)   
Cash flows from financing activities                                                                      
Proceeds of issue of share capital                                         1,818,345                  -   
Repayment of borrowings                                                            -          (200,000)   
Proceeds from borrowings                                                   1,751,326          1,751,928   
Investment income                                                                  -              1,815   
Net cash proceeds from financing activities                                3,569,671          1,553,743   
Cash flows from investing activities                                                                      
Net cash flow from acquisition of subsidiaries                               465,408            (1,000)   
Purchase of property, plant and equipment                                    (1,175)            (9,029)   
Net cash used in investing activities                                        464,233           (10,029)   
Net increase in cash                                                         384,247            192,904   
Cash at beginning of period                                                  382,339            189,435   
Cash at end of the period                                                    766,586            382,339   


Notes to the condensed consolidated financial results for the year ended 31 December 2017

1. General information

Kibo Mining Plc ("the Company") is a public limited company incorporated in Ireland. The consolidated
annual 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 market ("AIM") of the London Stock
Exchange plc and the Alternative Exchange of the Johannesburg Stock Exchange 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 annual financial results for the year ended 31 December 2017 have been
prepared in accordance with framework concepts and the recognition and measurement criteria of
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 and Financial Pronouncements as
issued by Financial Reporting Standards Council, IAS 34 - Interim Financial Reporting), the Listings
Requirements of the JSE Limited and the provisions of the Irish Companies Acts, 1963 to 2014 ('the
Companies Acts').

These condensed consolidated annual financial results do not include all the information required for full
financial statements and should be read in conjunction with the consolidated annual financial statements
of the Group for the period ended 31 December 2017, which is available for inspection at the Company's
registered offices.

The comparative amounts included in these condensed consolidated financial results include extracts
from the audited consolidated annual financial statements for the period ended 31 December 2017.

All monetary information is presented in the functional currency of the Company being pound Sterling.

The Company's financial statements are prepared on the historical cost basis, other than intangible assets
which is measured at fair value. The accounting policies have been applied consistently by Group entities
and are similar to those applied in the prior period. The Group financial results have been prepared on a
going concern basis.

These condensed consolidated financial results have been extracted from the audited financial statements
but are not itself audited.

3. Statement of Accounting Policies

The accounting policies have been applied consistently to all periods presented in these condensed
consolidated financial results using the accounting policies applied by the Group in its 31 December 2017
report, updated for any new accounting standards which became effective in the current year.

4. Responsibility Statement

The directors take full responsibility for the preparation of the report and that the financial information
has been correctly extracted from the underlying financial statements. These financial results were
prepared under the supervision of the Financial Director, Andreas Lianos.

5. Audit opinion

The consolidated annual financial statements were audited by the Company's auditors, Saffery
Champness LLP. The auditors' report together with the financial statements is available for inspection at
the Company's registered office. The auditors' report contains an emphasis of matter with regard to the
realisation of certain assets, as follows:

Emphasis of Matter - Realisation of Assets
In forming our opinion on the financial statements, which is not modified, we considered the adequacy of
disclosures made in Notes 11, 13 and 23 to the financial statements concerning the valuation of intangible
assets, and investments in Group undertakings. The realisation of intangible assets of GBP17,596,105 
(2016: GBP17,596,105), amounts due from Group undertakings of GBP24,402,788 (2016: GBP26,998,867) and
investments in Group undertakings of GBP3,468,224 (2016: GBP1,700,000) included in the Company Statement
of Financial Position are dependent on the economic exploitation of gold and coal reserves including the
ability of the Group to raise sufficient finance to develop these projects.

6. Subsequent events

Mbeya Coal to Power Project
The Group made considerable progress in the Mbeya Coal to Power Project by signing a Memorandum of
Understanding ("MOU") with the Tanzania Electric Supply Company ("TANESCO"), on 14 February
2018. This MOU is the precursor to the finalisation of the Power Purchase Agreement ("PPA") for the
300MW mine - mouth power station to be constructed in south-western Tanzania. Although the PPA has
not been signed at the date of issue of the Annual Financial Statements, the Tanzanian Government's
recent pledge to support the private sector is favourable to the Group and evidences the National
government's commitment to all projects.

Strategies to complete the funding arrangements for this flagship project are ongoing.

Botswana Power Project Acquisition
On 3 April 2018, the Group completed the acquisition of an 85% interest in the Mabesekwa Coal
Independent Power Project, located in Botswana. This acquisition is in line with the Group's strategy of
positioning itself as a strategic regional electricity supplier in Southern Africa and creates many synergies
with the MCPP in Tanzania.

As a result of the acquisition, 153,710,030 ordinary shares in Kibo were issued to Sechaba Natural
Resources Limited ("Sechaba"). Sechaba retains a 15% interest in the Mabesekwa Coal Independent
Power Project and gained the right to a seat on Kibo's board of directors. Initial accounting for the business
combination is incomplete at the time the financial statements are authorised for issue, as management is
finalising outstanding areas with regard to the acquisition. As part of the terms of the acquisition, 
Mr Mashale Phumaphi joined the company as a non-executive director, however, he has subsequently
resigned.

Share placements
Subsequent to year end, the company has raised the following placements:
 -  GBP750,000 in the placement of 17,647,060 ordinary Kibo shares at 4.25p per share;
 -  GBP1,500,000 in the placement of 28,571,428 ordinary Kibo shares at 5.25p per share;
 -  8,370,716 ordinary shares in the company were issued, at a price of 5p per share, to Sanderson
    Capital Partners Limited ("Sanderson") as a partial settlement on the balance of funds drawn
    down under the forward payment facility between the Company and Sanderson. The shares issued
    are in respect of a repayment amount of $568,712.

7. Litigation

There are currently no arbitration proceedings against the Group, or of which the Group is aware, which
may have, or have had in the 12 months preceding the date of this report, a material effect on the
consolidated annual financial results.

8. Dividends

There have been no dividends declared or paid during the current financial period.

9. Going Concern

The consolidated annual financial results have been prepared on the basis of accounting policies
applicable to a going concern. This basis presumes that funds will be available to finance future
operations and that the realisation of assets and settlement of liabilities, contingent obligations and
commitments will occur in the ordinary course of business. The directors constantly review the business
models of the Group and its operating subsidiaries to ensure sustainability and the ability to operate
profitably and generate positive cash flows. Funding facilities are also reviewed regularly to ensure that
the Group has sufficient facilities in place to finance its operations.

10. Basic, Dilutive and Headline Loss per share

The basic and dilutive loss and weighted average number of ordinary shares used in the calculation of
basic loss per share is as follows:

Basic and dilutive loss per share
The basic loss and weighted average number of ordinary shares used for calculation purposes comprise
the following:

Basic and dilutive loss per share                                              31 December     31 December
                                                                                2017 (GBP)      2016 (GBP)
Loss for the period attributable to equity holders of                          (3,712,707)     (3,611,496)
the parent                     
                     
Weighted average number of ordinary shares for                                372,255,127      351,080,645
the purposes of basic loss per share                      
                      
Basic loss per ordinary share                                                     (0.010)          (0.010)

As the exercise price of the share options and warrants in issue is higher than the current market value as
at reporting date, these option and warrants do not have a dilutive impact. Thus, there are no dilutive
share options or warrants in issue as at year end which decreased the basic loss per share as indicated
above.

Headline loss per share                                                                                            
Reconciliation of headline loss per share:                                                    
                                                                               31 December    31  December   
                                                                                2017 (GBP)      2016 (GBP)   
Loss for the period attributable to normal shareholders                        (3,712,707)     (3,611,496)   
Reversal of impairment of Intangible assets/ (Impairment of Intangible                   -               -   
assets)                                                                                                      
Loss on disposal of subsidiaries                                                         -               -   
Bargain purchase from acquisition of Subsidiaries                                        -               -   
Adjustment arising from change in non-controlling interest                               -               -   
Impairment of goodwill on acquisition of Subsidiaries                                    -               -   
Headline loss for the period attributable to normal shareholders               (3,712,707)      3,611,496)   
Headline loss per ordinary share                                                   (0.010)         (0.010)   

11. Called up share capital and share premium                                                                       
Details of authorised and issued capital are as follows:                                                           
                                                                                      2017            2016   
Authorised equity
1,000,000,000 (2016: 1,000,000,000) Ordinary shares of EUR0.015 each         EUR15,000,000   EUR15,000,000   
3,000,000,000 deferred shares of EUR0.009 each                               EUR27,000,000   EUR27,000,000   
                                                                             EUR42,000,000   EUR42,000,000   
Allotted, issued and fully paid shares                                                                             
(2017: 395,254,364 Ordinary shares of EUR0.015 each)                          GBP4,758,595               -   
(2016: 363,976,596 Ordinary shares of EUR0.015 each)                                     -    GBP4,346,890   
1,291,394,535 Deferred shares of EUR0.009 each                                GBP9,257,075    GBP9,257,075   
                                                                             GBP14,015,670   GBP13,603,965   


                                                              Ordinary    Deferred                           
                                                                 Share       Share        Share   Treasury   
                                                 Number of     Capital     Capital      Premium     shares   
                                                    Shares      (GBP)*        (GBP)       (GBP)     (GBP)*   
Balance at 31 December 2016                    363,976,596   4,346,890   9,257,075   27,318,262          -   
Shares issued during the period                 31,277,768     411,705           -    1,151,488          -   
Balance at 31 December 2017                    392,254,364   4,758,595   9,257,075   28,469,750          -   

12. Condensed Consolidated Segmental Analysis

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.

2017 Group                                                          Mining and                 31 December   
                                                                   Exploration     Corporate    2017 (GBP)   
                                                                         Group         Group         Group   
Revenue                                                                      -             -             -   
Administrative cost                                                          -   (1,871,697)   (1,871,697)   
Capital raising fees                                                         -     (908,543)     (908,543)   
Exploration expenditure                                            (1,741,018)             -   (1,741,018)   
Investment and other income                                              1,445             -         1,445   
Tax                                                                          -             -             -   
Loss after tax                                                     (1,739,573)   (2,780,240)   (4,519,813)   
                                     
2016 Group                                                          Mining and                 31 December   
                                                                   Exploration     Corporate    2016 (GBP)   
                                                                         Group         Group         Group   
Revenue                                                                 18,039             -        18,039   
Administrative cost                                                          -   (1,653,152)   (1,653,152)   
Capital raising fees                                                         -   (1,648,004)   (1,648,004)   
Exploration expenditure                                            (1,716,967)             -   (1,716,967)   
Investment and other income                                          1,414,668                   1,414,668   
Tax                                                                          -             -             -   
Profit/ (Loss) after tax                                               284,260   (3,301,156)   (3,585,416) 
                                       
2017 Group                                                                                     31 December   
                                                                        Mining     Corporate    2017 (GBP)   
                                                                         Group         Group         Group   
Assets                                                              18,423,284         6,103    18,429,387   
Segment assets                                                                                               
Liabilities                                                            264,562     1,297,505     1,562,066   
Segment liabilities                                                                                          
Other Significant items                                                                                      
Depreciation                                                             2,738             -         2,738   
                                     
2016 Group                                                                                     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   


13. Changes to the board of Kibo Mining Plc

No changes were made to the board during the current financial year.

By order of the Board                                                        
14 June 2018                                                                 
Directors:                                                                   
Christian Schaffalitzky               Chairman (Non-Executive)               
Louis Coetzee                         Chief Executive Officer (Executive)    
Noel O'Keeffe                         Technical Director (Non-Executive)     
Andrew Lianos                         Finance Director (Non-Executive)       
Lukas Marthinus Maree                 Executive Director                     
Wenzel Kerremans                      Non-Executive Director
Company Secretary:                    Noel O'Keeffe                 
Auditors:                             Saffery Champness LLP                  


For further information please visit www.kibomining.com or contact:

Louis Coetzee                  louisc@kibomining.com   Kibo Mining Plc          Chief Executive Officer    
            
Andreas Lianos                 +27 (0) 83 4408365      River Group              Corporate Adviser and                  
                                                                                Designated Adviser on JSE    
                                                                                          
Ben Tadd /                     +44 (0) 20 3700 0093    SVS Securities           Joint Broker                           
Tom                                                    Limited                                                         
Curran        
                                                                                                         
Jon Belliss                    +44 (0) 20 7399 9400    Novum Securities         Joint Broker                           
                                                       Ltd 
                                                                                                                   
Andrew Thomson                 +61 8 9480 2500         RFC Ambrian              NOMAD on AIM                           
                                                       Limited                                   
                                                                             
Isabel de Salis /              +44 (0) 20 7236 1177    St Brides Partners       Ltd   Investor and Media
Priit Piip                                                                      Relations Adviser   
      
       
This announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) no. 596/2014 ("MAR").

Notes to editors

  Kibo is a multi-asset resource development and energy company with a long-term goal of
  becoming a leading power producer in Sub-Saharan Africa. The Company aims to tackle
  the acute power deficit which is severely hindering economic development in the region.

  Kibo's flagship asset is the Mbeya Coal to Power Project ('MCPP') in Tanzania, which
  comprises the Mbeya Coal Mine, a 1.5Mt p/a mining operation, and the Mbeya Power
  Plant, a 300MW mine-mouth thermal power station. The Mbeya Coal Mine has a defined
  120.8 Mt NI 43 101 thermal coal resource. A Definitive Feasibility Study has been
  conducted on the project which underpinned its value and confirmed an initial rate of
  return of 69.2%. The 300MW mouth-of-mine thermal power station has long term
  scalability with the potential to become a 1000MW plant. The completed full Power
  Feasibility Study highlighted a power output target of 1,800 GWh/a based on annual
  average coal consumption of 1.5Mt. An Integrated Bankable Feasibility Study report for
  the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an initial
  25-year mine life, post tax equity IRR between 21-22%, debt pay-back period of 11-12
  years and a construction period of 36 months.

  To assist in the execution of this critical power project of the MCPP, Kibo has assembled
  an international team of advisors and partners including Engineering Procurement and
  Construction ('EPC') contractors and financial teams that are assisting in the advancement
  and development of the MCPP. These include ABSA/Barclays as Financial Advisor,
  China based EPC contractor SEPCO III, General Electric, Tractebel Engineering (Power),
  Minxcon Consulting (Mining) and legal advisors Norton Rose Fulbright.

  Kibo also has an 85% interest in the Mabesekwa Coal Independent Power Project
  ('MCIPP'), a nearly identical power project in Botswana. The project consists of 300Mt
  subset of the current in-situ 777Mt Coal Resource and has water and land use permits and
  environmental certification in place. A Pre-Feasibility Study on the coal mine has been
  completed, as has a Scoping Study, which highlight the power plant having a maximum
  capacity of 600MW (4x150MW) based on a coal delivery rate of 3.2Mtpa and a Life of
  Mine of over 30 years.

Johannesburg
14 June 2018

Corporate and Designated Adviser
River Group



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