TIDMKIBO
RNS Number : 9472N
Kibo Energy PLC
27 September 2019
Kibo Energy 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 Group" or "the Company")
Unaudited Interim results for the six months ended 30 June
2019
Dated 27 September 2019
Kibo Energy PLC, the multi-asset, Africa focused, energy
company, is pleased to announce its unaudited interim results for
the 6 month period ended 30 June 2019.
Highlights
-- Strong progress advancing diverse portfolio of major power
generation and mining projects in Sub-Saharan Africa and the UK
-- Engagement Letter signed with Wimmer Financial to advise Kibo
on and manage all aspects related to the structuring and provision
of a project finance corporate credit line facility of up to USD
900 million
-- Collaboration Agreement signed with US energy storage
company, ESS, to assist with integrating renewable power capacity
into Kibo's African coal to power projects
-- Significant advancement of Benga in Mozambique
o Negotiation with EDM on a PPA at an advanced stage
o Financial Model completed and EIS at advanced stage of
completion
-- Notable successes achieved for Mast in the UK
o Acquired first reserve power plant site in the UK
o Appointment of key technical contractors and power purchase
off-taker
-- Making headway with the MCPP in Tanzania having increased interest to 100%
o Confirmation from the Tanzanian Government that the project
can be developed for the export market
o Post period end, granted mining rights over Mbeya Coal
Deposit
-- Signed Collaboration Agreement with SES
o Company to benefit from SES's global experience in managing
and operating coal fired power stations
Chairman's Statement
I am pleased to present our half-year accounts for the 6 month
period ending 30 June 2019 and provide a summary of the Company's
activities during the period.
As you are aware, in February, the Company received
disappointing news that its Mbeya Coal to Power Project ('MCPP')
did not qualify under a Tanzanian Government tender to be
considered further for the delivery of coal fired electricity to
the domestic market. While this setback presented a challenge to
the Company, it allowed us to focus on fast-tracking the
development of some of our other energy projects across Africa and
in the UK. These comprise the Benga Power Plant Project ('Benga')
in Mozambique, the Mabesekwa Independent Power Project
('Mabesekwa') in Botswana and Mast Energy Developments Ltd ('Mast')
in the UK.
Operations
We made substantial progress at Benga during the period,
completing a positive Definitive Feasibility Study ('DFS'), which
was presented to the Mozambique Government, advancing negotiations
with Mozambican state-owned electric utility Electricidade de
Mocambique ('EDM') on a Power Purchase Agreement ('PPA').
Additionally, the Company completed a base case financial model for
the project and is well advanced in completing the required
Environmental Impact Assessment Study.
Kibo is now well positioned with Benga to realise its proposal
of developing a 150 MW to 300 MW thermal power plant in the Tete
province of northern Mozambique close to current thermal coal
producers. It has to date met its obligation to complete a positive
DFS on the project and thus maintains its 65% interest (local
company Termoeléctrica de Benga holds the remaining 35% interest)
with an option to increase its interest to 85%. A final review of
the DFS is currently in progress. I am also pleased to note the
engagement letter we signed with Wimmer Financial LLP in April to
advise Kibo on and manage all aspects related to the structuring
and provision of a project debt funding facility of up to USD 900
million. This, when enacted, will greatly assist with the project
financing of all our African energy projects as they approach a
final investment decision.
An important aspect of the Benga development and our other coal
to power projects in Africa is our strategy to develop co-located
and integrated renewable energy capacity on site. This will assist
with lowering average greenhouse gas emissions and make the
projects attractive to a larger number of potential project funders
many of whom have strict environmental conditions for investment.
To advance this strategy, Kibo signed a collaboration agreement
with US energy storage technology company ESS Tech Inc ('ESS') in
June. ESS is a leader in the design, manufacture, supply and
installation of long-term battery storage solutions for renewable
power. The collaboration agreement provides for ESS to be the
preferred electricity storage technology partner for Kibo which
thereby receives support and technical advice on its African power
projects, and assistance in developing new project opportunities,
funding and securing PPAs. The availability of effective and
long-term battery storage capacity is critical to incorporating
renewable energy generation as part of the baseload power output
from the coal to power plants and we are very pleased to have
secured collaboration with one of the leading-edge technology firms
in this fast-growing field. ESS already has a strong presence in
sub-Saharan Africa, partnering with Power Africa (a division of
USAID) in assisting with expanding electricity grid connectivity on
the continent.
Kibo's 60% owned UK subsidiary, Mast, also made solid progress
during the first half of 2019 in securing and evaluating options on
small power plant sites for the development of flexible gas-fuelled
electric generators servicing the rapidly developing Reserve Power
market in the UK. This resulted in the acquisition by Mast of its
first site, Bordersley, towards the end of June. The acquisition
included grid connection and gas connection offers from the
relevant UK authorities, with offers subject to successful
financial close and no delays in completion to electricity
generation. In order to ensure smooth and timely development of the
site, Mast has appointed experienced firms Clarke Energy (EPC
contractor) and Encora Energy Limited (owners' engineer) to manage
the technical aspects of the development. Mast has also
significantly de-risked the project with the recent execution of a
five-year PPA with Statkraft Markets GmbH, a global player in this
market. The commissioning of the Bordersley plant is anticipated by
the end of March 2020.
Subsequent to Mast's acquisition of Bordersley, Kibo immediately
consolidated a full 100% equity and economic interest in the
project by the purchase of the SPV that holds the asset, Bordersley
Power Plant Limited, ('Bordersley Power') from Mast for a nominal
sum of GBP100 cash and the 40% flow-through economic interest held
by Mast's minority shareholder in Bordersley Power, St Anderton on
Vaal for 46,067,206 newly issued shares in Kibo ('Consideration
Shares'). The acquisition of Bordersley Power ('Bordersley
Acquisition') was done through a wholly owned Kibo UK subsidiary
company. The Consideration Shares are payable in five tranches; an
immediate payment of 22,067,206 shares (completed) and four
tranches of 6,000,000 shares to be issued commensurate with Mast
reaching various milestones in the development of Bordersley up to
and including electricity production having commenced. The first of
the four tranches of 6,000,000 shares has also completed.
The issue price for the Consideration Shares is 5.25p per share
for a total value of GBP 2,420,000, which was calculated based on
the fair value sum of 40% of the projected Net Present Values of
Bordersley revenues and 100% of the project royalties accruing to
St Anderton on Vaal from Kibo as determined under the terms of the
original agreement between Mast and Kibo announced by RNS on the
15th August 2018. A welcome term of the Bordersley Acquisition
agreement is that for a period of two years following signing, St
Anderton on Vaal will advance all proceeds from any sales of the
Consideration Shares to Mast as a loan, which together with the
other terms of the service agreement between Mast and Bordersley
Power will mean that Mast will be solely responsible for the
funding and development of the Bordersley site without further
recourse to Kibo for funding during this two year period. Mast also
continues to aggressively pursue opportunities to acquire other
sites suitable for the development of flexible power plants and is
currently evaluating and negotiating on several sites over which it
has options.
In Tanzania, the Company continued to explore opportunities for
the commercialisation of the MCPP following the news in February
that it was not selected as one of the preferred tender bidders for
consideration to supply coal fired power to the domestic market.
Following meetings with Tanzanian Government representatives, the
Company received the welcome news in April that it was being
formally invited to develop the MCPP for the export market. This
provides the Company with a potential opportunity to participate in
the growing African power export markets and conclude agreements
with local private off-takers and with regional Power Pools member
countries e.g. East African and Southern African Power Pools.
Further good news for the Company was received in August when we
were formally issued mining license rights over the Mbeya coal
deposit. As well as the source of coal for the MCPP, the Mbeya coal
deposit provides additional opportunities for coal sales for
export, coal to gas production and coal sales to local off-takers,
which the Company is now well placed to further investigate.
The Company maintains a strong working relationship with China
based global energy developer SEPCOIII with which it has in-situ
contracts for the power plant construction element of the MCPP.
Kibo also continues to negotiate with SEPCOIII on the
implementation of the Strategic Development Agreement first
announced in October 2018 for the grant of EPC sole bidder status
to SEPCOIII across all Kibo's proposed and future coal to power
plants in Africa in exchange for staged equity investment in the
Company. We also expanded our partner network in Africa with the
signing of a collaboration agreement with STEAG Energy Services
("SES"), a manager and operator of thermal power plants globally.
The collaboration will enable Kibo to benefit from SES's experience
in operating and maintain coal fired power plants and provide key
technical support in the development of its African power
plants.
In Botswana, the MCIPP, in which we have an 85% interest, is
also advancing. It is currently at feasibility stage awaiting a
Mining Licence and is on a clear development path with visible
deliverables.
Corporate
The Company undertook three new share issues during the period
under review in respect of on-going operations and corporate
activity.
During March, it re-acquired 100% equity interest in the MCPP by
acquiring the 2.5% minority interest held by Sanderson Capital
Partners ('Sanderson') through the issue of 126,436,782 shares to
Sanderson at a price of GBP 0.01305 per share for a total value of
GBP 1,650,000 and an 0.3% royalty of the future operating profits
from development of the Mbeya coal deposit capped at GBP 2,000,000.
The acquisition price represented an approximately 10% premium on
what Sanderson originally paid for the 2.5% interest reflecting the
progress made since Sanderson first acquired it. The Company
believes that holding a 100% interest in the MCPP will make
bringing the project to commercialisation easier in terms of making
it more attractive for capital funding and expediting development.
The terms of the acquisition also provided for the continuation of
the Forward Payment Facility agreed between Sanderson and Kibo in
December 2016 for drawdown by Kibo of up to USD 2,940,000. To the
end of August, Kibo has drawn down GBP550,000 under this
facility.
During June, the Company issued 10,518,741 shares at a price of
GBP 1.35p to service providers for a total of GBP 142,003, which I
believe demonstrates continued support and belief in the inherent
value in Kibo.
During June, the Company issued 22,067,206 shares at a price of
GBP 5.25p to St Anderton on Vaal for a total value of GBP
1,158,528. This represented the first tranche of shares further to
Kibo's acquisition of Bordersley from Mast as discussed above.
Recent Developments
On 25 September 2019 the Company announced that is has signed a
binding Heads of Agreement ('the Agreement') with Shumba Energy Ltd
('Shumba') and various subsidiaries of each party ('the Parties')
to reorganise the arrangements for the MCIPP and its associated
coal asset in Botswana.
We believe this reorganization and the associated additional
joint venture arrangements have the potential to maximise value
from our respective coal assets in Botswana. This arrangement paves
the way for Kibo to become a major player in the rapidly evolving
energy sector in the country. As well as providing for the
amalgamation of Kibo's and Shumba's respective existing coal
resources at Mabesekwa, it includes joint venture terms to develop
a bespoke 300 MW coal to power plant specifically to fuel a
petrochemical plant ('PCP') planned for development by Shumba in
conjunction with its Chinese partners. The joint venture
arrangement also provides for coal sale agreements and power
purchase agreements to provide coal feedstock and electricity
respectively to the PCP. The power plant will be developed in
addition to the 300 MW power plant which Kibo is already advancing
in Botswana as part of the existing MCIPP and in which we continue
to have an 85% interest. This plant is currently at feasibility
stage awaiting a Mining Licence and is on a clear development path
with visible deliverables.
I encourage shareholders to read in full the recent RNS
announcement on this significant development in the Company's value
proposition for Botswana which we are fully committed to realising
over the next few years.
Outlook
Undoubtedly, we are in a prospering sector; our four projects
are directly positioned to address major energy issues in Africa
and closer to home in the UK. Of today's eight billion world
population, there are at least three billion with no or only
erratic access to power. Given that the world population is
expected to increase by a further three billion in the next 50
years, in tandem with our thirst for new technologies, average
power consumption is likely to escalate. Africa already suffers
from serious energy shortages, while recently in August the UK
suffered major power cuts resulting from a storm. Looking ahead, we
remain focused on advancing our projects towards commercialisation
and helping to alleviate these bottlenecks. Accordingly, we
anticipate a steady flow of news during the remainder of the
year.
In conclusion I wish to thank our CEO, Louis Coetzee, and his
management team for their continued hard work in steering Kibo in
its strategy of becoming a key player in the development of
reliable, sustainable and affordable electricity for Africa and
beyond.
Christian Schaffalitzky
Chairman
Unaudited Interim Results for the six months ended 30 June
2019
Unaudited condensed consolidated interim Statement of
Comprehensive Income
For the six months ended 30 June 2019
6 months to 6 months to 12 months to
30 June 30 June 31 December
Note 2019 2018 2018
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue - - -
Administrative expenses (1,375,981) (924,829) (2,045,613)
Exploration Expenditure (434,888) (402,609) (779,443)
Impairment of intangible
assets - - (912,892)
Capital raising fees (11,000) - (336,807)
Operating Loss (1,821,869) (1,327,438) (4,074,755)
Other Income 1,968 578 38,042
Finance costs (902)
------------ -------------- -------------
Loss before Tax (1,820,803) (1,326,860) (4,063,713)
Tax - - -
------------ -------------- -------------
Loss for the period (1,820,803) (1,326,860) (4,036,713)
Other comprehensive
income:
Exchange differences
on translating of
foreign operations,
net of taxes 155,121 (247,108) (401,751)
Total Comprehensive
Loss for the Period (1,665,682) (1,573,968) (4,438,464)
------------ -------------- -------------
Loss for the period
attributable to (1,820,803) (1,326,860) (4,036,713)
------------ -------------- -------------
Owners of the parent (1,549,988) (1,250,934) (3,388,778)
Non-controlling interest (270,815) (75,926) (647,935)
------------ -------------- -------------
Total comprehensive
loss attributable
to (1,665,682) (1,573,968) (4,438,464)
------------ -------------- -------------
Owners of the parent (1,394,867) (1,578,376) (3,776,894)
Non-controlling interest (270,815) 4,408 (661,570)
------------ -------------- -------------
Weighted average number
of shares in issue 5 681,176,592 496,954,459 565,932,121
Basic loss per share 5 (0.0023) (0.0025) (0.006)
Diluted loss per share 5 (0.0023) (0.0025) (0.006)
Unaudited condensed consolidated interim Statement of Financial
Position
As at 30 June 2019
Note 30 June 30 June 31 December
2019 2018 2018
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 113,600 7,847 20,240
Intangible assets 8 28,654,525 26,972,417 26,059,525
Goodwill 300,000 - 300,000
Total non-current assets 29,068,125 26,980,264 26,379,765
------------- ------------- -------------
Current assets
Trade and other receivables 92,616 78,631 89,349
Cash and cash equivalents 227,663 1,679,453 654,158
------------- ------------- -------------
Total current assets 320,279 1,758,084 743,507
------------- ------------- -------------
Total assets 29,388,404 28,738,348 27,123,272
------------- ------------- -------------
Equity
Called up share capital 6 19,062,604 16,756,351 17,240,017
Share premium 6 40,390,159 37,719,010 39,205,318
Common control reserve (1,767,189) 2,097,442 (18,329)
Translation reserve (501,501) (595,948) (656,622)
Share based payment reserve 182,727 556,086 41,807
Retained deficit (30,980,000) (27,785,587) (29,399,788)
------------- ------------- -------------
Attributable to equity holders
of the parent 26,386,800 28,747,354 26,412,403
------------- ------------- -------------
Non-controlling interest 168,580 (1,378,980) 409,171
Total Equity 26,555,380 27,368,374 26,821,574
Liabilities
Current liabilities
Trade and other payables 951,592 470,646 301,698
Borrowings 9 444,960 899,328 -
Deferred vendor liability 1,436,472 - -
Total current liabilities 2,833,024 1,369,974 301,698
------------- ------------- -------------
Total equity and liabilities 29,388,404 28,738,348 27,123,272
------------- ------------- -------------
Unaudited Condensed Consolidated Statement of Changes in
Equity
Share Share Share Control Foreign Retained Non-controlling Total
Capital Premium based Reserve currency deficit interest
payment translation
reserve reserve
GBP GBP GBP GBP GBP GBP GBP
Balance at 31
December 2018
(audited) 17,240,017 39,205,318 41,807 (18,329) (656,622) (29,399,788) 409,171 26,821,574
Loss for the year - - - - - (1,549,988) (270,815) (1,820,803)
Other
comprehensive
income-
translation of
foreign
operations - - - - 155,121 - - 155,121
Issue of share
capital 1,822,587 1,184,841 - - - - - 3,007,428
Issue of share
options or share
warrants - - 140,920 - - - - 140,920
Adjustment
arising from
change in
non-controlling
interest - - - (1,748,860) - (30,224) 30,224 (1,748,860)
----------- ----------- ---------- ------------ ------------ ------------- ---------------- ------------
Balance as at 30
June 2019
(unaudited) 19,062,604 40,390,159 182,727 (1,767,189) (501,501) (30,980,000) 168,580 26,555,380
----------- ----------- ---------- ------------ ------------ ------------- ---------------- ------------
Balance at 1
January 2018
(audited) 14,015,670 28,469,750 556,086 2,097,442 (268,506) (26,534,653) (1,383,388) 16,952,401
Loss for the year - - - - - (1,250,934) (75,926) (1,326,860)
Other
comprehensive
income-
translation of
foreign
operations - - - - (327,442) - 80,334 (247,108)
Issue of share
capital 2,740,681 9,249,260 - - - - - 11,989,941
----------- ----------- ---------- ------------ ------------ ------------- ---------------- ------------
Balance at 30
June 2018
(unaudited) 16,756,351 37,719,010 556,086 2,097,442 (595,948) (27,785,587) (1,378,980) 27,368,374
----------- ----------- ---------- ------------ ------------ ------------- ---------------- ------------
Balance at 1
January 2018
(audited) 14,015,670 28,469,750 556,086 (213,053) (268,506) (26,534,653) 927,107 16,952,401
Loss for the year - - - - - (3,388,778) (647,935) (4,036,713)
Adjustment
arising from
change in
non-controlling
interest - - - 194,724 - 9,364 143,634 347,722
Other
comprehensive
income-
translation of
foreign
operations - - - - (388,116) - (13,635) (401,751)
Reclassification
of share based
payment reserve
on expired share
options - - (514,279) - - 514,279 - -
Issue of share
capital 3,224,347 10,735,568 - - - - - 13,959,915
----------- ----------- ---------- ------------ ------------ ------------- ---------------- ------------
Balance at 31
December 2018
(audited) 17,240,017 39,205,318 41,807 (18,329) (656,622) (29,399,788) 409,171 26,821,574
----------- ----------- ---------- ------------ ------------ ------------- ---------------- ------------
Unaudited condensed consolidated interim statement of cash
flow
For the six months ended 30 June 2019
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2019 2018 2018
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Loss for the period before taxation (1,820,803) (1,326,860) (4,036,713)
Adjusted for:
Foreign exchange loss 13,159 (129,425) (270,881)
Warrants issued for facilitation 71,230 - -
fees
Share based payment for overtime 69,689 - -
Expenses settled through share issue 142,003 - -
Impairment of intangible assets - - 912,892
Depreciation on property, plant
and equipment - - 6,805
Cost settled through issue of shares - - 126,966
Operating income before working
capital changes (1,524,721) (1,456,285) (3,260,931)
Increase in trade and other receivables (3,267) (19,585) (30,303)
Increase in trade and other payables 649,894 204,428 35,480
Net cash outflows from operating
activities (878,095) (1,271,442) (3,255,754)
Cash flows from investing activities
Purchase of property, plant and
equipment (93,360) - (21,494)
Net cash used in investing activities (93,360) - (21,494)
Cash flows from financing activities
Repayment of borrowings 100,000 (199,709) (200,000)
Proceeds from borrowings 444,960 251,565 251,565
Proceeds from issue of share capital - 2,132,453 3,100,000
Net cash proceeds from financing
activities 544,960 2,184,309 3,151,565
Net movement in cash and cash equivalents (426,495) 912,867 (125,683)
Cash and cash equivalents at beginning
of period 654,158 766,586 766,586
Exchange movements - - 13,255
------------ ---------------- ------------
Cash and cash equivalents at end
of period 227,663 1,679,453 654,158
------------ ---------------- ------------
Notes to the unaudited condensed consolidated interim financial
statements
For the six months ended 30 June 2019
1. General information
Kibo Energy PLC 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 Market ("AIM") of the London Stock Exchange and the Alternative
Exchange ("ALTx") of the JSE Limited. The principal activities of
the Company and its subsidiaries are related to the development of
energy projects in Mozambique, Botswana, Tanzania and the United
Kingdom
2. Statement of Compliance and Basis of Preparation
The condensed consolidated interim financial results are for the
six months ended 30 June 2019, and have been prepared using the
same accounting policies as those applied by the Group in its
December 2018 consolidated annual financial statements, which are
in accordance with the framework concepts and the recognition and
measurement criteria of the International Financial Reporting
Standards and Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council 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
2018.
The comparative amounts in the consolidated financial results
include extracts from the consolidated annual financial statements
for the period ended 31 December 2018.
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
2018.
4. Adoption of new and revised standards
IFRS 16
The group has adopted IFRS 16 for the first time for the
six-month period commencing on 1 January 2019.
IFRS 16 replaces IAS 17 Leases (IAS 17), IFRIC 4 Determining
whether an Arrangement contains a Lease (IFRIC 4), SIC 15 Operating
Leases-Incentives and SIC 27 Evaluating the Substance of
Transactions Involving the Legal Form of a Lease. The standard
establishes a new definition and criteria to identify whether a
contract is, or contains, a lease as well as principles for the
recognition, measurement, presentation and disclosure of leases.
For lessee accounting, a single accounting model is introduced that
requires lessees to recognise assets and liabilities for all
leases.
The Group has elected to apply the modified retrospective
approach, where the Right of Use assets, classified as part of
property, plant and equipment, equal the lease liabilities,
classified as part of trade and other payables, on transition.
There is no restatement of comparative information and the
cumulative effect of initially applying IFRS 16 is recognised as an
adjustment to the opening balance of retained earnings.
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been classified as
operating leases under the principles of IAS 17 Leases. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's weighted average
incremental borrowing rate as of 1 January 2019. The weighted
average incremental borrowing rate applied to the lease liabilities
on 1 January 2019 ranged from 10.25% to 11.5% per annum.
The associated Right of Use assets for the property leases were
measured on a modified retrospective basis, with the new rules
applied effective 1 January 2019. The right of use assets were
measured at the amount equal to the lease liability on adoption
date.
In applying IFRS 16 for the first time, the group applied the
following practical expedients permitted by the standard:
-- the accounting for operating leases with a remaining lease
term of less than 12 months as at 1 January as short term
leases;
-- the exclusion of initial direct costs for the measurement of
the right-of-use asset at transition date;
-- the use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The group leases, as lessee, offices in South African &
Tanzania. The table below shows the financial impact associated
with the recognition and measurement of the Right to Use Asset and
corresponding Lease liabilities as at 1 January 2019:
June 2019
GBP
Right of use asset recognised 11,011
Lease liability recognised (11,011)
Depreciation expensed 1,943
Effect of discounting using the weighted average incremental
borrowing rate at 1 January 2019 (601)
5. 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 12 months
to to
30 June 30 June 31 December
2019 2018 2018
GBP GBP GBP
Loss for the year attributable
to equity holders of the parent (1,549,988) (1,250,934) (3,388,778)
Weighted average number of ordinary
shares for the purposes of basic
and dilutive loss per share 681,176,592 496,954,459 565,932,121
Basic loss per share (0.0023) (0.0025) (0.006)
6 months 6 months 12 months
to to to
Reconciliation of Headline loss per 30 June 30 June 31 December
share
2019 2018 2018
GBP GBP GBP
Loss for the year attributable to
equity holders of the parent (1,549,988) (1,250,934) (3,388,778)
Headline loss per share (1,549,991) (1,250,934) (3,388,778)
------------ ------------ ------------
Weighted average number of ordinary
shares for the purposes of headline
loss per share (revised) 681,176,592 496,954,459 565,932,121
Headline loss per share (0.0023) (0.0025) (0.006)
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
4/2019 issued by the South African Institute of Chartered
Accountants (SAICA).
6. Called up share capital and share premium
Authorised ordinary share capital of the company is
1,000,000,000 ordinary shares of EUR0.015 each and 3,000,000,000
deferred shares of EUR0.009 each.
Detail of issued capital is as follows:
Number of
Ordinary Share Deferred Share
Share
shares Capital Capital Premium
GBP GBP GBP
Balance at 31 December
2017 395,254,364 4,758,595 9,257,075 28,469,750
Shares issued in period
(net of expensed for cash) 244,776,705 3,224,347 - 10,735,568
Balance at 31 December
2018 640,031,069 7,982,942 9,257,075 39,205,318
------------ ---------- ---------- -----------
Shares issued in period
(net of expensed for cash) 159,022,729 1,822,587 - 1,184,841
------------ ---------- ---------- -----------
Balance at 30 June 2019 799,053,798 9,805,529 9,257,075 40,390,159
------------ ---------- ---------- -----------
The company issued the following ordinary shares during the
period, with regard to key transactions:
- 126,436,782 new ordinary shares were issued on 5 March 2019 at
GBP0.01305 per share to Sanderson Capital Partners in conversion of
its 2.5% minority interest in Mbeya Development;
- 10,518,741 new ordinary shares in the company were issued on
17 June 2019 at GBP0.0135 per share. The shares were issued in
payment of various service invoices to certain providers of
professional and technical consulting services;
- 22,067,206 ordinary shares were issued on 26 June 2019 at
GBP0.0525 per share as part consideration for the acquisition of
all St Anderton's direct and indirect interests in the Bordersley
power project.
7. 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 2019 Mining and 30 June 2019
Exploration Corporate (GBP)
Group Group Group
Revenue - - -
Administrative cost (448,966) (927,015) (1,375,981)
Exploration expenditure (434,888) - (434,888)
Investment and other income 1,398 570 1,968
Capital raising fees - (11,000) (11,000)
Finance costs - (902) (902)
Loss after tax (882,456) (938,347) (1,820,803)
------------- ---------- -------------
30 June 2018 Mining and 30 June 2018
Exploration Corporate (GBP)
Group Group Group
Revenue - - -
Administrative cost - (924,829) (924,829)
Exploration expenditure (402,609) - (402,609)
Investment and other income 578 - 578
------------- ---------- -------------
Loss after tax (402,031) (924,829) (1,326,860)
------------- ---------- -------------
30 June 2019 30 June 2019
Mining Corporate (GBP)
Group Group Group
----------- ---------- -------------
Assets
Segment assets 26,360,229 3,028,176 29,388,405
Liabilities
Segment liabilities 286,220 2,546,804 2,833,024
Other Significant items
Depreciation - - -
30 June 2018 30 June 2018
Mining Corporate (GBP)
Group Group Group
----------- ---------- -------------
Assets
Segment assets 19,206,661 9,531,687 28,738,348
Liabilities
Segment liabilities 391,334 978,640 1,369,974
Other Significant items
Depreciation - - -
8. Intangible assets
12 months
to
Composition of Intangible assets 30 June 30 June 31 December
2019 2018 2018
GBP GBP GBP
Mbeya Coal to Power Project 15,896,105 15,896,105 15,896,105
Lake Victoria 787,108 1,700,000 787,108
Mabesekwa Coal Independent Power Project 9,376,312 9,376,312 9,376,312
Bordersley Power Project* 2,595,000 - -
28,654,525 26,972,417 26,059,525
----------- ----------- ------------
The company acquired the intangible asset in Bordersley in two
separate transactions:
-- MAST Energy Developments Limited, a 60% owned subsidiary of
Kibo Energy PLC, purchased the rights to the development of a 5MW
gas-fuelled power generation plant supported by a Grid Connection
Offer and a Gas Connection Offer through the acquisition of
Bordersley Power a Special Purpose for a consideration of
GBP175,000 on 20 June 2019.
-- Kibo Energy PLC, through its 100% owned subsidiary, Sloane
Developments Ltd, acquired the see-through economic interest "40%
of the revenue and 100% of the royalties" held by St. Anderton, the
minority shareholder of MED (40%) for a consideration comprising
the allotment and issue of up to 46,067,206 ordinary shares in the
capital of Kibo to St. Anderton, subject to a 22,067,206 upfront
minimum issue, at an issue price of GBP0.0525 per share on 26 June
2019 - refer to the Chairman's Statement for more detail on the
transaction.
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.
*The recognition and measurement of the intangible assets
related to the St. Anderton and Bordersley Power acquisition is
based on management's provisional assessment of the financial
impact based on the information currently available.
9. Borrowings
12 months
to
Amounts falling due within one year 30 June 30 June 31 December
2019 2018 2018
GBP GBP GBP
Short term borrowings 444,960 899,328 -
444,960 899,328 -
-------- -------- ------------
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.
10. Financial instruments
12 months
to
30 June 30 June 31 December
2019 2018 2018
GBP GBP GBP
Financial assets - carrying amount
Loans and receivables held at amortised
cost
Trade and other receivables 92,616 78,631 89,349
Cash and cash equivalents 227,663 1,679,453 654,158
---------- ---------- ------------
320,279 1,758,084 743,507
---------- ---------- ------------
Financial liabilities - carrying amount
Financial liabilities held at amortised
cost
Trade and other payables 861,111 470,646 301,698
Borrowings 444,960 899,328 -
Deferred vendor liability 1,436,472 - -
---------- ---------- ------------
2,742,543 1,369,974 301,698
---------- ---------- ------------
The Board of Directors considers that the fair values of
financial assets and liabilities approximate their carrying values
at each reporting date due to the short term nature thereof, and
market related interest rate applied.
11. Corporate transactions
Kibo Nickel Limited and its subsidiaries
The Group entered into an investment and option agreement (the
"Agreement") with AIM quoted African Battery Minerals PLC ("ABM"),
whereby ABM will be able to acquire up to 10 million new ordinary
shares of 1.0 pence each in the capital of AIM quoted Katoro Gold
PLC ("Ordinary Shares"), a subsidiary of the Kibo Group, together
with up to 10 million warrants over Ordinary Shares of Katoro Gold
PLC, and an option to acquire, subject to the completion of due
diligence by ABM, up to a 35% interest in Katoro Gold PLC's 100%
owned Haneti Nickel Project ("Haneti") in Tanzania (the "Option")
for a total consideration of up to GBP125,000. ABM exercised their
option to acquire the 10 million new ordinary shares, together with
25% of the equity interest held by Katoro Gold PLC in Kibo Nickel
Limited and its subsidiaries, effective from 3 June 2019, which
resulted in a change in the interest held by the Group, without
loss of control over the subsidiary.
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
Mining Rights granted for MCPP
The Group has been granted seven Mining Rights for its Mbeya
Coal to Power Project ('MCPP') in Tanzania.
Disposal of Reef Miners Ltd
During August 2019, the Group entered into a conditional
agreement (subject to, among other things, due diligence) to
dispose of Reef Miners Limited, which owns the Imweru gold project
('Imweru' or the 'Project') and the Lubando gold project in
northern Tanzania to Lake Victoria Gold Limited ('LVG') for a total
staged cash consideration of up to US$1.0 million and a 1.5% Net
Smelter Royalty ('NSR') ('the Proposed Disposal').
Preliminary Notice to Proceed on Bordersley
During September 2019, a preliminary notice to proceed with the
construction and commissioning of the 5MW gas-fuelled power
generation plant at Bordersley Power Ltd ('Bordersley'), has been
issued by the Company's 60% owned subsidiary, and manager and
operator of Bordersley, MAST Energy Developments Limited ('MED').
This event triggered the payment of the next tranche of shares to
the original MED vendors, St. Anderton on Vaal Limited ('St.
Anderton'), pursuant to the agreement for Kibo to consolidate full
ownership of Bordersley by acquiring all of St. Anderton's direct
and indirect interests in Bordersley (please refer to announcement
dated 26 June 2019). St' Anderton has been issued 6,000,000
ordinary shares in the share capital of Kibo at a deemed issue
price of GBP0.0525 per share ('First Tranche Shares').
Proposed Capital Reorganisation
The Board has proposed to reduce the nominal value of the
ordinary shares in issue from EUR0.015 to EUR0.001 whilst retaining
the same number of shares, thus having no direct impact on the
trading price of the Company's New Ordinary Shares. The Board
considers the capital reorganisation to be in the best interest of
the Company and its shareholders, as the capital reorganisation
will allow the Company, if appropriate, to raise money in the
future by the issue of New Ordinary Shares, and therefore
facilitate the continued progress of its portfolio power generation
and mining projects in Sub-Saharan Africa and the UK.
It was proposed that:
-- each of the Existing Ordinary Shares of EUR0.015 be
subdivided and converted into one new 2019 Deferred Share of
EUR0.014 each and one New Ordinary Share of EUR0.001 each; and
-- all of the authorised but unissued ordinary shares of
EUR0.015 each be subdivided and converted into one 2019 Deferred
Share of EUR0.014 each and one New Ordinary Share of EUR0.001 each
for each Existing Ordinary Share
The above proposed capital reorganisation was subject to
shareholder approval, and duly approved at the Company's AGM held
on 24 September 2019.
Reorganization of the Mabesekwa Coal Independent Power Project
Arrangements ("MCIPP")
On 25 September 2019 the Company announced that is has signed a
binding Heads of Agreement ('the Agreement') with Shumba Energy Ltd
('Shumba') and various subsidiaries of each party ('the Parties')
to reorganise the arrangements for the MCIPP and its associated
coal asset in Botswana. Refer to the Chairman's Statement and
relevant RNS for more details in this regard.
16. Going concern
The Group currently generates no revenue and had net assets of
GBP26,555,380 as at 30 June 2019 (31 December 2018: net assets of
GBP26,821,574). The Directors have reviewed budgets, projected cash
flows and other relevant information, and on the basis of this
review and the below, they are confident that the company and the
Group will have adequate financial resources to continue in
operational existence for the foreseeable future.
Following the proposed capital reorganisation, the company has
or has access to sufficient funds to continue the development
activities for its various projects. In the event that the company
is not able to raise further funding, and before any mitigating
actions are taken, the company has sufficient funds for its present
working capital requirements for the foreseeable future. The
directors though continue to review the Group's options to secure
additional funding for its general working capital requirements,
alongside its ongoing review of potential acquisition targets and
corporate development needs. The directors are confident in this
light that such funding will be available, although there is no
guarantee as to the terms of such funding or that such funding will
be available. In addition, any equity funding may be subject to
shareholder approvals in line with legal and regulatory
requirements as appropriate. As a result, the directors continue to
monitor and manage the company's cash and overheads carefully in
the best interests of its shareholders.
Whilst the directors continue to consider it appropriate to
prepare the financial statements on a going concern basis, the
above constitutes a material uncertainty that the shareholders
should be aware of.
17. Commitments and contingencies
There are no material commitments, contingent assets or
contingent liabilities as at 30 June 2019.
18. Seasonality of operations
The company's operations are not considered to be seasonal or
cyclical. These interim results were therefore not impacted by
seasonality or cyclicality.
27 September 2019
By order of the board:
Christian Schaffalitzky Chairman (Non-Executive)
Louis Coetzee Chief Executive Officer (Executive)
Noel O'Keeffe Technical Director (Non-executive)
Andreas Lianos Financial Director (Non-Executive)
Lukas Maree Executive Director
Wenzel Kerremans Non-executive Director
Company Secretary: Noel O'Keeffe
Auditors: Crowe U.K. LLP
Brokers: First Equity Limited
Salisbury House
London Wall
London EC2M 5QQ
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
Johannesburg
27 September 2019
Designated and Corporate Adviser
River Group
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LRMPTMBBTMPL
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