Kibo Energy PLC

Annual / Quarterly Financial Statement • May 26, 2017

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RNS Number : 3756G

Kibo Mining Plc

26 May 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: IE00B61XQX41

("Kibo" or "the Company" or together with its subsidiaries "the Group")

Condensed Consolidated Annual Financial Results for the year ended 31 December 2016

Dated: 26 May 2017

Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the mineral exploration and development company focused on coal, gold and nickel, projects in Tanzania is pleased to release its condensed consolidated annual financial results for the year ended 31 December 2016. 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 be available on the Company's website at www.kibomining.com. Details of the date and venue for this year's AGM, which will take place towards the end of June, will be announced shortly.

Highlights from the Chairman, Christian Schaffalitzky's statement:

2016 saw our Company build further on the milestones reached during 2015 with the completion of a number of critical studies in regard to our flagship MCPP project and the spin-off of our key gold assets (Imweru and Lubando) to a new gold focused company, Katoro Gold PLC ("Katoro"). These strategic events were achieved while simultaneously levering the value created in the MCPP to arrange efficient funding mechanisms that minimised shareholder dilution.

Kibo Mining's key achievements are:

·    The completion of the definitive feasibility studies (DFS) on both the proposed coal mine and its dedicated power plant at our Mbeya Coal to Power Project (MCPP);

·    Signing of a collaboration agreement with the multinational US based GE Electric International Inc. in November 2016 which provided for GE to supply equipment, technology and services to the power plant;

·    The negotiation and awarding of the engineering, procurement and construction ("EPC") contract for the power plant construction to SEPCO III and the OEM contract to GE;

·    The completion of the Integrated Bankable Feasibility Study on the MCPP (announced January 2017); and

·    The completion in May 2017 of a reverse takeover transaction with Opera Investments Plc (renamed Katoro Gold PLC) which saw Katoro acquire the Imweru and Lubando licence portfolios, be admitted to AIM and raise £1.5 m for the advancement of a DFS at Imweru.

Condensed Consolidated Financial Results for the year ended 31 December 2016

Condensed Consolidated Statement of Comprehensive Income

	Year ended 31 December 2016	Year ended 31 December 2015
	Audited	Audited
	£	£
Revenue	18,039	44,181
Administrative expenses	(1,653,152)	(1,791,358)
Capital raising fees	(1,648,004)	-
Net reversal of impairment of intangible assets	-	3,182,240
Exploration expenditure	(1,716,967)	(1,454,216)
Operating (loss)/ profit	(5,000,084)	(19,153)
Investment and other income	1,414.668	196,315
(Loss)/Profit from ordinary activities before tax	(3,585,416)	177,162
Taxation	-	-
(Loss)/Profit for the period	(3,585,416)	177,162
Other comprehensive gain:
Exchange differences on translation of foreign operations	99,128	16,366
Adjustment arising from change in non-controlling interest	1,527,515	-
Other Comprehensive gain for the period net of tax	1,626,643	16,366
Total comprehensive (loss)/ profit for the period	(1,958,773)	193,528
(Loss)/ profit for the period	(3,585,416)	177,162
Attributable to the owners of the parent	(3,611,496)	-
Attributable to the non-controlling interest	26,080	-
Total comprehensive (loss)/ profit for the period	(1,986,288)	193,528
Attributable to the owners of the parent	(1,984,853)	-
Attributable to the non-controlling interest	26,080	-
Earnings/ (Loss) Per Share
Basic (loss)/earnings per share	(0.010)	0.001
Diluted earnings per share	(0.010)	0.001
Headline (loss) per share	(0.010)	(0.010)

Condensed Consolidated Statement of Financial Position

					31 December 2016	31 December 2015
					Audited	Audited
					£	£
Assets
Non‑Current Assets
Property, plant and equipment					9,107	7,182
Intangible assets					17,596,105	17,596,105
Total non-current assets					17,605,212	17,603,287
Current Assets
Trade and other receivables					50,633	550,692
Cash and cash equivalents					382,339	189,435
Total current assets					432,972	740,127
Total Assets					18,038,184	18,343,414
Equity and Liabilities
Equity
Called up share capital					13,603,965	13,210,288
Share premium account  Treasury Shares					27,318,262 -	25,782,519 (44,464)
Share based payment reserve					514,279	514,279
Translation reserve					(285,491)	(384,619)
Retained deficit					(23,625,367)	(21,541,386)
Attributable to equity holders of the parent					17,525,648	17,536,617
Non-controlling interest					(1,435)	-
Total Equity					17,524,213	17,536,617
Liabilities
Current Liabilities
Trade and other payables					146,380	306,797
Borrowings					251,928	500,000
Provisions					115,663	-
Total Current Liabilities					513,971	806,797
Total Equity and Liabilities					18,038,184	18,343,414

Condensed Consolidated Statement of Changes in Equity

	Share Capital	Share premium	Treasury shares	Total share capital	Share based payment reserve		Foreign currency translation reserve	Total        reserves			Retained deficit		Non-Controlling Interest		Total
All figures are stated in Sterling	£	£	£	£	£	£		£		£				£
Balance as at 31 December 2015	12,591,750	23,903,307	-	36,495,057	510,978	(400,985)		109,993		(22,229,526)		-		14,375,524
Profit for the year	-	-			-	-		-		177,162		-		177,162
Other comprehensive income - exchange differences on translating foreign operations	-	-	-	-	-	16,366		16,366		-		-		16,366 -
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	574,074	1,879,212		2,453,286	-	-		-		-		-		2,453,286
Issue of treasury shares	44,464	-	(44,464)	-	-	-		-		-		-		-
	618,538	1,879,212	(44,464)	2,453,286	3,301	16,366		19,667		688,140		-		3,161,093
Balance at 31 December 2015	13,210,288	25,782,519	(44,464)	38,948,343	514,279	(384,619)		129,660		(21,541,386)		-		17,536,617
Profit for the year	-	-	-	-	-	-		-		(3,611,496)		26,080		(3,585,416)
Adjustment arising from change in non-controlling interest	-	-	-	-	-	-		-		1,527,515		(27,515)		1,500,000
Other comprehensive income - exchange differences on translating foreign operations	-	-	-	-	-	99,128		99,128		-		-		99,128 -
Proceeds of share issue of share capital	393,677	1,335,876		1,774,017	-	-			-	-		-		1,729,553
Allotment of treasury shares	-	199,867	44,464	244,331	-	-				-		-		199,867
	393,677	1,535,743	44,464	1,973,884	-	99,128		99,128		(2,083,981)		(1,435)		(12,404)
Balance at 31 December 2016	13,603,965	27,318,262	-	40,922,227	514,279	(285,491)		228,789		(23,625,367)		(1,435)		17,524,213

Condensed Consolidated Statement of Cash Flow

All figures are stated in Sterling
		31 December 2016	31 December 2015
		Audited	Audited
		£	£
Cash flows from operating activities
(Loss)/ profit for the period before taxation		(3,585,416)	177,162
Adjustments for:
Foreign exchange gain		124,884	16,366
Depreciation on property, plant and equipment		8,228	21,685
Investment income		(1,815)	(2,890)
Bargain purchase from business combinations		-	(193,425)
Loss on disposal of subsidiaries		-	5,762
Impairment of Goodwill recognised		-	20,057
Provisions		115,663	-
Liabilities settled in shares		1,648,004	596,287
Net reversal of impairment		-	(3,182,240)
		(1,690,452)	(2,541,236)
Movement in working capital
(Increase)/ Decrease in debtors		500,059	(539,135)
Increase/ (Decrease) in creditors		(160,417)	66,691
		339,642	(472,444)
Net cash outflows from operating activities		(1,350,810)	(3,013,680)
Cash flows from financing activities
Proceeds of issue of share capital		-	2,453,286
Repayment of borrowings		(200,000)	-
Proceeds from borrowings		1,751,928	500,000
Investment income		1,815	2,890
Net cash proceeds from financing activities		1,553,743	2,955,176
Cash flows from investing activities
Net cash flow from acquisition of subsidiaries		(1,000)	61,492
Purchase of property, plant and equipment		(9,029)	-
Net cash used in investing activities		(10,029)	61,492
Net increase/(decrease) in cash and cash equivalents		192,904	2,988
Cash and cash equivalents at beginning of period		189,435	186,447
Cash and cash equivalents at end of the period		382,339	189,435

Notes to the condensed consolidated financial results for the year ended 31 December 2016

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 are for the year ended 31 December 2016 was 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 2016, 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 2016.

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 2016 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 Chief Financial Officer, Andreas Lianos.

5. Audit opinion

The consolidated annual financial statements were audited by the Company's auditors, Saffery Champness. The modified auditors report together with the financial statements is available for inspection at the Company's register offices. The modified 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 22 to the financial statements concerning the valuation of intangible assets, and investments in Group undertakings.  The realisation of intangible assets of £17,596,105 (2015: £17,596,105), amounts due from Group undertakings of £26,998,867 (2015: £27,712,269) and investments in Group undertakings of £1,700,000 (2015: £1,700,000) 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 Tanzania National Environmental Management Council ("NEMC") approved and accepted both the Mbeya Coal Mine and Mbeya Power Plant Environmental and Social Impact Assessment ("ESIA") scoping reports. 

Furthermore, the Integrated Bankable Feasibility Study has been finalised, confirming the Mbeya Coal to Power Project is a technically and operationally robust project:

·   Capital requirement for the integrated project reduced 21.1 % from the original integrated prefeasibility study;

·   MCPP total revenue over an assumed 25-year life of project approximately US$7.5billion;

·   Indicative Post Tax Equity IRR between 21% and 22%;

·   MCPP can be constructed and commissioned within the previously projected schedule duration of 36 months; and

·   Post tax Project IRR ranging between 14.7% and 16%.

Also, the Group signed a strategic Memorandum of Understanding with Mbeya Cement Company LTD ("Mbeya Cement"), to develop a strategic regional collaboration and reciprocal supply of materials agreement effective from 20 April 2017.

Cessation of Metal Tiger Joint Ventures

The Group has reached agreement with Metal Tiger Plc, the Company's Joint Venture ("JV") partner in Tanzania to cease JV activities at the Pinewood and Morogoro Joint Ventures with immediate effect and relinquish the licences back to the local authorities.

Acquisition by Opera of the Imweru and Lubando Gold Projects

On 23 September 2016, the Group entered into an agreement with Opera Investments Plc ("Opera") relating to the potential corporate transaction whereby Opera Investments PLC ("Opera") conditionally agreed to acquire Kibo Gold Limited ("Kibo Gold"), through which the Imweru and Lubando gold projects in Tanzania were held, from the Group for a total consideration of £3.66 million (the "Acquisition").

The consideration for the Acquisition was satisfied by the allotment and issue of 61,000,000 new ordinary shares in Opera ("Ordinary Shares") ("Consideration Shares") to the Group at a price of 6 pence per Consideration Share.

Opera has also raised gross proceeds of £1.5 million, through the issue of 25,000,000 new Ordinary Shares ("Placing Shares") at 6 pence per Placing Share (the "Placing"). The Group subscribed for 833,333 Placing shares at a cost of £50,000, funded from existing cash reserves.

The Acquisition constituted a reverse takeover of Opera for the purposes of the Listing Rules, for which Shareholder approval was obtained from the Opera Shareholders at the General Meeting held on 22 May 2017.  On 24 May 2017, the re-admission of the Opera Investments plc (Renamed "Katoro Mining PLC") ordinary shared on AIM was successfully completed.

Shares issued

The Company has issued 277,768 new Ordinary Kibo shares of €0.015 par value each in the capital of the Company (the "Settlement Shares") to service providers in settlement of invoices for a total amount of £13,194. The Settlement Shares were issued in respect of invoices for recent geological and investor relations services to the Company and were issued at a price of 4.75p per Kibo share.

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) / Earnings per share

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

Basic and dilutive (loss)/ earnings per share

The basic (loss)/ earnings and weighted average number of ordinary shares used for calculation purposes comprise the following:

Basic and dilutive (loss)/ earnings per share		31 December 2016 (£)	31 December 2015 (£)
(Loss)/ Earnings for the period attributable to equity holders of the parent		(3,611,496)	177,162
Weighted average number of ordinary shares for the purposes of basic earnings per share		351,080,645	316,986,334
Basic (loss)/ earnings per ordinary share		(0.010)	0.001

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/earnings per share

Reconciliation of headline loss/earnings per share:		31 December 2016 (£)	31 December 2015 (£)
(Loss)/ Profit for the period attributable to normal shareholders		(3,611,496)	177,162
Reversal of impairment of Intangible assets/ (Impairment of Intangible assets)		-	(3,182,240)
Loss on disposal of subsidiaries		-	5,762
Bargain purchase from acquisition of Subsidiaries		-	(193,425)
Adjustment arising from change in non-controlling interest		-	-
Impairment of goodwill on acquisition of Subsidiaries		-	20,057
Headline loss for the period attributable to normal shareholders		(3,611,496)	(3,172,687)
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:

		2016	2015
Authorised equity
1,000,000,000 (2015: 800,000,000) Ordinary shares of €0.015 each 3,000,000,000 deferred shares of €0.009 each		€15,000,000 €27,000,000	€12,000,000 €27,000,000
		€42,000,000	€39,000,000
Allotted, issued and fully paid shares
(2016: 363,976,596 Ordinary shares of €0.015 each)		£4,346,890	-
(2015: 330,928,714 Ordinary shares of €0.015 each)		-	£3,953,213
1,291,394,535 Deferred shares of €0.009 each		£9,257,075	£9,257,075
		£13,603,965	£13,210,288

	Number of Shares	Ordinary Share Capital (£)*	Deferred Share Capital (£)	Share Premium (£)	Treasury shares (£)*
Balance at 31 December 2015	330,928,714	3,953,213	9,257,075	25,782,519	(44,464)
Shares issued during the period	33,047,882	393,677	-	1,535,743	44,464
Balance at 31 December 2016	363,976,596	4,346,890	9,257,075	27,318,262	-

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.

2016 Group	Mining and Exploration	Corporate	31 December 2015 (£)
	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)
Net reversal of impairment of assets
Investment and other income	1,414,668		1,414,668
Tax
Profit/ (Loss) after tax	284,260	(3,301,156)	(3,585,416)

2015 Group	Mining and Exploration	Corporate	31 December 2015 (£)
	Group	Group	Group
Revenue	44,181	-	44,181
Administrative cost	-	(1,791,358)	(1,791,358)
Exploration expenditure	(1,454,216)	-	(1,454,216)
Net reversal of impairment of assets	3,182,240	-	3,182,240
Investment and other income	2,890	-	2,890
Tax	-	-	-
Profit/ (Loss) after tax	1,775,095	(1,597,933)	177,162

2016 Group	Mining	Corporate	31 December 2015 (£)
	Group	Group	Group
Assets	18,015,412	22,772	18,038,184
Segment assets
Liabilities
Segment liabilities	111,376	402,595	513,971
Other Significant items
Depreciation	8,228	-	8,228

2015 Group	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

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

26 May 2017

Directors:                                            

Christian Schaffalitzky                            Chairman (Non-Executive)

Louis Coetzee                                        Chief Executive Officer (Executive)

Noel O'Keeffe                                       Technical Director (Executive)

Andrew Lianos                                      Finance Director (Executive)

Lukas Marthinus Maree                         Non-Executive Director

Wenzel Kerremans                                 Non-Executive Director

Company Secretary:                               Noel O'Keeffe

Auditors:                                      Auditors:                                                Saffery Champness

Kibo Mining - Notes to editors

Kibo was established in early 2008 to explore and develop mineral deposits in Tanzania. The Company was admitted to AIM in London on 27 April 2010 and the AltX in Johannesburg on 30 May 2011. The Company is developing the Rukwa mouth-of-mine thermal power station and controls a large Tanzania mineral right portfolios, which also includes the Haneti Project (nickel, PGE and gold) and a 57% interest in Katoro Gold PLC's Imweru & Lubando Projects.

Its mineral interests are located both in the established and gold prolific Lake Victoria Goldfields, the emerging goldfields of eastern Tanzania and the Mtwara Corridor in southern Tanzania where the Government has prioritised infrastructural development attracting significant recent investment in coal and uranium.  Kibo's objective is to build shareholder value sustainably. This will be achieved primarily through exploration of its own projects and leveraging the Company's experience in Tanzania to acquire exploration and development assets on competitive terms. The focus is on assets that can be moved swiftly up the value curve whilst benefitting from strategic relationships with industry leaders with special skills and competencies within their chosen fields.

Updates on the Company's activities are regularly posted on its website www.kibomining.com 

Johannesburg

26 May 2017

Corporate and Designated Adviser

River Group

This information is provided by RNS

The company news service from the London Stock Exchange

END

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