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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