TIDMKIBO

RNS Number : 5558B

Kibo Energy PLC

11 June 2021

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 Company")

Dated: 11 June 2021

Kibo Energy PLC ('Kibo' or the 'Company')

Results for the Year Ended 31 December 2020

Kibo Energy PLC ("Kibo" or the "Company"), the multi-asset, Africa focused energy company, is pleased to release its consolidated annual financial results for the year ended 31 December 2020. The Company's Annual Report, which contains the full financial statements is in the process of being prepared for dispatch to shareholders. A copy of this Annual Report is also available from the Company's website at www.kibo.energy at the following link http://kibo.energy/wp-content/uploads/Kibo-Annual-Report-2020-Final.pdf . The financial statements are set out below and should be read in conjunction with the 2020 Annual Report.

Details of the date and venue for this year's AGM will be announced in due course.

Overview

Financial (including the consolidated results of MAST Energy Developments Plc and Katoro Gold Plc)

   --      Loss after tax GBP6,417,237 (2019: GBP3,903,116 loss) 

o GBP2,448,710 of total loss for the period stems from consolidated results of Katoro Gold Plc, which is separately funded

-- Administrative expenditure year to year remains fairly consistent at GBP3,393,687 (2019: GBP2,922,927)

-- Listing and capital raising fees increased from GBP729,072 to GBP1,027,658 due to the MED listing;

-- Additional exploration expenditure of GBP1,122,676 incurred in 2020 by Kibo's subsidiary, Katoro, on the Blyvoor JV Project in South Africa;

-- Cash outflow from consolidated operating activities consistent year to year GBP2,374,684 (2019: GBP2,392,495 cash outflow), including the consolidated cash outflows of MAST Energy Developments Plc and Katoro Gold Plc respectively, both which are separately funded;

-- Cash outflow from company operating activities have declined year to year GBP396,994 (2019: GBP490,210 cash outflow);

   --      Total net debt (cash less debt) GBP2,046,772 (2019: GBP1,456,217 net debt); 
   --      Basic and diluted EPS GBP0.003 loss (2019: basic and diluted GBP0.004 loss). 

Operational highlights in the 2020 year

   --     Continued advancement of the development of our key projects: 
   -          the Benga Power Plant Project in Mozambique ("Benga Project"); 
   -          the Mabesekwa Coal Independent Power Project in Botswana ("MCIPP Project"); 
   -          the Mbeya Coal to Power Project in Tanzania ("Mbeya Project"); 

- the UK's Reserve Power Market Projects ( Bordesley Energy Project") held by Kibo's subsidiary MAST Energy Developments Plc; and

- the Blyvoor Gold Tailings Project ("the Project") and the Haneti Nickel Project held by Kibo's subsidiary Katoro Gold Plc.

-- The Benga Project, located in the Tete province of Mozambique, is the Company's highest development priority; it holds a 65% interest in the project with the remaining 35% held by a local company, Termoeléctrica de Benga. The project was developed for a c. 150 MW PPA with local state electric utility Electricidade de Moçambique ('EDM'). An updated Memorandum of Understanding was signed with EDM during 2020, which provides for its continued support and commitment to negotiate a PPA for power off-take for the national grid. The project is now in the process of being upgraded to accommodate a c. 20O MW additional private commercial off taker in the form of the Tete Steel and Vanadium Project with Baobab Resources Ltd ('Baobab'). To date, the Defined Feasibility Study was updated and optimised to satisfy EDM and Baobab's power off-take requirements with the incorporation of a grid impact assessment and integration studies as well as an updated technical and financial review of the project during the second half of 2020.

-- The MCIPP Project in Botswana sees Kibo assume a 35% equity interest in the total 761 Mt Mabesekwa Coal Resource while maintaining its 85% interests in the existing MCIPP project for the development of a 300 MW coal to power plant and participate as a 35%-40% partner with Shumba for the development of a second 300 MW power with electricity output directed solely to a petrochemical plant being developed by Shumba and other parties. The project is aligned with Shumba's progress and therefore assumes a low development priority in the Kibo portfolio.

-- The Mbeya Project, with its 120 Mt Coal Resource, developed to a 1,5 million tonnes per annum mine, holds seven mining rights over the coal resource that will provide fuel to the 300 MW MCPP thermal power plant. The MCPP Environmental Impact Assessment certification for both mine and power station remain valid. The Company continues to work closely with the Tanzanian Government, partners, and other stakeholders to identify and investigate alternative commercial opportunities both within Tanzania and regionally.

-- The Bordesley Energy Project progressed the Bordesley 5 MW base case with upward optimization capability of 19.12 MW, amongst other development work such as EPC Scope of Works, entering into a 20-year tenancy agreement with two 5-year extension periods with the landlord. This term is synchronous with gas reciprocating engine life expectancy and optimizes commercial and technical outcomes. Bordesley now has numerous optimization options to develop as a Reserve Power generation hub by virtue of shared infrastructure with Target 2, power generation off-take by proxy sales and economy of scale due to two close-by Reserve Power sites totalling 14.12 Mw of generating capacity which culminates in EPC and Balance of Plant ("BOP") economy of scale project costs and timelines.

-- Katoro, entered into a binding conditional agreement to form a 50/50 unincorporated joint venture in South Africa, focused on the reprocessing of an existing 1.34 million ounce of gold JORC compliant tailings resource, completed technical work related to the upgrade and restatement of the Blyvoor Gold Tailings Project resource statement and completed additional technical and financial work that was conducted in response to the recommendations and findings of the Blyvoor Scoping Study. Katoro is currently in the processes of finalizing a comprehensive funding package in accordance with the Blyvoor Joint Venture ("the JV") that will allow the construction, commissioning and operation of a mining and processing facility capable of processing 500,000 tonnes of tailings material per month, at an average Life of Mine ("LoM") gold grade of 0.29 g/t and confirmed recovery of 51%, before incorporating recovery gains from the latest metallurgical optimization tests. The optimization results indicated that overall recoveries of up to 60% can be achieved by milling the coarser fraction (+75um) of the feedstock which comprises around 30% of the total Run of Mine ("RoM").

-- Katoro, concluded the disposal of its Imweru and Lubando Gold Projects in Tanzania for a total staged cash consideration of up to US$1.0 million and a 1.5% Net Smelter Royalty.

-- Funding of GBP1.45 million through placing completed in late 2020 which has enabled the Company to continue with our project development plans and ongoing working capital requirements during 2021.

-- The Directors continue to consider it appropriate to prepare the financial statements on a going concern basis, as the Group has sufficient funds for its present working capital requirements for the foreseeable future due to the c. GBP698k funds secured from warrants exercised in Kibo Energy Plc in 2021 to date and Katoro Gold Plc in excess of GBP500k, and funds raised in excess of GBP5m from the recent listing of Mast Energy Developments Plc. This is further expanded on in the annual financial statements.

Post period highlights and Outlook

-- On the 14 April 2021, Mast Energy Developments Plc completed a successful IPO on the Official List of the London Stock Exchange by way of a Standard Listing raising GBP5.4m with a market capitalisation on admission of GBP23m. Kibo remains a majority shareholder at 55.4%. listed on the London Stock Exchange.

-- MAST Energy Developments Plc , has progressed the acquisition transaction announced in the RNS of 7 September 2020, to the point where it is now finalizing a definitive Share Purchase Agreement ("SPA") to acquire 100% of the 9MW flexible gas power project (the 'Acquisition').

-- Kibo and its local JV partners in the Benga Power Project recently attended a workshop with EDM in Maputo to discuss and agree the next steps towards the ultimate finalization of a PPA. During the meeting the final optimised definitive feasibility study, inclusive of the updated grid integration study, and a summary of an updated draft financial model was presented and discussed as the fundamentals that will guide and focus the further course of the PPA process. This will ensure that a final result is obtained at the earliest opportunity possible.

-- Kibo takes major step forward in execution of the Company's renewable energy strategy, by way of commencing an extensive due diligence process in relation to the potential acquisition of all or part of a prospective portfolio of UK renewable energy projects. The opportunity consists of several attractive standalone renewable energy projects in the UK, focusing on the generation and/or storage of electric power from renewable generation sources. The portfolio consists of several waste-to-energy projects in which the Company has negotiated exclusivity and a first right to acquire, subject to successful due diligence results and an agreement on commercial terms and conditions. Any successful acquisition(s) from the project portfolio will enhance Kibo's strategy, which is focused on transforming and integrating conventional energy generation into sustainable renewable energy, and in the process support the UK's Renewable Energy Strategy.

-- Kibo entered into an agreement with South Africa-based Industrial Green Solutions (Pty) Ltd ('IGES') to jointly develop a portfolio of Waste to Energy projects in South Africa ('the Agreement') with an initial target of generating more than 50 megawatts of electricity for sale to industrial users. The Agreement, which is subject to the satisfaction of certain conditions, is in line with Kibo's strategy to integrate renewable energy into its project pipeline, which includes three utility-scale power generation and mining projects.

-- We are very excited about our new renewable energy initiatives which is focussed on addressing the non-recyclable plastics crisis to reduce the amount ending up in landfill by addressing this problem through a process of Pyrolysis which converts plastic waste into syngas which in turn generates electricity. Our renewable generated electricity will be sold to offtake partners, and our substantial combined project pipeline of waste to energy projects in the UK and ZA with two near term targets which we aim to take into production, will greatly assist in the realisation of our strategy and value to shareholders.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

For further information please visit www.kibo.energy or contact:

 
Louis Coetzee             info@kibo .energy            Kibo Energy         Chief Executive Officer 
                                                        PLC 
Andreas Lianos            +357 99 53 1107              River Group         JSE Corporate and Designated 
                                                                            Adviser 
                          ---------------------------  ------------------  ---------------------------- 
Claire Noyce              +44 (0) 20 3764              Hybridan LLP        Broker 
                           2341 
                          ---------------------------  ------------------  ---------------------------- 
Bhavesh Patel             +44 20 3440 6800             RFC Ambrian         NOMAD on AIM 
 / Stephen Allen                                        Ltd 
                          ---------------------------  ------------------  ---------------------------- 
Isabel de Salis           info@stbridespartners.co.uk  St Brides Partners  Investor and Media Relations 
 / Charlotte Hollinshead                                Ltd                 Adviser 
                          ---------------------------  ------------------  ---------------------------- 
 

CHAIRMAN'S REPORT

I am pleased to provide a review of our activities during the period and to present our full-year audited accounts for 2020.

Kibo's strategy remains to develop utility-level and standalone, sustainable, affordable energy solutions through the design, build, construction and operation of clean energy solutions, integrated with renewable and intelligent storage solutions. A cornerstone of this strategy is the integration of suitable, sustainable renewable technologies with proven clean low-cost coal base load technology in all our project development plans, with the assumption that base load energy plays a very important role in addressing the increasing demand for affordable, reliable and sustainable electricity in our geographic focus areas.

As we support the global strategic concept of sustainability, we continue to seek best of breed environmentally friendly technological solutions, working with our strategic development partners through existing collaboration agreements.

In this regard, during the year, we advanced the development of our key projects: the Benga Power Plant Project ("BPPP" or "Benga Project") in Mozambique; the Mabesekwa Coal Independent Power Project ("MCIPP" or "Mabesekwa Project") in Botswana; and the Mbeya Coal to Power Project ("MCPP") in Tanzania.

A key focus area, the entry into the UK's Reserve Power Market, has taken shape with the recent listing of MAST Energy Developments Plc ("MED") on the 14 April 2021. We have now sent MED off on its own path, as we did with Katoro Gold some years ago.

As we look back on 2020, while we set a solid platform for continued work in FY 2021, we were undoubtedly impacted by the ongoing impact of Covid-19. While the MCPP and MCIPP projects were most materially impacted, they remain in good standing and we continue to explore how we can extract best value from them.

In Mozambique, we made great strides developing the Benga Project, increasing our future off take potential by more than 100% through the inclusion of the Baobab development in the Benga portfolio.

We were also pleased with the progress of MED, and with its IPO and admission now completed, and Kibo's retention of the majority shareholding it continues to provide, now more than ever the prospect of short term revenue and real opportunities to participate in the development of alternative energy solutions.

On the corporate side, keeping the Company funded presented on-going challenges due to the low share price and the general uncertainty created by the Covid-19 pandemic. We have however steadied the ship and can see clearer waters ahead in 2021. In this regard, a GBP1 million convertible loan note facility with a first drawdown tranche of GBP300,000 in August was replaced with a broker sponsored placing with ETX Capital Limited in September for total proceeds of GBP1,450,000, meeting our working capital requirement to allow us to reach key development milestones, particularly for the Benga and MED projects, during the second half of 2020.

Being able to secure funding during this difficult period is testament to the belief in our company by investors and other stakeholders.

The result for the reporting period amounted to a loss of GBP6,417,237 for the year ended 31 December 2020 (31 December 2019: GBP3,903,116) as detailed further in the Statement of Profit or Loss and Other Comprehensive Income, and further details on financial activities are detailed elsewhere in the Annual Report.

In addition to our interest of c. 55.4% in MED, I would also like to mention our investment in Katoro Gold PLC (AIM: KAT/www.katorogold.com), which currently stands at 25.37%. Katoro is making excellent advances pursuing robust development opportunities in battery base metals and gold projects.

Both of these companies have a short term view to production and revenue and we look forward to their accelerated project plans for FY 2021.

We are optimistic and positive about the Kibo Group of companies. We have used 2020 to consolidate and refine planning and look forward to a year of success in FY 2021.

In closing, I would like to acknowledge the support of our shareholders, especially those who have helped the Company directly through the past year. Also, I would like to thank our Board and management under the strong leadership of our CEO, Louis Coetzee, for their hard work in guiding the Company through this challenging period.

They continue to show the skill and leadership to realise our strategy of becoming a successful global developer of sustainable energy projects in an industry in this transitional phase from fossil fuels to renewable energy generation.

_____________________________

Christian Schaffalitzky

Chairman

10 June 2021

REVIEW OF ACTIVITIES

Introduction

Kibo aims to be a significant regional broad based energy developer of sustainable power solutions, integrating clean-burning fossil fuel, renewable generation and energy storage technology. Its operational objectives for the period focused on project development and delivery as well as accelerating the integration of solutions that enable the Company to ultimately transition from using clean fossil fuel technology to renewable energy technology solutions and the implementation of a sustainable funding model to enable these objectives.

During FY 2020, Kibo continued to advance its African and UK energy projects, albeit at a slower pace than originally scheduled due to the impact of the Covid-19 pandemic on field operations. The Company has continued to maintain its business relationships and operational capability during this difficult period and is well positioned to quickly accelerate its development schedules in a post pandemic world.

Operations

Tanzania - Mbeya Project ("MCPP" or "Mbeya Project")

The MCPP remains a key project, being fully developed, funding ready and still acknowledged by the Tanzanian Government. The project suffered a minor setback from what we believe to be clumsy tendering procedure and efforts are on the way to get the project back on track in Tanzania. The untimely passing of the Tanzanian President unfortunately put a stop to all statutory proceedings.

The project, with its 120 Mt Coal Resource*, developed to a 1,5 million tonnes per annum mine, holds seven mining rights over the coal resource that will provide fuel to the 300 MW MCPP thermal power plant. The MCPP Environmental Impact Assessment certification for both mine and power station remain valid.

The Company continues to work closely with the Tanzanian Government, partners and other stakeholders to identify and investigate alternative commercial opportunities both within Tanzania and regionally.

*Kibo confirms that there has been no material change to the Mbeya Coal Resource since the Coal Resource estimate was first published as part of the RNS dated 11 April 2016 which is available on its website www.kibo.energy .

Mozambique - Benga Power Plant Project ("BPPP" or "Benga Project")

The Benga project, located in the Tete province of Mozambique, is the Company's highest development priority; it holds a 65% interest in the project with the remaining 35% held by a local company, Termoeléctrica de Benga.

The project was developed for a c. 150 MW PPA with local state electric utility Electricidade de Moçambique ('EDM'). An updated Memorandum of Understanding was signed with EDM during 2020, which provides for its continued support and commitment to negotiate a PPA for power off-take for the national grid.

The project is now in the process of being upgraded to accommodate a c. 20O MW additional private commercial off taker in the form of the Tete Steel and Vanadium Project with Baobab Resources Ltd ('Baobab') . To date, the DFS was updated and optimised to satisfy EDM and Baobab's power off-take requirements with the incorporation of a grid impact assessment and integration studies as well as an updated technical and financial review of the project during the second half 2020. The proposed power plant footprint was also increased with the acquisition of additional land increasing the project site by 345 hectares principally to provide for the incorporation of renewable energy technologies on-site. Discussions are also ongoing with regards to providing auxiliary power requirements for the first phase of a 250,000 tpa steel rolling mill of the Baobab Tete Steel Project, on a build, own and operate basis.

The Benga project is a key enabler of Tete Steel and Vanadium project, which in turn is a key enabler of the Mozambique Revuboe Industrial Free Zone ('RIFZ'), intended to bolster the economy in the resources rich Tete Province.

United Kingdom - Mast Energy Developments Plc ("MED")

MED, intending to participate in the UK Reserve Market, is an exciting addition to the Kibo stable.

The recent listing of the Company's now 55.42% subsidiary MED Plc on the London Stock Exchange on 14 April 2021 where it raised c. GBP5m as part of an IPO, will enable it to accelerate development and commissioning of its existing flexible power sites and allow acquisition of additional sites. MED's target is to assemble a portfolio of well-located flexible power sites in the UK, commencing with c. 50 MW in year one and building up to a portfolio of up to 300 MW of flexible power generating capacity over the next few years.

Botswana- Mabesekwa Project ("MCIPP" or "Mabesekwa Project")

Kibo negotiated a major re-structuring and expansion of its Botswana energy asset holdings in September 2019 in collaboration with Shumba Energy Limited. The binding Heads of Agreement saw Kibo assume a 35% interest in the total 761 Mt Mabesekwa Coal Resource* while maintaining its 85% interests in the existing MCIPP project for the development of a 300 MW coal to power plant and participate as a 35%-40% partner with Shumba for the development of a second 300 MW power with electricity output directed solely to a petrochemical plant being developed by Shumba and other parties. The project is aligned with Shumba's progress and therefore assumes a low development priority in the Kibo portfolio.

*The Company confirms that there has been no material change to the Mabesekwa Coal Resource since the Coal Resource estimate was first published as part of the announcement dated 21 June 2018 which is available on its

website   www.kibo.energy 

Corporate

During 2020, the Company undertook various funding initiatives to ensure the ongoing development of its projects. As part of this process, it embarked on aggressive austerity measures to preserve cash whilst being able to continue with core activities and raised c. GBP 1.4 million.

In preparation for, and to facilitate the listing of the MED Plc on the London Stock Exchange, recently completed, the Company undertook corporate restructuring within and between the Kibo and MED group companies during 2020. The latter part of 2020 was spent in preparation of the intended MED IPO, which was completed within budget and time. A regrettable delay in FCA approval pushed the time line out by more than three months.

_______________________________

Louis Coetzee

Chief Executive Officer

10 June 2021

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 
All figures are stated in Sterling                                        GROUP 
                                                       ------------------------------------------- 
                                                       31 December           31 December 
                                                           2020                  2019 
                                                       -----------  ------------------------------ 
                                                         Audited               Audited 
                                                 ---- 
                                                 Note      GBP                   GBP 
                                                 ---- 
 
Revenue                                                          -                               - 
Administrative expenses                                (3,393,687)                     (2,922,927) 
Listing and capital raising fees                       (1,027,658)                       (729,072) 
Exploration expenditure                                (2,052,202)                       (897,039) 
                                                       -----------  ------------------------------ 
Operating loss                                    3    (6,473,547)                     (4,549,038) 
Investment and other income                       2         78,945                         645,922 
Share of loss from associate                      11         (332)                               - 
Finance costs                                             (22,303)                               - 
Loss before tax                                   3    (6,417,237)                     (3,903,116) 
Taxation                                          6              -                               - 
                                                       -----------  ------------------------------ 
Loss for the period                                    (6,417,237)                     (3,903,116) 
 
Other comprehensive loss: 
Items that may be classified subsequently to 
 profit or loss: 
Exchange differences on translation of foreign 
 operations                                                152,635                          86,098 
Exchange differences reclassified on disposal 
 of foreign operation                                      121,670                               - 
Other Comprehensive loss for the period net 
 of tax                                                    274,305                          86,098 
 
Total comprehensive loss for the period                (6,142,932)                     (3,817,018) 
                                                       -----------  ------------------------------ 
 
Loss for the period                                    (6,417,237)                     (3,903,116) 
                                                       -----------  ------------------------------ 
Attributable to the owners of the parent               (4,726,286)                     (3,500,004) 
Attributable to the non-controlling interest           (1,690,951)                       (403,112) 
 
Total comprehensive loss for the period                (6,142,932)                     (3,817,018) 
                                                       -----------  ------------------------------ 
Attributable to the owners of the parent               (4,451,981)                     (3,415,653) 
Attributable to the non-controlling interest           (1,690,951)                       (401,365) 
 
Loss Per Share 
Basic loss per share                              8        (0.003)                         (0.004) 
Diluted loss per share                            8        (0.003)                         (0.004) 
 
 
 

All activities derive from continuing operations.

The Group has no recognised gains or losses other than those dealt with in the Statement of Profit or Loss and Other Comprehensive Income.

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

   ______________________________              ________________________ 
   Christian Schaffalitzky                   Noel O'Keeffe 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION                        GROUP 
 
 
 
 All figures are stated in Sterling 
-------------------------------------------------- 
                                                          31 December   31 December 
                                                              2020          2019 
                                                          ------------  ------------ 
                                                            Audited       Audited 
                                                    ----  ------------  ------------ 
                                                    Note      GBP           GBP 
                                                    ----  ------------  ------------ 
Assets 
Non--Current Assets 
Property, plant and equipment                        9           2,118        64,405 
Intangible assets                                    10     18,491,105    18,491,105 
Investments in associates                            11      9,696,351     9,696,683 
Other financial assets                               12              -        37,661 
Goodwill                                             14        300,000       300,000 
Total non-current assets                                    28,489,574    28,589,854 
                                                          ------------  ------------ 
 
Current Assets 
Other financial asset                                12              -             - 
Trade and other receivables                          15        115,886       380,693 
Cash                                                 16        256,760        91,634 
Total current assets                                           372,646       472,327 
                                                          ------------  ------------ 
 
Assets classified as held for sale                   17              -       794,074 
Total Assets                                                28,862,220    29,856,255 
                                                          ============  ============ 
 
Equity and Liabilities 
Equity 
Called up share capital                              18     20,411,493    19,532,350 
Share premium account                                18     44,312,371    42,750,436 
Control reserve                                      19       (18,329)      (18,329) 
Share based payment reserve                          20      1,728,487     1,504,513 
Translation reserve                                  21      (598,637)     (872,942) 
Retained deficit                                          (39,019,856)  (34,625,954) 
                                                          ------------  ------------ 
Attributable to equity holders of the parent                26,815,529    28,270,074 
                                                          ------------ 
Non-controlling interest 22                                  (256,841)        27,073 
                                                          ------------ 
Total Equity                                                26,558,688    28,297,147 
                                                          ------------ 
 
Liabilities 
 Current Liabilities 
Trade and other payables                             23      1,444,986     1,024,126 
Borrowings                                           24        858,546       523,725 
Total Current Liabilities                                    2,303,532     1,547,851 
                                                          ------------  ------------ 
 
Liabilities directly associated with assets 
 held for sale                                       17              -        11,257 
                                                          ------------  ------------ 
Total Equity and Liabilities                                28,862,220    29,856,255 
 
 
 

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

   ______________________________              ________________________ 
   Christian Schaffalitzky                   Noel O'Keeffe 
 
COMPANY STATEMENT OF FINANCIAL POSITION                    Company 
 
 
 All figures are stated in Sterling 
------------------------------------------        -------------------------- 
                                                  31 December   31 December 
                                                      2020          2019 
                                            ----  ------------  ------------ 
                                            Note    Audited       Audited 
                                            ----  ------------  ------------ 
                                                      GBP           GBP 
                                                  ------------  ------------ 
Non--Current Assets 
Investments in group undertakings            25     46,664,160    43,318,643 
Total Non- current assets                           46,664,160    43,318,643 
                                                  ------------  ------------ 
 
Current Assets 
Trade and other receivables                  15         39,085       361,467 
Cash                                         16        141,788        31,389 
Total Current assets                                   180,873       392,856 
                                                  ------------  ------------ 
 
Total Assets                                        46,845,033    43,711,499 
                                                  ============  ============ 
 
Equity and Liabilities 
Equity 
Called up share capital                      18     20,411,493    19,532,350 
Share premium                                18     44,312,371    42,750,436 
Share based payment reserves                 20        977,575       977,575 
Retained deficit                                  (19,419,674)  (20,109,544) 
                                                  ------------  ------------ 
Total Equity                                        46,281,765    43,150,817 
                                                  ------------  ------------ 
 
Liabilities 
Current Liabilities 
Trade and other payables                      23       218,877       265,727 
Borrowings                                    24       344,391       294,955 
Total liabilities                                      563,268       560,682 
                                                  ============  ============ 
Total Equity and Liabilities                        46,845,033    43,711,499 
                                                  ============  ============ 
 
 
 

Equity includes a profit for the year of the parent company of GBP689,870 (2019: loss of GBP1,832,539).

The accompanying notes on pages 50-80 form integral part of these financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

   ______________________________              ________________________ 
   Christian Schaffalitzky                   Noel O'Keeffe 
 
                                                                            CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
----------------------------------------------------------------------------------------------------------------------- 
                    Share       Share     Warrants   Control     Foreign      Retained    Non-controlling  Total equity 
                    Capital     premium   and Share   reserve   currency       deficit        interest 
                                            based              translation 
                                           payment               reserve 
GROUP                                      reserve 
----------------  ----------  ----------  ---------  --------  -----------  ------------  ---------------  ------------ 
All figures are      GBP         GBP         GBP       GBP         GBP          GBP             GBP            GBP 
stated in 
Sterling 
----------------  ----------  ----------  ---------  --------  -----------  ------------  ---------------  ------------ 
 
Balance as at 1 
 January 2019     17,240,017  39,205,318     41,807  (18,329)    (656,622)  (29,399,788)          409,171    26,821,574 
                  ----------  ----------  ---------  --------  -----------  ------------  ---------------  ------------ 
Loss for the 
 year                      -           -          -         -            -   (3,500,004)        (403,112)   (3,903,116) 
Adjustment 
 arising from 
 change in 
 non-controlling 
 interest                  -           -          -         -            -   (1,726,162)           19,267   (1,706,895) 
Other 
 comprehensive 
 income - 
 exchange 
 differences               -           -          -         -       84,351             -            1,747        86,098 
Disposal of 
 subsidiary                -           -          -         -    (300,671)             -                -     (300,671) 
Proceeds of 
 share issue of 
 share capital     2,292,333   3,545,118          -         -            -             -                -     5,837,451 
Deferred vendor 
 liability - 
 equity settled            -           -    421,471         -            -             -                -       421,471 
Share options 
 and warrants 
 issued during 
 the year                  -           -  1,041,235         -            -             -                -     1,041,235 
                  ----------  ---------- 
                   2,292,333   3,545,118  1,462,706         -    (216,320)   (5,226,166)        (382,098)     1,475,573 
                  ----------  ----------  ---------  --------  -----------  ------------  ---------------  ------------ 
Balance as at 31 
 December 2019    19,532,350  42,750,436  1,504,513  (18,329)    (872,942)  (34,625,954)           27,073    28,297,147 
                  ==========  ==========  =========  ========  ===========  ============  ===============  ============ 
Loss for the 
 year                      -           -          -         -            -   (4,726,286)      (1,690,951)   (6,417,237) 
Other 
 comprehensive 
 income - 
 exchange 
 differences               -           -          -         -      152,635             -                -       152,635 
Shares issued        871,984   1,149,095          -         -            -             -                -     2,021,079 
Shares issued to 
 pay deferred 
 vendor 
 liability             7,159     412,840  (421,471)         -            -             -                -       (1,472) 
Warrants issued 
 by Katoro Gold 
 plc                       -           -    419,667         -            -             -                -       419,667 
Share Options 
 issued by 
 Katoro Gold plc           -           -    225,778         -            -             -                -       225,778 
Change in 
 shareholding 
 without a loss 
 of control                -           -          -         -            -       332,384        1,407,037     1,739,421 
Disposal of 
 subsidiary                -           -          -         -      121,670             -                -       121,670 
                     879,143   1,561,935    223,974         -      274,305   (4,393,902)        (283,914)   (1,738,459) 
                  ----------  ----------  ---------  --------  -----------  ------------  ---------------  ------------ 
Balance as at 31 
 December 2020    20,411,493  44,312,371  1,728,487  (18,329)    (598,637)  (39,019,856)       ( 256,841)    26,558,688 
                  ==========  ==========  =========  ========  ===========  ============  ===============  ============ 
Note                      18          18     20         19         21                           22 
 

The notes on pages 50-80 form part of the financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

       Christian Schaffalitzky               Noel O'Keeffe 
 
                                        COMPANY STATEMENT OF CHANGES IN EQUITY 
---------------------------------------------------------------------------------------------------------------------- 
                    Share capital  Share premium     Share based     Foreign currency   Retained deficit  Total equity 
                                                   payment reserve      translation 
COMPANY                                                                   reserve 
------------------  -------------  -------------  -----------------  -----------------  ----------------  ------------ 
All figures are          GBP            GBP              GBP                GBP               GBP             GBP 
stated in Sterling 
------------------  -------------  -------------  -----------------  -----------------  ----------------  ------------ 
 
Balance at 1 
 January 2019          17,240,017     39,205,318            977,575                  -      (18,277,005)    38,168,330 
Loss for the year                                                                            (1,832,539)   (1,832,539) 
Share options and 
 warrants issued 
 during the year                -              -                  -                  -                 -       977,575 
Proceeds of issue 
 of share capital       2,292,333      3,545,118                  -                  -                 -     5,837,451 
                        2,292,333      3,545,118            977,575                  -       (1,832,549)     4,982,487 
                    -------------  -------------  -----------------  -----------------  ----------------  ------------ 
Balance at 31 
 December 2019         19,532,350     42,750,436            977,575                  -      (20,109,544)    43,150,817 
                    =============  =============  =================  =================  ================  ============ 
Profit for the 
 year                           -              -                  -                  -           689,870       689,870 
Shares issued             871,984      1,149,095                  -                  -                 -     2,021,079 
Shares issued to 
 pay deferred 
 vendor liability           7,159        412,840                  -                  -                 -       419,999 
                          879,143      1,561,935                  -                  -           689,870     3,130,948 
                    -------------  -------------  -----------------  -----------------  ----------------  ------------ 
Balance at 31 
 December 2020         20,411,493     44,312,371            977,575                  -      (19,419,674)    46,281,765 
                    =============  =============  =================  =================  ================  ============ 
Note                     18             18               20                 21 
 

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

   ______________________________              ________________________ 
   Christian Schaffalitzky                   Noel O'Keeffe 
 
CONSOLIDATED STATEMENT OF CASH FLOWS 
 
 
 All figures are stated in Sterling 
----------------------------------------------------- 
                                                                       GROUP 
                                                              ------------------------ 
                                                              31 December  31 December 
                                                                  2020         2019 
                                                              -----------  ----------- 
                                                                Audited      Audited 
                                                       ----- 
                                                       Notes      GBP          GBP 
                                                       ----- 
 
Cash flows from operating activities 
Loss for the period before taxation                           (6,417,237)  (3,903,116) 
Adjustments for: 
Loss/(Profit) from the loss of control of subsidiary                    -    (320,349) 
Loss/(Profit) from the disposal of subsidiary                     102,414    (270,639) 
Investments acquired not for cash                       12              -     (37,661) 
Warrants and options issued                                       697,006    1,041,235 
Loss from equity accounted associate                                  332            - 
Exploration and development expenditure on 
 a Joint Operation                                              1,122,676            - 
Impairment of financial asset receivable                          640,821            - 
Depreciation on property, plant and equipment            9          5,686       20,596 
Profit on sale of property, plant and equipment                  (53,574)            - 
Cost settled through the issue of shares                          436,076      721,555 
                                                              (3,465,800)  (2,748,379) 
                                                              -----------  ----------- 
Movement in working capital 
Decrease/(Increase) in debtors                          15        108,872    (402,661) 
Increase in creditors                                   23        982,244      758,545 
                                                              -----------  ----------- 
                                                                1,091,116      355,884 
                                                              -----------  ----------- 
Net cash outflows from operating activities                   (2,374,684)  (2,392,495) 
                                                              -----------  ----------- 
 
Cash flows from financing activities 
Proceeds of issue of share capital                              2,277,000      981,708 
Proceeds from borrowings                                        1,370,000      952,465 
Net cash proceeds from financing activities                     3,647,000    1,934,173 
                                                              -----------  ----------- 
 
Cash flows from investing activities 
Cash advanced to Joint Venture                                (1,122,676)            - 
Cash received/(forfeited) on disposal of subsidiary                76,716      (8,329) 
Cash received on sale of plant and equipment                       58,628            - 
                                                              -----------  ----------- 
Net cash flows investing activities                             (987,332)      (8,329) 
                                                              -----------  ----------- 
 
Net increase/(decrease) in cash                                   284,984    (466,651) 
Cash at beginning of period                                        91,634      654,158 
Exchange movement                                               (119,858)     (88,907) 
                                                              -----------  ----------- 
Cash at end of the period                               16        256,760       98,600 
                                                              -----------  ----------- 
Continuing operations                                             256,305       91,634 
                                                              -----------  ----------- 
Assets classified as held for sale                                      -        6,966 
                                                              ===========  =========== 
 

The accompanying notes on pages 50-80 form an integral part of these financial statements.

 
COMPANY STATEMENT OF CASH FLOWS 
 
 
 All figures are stated in Sterling 
--------------------------------------------         --------------------------- 
                                                               COMPANY 
                                                     --------------------------- 
                                                      31 December    31 December 
                                                          2020           2019 
                                                     --------------  ----------- 
                                                        Audited        Audited 
                                              -----  --------------  ----------- 
                                              Notes       GBP            GBP 
                                              -----  --------------  ----------- 
Cash flows from operating activities 
 
Profit/(Loss)for the period before taxation 
 Adjusted for:                                              689,870  (1,832,539) 
Inter-company sales capitalised                           (174,000)            - 
Reversal of impairment loss                             (1,586,957)            - 
Share based payments                                        200,562      977,575 
Expenses settled in shares                                  198,000      211,788 
                                                          (672,525)    (633,175) 
                                                     --------------  ----------- 
Movement in working capital 
Decrease / (Increase) in debtors               15           322,382     (27,690) 
(Decrease)/ Increase in creditors              23          (46,851)      170,655 
                                                     --------------  ----------- 
                                                            275,531      142,965 
                                                     --------------  ----------- 
Net cash outflows from operating activities               (396,994)    (490,210) 
                                                     --------------  ----------- 
 
Cash flows from financing activities 
 
Proceeds of issue of share capital             18           940,000      981,708 
Proceeds from borrowings                       24           590,000      544,955 
Net cash proceeds from financing activities               1,530,000    1,526,663 
                                                     --------------  ----------- 
 
Cash flows from investing activities 
Cash advances to Group Companies               25       (1,022,607)  (1,044,038) 
                                                     --------------  ----------- 
Net cash used in investing activities                   (1,022,607)  (1,044,038) 
                                                     --------------  ----------- 
 
Net (decrease)/increase in cash                             110,399      (7,585) 
Cash at beginning of period                                  31,389       38,974 
Cash at end of the period                      16           141,788       31,389 
                                                     ==============  =========== 
 

The accompanying notes on pages 50-80 form an integral part of these financial statements.

   1.   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 individual projects as operating segments. These operating segments are monitored and strategic decisions are made based upon their individual nature, together with other non-financial data collated from exploration activities. Principal activities for these operating segments are as follows:

 
 2020 Group                                              Mast Energy                               Blyvoor                 31 December 
                                 Mabesekwa       Mbeya       Project                    Lake         Joint                  2020 (GBP) 
                       Benga   Independent        Coal      & Sloane                Victoria       Venture                       Group 
                       Power         Power    to Power   Development      Haneti        Gold                   Corporate 
                  ----------  ------------  ----------  ------------  ----------  ----------  ------------  ------------  ------------ 
 Administrative 
  cost              (17,677)      (10,182)    (39,424)     (219,821)    (13,745)   (909,306)      (16,053)   (2,190,113)   (3,416,321) 
 Listing and 
  Capital 
  raising fees             -             -           -     (161,743)           -           -             -    (865,915,)   (1,027,658) 
 Exploration 
  expenditure      (260,170)       (8,557)   (112,762)     (276,000)   (133,906)    (59,041)   (1,201,768)             -   (2,052,204) 
 Investment and 
  other income                           -      53,600             -           -       2,628         6,943        15,775        78,946 
 Loss after tax    (277,847)      (18,739)    (98,586)     (657,564)   (147,651)   (965,719)   (1,210,878)   (3,040,253)   (6,417,237) 
                  ----------  ------------  ----------  ------------  ----------  ----------  ------------  ------------  ------------ 
 
 
 2019 Group                      Mabesekwa       Mbeya                                 Lake                 31 December 
                       Benga   Independent        Coal   Mast Energy               Victoria                  2019 (GBP) 
                       Power         Power    to Power   Development     Haneti        Gold     Corporate         Group 
                  ----------  ------------  ----------  ------------  ---------  ----------  ------------  ------------ 
 Administrative 
  cost              (88,396)      (37,384)   (272,399)      (32,467)    (8,670)   (228,770)   (2,683,617)   (3,351,702) 
 Listing and 
  Capital 
  raising fees             -             -           -             -          -           -     (300,297)     (300,297) 
 Exploration 
  expenditure       (16,252)      (17,393)   (456,205)     (306,000)   (46,799)    (54,390)             -     (897,039) 
 Investment and 
  other 
  income                   -             -       4,179             9          -       1,649       640,085       645,922 
 Loss after tax    (104,648)      (54,777)   (724,424)     (338,458)   (55,469)   (281,511)   (2,343,829)   (3,903,116) 
                  ----------  ------------  ----------  ------------  ---------  ----------  ------------  ------------ 
 
 
 2020 Group                 Mabesekwa                                           Lake   Blyvoor                                  31 December 
                  Benga   Independent   Mbeya Coal   Mast Energy            Victoria     Joint                                   2020 (GBP) 
                  Power         Power     to Power   Development   Haneti       Gold   Venture                     Corporate          Group 
                -------  ------------  -----------  ------------  -------  ---------  --------  ---------------------------- 
 Assets 
 Segment 
  assets         27,022     9,696,351   15,902,052     2,895,204   16,410      2,543    17,340                       305,298   28,862,220 
 
 Liabilities 
 Segment 
  liabilities    93,245        10,297      152,155       470,507   66,731     21,603     5,738                     1,483,256    2,303,532 
 
 Other 
 Significant 
 items 
 Depreciation       141             -        5,117             -        -          -                                     427        5,685 
 
 
 
 2019 Group                      Mabesekwa        Mbeya                                 Lake               31 December 
                               Independent      Coal to   Mast Energy               Victoria                2019 (GBP) 
                 Benga Power         Power        Power   Development   Haneti          Gold   Corporate         Group 
                ------------  ------------  -----------  ------------  -------  ------------  ---------- 
 Assets 
 Segment 
  assets                 835     9,697,694   15,965,122     3,129,305    3,938        23,745   1,035,616    29,856,255 
 
 Liabilities 
 Segment 
  liabilities         36,195         8,940      206,421       234,175        -        35,093   1,459,755     1,980,579 
 
 Other 
 Significant 
 items 
 Depreciation            655             -       19,941             -        -             -           -        20,596 
 

Geographical segments

The Group operates in six principal geographical areas - Corporate (Ireland, Cyprus, South Africa & United Kingdom) and Mining (Tanzania, and Botswana).

 
 
                                                                                       Ireland, United   31 December 
                                 Tanzania    Botswana        Cyprus     South Africa           Kingdom    2020 (GBP) 
 Carrying value of segmented 
  assets                           21,910   9,696,351        76,398           19,744        19,047,817    28,862,220 
 Loss after tax                 (180,570)       (332)   (3,741,808)      (1,196,471)       (1,298,056)   (6,417,237) 
                               ----------  ----------  ------------  ---------------  ----------------  ------------ 
 
 
                                                                      Ireland, United 
                                                                       Kingdom, South   31 December 2019 
                                 Tanzania    Botswana        Cyprus            Africa              (GBP) 
 Carrying value of segmented 
  assets                           69,017   9,377,323        15,868        20,394,047         29,856,255 
 Loss after tax                 (515,746)    (18,220)   (1,029,079)       (2,340,071)        (3,903,116) 
                               ----------  ----------  ------------  ----------------  ----------------- 
 
   2.   Other Income 
 
                                           31 December   31 December 
                                            2020 (GBP)    2019 (GBP) 
 Other income                                   25,371        54,862 
 Profit on sale of subsidiary                        -       591,060 
 Profit on sale of plant and equipment          53,574             - 
                                          ------------  ------------ 
                                                78,945       645,922 
                                          ------------  ------------ 
 
   3.   Loss on ordinary activities before taxation 
 
 Operating loss is stated after the following key                31   31 December 
  transactions:                                            December    2019 (GBP) 
                                                         2020 (GBP)         Group 
                                                              Group 
 Depreciation of property, plant and equipment of 
  Group financial statements                                  5,685        20,596 
 Impairment of other financial assets - receivable          640,821             - 
  from Lake Victoria Gold 
 Impairment of other financial assets - unlisted             37,661             - 
  investment in Lake Victoria Gold 
 Loss on disposal of subsidiary-Reef Miners(Pty)            102,414             - 
  Ltd 
 Group auditors' remuneration for audit of Group 
  and Company financial statements                           45,000        45,000 
 Subsidiaries auditors remuneration audit of the 
  financial statements of the company's subsidiaries        158,122       140,765 
 
   4.   Staff costs (including Directors) 
 
                                    Group          Group        Company        Company 
                              31 December    31 December    31 December    31 December 
                               2020 (GBP)     2019 (GBP)     2020 (GBP)     2019 (GBP) 
 Wages and salaries             1,028,318        644,903         38,595        273,632 
 Share based remuneration         225,778        405,345              -        202,060 
                                1,254,096      1,050,248         38,595        475,692 
                            -------------  -------------  -------------  ------------- 
 

The average monthly number of employees (including executive Directors) during the period was as follows:

 
                                  Group          Group        Company        Company 
                            31 December    31 December    31 December    31 December 
                             2020 (GBP)     2019 (GBP)     2020 (GBP)     2019 (GBP) 
 Exploration activities              10             10              1              1 
 Administration                       6              6              1              1 
                          -------------  -------------  -------------  ------------- 
                                     16             16              2              2 
                          -------------  -------------  -------------  ------------- 
 
   5.   Directors' emoluments 
 
                                 Group          Group        Company        Company 
                           31 December    31 December    31 December    31 December 
                            2020 (GBP)     2019 (GBP)     2020 (GBP)     2019 (GBP) 
 Basic salary and fees         434,823        323,306         38,595        273,632 
 Share based payments                -        225,182              -        202,060 
                         -------------  -------------  -------------  ------------- 
                               434,823        548,488         38,595        475,692 
                         -------------  -------------  -------------  ------------- 
 

The emoluments of the Chairman were GBP 27,837 (2019: GBP 43,588 ).

The emoluments of the highest paid director were GBP 170,190 (2019: GBP 245,291 ).

Following from the terms and conditions related to further funding advances from financiers, with effect from June 2020, the Directors agreed to reduce their salaries by 40%.

Directors received shares in the value of GBPNil during the year (2019: GBP151,003) in lieu of settlement of salaries not settled in cash.

Share warrants to the value of GBPNil (2019: GBP74,179) were issued to directors during the year.

Key management personnel consist only of the Directors. Details of share options and interests in the Company's shares of each director are shown in the Directors' report.

T he following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period:

 
 31 December 2020                            Salary 
                                           and fees 
                                Salary      settled        Warrants 
                              and fees    in shares          issued         Total 
                                   GBP          GBP             GBP           GBP 
 Christian Schaffalitzky        27,837            -               -        27,837 
 Louis Coetzee                 170,190            -               -       170,190 
 Noel O'Keeffe                  66,085            -               -        66,085 
 Lukas Maree                    78,892            -               -        78,892 
 Wenzel Kerremans               16,702            -               -        16,702 
 Andreas Lianos                 62,168            -               -        62,168 
 Christiaan Schutte             12,949            -               -        12,949 
 Total                         434,823            -               -       434,823 
                            ----------  -----------  --------------  ------------ 
 
 31 December 2019                            Salary 
                                           and fees 
                                Salary      settled        Warrants 
                              and fees    in shares          issued       Total 
                                   GBP          GBP             GBP         GBP 
 Christian Schaffalitzky        17,517       17,483           8,588      43,588 
 Louis Coetzee                 168,522       51,480          25,289     245,291 
 Noel O'Keeffe                  49,674       15,505           7,616      72,796 
 Lukas Maree                    57,626       20,185           9,915      87,726 
 Wenzel Kerremans               11,333        3,667           1,801      16,801 
 Andreas Lianos                 18,634       42,683          20,970      82,287 
                            ----------  -----------  --------------  ---------- 
 Total                         323,306      151,003          74,179     548,488 
                            ----------  -----------  --------------  ---------- 
 
 

Director salaries and fees accrued as at 31 December 2020 amount to GBP474,267 (2019: GBP224,672).

   6.   Taxation 

Current tax

 
                                                31 December   31 December 
                                                 2020 (GBP)    2019 (GBP) 
 Charge for the period in Ireland, Republic               -             - 
  of South Africa, Cyprus, United Kingdom 
  and Republic of Tanzania 
                                               ------------  ------------ 
 Total tax charge                                         -             - 
                                               ------------  ------------ 
 

The difference between the total current tax shown above and the amount calculated by applying the standard rate of corporation tax for various jurisdictions to the loss before tax is as follows:

 
                                                      2020 (GBP)    2019 (GBP) 
                                                    ------------  ------------ 
 Loss on ordinary activities before tax              (6,417,237)   (3,903,116) 
                                                    ------------  ------------ 
 
 Income tax expense calculated at blended rate of 
  14.9% (2019: 12.5%)                                  (956,752)     (487,890) 
                                                    ------------  ------------ 
 
 Income which is not taxable                         (1,515,818)      (80,740) 
 Expenses which are not deductible                     2,919,587             - 
 Losses available for carry forward                    (447,017)       568,630 
 Income tax expense recognised in the Statement                -             - 
  of Profit or Loss 
                                                    ------------  ------------ 
 

The effective tax rate used for the December 2020 and December 2019 reconciliations above is the corporate rate of 14.9% and 12.5% payable by corporate entities on taxable profits under tax law in that jurisdiction respectively.

No provision has been made for the 2020 deferred taxation as no taxable income has been received to date, and the probability of future taxable income is indicative of current market conditions which remain uncertain . At the Statement of Financial Position date, the Directors estimate that the Group has unused tax losses of GBP35,320,553 (2019: GBP28,903,316) available for potential offset against future profits which equates to an estimated potential deferred tax asset of GBP4,569,667 (2019: GBP3,612,915). No deferred tax asset has been recognised due to the unpredictability of the future profit streams. Losses may be carried forward indefinitely in accordance with the applicable taxation regulations ruling within each of the above jurisdictions.

   7.   Profit/(Loss) of parent Company 

As permitted by Section 293 of the Companies Act 2014, the Statement of Profit or Loss of the parent Company has not been separately disclosed in these financial statements. The parent Company's profit for the financial period was GBP6 89,870 (2019: Loss of GBP 1,832,539 ).

   8.   Loss per share 

Basic loss per share

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

 
 Basic Loss per share                      31 December   31 December 
                                            2020 (GBP)    2019 (GBP) 
 Loss for the period attributable 
  to equity holders of the parent          (4,726,286)   (3,500,004) 
 
 Weighted average number of ordinary 
  shares for the purposes of basic 
  loss per share                         1,546,853,959   849,795,672 
 
 Basic loss per ordinary share (GBP)           (0.003)       (0.004) 
 

As there are no instruments in issue which have a dilutive impact, the dilutive loss per share is equal to the basic

loss per share, and thus not disclosed separately.

   9.     Property, plant and equipment 
 
 
 
 
  GROUP             Furniture   Motor     Office       I.T      Plant &   Right of    Total 
                        and     Vehicles  Equipment  Equipment  Machinery    use 
                     Fittings                                               assets 
   Cost                (GBP)     (GBP)      (GBP)      (GBP)      (GBP)     (GBP)      (GBP) 
   Opening Cost as 
    at 1 January 
    2019               122,983   106,775     40,945     30,516      8,821    11,011    321,051 
 
   Disposals         (112,286)  (82,615)   (34,255)   (24,514)          -         -  (253,669) 
   Additions                 -         -          -          -          -    56,930     56,930 
   Exchange 
    movements          (8,162)       924    (1,619)    (1,005)      2,441         -    (7,422) 
 
   Closing Cost as 
    at 31 December 
    2019                 2,535    25,084      5,071      4,997     11,262    67,941    116,890 
                     ---------  --------  ---------  ---------  ---------  --------  --------- 
 
   Opening cost at 
    1 January 2020       2,535    25,084      5,071      4,997     11,262    67,941    116,890 
   Disposals                 -   (7,972)          -          -          -  (67,941)   (75,913) 
   Additions                 -         -          -          -          -                    - 
   Exchange 
    movements             (99)     (981)      (101)        (8)    (2,661)         -    (3,850) 
 
   Closing Cost as 
    at 31 December 
    2020                 2,436    16,131      4,970      4,989      8,601         -     37,127 
                     ---------  --------  ---------  ---------  ---------  --------  --------- 
 
                     Furniture   Motor     Office       I.T      Plant &   Right of    Total 
                        and     Vehicles  Equipment  Equipment  Machinery    use 
                     Fittings                                               assets 
   Accumulated         (GBP)     (GBP)      (GBP)      (GBP)      (GBP)     (GBP)      (GBP) 
   Depreciation 
   ("Acc Depr") 
   Acc Depr as at 1 
    January 2019       122,187    94,092     37,518     27,182      8,821         -    289,800 
 
   Disposals         (111,482)  (82,615)   (31,851)   (22,552)      (116)         -  (248,615) 
   Depreciation             99     5,553      1,119        605        481    12,739     20,596 
   Exchange 
    Movements          (8,269)     1,172    (2,395)    (1,880)      2,077         -    (9,295) 
   Acc Depr as at 
    31 December 
    2019                 2,535    18,202      4,392      3,355     11,263    12,739     52,486 
                     ---------  --------  ---------  ---------  ---------  --------  --------- 
 
   Disposals                 -   (6,606)                     -          -  (12,739)   (19,345) 
   Depreciation              -     5,117        141        427          -         -      5,685 
   Exchange 
    movements             (99)   (1,428)      (135)        507    (2,662)         -    (3,817) 
 
   Acc Depr as at 
    31 December 
    2020                 2,436    15,285      4,398      4,289      8,601         -     35,009 
                     ---------  --------  ---------  ---------  ---------  --------  --------- 
 
                     Furniture   Motor     Office       I.T      Plant &   Right of    Total 
                        and     Vehicles  Equipment  Equipment  Machinery    use 
                     Fittings                                               assets 
   Carrying            (GBP)     (GBP)      (GBP)      (GBP)      (GBP)     (GBP)      (GBP) 
   Value 
                     ---------  --------  ---------  ---------  ---------            --------- 
   Carrying value 
    as at 31 
    December 2019            -     6,882        679      1,642          -    55,202     64,405 
                     ---------  --------  ---------  ---------  ---------  --------  --------- 
   Carrying value 
    as at 31 
    December 2020            -       846  572              700          -         -      2,118 
                     ---------  --------  ---------  ---------  ---------  --------  --------- 
 

.

   10.   Intangible assets 

Intangible assets consist of separately identifiable prospecting and exploration assets or intellectual property (Bordersley Power) acquired either through business combinations or through separate asset acquisitions. These intangible assets are recognised at the respective fair values of the underlying asset acquired, or where the fair value of the underlying asset acquired is not readily available, the fair value of the consideration.

The following reconciliation serves to summarise the composition of intangible assets as at period end:

 
                                    Mabesekwa   Mbeya Coal        Lake     Bordersely         Total 
                                      Coal to     to Power    Victoria    Power (GBP)        ( GBP) 
                                Power Project      Project     Project 
                                       ( GBP)       ( GBP)      ( GBP) 
 Valuation as at 1 January 
  2019                              9,376,312   15,896,105     787,108              -    26,059,525 
                              ---------------  -----------  ----------  -------------  ------------ 
 Disposals of the Mabesekwa 
  Coal Project                    (9,376,312)            -           -              -   (9,376,312) 
 Acquisition of Bordersley 
  Power Ltd                                 -            -           -      2,595,000     2,595,000 
 Assets classified as held 
  for sale                                  -            -   (787,108)                    (787,108) 
 Carrying value as at 1 
  January 2020                              -   15,896,105           -      2,595,000    18,491,105 
 Impairments                                -            -           -              -             - 
 Carrying value as at 31 
  December 2020                             -   15,896,105           -      2,595,000    18,491,105 
                              ---------------  -----------  ----------  -------------  ------------ 
 

Intangible assets are not amortised, due to the indefinite useful life which is attached to the underlying prospecting rights and/ or intellectual property acquired, until such time that active mining operations/ power generation commence, which will result in the intangible asset being amortised over the useful life of the relevant project.

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.

One or more of the following facts or circumstances indicate that an entity should test an intangible asset for impairment:

-- the period for which the entity has the right to explore or develop the asset has expired during the period or will expire in the foreseeable future;

   --      substantial expenditure on the asset in future is neither planned nor budgeted; 

-- exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and

-- sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the development asset is unlikely to be recovered in full from successful development or by sale.

In assessing whether a write-down is required in the carrying value of a potentially impaired intangible asset, the asset's carrying value is compared with its recoverable amount. The recoverable amount is the higher of the asset's fair value less costs to sell and value in use. The valuation techniques applicable to the valuation of the abovementioned intangible assets comprise a combination of fair market values, discounted cash flow projections and historic transaction prices.

The following key assumptions influence the measurement of the intangible assets' recoverable amounts, through utilising the value in use calculation performed:

   --      currency fluctuations and exchange movements applicable to model; 
   --      commodity prices related to ore reserve and forward looking statements; 
   --      expected growth rates in respect of production capacity; 
   --      cost of capital related to funding requirements; 
   --      applicable discounts rates, inflation and taxation implications; 
   --      future operating expenditure for extraction and mining of measured mineral resources; and 
   --      co-operation of key project partners going forward. 

Through review of the project specific financial, operational, market and economic indicators applicable to the above intangible assets, as well as consideration of the various elements which contribute toward the indication of impairment of exploration and evaluation assets, it was concluded no impairment was necessary in the 2020 financial period. A summary of the assessment performed for each of the intangible assets are detailed below.

Mbeya Coal to Power Project

The Mbeya Coal to Power Project situated in the Mbeya region of Tanzania, which comprises the Mbeya Coal Mine, a potential 1.5Mt p/a mining operation, and the Mbeya Power Plant, a planned 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 an annual power output target of 1.8GW 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.

Subsequent to the completion of a compulsory tender process through TANESCO on the development of the Mbeya Coal to Power Project, the Group was informed that its bid to secure a Power-Purchase Agreement was unsuccessful in February 2019.

Further engagement with TANESCO has subsequently culminated in the receipt of a formal notice from TANESCO inviting the Group it to develop the Mbeya Coal to Power Project for the export market and thereby enabling the Company to engage with the African Power Pools regarding potential off-take agreements.

As at year end, taking into account the various aspects listed above, the Group concluded that none of the impairment indicators had been met in relation to the Mbeya Coal assets.

Lake Victoria Project

The Group entered into an agreement during August 2019 with Lake Victoria Gold Limited ("LVG") covering the proposed disposal of 100% of the equity interest held by Katoro in its wholly owned subsidiary, Reef Miners Limited ("Reef"), which owns the Imweru gold project and the Lubando gold project in northern Tanzania.

As at year end, the conditions precedent relating to the disposal had been met, and the disposal has thus been completed. (refer to Note 17).

Mabesekwa Coal Independent Power Project

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 was 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 retained a 15% interest in the Mabesekwa Coal Independent Power Project. The intangible asset was recognised at the fair value of the consideration paid, which emanates from the fair value of the equity instruments issued as at transaction date, being GBP 9,376,312.

The Mabesekwa Coal Independent Power Project ("MCIPP") is located approximately 40km east of the village of Tonata and approximately 50km southeast of Francistown, Botswana's second largest city. Certain aspects of the Project have been advanced previously by Sechaba Natural Resources Limited ("Sechaba"), including water and land use permits and environmental certification. Mabesekwa consists of a 300Mt subset of the current insitu 777Mt Coal Resource.

A pre-feasibility study on a coal mine and a scoping study on a coal fired thermal power plant has been completed. Kibo is in possession of a Competent Persons Report on the project, which includes a SAMREC-compliant Maiden Resource Statement on the excised 300 Mt portion of the Mabesekwa coal deposit.

In September 2019, Kibo and Shumba Energy Limited ("Shumba") signed a binding Heads of Agreement to reorganise the arrangements for the MCIPP and its associated coal asset in Botswana.

Under the reorganisation the MCIPP retained assets will be consolidated back into KEB and Kibo's interest in KEB will be reduced to 35% to maintain Kibo's look-through interest in the MCIPP resource and make sundry adjustments to recognise Kibo's project expenditure. A variety of shareholders' and joint development agreements govern the management of the various entities, including minority interest protections, with details of Kibo's final interests in these entities and the MCIPP resource to be advised upon completion of the reorganisation.

In exchange for the increase in the equity interest held by Shumba, Shumba would forego the previous claim it had against a portion of the MCIPP coal resources, thereby increasing the value of the interest held by KEB.

The transaction became effective on 5 December 2019 when Kibo concluded a shareholders agreement with KEB and Shumba whereby Kibo, through its wholly owned subsidiaries, Kibo Mining Cyprus Limited and Kibo Energy Botswana Limited would decrease their equity interest in KEB from 85% to 35%, effectively halving their interest in the MCIPP project.

As a result of the reorganisation, Kibo lost control of KEB and therefore derecognised the intangible asset previously recorded and simultaneously recognised an investment in associate equal to the fair value of the remaining interest retained in KEB (refer Note 11).

Bordersley Power Ltd

Kibo Energy PLC initially acquired an indirect 100% equity interest in shovel-ready reserve power generation project, Bordersley, which will comprise a 5MW gas-fuelled power generation plant for the consideration of GBP175,000 settled through the issue of shares.

Thereafter, Kibo acquired all of St' Anderton's direct and indirect interests (Royalty Agreements) in the Bordersley power project described above giving it a 100% economic and 100% equity interest in Bordersley (the 'Acquisition'). Consideration for the Acquisition consists of the allotment and issue of 46,067,206 ordinary shares in the capital of Kibo to St' Anderton at an issue price of GBP0.0525 per share and payable in five tranches ('Consideration Shares') such that the full consideration is only payable in the event that Bordersley is progressively derisked.

The issue price of the Consideration Shares and the associated number to be issued to St' Anderton was determined by using the methodology set out in the original MED vendor agreement as guidance, and was calculated as c. GBP2,420,000 comprising:

-- 100% of the net present value of the Project Royalties (being the royalty equal to 5% of the gross revenue less gas and trading costs) amounting to c. GBP370,000; and

-- 40% of the net present value of the Project Revenue (being net profit before tax) flowing to St' Anderton from Bordersley through MED amounting to c. GBP2,050,000.

   11.   Investment in associate 

Mabesekwa Coal Independent Power Plant

 
                                            Group (GBP)        Company (GBP) 
                                          2020       2019      2020     2019 
                                        ---------  ---------  -------  ------ 
Balance at the beginning of the 
 year                                   9,696,683          -        -       - 
Associate acquired during the period            -  9,696,683        -       - 
Share of loss for the year                  (332) 
Balance at the end of the year          9,696,351  9,696,683        -       - 
                                        =========  =========  =======  ====== 
 

The Group retained a 35% equity interest in Kibo Energy Botswana (Pty) Ltd as a result the reorganisation of its interests in the Mabesekwa Coal Independent Power Plant as disclosed in Note 10.

The value of the remaining equity interest in Kibo Energy Botswana (Pty) Ltd on initial recognition, was determined based on the fair value of the proportionate equity interest retained in the in the enlarged resource following the restructuring.

Summarised financial information of the associate is set out below:

 
                           Group (GBP)   Group (GBP) 
                                  2020          2019 
                          ------------  ------------ 
Non-Current assets           8,396,296     9,376,312 
Current assets                     869         1,011 
Loss for the year              (1,107)      (18,220) 
 

Kibo Energy Botswana (Pty) Ltd's principal place of business is Plot 2780, Extension 9, Gaborone, Botswana.

   12.   Other financial assets 
 
                                         Group (GBP)     Company (GBP) 
                                         2020     2019   2020     2019 
                                       ---------  ----  -------  ------ 
Other financial assets consists of: 
Lake Victoria Gold receivable            640,821     -        -       - 
Impairment following from increase 
 in credit risk                        (640,821)     -        -       - 
                                               -     -        -       - 
                                       =========  ====  =======  ====== 
 

Lake Victoria Gold Receivable

On 30 June 2020, the last condition precedent related to the disposal of Reef Miners Limited ("Reef") as per the SPA, comprising the Imweru gold project and the Lubando gold project in northern Tanzania, was met resulting in the effective disposal of the subsidiary to Lake Victoria Gold Limited ("LVG").

The amount receivable from Lake Victoria Gold will be due and payable on the following dates:

   1.     US$100,000 upon the satisfaction of the Condition Precedent; 
   2.     US$100,000 upon registration of Reef in the name of LVG; 
   3.     US$100,000 four months from the date of the SPA; 
   4.     US$200,000 nine months from the date of the SPA; and 

5. US$500,000 upon the earlier of the commissioning of the first producing mine of LVG in the Tanzania or the date 24 months from the date of the SPA.

As at 31 December 2020, funds of $100,000 have been received from Lake Victoria Gold in respect of the sale of Reef Miners Limited ("Reef")

The receivable in Lake Victoria Gold has been fully impaired due to the significant increase in credit risk, which is as a result of payments 1,3 and 4 not being received as they become due and is still outstanding after the year end.

Blyvoor Joint Operations

On 30 January 2020, the Group entered into a Joint Venture Agreement with Blyvoor Gold Mines (Pty) Ltd, whereby Katoro Gold plc and Blyvoor Gold Mines (Pty) Ltd would become 50/50 participants in a unincorporated Joint Venture.

In accordance with the requirements of the Joint Venture Agreement, the Katoro Group was to provide a ZAR15.0 million loan (approximately GBP790,000) to the JV ('the Katoro Loan Facility'), which will fund ongoing development work on the Project.

As at year end, the Group has advanced funding in the amount of GBP1,201,767 of which 100% relates to expenditure allocated to the Joint Venture operations, carried by the Katoro Gold plc Group.

The Katoro Loan Facility shall form part of the development capital project financing that Katoro shall procure in accordance with its obligations contained in the Agreement, as detailed below, provided that:

-- the balance of the Katoro Loan Facility then outstanding shall be subordinated to third party creditors participating in the development capital project financing;

-- the Katoro Loan Facility will bear interest at the 12-month London Inter-Bank Offered Rate, or its successor; and

   --      the Katoro Loan Facility will be repayable within 12 months after: 

- the last third-party creditor participating in the project financing shall have been paid; or

- any earlier date on which the Parties may agree.

At fair value through profit or loss

 
                                          Group (GBP)      Company (GBP) 
                                          2020     2019    2020     2019 
                                        --------  ------  -------  ------ 
Opening balance                           37,661       -        -       - 
Fair value adjustment through profit 
 or loss                                (37,661)  37,661        -       - 
                                               -  37,661        -       - 
                                        ========  ======  =======  ====== 
 

The investment represents 700,000 ordinary shares in Lake Victoria Gold Limited, incorporated in Australia, with a value of AUS$70,000. The shares were issued to Katoro Gold Plc in recognition of the company granting the extension to receipt of the first tranche of monies due under the term sheet. The shares were issued on 15 October 2019 and recorded using the spot rate between the British pound and Australian dollar at that date. The investment in Lake Victoria Gold has been fully impaired due to the significant increase in credit risk of Lake Victoria Gold Limited. In the prior year annual financial statements the disclosure in the accounting policies and the notes to the annual financial statements erroneously referred to the investments as being carried at fair value through other comprehensive income.

   13.   Acquisition and Disposal of interests in other entities 

Reef Miners Limited - Imweru and Lubando gold project - 2020

On 30 June 2020, the last condition precedent related to the disposal of Reef Miners Limited ("Reef"), comprising the Imweru gold project and the Lubando gold project in northern Tanzania, was met, resulting in the effective disposal of the subsidiary to Lake Victoria Gold Limited ("LVG"). The assets and corresponding liabilities of Reef was recognised as part of the assets classified held for sale in the comparative financial period.

The following disposal of the subsidiary was recognised in the 2020 financial statements:

 
 
                                                             Group (GBP) 
Intangible assets                                              (787,108) 
Cash and cash equivalents                                          (336) 
Trade and other payables                                           9,136 
Net assets value disposed off                                  (778,308) 
Foreign currency translation reserve reclassified through 
 profit or loss                                                (121,670) 
Proceeds from disposal                                           797,564 
                                                             ----------- 
Loss on disposal of subsidiary                                 (102,414) 
Impairment of other financial asset receivable                 (640,821) 
                                                             ----------- 
Total loss                                                     (743,235) 
 

Mabesekwa Coal Independent Power Project - 2019

In September 2019, Kibo and Shumba Energy Limited ("Shumba") signed a binding Heads of Agreement to reorganise the arrangements for the MCIPP and its associated coal asset in Botswana.

Under the reorganisation the MCIPP retained assets will be consolidated back into Kibo Energy Botswana (Pty) Ltd ("KEB") and Kibo's interest in KEB will be reduced to 35% to maintain Kibo's look-through interest in the MCIPP resource and make sundry adjustments to recognise Kibo's project expenditure. A variety of shareholders' and joint development agreements govern the management of the various entities, including minority interest protections, with details of Kibo's final interests in these entities and the MCIPP resource to be advised upon completion of the reorganisation.

In exchange for the increase in the equity interest held by Shumba, Shumba would forego the previous claim it had against a portion of the MCIPP coal resources, thereby increasing the value of the interest held by KEB.

The transaction became effective on 5 December 2019 when Kibo concluded a shareholders agreement with KEB and Shumba whereby Kibo, through its wholly owned subsidiaries, Kibo Mining Cyprus Limited and Kibo Energy Botswana Limited would decrease their equity interest in KEB from 85% to 35%, effectively halving their interest in the MCIPP project.

Benga Power Plant Project - 2019

Kibo entered into a Joint Venture Agreement with Mozambique energy company Termoeléctrica de Benga S.A. to participate in the further assessment and potential development of the Benga Independent Power Project ('BIPP'). The assets associated with the acquisition were transferred into a newly incorporated entity in which Kibo and Termoeléctrica hold initial participation interests of 65% and 35% respectively, which Kibo obtained for no consideration on commencement. As disclosed in the significant judgement section of the financial results, Kibo is not able to exercise control over the operations of the newly incorporated entity, therefore the investment is recognised as a Joint Venture for financial reporting purposes, which requires the recognition of the participants interest in the net revenue of the Joint Venture's operations.

In order to maintain its initial participation interest Kibo is required to ensure funding of a maximum amount of GBP1 million towards the completion of a Definitive Feasibility Study.

Bordersley Power Ltd - 2019

Kibo Energy PLC initially acquired an indirect 100% equity interest in shovel-ready reserve power generation project, Bordersley, which will comprise a 5MW gas-fuelled power generation plant for the consideration of GBP175,000 settled through the issue of shares.

Thereafter, Kibo acquired all of St' Anderton's direct and indirect interests (Royalty Agreements) in the Bordersley power project described above giving it a 100% economic and 100% equity interest in Bordersley (the 'Acquisition'). Consideration for the Acquisition consists of the allotment and issue of 46,067,206 ordinary shares in the capital of Kibo to St' Anderton at an issue price of GBP0.0525 per share and payable in five tranches ('Consideration Shares') such that the full consideration is only payable in the event that Bordersley is progressively derisked.

As there were no separately identifiable assets and/or liabilities acquired, the purchase price was allocated toward the Intellectual Property acquired, in the amount of GBP 2,595,000, as disclosed in Note 10.

   14.   Goodwill 

MAST Energy Development Limited - 2019

In the previous financial period the Group acquired a 60% equity interest in MAST Energy Project Limited, previously known as MAST Energy Development Limited, for GBP300,000, settled through the issue of 5,714,286 ordinary shares in Kibo effective on 19 October 2018. The acquisition of MAST Energy Development Limited falls within the ambit of IFRS 3: Business Combinations. The net assets acquired were valued at Nil, with the resultant purchase price being allocated to Goodwill on date of acquisition.

Various "shovel ready" sites have already been identified in the UK, capable of sustaining gas fired power generators and ancillary structures from 20MW upwards. Financial modelling indicates projected IRRs of 13-16% and NPVs of GBP16-19 million for the initial assets.

Goodwill is assessed for impairment on an annual basis, against the recoverable amount of underlying Cash Generating Unit ("CGU"). The recoverable amount of the CGU, is the higher of its fair value less cost to sell and its value in use. The valuation techniques applicable to the valuation of the abovementioned CGU comprise a combination of fair market values, discounted cash flow projections and historic transaction prices.

Through review of the project specific financial, operational, market and economic indicators applicable to the above CGU, as well as consideration of the various elements which contribute toward the indication of impairment of similar projects, it was concluded no impairment was necessary in the 2020 financial period.

   15.   Trade and other receivables 
 
                                 Group 
                                  2020         Group       Company       Company 
                                 (GBP)    2019 (GBP)    2020 (GBP)    2019 (GBP) 
 
 Amounts falling due within 
  one year: 
 Other debtors                 115,886       380,693        39,085       361,467 
                               115,886       380,693        39,085       361,467 
                              --------  ------------  ------------  ------------ 
 

The nature of amounts owed by Group undertakings is such that the expected recovery thereof is in excess of one year, and is thus classified as amounts falling due after one year.

The carrying value of current trade and other receivables approximates their fair value.

Amounts owed by Group undertakings represent inter-company loans between the Company and its subsidiaries. They have no fixed repayment terms, bear no interest and are unsecured, resulting in the recognition of the receivable as a non-current asset due to settlement being extended beyond 12 months.

During the period the Board resolved to capitalise inter-company loans and convert the respective loans owed by subsidiaries into share capital in order to adhere to international transfer pricing regulation and this resulted in a corresponding decrease in amounts owed by group undertakings.

Trade and other receivables pledged as security

None of the above stated trade and other receivables were pledged as security at period end. Credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical repayment trends of the individual debtors.

   16.   Cash 
 
                                          Group (GBP)     Company (GBP) 
Cash consists of:                        2020     2019    2020     2019 
                                        -------  ------  -------  ------ 
 
Short term convertible cash reserves    256,760  91,634  141,788  31,389 
                                        256,760  91,634  141,788  31,389 
                                        =======  ======  =======  ====== 
 

Cash has not been ceded, or placed as encumbrance toward any liabilities as at year end.

   17.   Assets classified as held for sale 

On 22 August 2019, the Group entered into a term sheet with Lake Victoria Gold Limited ("LVG") covering the disposal of 100% of the equity interest held by subsidiary Katoro Gold Plc in its wholly owned subsidiary, Reef Miners Limited ("Reef"), which owns the Imweru gold project and the Lubando gold project in northern Tanzania. Although the sale and purchase agreement with LVG has not been entered into to date, and LVG have requested extensions on the payment tranches to be made in accordance with the term sheet, the Board feels that the sale of Reef is in the best interest of the Company at this time and the directors are of the opinion that the sale is highly probable. The assets, together with the associated liabilities of Reef have therefore been classified as held for sale in the comparative financial period.

The major classes of assets and liabilities in the disposal group classified as held for sale are as follows:

 
            Assets                                  2019 
            Intangible assets                       787,108 
            Cash and cash equivalents                 6,966 
                                        ------------------- 
                                                    794,074 
            Liabilities 
            Trade and other payables                 11,257 
 

The disposal of Reef Miners Limited ("Reef") to Lake Victoria Gold Limited ("LVG") was completed effective from 30 June 2020, thus the assets classified as held for sale have been disposed of in the current financial period. Refer to note 13 for further detail on these transactions. The consideration receivable related to the disposal of Reef, amounting to GBP 797,564 was receivable in cash, with no non-cash element receivable.

The following loss from disposal of the subsidiary was recognised in the 2020 financial statements:

 
 
                                                             Group (GBP) 
Intangible assets                                              (787,108) 
Cash and cash equivalents                                          (336) 
Trade and other payables                                           9,136 
Net assets value disposed off                                  (778,308) 
Foreign currency translation reserve reclassified through 
 profit or loss                                                (121,670) 
Proceeds from disposal - receivable outstanding as at 
 year end                                                        720,848 
Proceeds from disposal - cash received                            76,716 
                                                             ----------- 
Loss on disposal of subsidiary                                 (102,414) 
Impairment of financial asset receivable                       (640,821) 
                                                             ----------- 
Total loss                                                     (743,235) 
 
   18.   Share capital - Group and Company 
 
                                                     2020             2019 
 Authorised equity 
 5,000,000,000 Ordinary shares of EUR0.001 
  each 
  1,000,000,000 deferred shares of EUR0.014 
  each                                            EUR5,000,000     EUR2,000,000 
  3,000,000,000 deferred shares of EUR0.009      EUR14,000,000    EUR14,000,000 
  each                                           EUR27,000,000    EUR27,000,000 
                                                 EUR46,000,000    EUR43,000,000 
 Allotted, issued and fully paid shares 
 (2020: 2,221,640,835 Ordinary shares of         GBP 1,205,611                - 
  EUR0.001 each ) 
 (2019: 1,257,276,078 Ordinary shares of                     -       GBP326,468 
  EUR0.001 each) 
 1,291,394,535 Deferred shares of EUR0.009        GBP9,257,075     GBP9,257,075 
  each 
 805,053,798 Deferred shares of EUR0.014          GBP9,948,807     GBP9,948,807 
  each 
                                               ---------------  --------------- 
                                                GBP 20,411,493    GBP19,532,350 
 
 
                                              Ordinary         Deferred                      Treasury 
                             Number of      Share Capital    Share Capital   Share Premium    shares 
                               Shares           (GBP)            (GBP)           (GBP)         (GBP) 
 
 
 Balance at 31 December 
  2019                     1,257,276,078          326,468       19,205,882      42,750,436          - 
                          --------------  ---------------  ---------------  --------------  --------- 
 
 Shares issued during 
  the period                 964,364,757          879,143                -       1,561,935          - 
 
 Balance at 31 December 
  2020                     2,221,640,835        1,205,611       19,205,882      44,312,371          - 
                          --------------  ---------------  ---------------  --------------  --------- 
 

All ordinary shares issued have the right to vote, right to receive dividends, a copy of the annual report, and the right to transfer ownership of their shares.

During the period, the Company resolved to increase the Ordinary Share capital from five billion Ordinary Shares to eight billion Ordinary Shares to ensure sufficient authorised Ordinary Share capital available to issue more Ordinary Shares when required.

   19.   Control reserve 

The transaction with Opera Investments PLC in 2017 represented a disposal without loss of control. Under IFRS this constitutes a transaction with equity holders and as such is recognised through equity as opposed to recognising goodwill. The control reserve represents the difference between the purchase consideration and the book value of the net assets and liabilities acquired in the transaction with Opera Investments.

   20.   Share based payments reserve 

The following reconciliation serves to summarise the composition of the share based payment reserve as at period end:

 
                                                               Group (GBP) 
                                                    --------------------------------- 
                                                          2020                   2019 
                                                    ----------  --------------------- 
 Opening balance of share based payment reserve      1,504,513                 41,807 
 Issue of share options and warrants                   645,445              1,041,235 
 Deferred vendor liability settled through 
  the issue of shares                                (421,471)                421,471 
 Reclassification of share based payment reserve             -                      - 
  on expired share options 
                                                    ----------  --------------------- 
                                                     1,728,487              1,504,513 
                                                    ----------  --------------------- 
 
 
                                                           Company (GBP) 
                                                    -------------------------- 
                                                        2020              2019 
                                                    --------  ---------------- 
 Opening balance of share based payment reserve      977,575                 - 
 Issue of share options and warrants                       -           977,575 
 Reclassification of share based payment reserve           -                 - 
  on expired share options 
                                                    --------  ---------------- 
                                                     977,575           977,575 
                                                    --------  ---------------- 
 

Share options and Warrants

Share Options

During the prior year, Katoro Gold Plc, a subsidiary of Kibo, implemented a share option plan whereby the Board and Management of the Company were issued 14,944,783 Ordinary shares, being 10% of the Company's issued share capital on 8 February 2019, at 1.3 pence per share. The options have an expiry date of the seventh anniversary date of the date of grant, with 50% vesting on issue and the remaining 50% vesting in one year.

During the current year, the company implemented a share option plan whereby the Board and Management of the Company were grant options over a total of 17,300,000 new ordinary shares of GBP0.01each in the capital of the Company. The Options are exercisable at 2.6 pence per Ordinary Share, constituting a c. 10% premium to the Company's recent closing share price on 28 August 2020. The Options have an expiry date of the seventh anniversary from the date of grant of 28 August 2020, with 50% vesting on issue and the remaining 50% vesting in one year.

The fair value of the share options issued have been determined using the Black-Scholes option pricing model.

The inputs to the Black-Scholes model were as follows:

 
 Description of key input     Key Assumptions   Key Assumptions 
 Date issued                         February       August 2020 
                                         2019 
 Options granted                   14,944,783        17,300,000 
 Stock price                             1.3p              2.4p 
 Exercise price                          1.3p              2.6p 
 Risk free rate                          0.4%              0.3% 
 Volatility                               82%           142.84% 
 Time to maturity                     7 years           7 years 
 

Expected volatility was determined using the historic average volatility in the company's share price over the past 2 to 3 years.

The weighted average fair value for the share options granted during year is 2.26p.

Warrants

The Group has the following warrants over its Ordinary Shares:

-- 1,208,333 warrants to Beaufort's (Beaufort Securities Limited, the former broker to the Group) in respect of the placing fees. Each warrant shall entitle Beaufort to subscribe for one new Ordinary Share and shall be exercisable at 6 pence per share for up to five years;

-- 10,000,000 warrants to African Battery Metals Plc in respect of the Nickel project facilitation fees. The warrants were issued over 2 tranches. The first tranche of 2,500,000 warrants were issued upon signature of the Option Agreement between the parties on 15 March 2019, with the remaining 7,500,000 issued on 15 May 2019. These warrants are exercisable within 3 years of issue date at a price of 1.25 pence per share;

-- 10,000,000 warrants to various funders in respect of placing and subscription of 10,000,000 ordinary shares of 1.0p each issued on 2 October 2019. Each warrant shall entitle the fundraisers to subscribe for a further new Ordinary Share at a price of 1.5p, with a life to expiry of 2 years.4,800,000 of these warrants have been exercised by 31 December 2020,with only 5,200,000 warrants left;

-- 17,200,000 warrants to various funders in respect of placing and subscription of 17,200,000 ordinary shares of 1.0p each issued on 31 March 2020. Each warrant shall entitle the fundraisers to subscribe for a further new Ordinary Share at a price of 2.0p, with a life to expiry of 2 years;

-- 36,666,666 warrants to various funders in respect of placing and subscription of 73,333,333 ordinary shares of 1.0p each issued on 25 June 2020. Each warrant shall entitle the fundraisers to subscribe for a further new Ordinary Share at a price of 3.0p, with a life to expiry of 3 years. The Directors also participated in the Fundraise, of which they acquired 3,333,333 ordinary shares and 1,666,666 warrants.

-- 663,333,420 warrants were issued with the share placing completed on 21 October 2019. Each share issued for this placing includes one warrant exercisable at 0.8 pence per share for the period of 18 months and half a warrant exercisable at 1.0 pence per share for the period of 36 months from the date of issue.

-- 362,500,000 warrants were issued with the share placing completed on 17 September 2020. For every two shares issued for this placing includes one warrant exercisable at 0.4 pence per share for the period of 36 months from the date of issue.

-- 240,000,000 warrants were issued with the early termination of convertible loan note completed on 17 September 2020. The warrants are exercisable at 0.25 pence per share for the period of 36 months from the date of issue.

-- 10,000,000 warrants were issued to the company's broker for broker fees relating to the share placing completed on 17 September 2020. The warrants are exercisable at 0.2 pence per share for the period of 36 months from the date of issue.

The fair value of the warrants issued have been determined using the Black-Scholes option pricing model.

The inputs to the Black-Scholes model were as follows:

 
 Description                Key              Key              Key              Key              Key              Key 
  of key input      Assumptions      Assumptions      Assumptions      Assumptions      Assumptions      Assumptions 
                       Beaufort          African        Financing        Financing        Financing      Kibo Energy 
                                         Battery           shares           shares           shares      Plc October 
                                      Metals Plc                                                        2019 placing 
 
 Date issued         April 2017         May 2019          October       March 2020        June 2020          October 
                                                             2019                                               2019 
 Warrants 
  granted             1,208,333       10,000,000       10,000,000       17,200,000       36,666,666      442,222,280 
 Stock price                 6p             1.3p            1.10p            1.35p             1.7p            0.45p 
 Exercise price              6p            1.25p             1.5p               2p               3p             0.8p 
 Risk free 
  rate                     0.1%             0.4%             0.4%             0.1%             0.1%             0.4% 
 Volatility                 70%              82%              82%           86.44%          148.29%              99% 
 Time to                5 years          3 years          2 years          2 years          3 years        18 months 
  maturity 
 
 
 Description        Key Assumptions   Key Assumptions   Key Assumptions    Key Assumptions 
  of key input          Kibo Energy       Kibo Energy       Kibo Energy        Kibo Energy 
                        Plc October     Plc September        Plc Broker    CLN Termination 
                       2019 placing      2020 placing            shares 
 
 Date issued           October 2019         September         September  September 2020 
                                                 2020              2020 
 Warrants 
  granted               221,111,140       362,500,000        10,000,000        240,000,000 
Stock price                    0.5p             0.25p             0.25p              0.25p 
 Exercise 
  price                          1p              0.4p             0.20p              0.25p 
Risk free 
 rate                          0.4%                0%                0%                 0% 
 Volatility                     99%            144.5%            144.5%             144.5% 
Time to maturity            3 years           3 years           3 years            3 years 
 
 
 

Expected volatility was determined using the historic average volatility in the company's share price over the past 2 to 3 years.

Expenses settled through the issue of shares

The Group recognised the following expense related to equity settled share based payment transactions:

 
                                               2020 (GBP)  2019 (GBP) 
 
Geological expenditure settled                    663,079     100,559 
Listing and capital raising fees                  178,000     252,854 
Statutory fees                                          -     144,013 
Shares and warrants issued to directors and 
 staff                                            225,778     405,345 
                                                1,066,857     902,771 
 

At 31 December 2020 the Group had 32,244,781 share options and 1,341,308,419 warrants outstanding.

 
                                                                                       Exercisable 
                                                                                         as at 31 
                            Exercise start                 Exercise                      December 
            Date of Grant         date       Expiry date     Price    Number Granted       2020 
                                08 Feb 2019 
Options         8 Feb 2019            (50%)    7 Feb 2026      1.3p       14,944,783     14,944,783 
                    08 Feb 2020 
                          (50%) 
                                28 Aug 2020 
               28 Aug 2020            (50%)   28 Aug 2027      2.6p       17,300,000     17,300,000 
                    28 Aug 2020 
                          (50%) 
                                                                          32,244,781     32,244,781 
 
 
Warrants       04 Nov 2019      04 Nov 2019   03 May 2021      0.4p      442,222,280    442,222,280 
     04 Nov 2019      04 Nov 2019             03 Nov 2022      0.6p      221,111,140    221,111,140 
                                                  17 Sept 
    17 Sept 2020     17 Sept 2020                    2023      0.4p      362,500,000    362,500,000 
                                                  17 Sept 
    17 Sept 2020     17 Sept 2020                    2023     0.25p      240,000,000    240,000,000 
                                                  17 Sept 
    17 Sept 2020     17 Sept 2020                    2023      0.2p       10,000,000     10,000,000 
      April 2017       April 2017              April 2022        6p        1,208,333      1,208,333 
     15 May 2019      15 May 2019             15 May 2022     1.25p       10,000,000     10,000,000 
     02 Oct 2019      02 Oct 2019             02 Oct 2021      1.5p        5,200,000        400,000 
     31 Mar 2020      31 Mar 2020             31 Mar 2022        2p       17,200,000     17,200,000 
     25 Jun 2020      25 Jun 2020             25 Jun 2023        3p       36,666,666     36,666,666 
 
                                                                       1,346,108,419  1,341,308,419 
 
Total Contingently Issuable shares                                     1,378,353,200  1,373,553,200 
 

Reconciliation of the quantity of share options in issue:

 
                                       Group            Company 
                                  2020        2019     2020  2019 
Opening balance                14,944,781           -     -     - 
New share options issued       17,300,000  14,944,781     -     - 
Expiration of share options             -           -     -     - 
                               32,244,781  14,944,781     -     - 
 

Reconciliation of the quantity of warrants in issue:

 
                                 Group                      Company 
                           2020          2019          2020          2019 
Opening balance          663,333,420            -    663,333,420            - 
New warrants issued      682,774,999  663,333,420    612,500,000  663,333,420 
Warrants exercised       (4,800,000)            -              -            - 
                       1,341,308,419  663,333,420  1,275,833,420  663,333,420 
 

The weighted average exercise price for warrants exercised in Katoro Gold plc during the year amounted to GBP0.015 per warrant with a weighted average share price at exercise date of GBP0.035 per share.

Deferred vendor liability

The amount due to vendors represents the balance of the purchase consideration owing in respect of the acquisition of Bordersley Power Limited from St' Anderton on Vaal Limited. The liability will be settled through the issue of ordinary shares in the Company, in four equal tranches of 6,000,000 at an issue price of GBP0.0525 each, as the project is progressively derisked, as detailed below:

-- Upon receiving confirmation from Mast Energy Development that a preliminary notice to proceed with construction of the Bordersley power site has been issued by the Owners Engineer for the construction and commissioning of the Bordersley site;

-- Upon receiving confirmation from Mast Energy Development that a final notice to proceed with construction of the Bordersley power site has been issued by the Owners Engineer for the construction and commissioning of the Bordersley site;

-- Upon receiving confirmation from Mast Energy Development that the Owners Engineer for the construction and commissioning of the Bordersley site has commenced with commissioning of the Bordersley power plant; and

-- Upon receiving confirmation from Mast Energy Development that the Owners Engineer for the construction and commissioning of the Bordersley site has confirmed steady state production at the Bordersley power plant.

The fair value of the deferred vendor liability is calculated in accordance with the anticipated purchase consideration payable, at the fair value of the shares on the date of the transaction.

The amount payable has been settled during the current year through the issue of ordinary shares.

   21.   Translation reserves 

The foreign exchange reserve relates to the foreign exchange effect of the retranslation of the Group's overseas subsidiaries on consolidation into the Group's financial statements, taking into account the financing provided to subsidiary operations is seen as part of the Group's net investment in subsidiaries.

 
                                     Group              Company 
                             2020 (GBP)  2019 (GBP)   2020    2019 
                                                      (GBP)   (GBP) 
Opening balance               (872,942)   (656,622)       -       - 
Movement during the period      152,635   (216,320)       -       - 
Disposal of subsidiary          121,670           - 
Closing balance               (598,637)   (872,942)       -       - 
 
   22.   Non -controlling interest 

The non-controlling interest carried forward relates to the minority equity attributable to Katoro Gold PLC and its subsidiaries.

 
                                                          Group 
                                                 2020 (GBP)   2019 (GBP) 
Opening balance                                       27,073     409,171 
Change of interest in subsidiary without loss 
 of control                                        1,407,037      19,267 
Loss for the year allocated to non-controlling 
 interest                                        (1,690,951)   (401,365) 
                                                              ---------- 
Closing balance of non-controlling interest          256,841      27,073 
                                                              ---------- 
 
 

The summarised financial information for significant subsidiaries in which the non-controlling interest has an influence, namely Katoro Gold PLC as at ended 31 December 2020, is presented below:

 
                                                      Katoro plc Group  Katoro plc 
                                                                             Group 
                                                            2020 (GBP)  2019 (GBP) 
Statement of Financial position 
Total assets                                                   353,682     295,116 
Total liabilities                                            (231,806)   (117,402) 
 
                       Statement of Profit and Loss 
Revenue for the period                                               -           - 
Loss for the period                                        (2,561,114)   (668,659) 
 
 
Statement of Cash Flow 
Cash flows from operating activities   (1,039,035)  (580,727) 
Cash flows from investing activities   (1,027,925)          - 
Cash flows from financing activities     2,129,800    202,934 
 
   23.   Trade and other payables 
 
                                          Group        Group       Company      Company 
                                        2020 (GBP)   2019 (GBP)   2020 (GBP)   2019 (GBP) 
Amounts falling due within one year: 
Trade payables                           1,444,986    1,024,126      218,877      265,727 
                                         1,444,986    1,024,126      218,877      265,727 
 

The carrying value of current trade and other payables equals their fair value due mainly to the short term nature of these receivables.

   24.   Borrowings 
 
                                               Group        Group       Company      Company 
                                             2020 (GBP)   2019 (GBP)   2020 (GBP)   2019 (GBP) 
Amounts falling due within one 
 year: 
Short term loans                                858,546      523,725      344,391      294,955 
                                                858,546      523,725      344,391      294,955 
 
                                               Group        Group       Company      Company 
                                             2020 (GBP)   2019 (GBP)   2020 (GBP)   2019 (GBP) 
Reconciliation of borrowings: 
Opening balance                                 523,725            -      294,955            - 
Raised during the year                        1,370,000    1,613,715      590,000      544,955 
Repaid during the year                         (25,000)            -     (25,000)            - 
Consulting fees                                 276,000            -            -            - 
Facilitation fees                               264,200            -      250,000            - 
Reclassification shareholder contribution 
 to debt                                         41,155            -            -            - 
                                             (1,591,534 
Settled through the issue of shares                   )  (1,090,000)    (765,564)    (250,000) 
Closing balance                                 858,546      523,725      344,391      294,955 
 

Short term loans

Short term loans relate to the unsecured interest free loan facility from Sanderson Capital Partners Limited and various high net worth clients of SI Capital which is repayable either through the issue of ordinary shares or payment of cash by the Company.

   25.   Investment in group undertakings 

Breakdown of investments at 31 December 2020

 
                                                        Subsidiary 
                                                        undertakings 
                                                           (GBP) 
            Kibo Mining (Cyprus) Limited                  42,796,376 
            Mbeya Developments Limited                     1,706,896 
            Katoro Gold Plc                                2,160,888 
            Total cost of investments                     46,664,160 
 

Breakdown of investments at 31 December 2019

 
                                                           Subsidiary 
                                                           undertakings 
                                                              (GBP) 
            Kibo Mining (Cyprus) Limited                     40,048,442 
            Sloane Developments Limited                       2,643,558 
            Katoro Gold Plc                                     626,643 
            Total cost of investments                        43,318,643 
 
                                                       Subsidiary 
                                                      undertakings 
                                                          (GBP) 
Investments at Cost 
At 1 January 2019                                              37,890,651 
 
Additions in Kibo Mining (Cyprus) Limited                       2,642,265 
Additions in Katoro Gold PLC                                    2,643,558 
Provision for impairment                                          142,169 
 
At 31 December 2019 (GBP)                                      43,318,643 
 
Additions in Kibo Mining Cyprus Limited                         2,747,934 
Mbeya Developments Limited                                      1,706,896 
Disposal in Sloane Developments Limited                       (2,643,558) 
Reversal of impairment in Katoro Gold PLC                       1,534,245 
Provision for impairment                                                - 
 
At 31 December 2020 (GBP) *                                    46,664,160 
 

The reversal of the impairment in Katoro Gold PLC is due to the significant improvement in the share price, which results in the recoverable amount of the investment in Katoro Gold PLC increasing considerably.

At 31 December 2020 the Company had the following undertakings:

 
 
                      Subsidiary,                                                Interest          Interest 
   Description        associate,        Activity           Incorporated          held              held 
                      Joint Ops                            in                    (2020)            (2019) 
 
  Directly held 
  Investments 
 Kibo Mining 
  (Cyprus) 
  Limited          Subsidiary         Treasury Function  Cyprus                       100%              100% 
                                      Mineral 
 Katoro Gold Plc   Subsidiary          Exploration       United Kingdom             29.25%            55.53% 
 Indirectly held 
 Investments 
 MAST Energy 
  Development 
  Plc              Subsidiary         Power Generation   United Kingdom               100%                 - 
 Sloane 
  Developments 
  Limited          Subsidiary         Holding Company    United Kingdom               100%              100% 
 MAST Energy 
  Projects 
  Limited          Subsidiary         Power Generation   United Kingdom                60%               60% 
 Bordersley Power 
  Limited          Subsidiary         Power Generation   United Kingdom               100%              100% 
 Kibo Gold 
  Limited          Subsidiary         Holding Company    Cyprus                    29.25.%            55.53% 
 Savannah Mining                      Mineral 
  Limited          Subsidiary          Exploration       Tanzania                   29.25%            55.53% 
 Reef Miners                          Mineral 
  Limited          Subsidiary          Exploration       Tanzania                       0%            55.53% 
 Kibo Nickel 
  Limited          Subsidiary         Holding Company    Cyprus                     29.25%            55.53% 
 Eagle 
  Exploration                         Mineral 
  Limited          Subsidiary          Exploration       Tanzania                   29.25%            55.53% 
 Katoro (Cyprus)                      Mineral 
  Limited          Subsidiary          Exploration       Cyprus                     29.25%                 - 
 Katoro South 
  Africa                              Mineral 
  Limited          Subsidiary          Exploration       South Africa               29.25%                 - 
 Blyvoor Joint                        Mineral 
  Venture          Joint Operation     Exploration       South Africa               29.25%                 - 
 Mbeya Holdings 
  Limited          Subsidiary         Holding Company    Cyprus                       100%              100% 
 Mbeya 
  Development 
  Limited          Subsidiary         Holding Company    Cyprus                       100%              100% 
 Mbeya Mining 
  Company 
  Limited          Subsidiary         Holding Company    Cyprus                       100%              100% 
 Mbeya Coal                           Mineral 
  Limited          Subsidiary          Exploration       Tanzania                     100%              100% 
 Rukwa Holding 
  Limited          Subsidiary         Holding Company    Cyprus                       100%              100% 
 Mbeya Power 
  Tanzania 
  Limited          Subsidiary         Power Generation   Tanzania                     100%              100% 
 Kibo Mining 
  South Africa 
  (Pty) Ltd        Subsidiary         Treasury Function  South Africa                 100%              100% 
 Kibo Exploration 
  Limited          Subsidiary         Treasury Function  Tanzania                     100%              100% 
 Kibo MXS Limited  Subsidiary         Holding Company    Cyprus                       100%              100% 
 Mzuri 
  Exploration 
  Services                            Exploration 
  Limited          Investment          Services          Tanzania                    4.78%             4.78% 
 Protocol Mining                       Exploration 
  Limited          Investment           Services         Tanzania                    4.78%             4.78% 
 Jubilee 
  Resources                            Mineral 
  Limited          Subsidiary           Exploration      Tanzania                     100%              100% 
 Kibo Energy 
  Botswana 
  Limited          Subsidiary          Holding Company   Cyprus                       100%              100% 
 Kibo Energy 
  Botswana                             Mineral 
  (Pty) Ltd        Associate            Exploration      Botswana                      35%               35% 
 Kibo Energy 
  Mozambique 
  Limited          Subsidiary          Holding Company   Cyprus                       100%              100% 
 Pinewood 
  Resources                            Mineral 
  Limited          Subsidiary           Exploration      Tanzania                     100%              100% 
 BENGA Power 
  Plant Limited    Joint Venture       Power Generation  Tanzania                      65%               65% 
 Makambako 
  Resources                            Mineral 
  Limited          Subsidiary           Exploration      Tanzania                     100%              100% 
 
 

The Group has applied the approach whereby loans to Group undertakings and trade receivables from Group undertakings were capitalised to the cost of the underlying investments. The capitalisation results in a decrease in the exchange fluctuations between Group companies operating from various locations.

   26.   Related party transactions 

Related parties of the Group comprise subsidiaries, joint ventures, significant shareholders, the Board of Directors and related parties in terms of the listing requirements.

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.

Board of Directors/ Key Management

 
Name                                Relationship (Directors of:) 
A. Lianos                           River Group, Boudica Group and Namaqua Management 
                                     Limited 
 

Other entities over which directors/key management or their close family have control or significant influence:

 
River Group                   River Group provide corporate advisory services 
                               and is the Company's Designated Advisor. 
 
 Boudica Group                 Boudica Group provides secretarial services 
                               to the Group. 
 St Anderton on Vaal Limited 
                               St Anderton on Vaal Limited provides consulting 
                               services to the Group. The directors of St 
                               Anderton on Vaal Limited are also directors 
                               of Mast Energy Developments Limited. 
 

Kibo Mining Plc is a shareholder of the following companies and as such are considered related parties:

   Directly held subsidiaries:                              Kibo Mining (Cyprus) Limited 

Katoro Gold Plc

 
Indirectly held subsidiaries:  Kibo Gold Limited 
                               Kibo Mining South Africa Limited 
                               Savannah Mining Limited 
                               Reef Mining Limited 
                               Kibo Nickel Limited 
                               Katoro (Cyprus) Limited 
                               Katoro South Africa Limited 
                               Kibo Energy Botswana Limited 
                               Kibo Energy Mozambique Limited 
                               Eagle Exploration Mining Limited 
                               Mzuri Energy Limited 
                               Rukwa Holdings Limited 
                               Mbeya Holdings Limited 
                               Mbeya Development Company Limited 
                               Mbeya Mining Company Limited 
                               Mbeya Coal Limited 
                               Mzuri Power Limited 
                               Kibo Exploration Limited 
                               Mbeya Power Tanzania Limited 
                               Kibo MXS Limited 
                               Kibo Energy Mozambique Limited 
                                Pinewood Resources Limited 
                               Makambako Resources Limited 
                               Jubilee Resources Limited 
                                Kibo Energy Botswana Limited 
                               MAST Energy Developments Limited 
                               MAST Energy Projects Limited 
                               Sloane Developments Limited 
                               Bordersley Power Limited 
 

The transactions during the period between the Company and its subsidiaries included the settlement of expenditure to/from subsidiaries, working capital funding, and settlement of the Company's liabilities through the issue of equity in subsidiaries. The loans to/ from group companies do not have fixed repayment terms and are unsecured.

The following transactions have been entered into with related entities, by way of common directorship, throughout the financial period.

River Group was paid GBP37,500 (2019: GBP35,384) for designated advisor services, corporate advisor services and corporate financer fees during the year settled through cash. No fees are payable to River Group as at year end. The expenditure was recognised in the Company as part of administrative expenditure.

St Anderton on Vaal Limited was paid GBP276,000 (2019: GBP297,000) during the year for consulting services rendered to Mast Energy Project Limited.

During the year, Namaqua Management Limited or its nominees, was paid GBP365,027 (2019: GBP472,153) for the provision of administrative and management services. GBPNil was payable at the year-end (2019: GBP247,836).

The Boudica Group was paid GBPNil (2019: GBP32,400) for corporate services during the current financial period. No fees are payable to Boudica Group at year end.

   27.   Financial Instruments and Financial Risk Management 

The Group and Company's principal financial instruments comprises trade payables and borrowings. The main purpose of these financial instruments is to provide finance for the Group and Company's operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

It is, and has been throughout the 2020 and 2019 financial period, the Group and Company's policy not to undertake trading in derivatives.

The main risks arising from the Group and Company's financial instruments are foreign currency risk, credit risk, liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below.

 
                                        2020 (GBP)                  2019 (GBP) 
Financial instruments of           Loans and     Financial     Loans and     Financial 
 the Group are:                  receivables   liabilities   receivables   liabilities 
 
Financial assets at amortised 
 cost 
Trade and other receivables           86,719             -       380,693             - 
Cash                                 256,760             -        91,634             - 
 
Financial liabilities at 
 amortised cost 
Trade payables                             -     1,444,986             -     1,024,126 
Borrowings                                 -       858,546             -       523,725 
                                                                          ------------ 
                                     343,479     2,303,532       472,327     1,547,851 
 
 
                                        2020 (GBP)                  2019 (GBP) 
Financial instruments of           Loans and     Financial     Loans and     Financial 
 the Company are:                receivables   liabilities   receivables   liabilities 
 
Financial assets at amortised 
 cost 
Trade and other receivables 
 - current                            27,602             -       361,467             - 
Cash                                 141,788             -        31,389             - 
 
Financial liabilities at 
 amortised cost 
Trade payables - current                   -       218,877             -       227,237 
Borrowings                                 -       344,391             -       294,955 
                                                                          ------------ 
                                     169,390       563,268       392,856       522,192 
 

Foreign currency risk

The Group undertakes certain transactions denominated in foreign currencies and exposures to exchange rate fluctuations therefore may arise. Exchange rate exposures are managed by continuously reviewing exchange rate movements in the relevant foreign currencies. The exposure to exchange rate fluctuations for the Group/Company is limited to foreign currency translation of subsidiaries, which is not material, as the Group/Company does not hold any significant foreign denominated monetary assets or liabilities.

At the period ended 31 December 2020, the Group had no outstanding forward exchange contracts.

Exchange rates used for conversion of foreign subsidiaries undertakings were:

 
                         2020    2019 
ZAR to GBP (Spot)       0.0499  0.0542 
ZAR to GBP (Average)    0.0469  0.0543 
USD to GBP (Spot)       0.7325  0.7623 
USD to GBP (Average)    0.7798  0.7837 
EURO to GBP (Spot)      0.8984  0.8537 
EURO to GBP (Average)   0.8894  0.8772 
 

The executive management of the Group monitor the Group's exposure to the concentration of fair value estimation risk on a monthly basis.

Group Sensitivity Analysis

As the Group/Company has no material monetary assets denominated in foreign currencies, the impact associated with a change in the foreign exchange rates is not expected to be material to the Group/Company.

Credit risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. As the Group does not, as yet, have any sales to third parties, this risk is limited.

The Group and Company's financial assets comprise receivables and cash and cash equivalents. The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Group and Company's exposure to credit risk arise from default of its counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in its consolidated statement of financial position. Expected credit losses were not measured on a collective basis. The various financial assets owed from group undertakings were evaluated against the underlying asset value of the investee, taking into account the value of the various projects undertaken during the period, thus validating, as required the credit loss recognised in relation to amounts owed by group undertakings.

The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are connected or related entities.

Financial assets exposed to credit risk at period end were as follows:

 
Financial instruments                  Group (GBP)            Company (GBP) 
                                   2020        2019         2020     2019 
 
Trade & other receivables        86,719     380,693       39,085     361,467 
Cash                            256,760      91,634      141,788      31,389 
 

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group and Company's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group.

The Group and Company's financial liabilities as at 31 December 2020 were all payable on demand.

 
                           Less than  Greater than 
Group (GBP)                  1 year      1 year 
At 31 December 2020 
Trade and other payables   1,444,986             - 
Borrowings                   858,546             - 
 
At 31 December 2019 
Trade and other payables   1,024,126             - 
Borrowings                   523,725 
 
 
Company (GBP) 
At 31 December 2020 
Trade and other payables   218,877  - 
Borrowings                 344,391  - 
 
At 31 December 2019 
Trade and other payables   265,727  - 
Borrowings                 294,955 
 

Interest rate risk

The Group and Company's exposure to the risk of changes in market interest rates relates primarily to the Group and Company's holdings of cash and short term deposits.

It is the Group and Company's policy as part of its management of the budgetary process to place surplus funds on short term deposit in order to maximise interest earned.

Group Sensitivity Analysis:

Currently no significant impact exists due to possible interest rate changes on the Company's interest bearing instruments.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the period ended 31 December 2020. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses as disclosed in the consolidated statement of changes in equity.

Fair values

The carrying amount of the Group and Company's financial assets and financial liabilities recognised at amortised cost in the financial statements approximate their fair value.

Hedging

At 31 December 2020, the Group had no outstanding contracts designated as hedges.

   28.   Post Statement of Financial Position events 

Warrant Exercise and Share Issues

During 2021 to date, Kibo issued an additional 188,431,556 shares all of which resulted from the exercise of a similar amount of warrants by warrant holders whereupon they received one Kibo share for each warrant exercised. The warrants were exercisable at prices of GBP0.002 to GBP0.004 and yielded proceeds of GBP697,726 to the Company. The Company also issued 65,276,346 shares at a deemed share price of GBP0.0026 to Sanderson Capital Partners Limited in payment of 50% of the outstanding balance of GBP339,437 on a Debt Factoring Agreement original signed on the 20 December 2016. The remaining balance of GBP169,718.5 is to be paid in cash of which GBP25,000 has already been paid.

Listing of Mast Energy Developments Plc on the LSE

On the 14 April 2021, Mast Energy Developments Plc listed on the London Stock Exchange. Coincident with listing, Kibo's 100% shareholding in MED of 104,496,960 shares held through its wholly owned subsidiary Kibo Mining (Cyprus) Limited reduced to 55.42%. This resulted from the execution of a share sale agreement whereby MED's wholly owned subsidiary, Sloane Developments Limited purchased the 40% minority interest in Mast Energy Projects Limited that it did not already hold from Guernsey company St. Anderton on Vaal Ltd in exchange for 36,917,076 newly issued shares in MED. MED also issued an additional 47,150,000 new shares to subscribers to the IPO.

This resulted in Kibo Mining (Cyprus) Limited holding 104,496,960 of the 188,564,036 shares issued in MED post IPO (55.42% shareholding).

Migration of Companies Dematerialised Shares to Euroclear Bank

On the 22 February 2021, the shareholders of Kibo approved resolutions to permit the migration of the Company's dematerialised shares held through CREST to Euroclear Nominees Limited. This was required to allow shareholders continue to hold the Company shares in dematerialised form following the UK's exit from the EU. The migration successfully occurred on the 12 March 2021.

2nd Production-Ready Site Approaching Operational Status for Commercial Production

Sloane Developments Ltd ('Sloane'), has progressed the acquisition transaction announced in the RNS of 7 September 2020, to the point where it is now finalizing a definitive Share Purchase Agreement ("SPA") to acquire 100% of the 9MW flexible gas power project (the 'Acquisition').

The decision was largely influenced by the rapid progress made in getting the site ready to commence with commercial production. Latest reports from the project vendor and onsite engineers state that the site will be in electricity generation readiness pending finalization of the SPA. The site and equipment will then settle into steady state electricity generation and commensurate revenue creation as planned for the project life cycle.

Kibo advances Benga power project

Kibo and its local JV partners recently attended a workshop with EDM in Maputo to discuss and agree the next steps towards the ultimate finalization of a PPA. During the meeting the final optimised definitive feasibility study, inclusive of the updated grid integration study, and a summary of an updated draft financial model was presented and discussed as the fundamentals that will guide and focus the further course of the PPA process. This will ensure that a final result is obtained at the earliest opportunity possible.

The very productive discussions during the workshop, amongst others, also included an agreement reached between the parties to integrate specific EDM inputs into the Financial Model and the immediate initiation of a formal EPC process towards finalizing an advanced Financial Model that reflects firm numbers on key commercial parameters.

Agreement to co-develop renewable projects in South Africa

The Company entered into an agreement with South Africa-based Industrial Green Solutions (Pty) Ltd ('IGES') to jointly develop a portfolio of Waste to Energy projects in South Africa ('the Agreement') with an initial target of generating more than 50 megawatts of electricity for sale to industrial users. The Agreement, which is subject to the satisfaction of certain conditions, is in line with Kibo's strategy to integrate renewable energy into its project pipeline, which includes three utility-scale power generation and mining projects.

   29.   Commitments and Contingencies 

Benga Power Project

Kibo entered into a Joint Venture Agreement (the 'Benga Power Joint Venture' or 'JV') with Mozambique energy company Termoeléctrica de Benga S.A. to participate in the further assessment and potential development of the Benga Independent Power Project ('BIPP'). In order to maintain its initial participation interest Kibo is required to ensure funding of a maximum amount of GBP1 million towards the completion of a Definitive Feasibility Study, however this expenditure is still discretionary.

Other than the commitments and contingencies noted above, the Group does not have identifiable material commitments and contingencies as at the reporting date. Any contingent rental is expensed in the period in which it is incurred.

   30.   Going Concern 

The Company and Group's ability to continue as a going concern is dependent on the sourcing of additional funding by the directors for the foreseeable future. The future of the Company and the Group is dependent on the successful future outcome of its short- and medium-term ability to raise new equity funding and the successful development of its energy development assets and of the availability of further funding to bring these interests to production. All these dependencies are subject to material uncertainty but in preparing the financial statements, the Directors consider that they have taken into account all information that could reasonably be expected to be available. Consequently, they consider that it is appropriate to prepare the financial statements on the going concern basis.

The directors are following an active approach to continuously reduce administrative costs in order to alleviate the pressure on cash flow, most notably the 40% reduction in the remuneration of directors and management that were implemented effective June 2020.

The directors have reviewed budgets, projected cash flows and other relevant information, and on the basis of this review, are confident that the Company and the Group will have adequate financial resources to continue in operational existence for the foreseeable future.

Accounting policy

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 1/2021 issued by the South African Institute of Chartered Accountants (SAICA).

Reconciliation of Headline earnings per share

Headline loss per share

Headline loss per share comprises the following:

 
Reconciliation of headline loss per share:                                              31 December             31 December 
                                                                                         2020 (GBP)              2019 (GBP) 
Loss for the period attributable to normal 
 shareholders                                                                           (4,726,286)             (3,500,004) 
Adjustments 
Loss/(profit) on disposal of subsidiaries                                                   102,414               (591,060) 
Profit on disposal of motor vehicle                                                        (53,574)                       - 
Headline loss for the period attributable 
 to normal shareholders                                                                 (4,677,446)             (4,091,064) 
 
Headline loss per ordinary share                                                            (0.003)                 (0.005) 
 
Weighted average number of shares in 
 issue:                                                                               1,546,853,959             849,795,672 
 
        Headline loss per share, on a per-share basis:Reconciliation of headline loss per          31 December  31 December 
                                                       share:                                       2020 (GBP)   2019 (GBP) 
                                                                                        Loss for the period attributable to 
                                                       normal shareholders                            (0.0030)     (0.0041) 
                                                                                                                Adjustments 
                                                      Loss/(profit) on disposal of subsidiaries        0.00003     (0.0007) 
                                                      Profit on disposal of motor vehicle            (0.00003)            - 
                                                                   Impairments                                    (0.00008) 
                                                                                  Headline loss for the period attributable 
                                                       to normal shareholders                        (0.00308)     (0.0048) 
 
                                                      Headline loss per ordinary share                 (0.003)      (0.005) 
 
 
                                                              In order to accurately reflect the weighted average number of 
                                                               ordinary shares for the purposes of basic earnings, dilutive 
                                                               earnings and headline earnings per share as at year end, the 
                                                   weighted average number of ordinary shares was adjusted retrospectively. 
 
 
 
                                                                                                                   **S** 
                                                                                                               Johannesburg 
                                                                                                               11 June 2021 
                                                                                           Corporate and Designated Adviser 
                                                                                                                River Group 
 

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