Source - RNS
RNS Number : 8073K
Kibo Mining Plc
27 September 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 £1.5m 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 £150,000 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 £522,800 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

 

*Administrative expenditure for the interim period ended June 2016 includes £947,418 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

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity

 

 

Share

Capital

Share

Premium

Treasury  shares

 

Share based payment reserve

Foreign currency translation reserve

 Total

       reserves

Retained deficit

Total

 

£

£

£

         £

 £

£

 £

£

 

 

 

 

 

 

 

 

 

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) - exchange differences

 

 

 

 

(53,338)

(53,338)

 

(53,338)

Share options and warrants expired or cancelled during the period

 

 

 

(510,978)

 

(510,978)

510,978

 

Share options issued during the current period

 

 

 

514,279

 

514,279

 

514,279

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 differences on translating of foreign operations

-

 

-

-

46,378

46,378

-

46,378

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

(unaudited)

 

13,470,787

26,495,318

(44,464)

514,279

(338,241)

176,038

(23,861,789)

16,235,890

                   

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)

 

£

£

£

 

             

             

            

(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 changes

(1,297,474)

(781,217)

(2,541,236)

(Increase)/ Decrease in trade and other receivables

493,974

(832,587)

(539,135)

(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 period

189,435

186,447

186,447

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 £947,418 relating to financing activities specific to the borrowings raised throughout the current period (2015 financial period £51,000).

 

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

 

£

£

£

 

 

 

 

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

 

£

£

£

 

 

 

 

Loss for the year attributable to equity holders of the parent

(2,320,403)

(913,891)

177,162

Impairment of Goodwill

Loss on disposal of subsidiaries

Bargain purchase from acquisition of subsidiaries

-

-

(185,698)

-

-

20,057

5,762

(193,425)

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 for the purposes of headline loss per share  (revised)

338,524,702

305,438,536

316,986,334

                      

 

 

 

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 €0.015 each and 3,000,000,000 deferred shares of €0.009 each.

 

Detail of issued capital is as follows:

 

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 Exploration

Corporate

30 June 2016 (£)

 

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 Exploration

Corporate

30 June 2015 (£)

 

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

Mining

Corporate

30 June 2016 (£)

 

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

Mining

Corporate

31 December 2015 (£)

 

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

Louis Coetzee

Noel O'Keeffe

Andreas Lianos

Lukas Maree

Wenzel Kerremans

 

Chairman (Non-Executive)

Chief Executive Officer (Executive)

Technical Director (Executive)

Chief Financial Officer (Executive)

Non-Executive Director

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

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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