Share Name Share Symbol Market Type Share ISIN Share Description
Kibo Mining LSE:KIBO London Ordinary Share IE00B97C0C31 ORD EUR0.015
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.125p +3.03% 4.25p 4.00p 4.50p 4.75p 4.25p 4.375p 1,262,246 12:51:13
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.0 -3.6 1.0 4.3 15.47

Kibo Mining (KIBO) Latest News (4)

More Kibo Mining News
Kibo Mining Takeover Rumours

Kibo Mining (KIBO) Share Charts

1 Year Kibo Mining Chart

1 Year Kibo Mining Chart

1 Month Kibo Mining Chart

1 Month Kibo Mining Chart

Intraday Kibo Mining Chart

Intraday Kibo Mining Chart

Kibo Mining (KIBO) Discussions and Chat

Kibo Mining (KIBO) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
13:28:414.2523,018978.27O
13:26:264.22217,6349,184.15O
13:23:284.0698,2273,988.02O
13:21:264.252,07388.10O
13:08:004.2550,0002,125.00O
View all Kibo Mining trades in real-time

Kibo Mining (KIBO) Top Chat Posts

DateSubject
18/12/2017
08:20
Kibo Mining Daily Update: Kibo Mining is listed in the Mining sector of the London Stock Exchange with ticker KIBO. The last closing price for Kibo Mining was 4.13p.
Kibo Mining has a 4 week average price of 3.88p and a 12 week average price of 3.88p.
The 1 year high share price is 7.25p while the 1 year low share price is currently 3.75p.
There are currently 363,976,596 shares in issue and the average daily traded volume is 2,449,421 shares. The market capitalisation of Kibo Mining is £15,469,005.33.
04/12/2017
20:04
lurker5: Some Serious Thinking for the clappies. (Mabesekwa not the 'curve ball' they were expecting. ? More a googly !) LC's latest trick raises what should be deep concerns for those hoping for a higher Kibo share price. Its not just that the Mabesekwa deal sets a value for an almost exactly similar project to Mbeya, at a similar stage, of only £10.9m But that it shows LC wants to set off on a shareholder value damaging spate of empire building, instead of getting on with finalising the MCPP Because Shumba Energy is a listed company it can't sell assets at less than true value, so £10.9m is a genuine market value, raising the question why does anyone think Kibo itself should be worth any more ? On the same basis its shares should be 2.7p It's probable that Mabesewa's mine component is valued less than Kibo's because it won't sell its coal beyond the power station. Even so, the deal still shows the 'project' itself (that the clappies think can be 'sold' for its NPV) to have a very low value indeed. - as anyone understanding project economics will already know. The clappies should also ask why is Shumba Energy selling off Mabesekwa if it has the sort of value the clappies think the MCPP has ? See end of this note for a description of Mabesekwa and questions to ask. Meanwhile let's revisit LC's alleged fair Kibo share price of 10-15p (Slightly different than Doh!fort's 30p - let alone its 60 p!) His 10-15p once up and running in at least four year's time is almost the same as the estimates already set out on this thread. These are however for the 'theoretical' NPV per share, which it has been explained has never even been approached in practice by any of the more than 70 mining cos examined in detail over the last 12 years. For an 8% discount rate NPV, none of the parent co's shares have ever been higher than half and most only 1/3rd of that 'target' price. It's been clearly explained why that is logical. LC's figure is almost certainly based on the same thinking of a 'theoretical' NPV 'target'. - without adjusting for the in-practice discount. But even that was before his 'curve ball' plan to dilute by 40% through acquiring Mabesekwa well before it can contribute anything except more development cost. So his own 'fair value' for MCPP now becomes 7p-11p. After the 'realistic' discount, it becomes 3.5p-5.5p. Once again, why would any sane person pay anything like that now, for earnings that won't start for at least four years, with more risks meanwhile ? But the clappies will need to hold on grimly to something - anything. What about that other fallacy they believe in - 'free carries' ? The mention of a 'free carry' for Shumba Energy (or the Sechaba subsidiary that will hold the 15%.) will prove to them that they exist ! Unfortunately what's mentioned is merely letting off Sechaba from the 15% of the spend needed for a IBFS etc before financial close - which based on Mbeya might be 15% of $10m - ie peanuts. The key phrase is of course "until financial close of a project financing, after which Sechaba may be diluted" So LC has now let all the cats out of the bag. 'Dilution' - denied up to now by the clappies - will be the reality, and along with NCCL's clarification of no 'free carries' beyond costs already incurred (my relevant post 'removed by the clappies of course) puts a solid lid on any dream that Kibo's shares can ever get over 10p or probably anywhere near it - and even that a long way off. LC realises that, so instead is building an empire where he can claim more pay than for a tinpot AIM minnow. He doesn't care about Kibo's share price (why isn't he and his fellows buying ?). A stockmarket empire is almost always built by greatly expanding shares in issue - not by any increase in their price. After this deal Kibo's shares will have expanded over six times since 2013; and a staggering 23 times since listing in 2010. When this deal completes they will have expanded by a truly record 33 times. And what has been achieved ? The long term chart (adjusted for that 1:15 consolidation in 2013) shows clearly ! A long term share price is almost always a good guide to the quality of a company's management Kibo real long term chart adjusted for 1:15 consolidation 2013 (Can't post that chart here. To see what I mean go to 'charts' and click the 'All' periods.) When first listed in April 2010 the 3p share price was equivalent to 45 p today adjusting for the 2013 consolidation. And the market cap was £7.5m So the shares have lost 89% of their value over 7 years. and meanwhile Kibo has raised £13.1m cash from shareholders, and issued shares worth $21m to acquire the exploration projects - half of which excluding Rukwa coal it has lost. Any fool can predict what happens next. Kibo's shares will drop into the 3's or even less. And they won't be rescued by any announced PPA or even Financial Close (not due for at least another year I would guess) They will merely confirm the figures already set out here. To paraphrase the clappies 'I wouldn't want to be in Kibo over this coming year' One last thing that could be slightly positive if they had the wit. They boast of together having a vast shareholding. If they had any sense they'd form a shareholder action group to tell LC to get on with Mbeya first, before diluting what limited value it has by spending on yet more, dodgy, 'power assets'. (See below why) Requisitioning an EGM needs only 10% and there are few key shareholders to oppose. They'd have to propose replacing LC with a more competent leader if they can find one of course, and would need an intelligent spokesman. So a non-starter then ! So what about LC's latest ? - especially when, only last December, Shumba Energy was saying this about Mabesekwa ! "Shumba Energy’s strategy, in a market with only two other active energy developers, namely India’s Jindal Africa and ASX-listed African Energy Resources, is to unlock the value in Botswana’s highgrade thermal coal reserves as a means to generate cost-effective reliable energy for the region. “We will do this by developing integrated power projects which consist of coal mines with mine-mouth power stations,” says Phumaphi. “Being one of only a few projects ready to take advantage of the current coal market dynamics, Shumba Energy is in the fortunate position of having continued the development of its assets despite the tough market conditions and competition from larger international companies, to now be in a position to take advantage of the reinvigorated coal price,” says Phumaphi. "Shumba Energy entered into a joint development agreement with South African-based renewable energy project developer Mulilo Renewable Energy in August 2015. This is for the joint development of the MEIPP project at the Mabesekwa coal mine with a view to submitting bid responses under South Africa’s coal base-load cross border Independent Power Producer programme and the Botswana Coal Greenfi eld Power Procurement programme. The MEIPP project would see Shumba and Mulilo develop a 600 MW power plant, comprising 150 MW generating units, using circulating-fl uidised-bed boilers and dry cooling. "The power plant will be established in close proximity to the mine mouth of the Mabesekwa coalfi eld, about 5 km away, and would cost between US$600 million and $800 million, according to Phumaphi. But Mulilo didn't last long ! It has withdrawn (shades of Votorantim, Metal Tiger, SEPCOIII and Korea's EWP all 'withdrawing' from Kibo JV's after taking a look) - Why ? And why, after waxing so enthusiastic only a short time ago, does Shumba now sell out to Kibo for only £10.9m ? I have no time for those who accuse me of a feud with Kibo. I've been championing all types of shares that I think worthwhile for over 40 years, half of them for private investors, and have always been thanked as one of the few analysts to also criticise shares that are overpriced and risky. I'm following the situation at Kibo because it has just about the worst record ever, of not delivering for shareholders, and I'm going to keep on monitoring what it says and what is does (more often doesn't) deliver. As also whatever its extremely dim broker has put out - both for Kibo and Katoro. To help anyone who genuinely wants the whole picture, I've answered most questions in posts on here - nos 1, 257, 345, and 372.
22/11/2017
11:36
yaki: lurker5 - great note, will read it in more detail when have time. On my first skim, I noted you got the costs figure wrong: "...Kibo's work done has already been audited at around $5m" It was 10m - check rns flow More comments later when I have time to read it! lurker522 Nov '17 - 10:53 - 345 of 347 2 0 COAL TO POWER SHARE VALUES - Straight from the horse's mouth This site promised to update estimates of Kibo's likely post MCCP up and running share price when more info became available. NCCL and ORCP have now released info which confirms that all these cos 'retentions' of a share in the project equity will not be 'free' (beyond a credit for their mines and work already done) but - as common sense and any knowledge of project financing has always indicated - will have to be paid for in hard cash raised from equity share issues. This post estimates the price at which Kibo's equity will be issued (and a cruder estimate for NCCL which has not yet issued any IBFS) which will therefore determine their market price and, while raising the necessary equity for the MCPP (assuming all in listed shares, although might not be) will have to be at a price institutions will pay so as to receive the long term return they want, given the risks. Because most on the BB's (as also Kibo's analyst) seem unable to understand project economics and financing for something like Kibo's MCPP, and how to calculate Kibo's likely share price once MCPP is financed and up and running, a step-by-step explanation follows. Sorry for the length. The calculations confirm as they always have 1) that Kibo's likely share value even when MCPP is up and running in more than 4 years time, is unlikely to exceed 10-12p and more likely will be around 8-10p compared with the current 5p. (The figures assume Kibo in its present form, though will have to split into power and exploration (Haneti and Katoro) components. It won't make any difference to overall value.) 2) that because NCCL has a larger project; likely much more credit than Kibo has for work already done; and considerably fewer shares in issue, it remains by far the most attractive investment. 3) The calculations don't consider ORCP, but note that its brokers' predictions some time ago - not relying on the erroneous method used by Kibo's broker - produced a fair value for it also around 10p - some 4-5 times its current price. 4) EDL is less far advanced but will be included in a pending research report. Without detail, a full financial model to estimate the companies' share values once their projects are built and paid for and earning revenue, running through all costs, taxes, financing etc costs, and equity shares needed to be issued and at what price, to arrive at net earnings per share, will have gaps. But there has been enough info on MCPP and Tete for competent analysts to make estimates in other ways. (design and financial engineers know how to use a variety of methods coming from different directions - and if they show similar results, know they are a fair guide to the outcome.) One of these methods was set out in the ADVFN - "Kibo proper Research -" thread dated 23rd August, which uses NPV's to arrive at an estimated 7.5p fair value for Kibo. The same thread explained why Kibo's broker's analyst's methods were badly wrong (as also its prediction for Katoro Gold) Now however, we can make a much more accurate calculation using Kibo's own figures from its Jan 23 announcement of the IRR and payback period for the equity part of MCPP's funding. Other guidence comes from ORCP's and NCCL's recent announcements as to the limits to 'free carries' they can expect - and the equity fund raises needed. The calculation by-passes all the detailed work needed for a full financial breakdown to earnings level, by showing it flowing through to equity shareholders directly. The only detail not disclosed is the up-to-date capital cost and the debt/equity ratio. Going by past info we assume $715m capex, (including an optimistic $30m credit for the mine and FS work done by Kibo) and 70% borrowings. Working back from the stated 'equity IRR between 21% and 22%' (assuming 21.5%) and equity pay-back in 4-5 years', on a $215m equity investment, gives an average annual net profit to all equity shareholders of $56.5m over 25 yrs. (If borrowings are 75%, the average net annual profit will be $47.1m pa spread over a smaller no of equity shares). NCCL has quoted its equivalent figure as more than twice that - although has not yet published any up-to-date feasibility figures. That $56.5m figure is much more accurate than anything that can be estimated based on PPA's or whatever, because it is the final result after all costs, tying in with the consultants' IRR, so that outsiders don't need knowledge of the full profit and cost breakdown. It takes full account of the loan repayments (on a 10% 12 year 70% loan - ie $502m) so the $56.5m pa is there to be apportioned between the equity shareholders alone. So what share can Kibo expect ? Going by recent deals, GE will take a majority 60% stake. So that means only 40% of $56.5m pa is available for the other investors including Kibo = $22.6m pa. ORCP has also just announced that it will be credited for the work already done (and the value of its coal mine) with 12.5% of the $1.6bn Thar coal-to-power project. Kibo's work done has already been audited at around $5m and has either been paid or is in hock to suppliers not yet paid. So it cannot expect more than a $25m credit (based on the auditors' mine valuation in the last accounts) which equals 25/215 = 11.6% NCCL is on the same lines, but likely to be on a larger figure reflecting a longer design process that was being audited at around $35m for the power only deal with SEP - which NCCL was expecting in the form of cash which it was going to reinvest for its equity in its larger project. The deal with GE will be different with the mine now to be included, but should be at least the same and probably more. Such contributions are for genuine costs already incurred, so they add to the total project cost and therefore to the equity funding that other partners will have to make. Oracle makes the point that all other stakes are to be funded in hard cash - in other words equity rises will be necessary. It will be the same for all four. Some have asked if a 'development premium'(They happen in property development only when market value when complete is greater than cost - so are no guide here) might be paid in recognition of all past work done. But that is all captured in the past costs already announced for both Kibo and NCCL, and if more is paid (or allowed) as anyone understanding project financing and NPV and IRR calcs will know, any more 'free share' will dent the other partners' profit share to below what their own shareholders or bankers will demand to cover operating costs and loan repayments and leave themselves with their own required profit. To understand that, note that the profit margin on the overall project (aka IRR) is only 14.7%-16%. (before being geared up to 21-22% at equity level by the 70% loan) To 'give away' that share means Kibo in effect takes the whole profit, leaving nothing for the others. It's for similar reasons that Kibo can't 'sell' MCPP. There is nothing to sell until it's paid for. And neither is there any scope to 'sell down' the power revenues in advance to raise the build cost So with 11.6% the most 'free carry' Kibo can expect, it would have a $6.5m pa share of the project net cash flow. On 395m shares currently that is just under 1.65c/share (1.22p) and on a 5x PER would warrant a 7.6p share price. A 5x PER equates to the 10% dividend yield that a non-growth, limited life power station in a risky country, would have to offer to infrastructure investors. If, on the other hand, what Kibo means is that it has the chance of a full 30% share, it is going to have to fund the balance in cash - ie = 18.4% of $217m = $40m. (or £30m). That can only be done by issuing shares for which, conveniently, Kibo increased its total authorised last year to another 605m over and above the current 395m. It was obviously planning ahead. To raise £30m at 7.5p (It can't be any higher if investors are to get the returns they want - see the calculation result later) would need another 400m m shares, doubling the total to 800mm. (That is without the other shares Kibo is almost certainly going to have to issue for working capital and to show GE and the bankers that it will be a strong equity partner to bear any risks that arise) So 30% of $56.5m /800m shares = 2.1c/share, or 1.6p per share per annum - the same as the first estimate. On a 5x PER that justifies a 8.0p share price, so a 7.5 p issue price is a non-starter by a long way. New Kibo investors would see a negligible long-term profit. The issue price is therefore going to have to be lower. It is, of course, possible that Kibo will come up with better figures than in the IBFS - but unlikely to be much better. It might also be that GE will reduce the upfront capex required by supplying equipment on a lease basis. That would enable Kibo's mine/work contribution to earn a larger share (and perhaps that is the 'innovative' scheme that it announced - but as is normal for Kibo, without any context to allow shareholders to evaluate whether valuable or not). However, the lease payments would reduce the cash flow return and therefore might cancel out the capex effect. Usually, such up-front equipment deals (like all 'streaming' deals for mining projects) come with substantial extra cost to shareholders who end up worse off. It will also be necessary for Kibo to restructure with Haneti and Katoro separate, perhaps with the power side un-listed and Kibo with a dividend (which at 10% would be 0.75p per share) Splitting the company won't make any difference to Kibo's overall value however. Reality checks. Any clued up analyst estimating Kibo's share value would have made reality checks. We're told by some on the BB's that Kibo's broker's analyst states a share value of 61p - which would mean a market value of £241m even if no more shares are issued. At present its balance sheet value is £20m. (which the auditors say includes 'fair value'. for the coal mine and feasibility work) So where is the extra £221m coming from ? The IBFS doesn't produce more than a $56.5m annual net profit even for 100% of the project which Kibo has no hope of owning. Even if, through some fantasy, it keeps 100% with no increase in issued shares, that would produce a profit per Kibo share of 5.7c or 4.3p. Has Beaufort taken that figure and bumped it up with a 14x PER to arrive at 60 p ? It wouldn't be surprising - but is a fraudulent calculation because it is impossible for Kibo to retain more than 11.5% without raising funds by increasing its shares in issue - which would sharply dilute that 4.3p figure. But such manipulated figures are in line with the 30p that same broker 'targeted' in 2015, and the bogus 10.5p it produced for Katoro's float. Their fraudulent calculations were exposed in the Oct 29 ADVFN posting and on Aug 23 A 8p share price (but only when MCPP is operating in 4 years time) is rather different to the extraordinary predictions both by the broker and by some on the bulletin boards But it is based on Kibo itself, quoting from the consultant's - whose figures will be used in negotiations before Financial Close. The PPA is probably the only figure waiting for agreement, but the one used by the consultants will have been realistic. If different, the Tanz Govt will still limit the overall MCPP IRR as is normal for these sorts of projects and over which it exercises control through the PPA and mine licensing. If, later on, MCPP can sell excess power to other customers at higher tariffs than to Tanesco then it might considerably add to the bottom line profit. But its not likely to happen quickly. The fantasy predictions stem from a failure to understand what an NPV is and what it isn't. Their proponents think a project, even if not yet built and paid for, can be 'sold' for its NPV. Therefore they think that all the capex needed to build the project can be raised by selling the NPV or part of it. (Forget that Kibo's MCPP's NPV is much smaller than the capex - ie its not very profitable anyway, and would in no way meet the size of capex) Result in their eyes- no need to issue shares. And therefore the whole NPV after building will 'belong' to present shareholders with no dilution. That is what, in effect, that broker's analyst also pretends to expect (although he weazels out in small print some pages away from his bogus 'headline' target, explaining that it is 'unrisked and ungeared' - terms not well understood by inexperienced investors) Such theories are a logical nonsense, because no one will pay the NPV to buy a project on top of funding the capex to build it, which is is the only way the NPV will materialise. The buyer would lose all profit - aka the NPV - by doing so. Similar reasoning shows there is no part of an NPV which can be 'sold down' in advance of the project's funding. What about Sanderson's stake ? Some are clinging to Kibo's Sept 2016 announcement of a 2.5% share of the MDC given to Sanderson to pay off its £1.5m loan, thinking it indicates a value for Kibo shareholders. But Kibo is not the same as the MCPP, and the MCPP is not the same as the MDC (Mbeya Development company) which will be a special purpose vehicle to manage the build and raise the funds for the MCPP. . Special purpose vehicles are often financed differently to the company itself, or the project. The development partners put in funds to manage the 3-year building program, and the SPV is wound up on completion. Even though it might currently 'own 100%' of the MCPP, the MDC won't own anything like that once the MCPP is financed by GE and the other partners and they take their proportionate stakes. The announcement also says the 2.5% stake is "based on" a $100m 'discounted value of MCPP - which is strange because it is very different to the $275m or so NPV for the project quoted in previous announcements (- although, as usual we haven't been told the vital discount rate, so we can't value it or compare it properly) What Kibo quotes as MDC's discounted value might however looks closer to the NPV previously announced for the mine alone (although the announcement said 'for the project'- implying the mine/power station combined) And in line with its other confusing announcements, Kibo has also, separately, announced a NPV and IRR for the mine. But if the project is to be 'integrated', as is the case in the Jan 23 IBFS, any figures for the mine are irrelevant. Its value depends on the internal transfer price for the coal, which can be arbitrary, while its 'profitability' is also irrelevant to the overall profitability of the whole project - which will be set by the Tanz Government via the PPA it allows. But if that $100m NPV does refer just to the mine and it really will be a stand-alone separate company, it would imply that Kibo has all of it, subject to funding its quoted $17m capex (the cheapest of 3 options ranging up to around $75m previously announced) for which it would have to raise the funds. $17m (£13m) would need 186m shares - making the total 581m. On paper that would mean $100m/581m = 17.2p NPV per Kibo share. But we haven't been told the discount rate to enable conversion to an earnings basis, and as explained extensively elsewhere, and from long running research, mining/project shares NEVER reach anywhere near their 'theoretical' NPV value (for perfectly logical reasons). So the most Kibo shares might reach for its mine alone (with only a token investment in the power side) is probably around 8p, assuming no more shares issued for a share of the power side. And that is all. If Kibo keeps the mine separate it has nothing else to contribute equity to the hard cash needed to build the power side. So if is to have any power share in addition, it will have to pay for it in cash - by issuing more shares. (Once again. Kibo cannot 'sell the power in advance (It doesn't own it anyway if GE is to have 60%) and it cannot sell part of the NPV to raise cash. There is no alternative than to issue shares. Assuming it wants the full '30%' that Kibo has 'hinted' it will 'retain', it will need to add another 18.4% of the full MCPP equity to its 97.5% of the mine, for which it will have to raise about $40m (£30m) - ie another 429m shares (It has 'headroom' to issue up to 650m) taking the total to around 1bn. Together with the mine's £75m NPV (we don't have the discount rate to turn it into a net profit equivalent) and 15% of the £56.5m project net cash flow (assuming it is for combined mine/power) -divided by 1bn shares gives NPV and cash flow per share as respectively 7.5p and 0.85p. If the latter is valued at 5x, the grand total is 11.75p. But, as ever, the NPV part won't be valued in the market at anywhere near its theoretical 7.65p, so bringing a realistic expectation for the share price to around 8p - as before. However the sums are done. Whatever assumptions are made about coal/power split. Taking everything announced by Kibo incl re the Sanderson stake, we can never make the likely Kibo share valuation post MCPP commissioning higher than around 8p. The calculations are logical and based on proper knowledge of investment analysis, maths, and project economics. Any experienced banker or project financier is welcome to comment. But they don't seem to exist on the Kibo BB's. Who in their right mind would pay more than the current 5p for a risky share that might not even double over the next four years ? They've probably taken a quick look and walked away. Just like, apparently, the shareholder regularly selling 100k share chunks daily for months now. He's probably one of the investors who rescued Kibo from its earlier mismanagement in 2012 with a eight-fold real share dilution, disguised with a 1:15 share consolidation at the same time. Or else he came in on the 2015 placings at 5 and 6p which, via Beaufort were specifically to fund MCPP work and probably attracted those particularly interested. But they have obviously been doing their sums and realise the puff they bought into was bogus.
22/11/2017
10:53
lurker5: COAL TO POWER SHARE VALUES - Straight from the horse's mouth This site promised to update estimates of Kibo's likely post MCCP up and running share price when more info became available. NCCL and ORCP have now released info which confirms that all these cos 'retentions' of a share in the project equity will not be 'free' (beyond a credit for their mines and work already done) but - as common sense and any knowledge of project financing has always indicated - will have to be paid for in hard cash raised from equity share issues. This post estimates the price at which Kibo's equity will be issued (and a cruder estimate for NCCL which has not yet issued any IBFS) which will therefore determine their market price and, while raising the necessary equity for the MCPP (assuming all in listed shares, although might not be) will have to be at a price institutions will pay so as to receive the long term return they want, given the risks. Because most on the BB's (as also Kibo's analyst) seem unable to understand project economics and financing for something like Kibo's MCPP, and how to calculate Kibo's likely share price once MCPP is financed and up and running, a step-by-step explanation follows. Sorry for the length. The calculations confirm as they always have 1) that Kibo's likely share value even when MCPP is up and running in more than 4 years time, is unlikely to exceed 10-12p and more likely will be around 8-10p compared with the current 5p. (The figures assume Kibo in its present form, though will have to split into power and exploration (Haneti and Katoro) components. It won't make any difference to overall value.) 2) that because NCCL has a larger project; likely much more credit than Kibo has for work already done; and considerably fewer shares in issue, it remains by far the most attractive investment. 3) The calculations don't consider ORCP, but note that its brokers' predictions some time ago - not relying on the erroneous method used by Kibo's broker - produced a fair value for it also around 10p - some 4-5 times its current price. 4) EDL is less far advanced but will be included in a pending research report. Without detail, a full financial model to estimate the companies' share values once their projects are built and paid for and earning revenue, running through all costs, taxes, financing etc costs, and equity shares needed to be issued and at what price, to arrive at net earnings per share, will have gaps. But there has been enough info on MCPP and Tete for competent analysts to make estimates in other ways. (design and financial engineers know how to use a variety of methods coming from different directions - and if they show similar results, know they are a fair guide to the outcome.) One of these methods was set out in the ADVFN - "Kibo proper Research -" thread dated 23rd August, which uses NPV's to arrive at an estimated 7.5p fair value for Kibo. The same thread explained why Kibo's broker's analyst's methods were badly wrong (as also its prediction for Katoro Gold) Now however, we can make a much more accurate calculation using Kibo's own figures from its Jan 23 announcement of the IRR and payback period for the equity part of MCPP's funding. Other guidence comes from ORCP's and NCCL's recent announcements as to the limits to 'free carries' they can expect - and the equity fund raises needed. The calculation by-passes all the detailed work needed for a full financial breakdown to earnings level, by showing it flowing through to equity shareholders directly. The only detail not disclosed is the up-to-date capital cost and the debt/equity ratio. Going by past info we assume $715m capex, (including an optimistic $30m credit for the mine and FS work done by Kibo) and 70% borrowings. Working back from the stated 'equity IRR between 21% and 22%' (assuming 21.5%) and equity pay-back in 4-5 years', on a $215m equity investment, gives an average annual net profit to all equity shareholders of $56.5m over 25 yrs. (If borrowings are 75%, the average net annual profit will be $47.1m pa spread over a smaller no of equity shares). NCCL has quoted its equivalent figure as more than twice that - although has not yet published any up-to-date feasibility figures. That $56.5m figure is much more accurate than anything that can be estimated based on PPA's or whatever, because it is the final result after all costs, tying in with the consultants' IRR, so that outsiders don't need knowledge of the full profit and cost breakdown. It takes full account of the loan repayments (on a 10% 12 year 70% loan - ie $502m) so the $56.5m pa is there to be apportioned between the equity shareholders alone. So what share can Kibo expect ? Going by recent deals, GE will take a majority 60% stake. So that means only 40% of $56.5m pa is available for the other investors including Kibo = $22.6m pa. ORCP has also just announced that it will be credited for the work already done (and the value of its coal mine) with 12.5% of the $1.6bn Thar coal-to-power project. Kibo's work done has already been audited at around $5m and has either been paid or is in hock to suppliers not yet paid. So it cannot expect more than a $25m credit (based on the auditors' mine valuation in the last accounts) which equals 25/215 = 11.6% NCCL is on the same lines, but likely to be on a larger figure reflecting a longer design process that was being audited at around $35m for the power only deal with SEP - which NCCL was expecting in the form of cash which it was going to reinvest for its equity in its larger project. The deal with GE will be different with the mine now to be included, but should be at least the same and probably more. Such contributions are for genuine costs already incurred, so they add to the total project cost and therefore to the equity funding that other partners will have to make. Oracle makes the point that all other stakes are to be funded in hard cash - in other words equity rises will be necessary. It will be the same for all four. Some have asked if a 'development premium'(They happen in property development only when market value when complete is greater than cost - so are no guide here) might be paid in recognition of all past work done. But that is all captured in the past costs already announced for both Kibo and NCCL, and if more is paid (or allowed) as anyone understanding project financing and NPV and IRR calcs will know, any more 'free share' will dent the other partners' profit share to below what their own shareholders or bankers will demand to cover operating costs and loan repayments and leave themselves with their own required profit. To understand that, note that the profit margin on the overall project (aka IRR) is only 14.7%-16%. (before being geared up to 21-22% at equity level by the 70% loan) To 'give away' that share means Kibo in effect takes the whole profit, leaving nothing for the others. It's for similar reasons that Kibo can't 'sell' MCPP. There is nothing to sell until it's paid for. And neither is there any scope to 'sell down' the power revenues in advance to raise the build cost So with 11.6% the most 'free carry' Kibo can expect, it would have a $6.5m pa share of the project net cash flow. On 395m shares currently that is just under 1.65c/share (1.22p) and on a 5x PER would warrant a 7.6p share price. A 5x PER equates to the 10% dividend yield that a non-growth, limited life power station in a risky country, would have to offer to infrastructure investors. If, on the other hand, what Kibo means is that it has the chance of a full 30% share, it is going to have to fund the balance in cash - ie = 18.4% of $217m = $40m. (or £30m). That can only be done by issuing shares for which, conveniently, Kibo increased its total authorised last year to another 605m over and above the current 395m. It was obviously planning ahead. To raise £30m at 7.5p (It can't be any higher if investors are to get the returns they want - see the calculation result later) would need another 400m m shares, doubling the total to 800mm. (That is without the other shares Kibo is almost certainly going to have to issue for working capital and to show GE and the bankers that it will be a strong equity partner to bear any risks that arise) So 30% of $56.5m /800m shares = 2.1c/share, or 1.6p per share per annum - the same as the first estimate. On a 5x PER that justifies a 8.0p share price, so a 7.5 p issue price is a non-starter by a long way. New Kibo investors would see a negligible long-term profit. The issue price is therefore going to have to be lower. It is, of course, possible that Kibo will come up with better figures than in the IBFS - but unlikely to be much better. It might also be that GE will reduce the upfront capex required by supplying equipment on a lease basis. That would enable Kibo's mine/work contribution to earn a larger share (and perhaps that is the 'innovative' scheme that it announced - but as is normal for Kibo, without any context to allow shareholders to evaluate whether valuable or not). However, the lease payments would reduce the cash flow return and therefore might cancel out the capex effect. Usually, such up-front equipment deals (like all 'streaming' deals for mining projects) come with substantial extra cost to shareholders who end up worse off. It will also be necessary for Kibo to restructure with Haneti and Katoro separate, perhaps with the power side un-listed and Kibo with a dividend (which at 10% would be 0.75p per share) Splitting the company won't make any difference to Kibo's overall value however. Reality checks. Any clued up analyst estimating Kibo's share value would have made reality checks. We're told by some on the BB's that Kibo's broker's analyst states a share value of 61p - which would mean a market value of £241m even if no more shares are issued. At present its balance sheet value is £20m. (which the auditors say includes 'fair value'. for the coal mine and feasibility work) So where is the extra £221m coming from ? The IBFS doesn't produce more than a $56.5m annual net profit even for 100% of the project which Kibo has no hope of owning. Even if, through some fantasy, it keeps 100% with no increase in issued shares, that would produce a profit per Kibo share of 5.7c or 4.3p. Has Beaufort taken that figure and bumped it up with a 14x PER to arrive at 60 p ? It wouldn't be surprising - but is a fraudulent calculation because it is impossible for Kibo to retain more than 11.5% without raising funds by increasing its shares in issue - which would sharply dilute that 4.3p figure. But such manipulated figures are in line with the 30p that same broker 'targeted' in 2015, and the bogus 10.5p it produced for Katoro's float. Their fraudulent calculations were exposed in the Oct 29 ADVFN posting and on Aug 23 A 8p share price (but only when MCPP is operating in 4 years time) is rather different to the extraordinary predictions both by the broker and by some on the bulletin boards But it is based on Kibo itself, quoting from the consultant's - whose figures will be used in negotiations before Financial Close. The PPA is probably the only figure waiting for agreement, but the one used by the consultants will have been realistic. If different, the Tanz Govt will still limit the overall MCPP IRR as is normal for these sorts of projects and over which it exercises control through the PPA and mine licensing. If, later on, MCPP can sell excess power to other customers at higher tariffs than to Tanesco then it might considerably add to the bottom line profit. But its not likely to happen quickly. The fantasy predictions stem from a failure to understand what an NPV is and what it isn't. Their proponents think a project, even if not yet built and paid for, can be 'sold' for its NPV. Therefore they think that all the capex needed to build the project can be raised by selling the NPV or part of it. (Forget that Kibo's MCPP's NPV is much smaller than the capex - ie its not very profitable anyway, and would in no way meet the size of capex) Result in their eyes- no need to issue shares. And therefore the whole NPV after building will 'belong' to present shareholders with no dilution. That is what, in effect, that broker's analyst also pretends to expect (although he weazels out in small print some pages away from his bogus 'headline' target, explaining that it is 'unrisked and ungeared' - terms not well understood by inexperienced investors) Such theories are a logical nonsense, because no one will pay the NPV to buy a project on top of funding the capex to build it, which is is the only way the NPV will materialise. The buyer would lose all profit - aka the NPV - by doing so. Similar reasoning shows there is no part of an NPV which can be 'sold down' in advance of the project's funding. What about Sanderson's stake ? Some are clinging to Kibo's Sept 2016 announcement of a 2.5% share of the MDC given to Sanderson to pay off its £1.5m loan, thinking it indicates a value for Kibo shareholders. But Kibo is not the same as the MCPP, and the MCPP is not the same as the MDC (Mbeya Development company) which will be a special purpose vehicle to manage the build and raise the funds for the MCPP. . Special purpose vehicles are often financed differently to the company itself, or the project. The development partners put in funds to manage the 3-year building program, and the SPV is wound up on completion. Even though it might currently 'own 100%' of the MCPP, the MDC won't own anything like that once the MCPP is financed by GE and the other partners and they take their proportionate stakes. The announcement also says the 2.5% stake is "based on" a $100m 'discounted value of MCPP - which is strange because it is very different to the $275m or so NPV for the project quoted in previous announcements (- although, as usual we haven't been told the vital discount rate, so we can't value it or compare it properly) What Kibo quotes as MDC's discounted value might however looks closer to the NPV previously announced for the mine alone (although the announcement said 'for the project'- implying the mine/power station combined) And in line with its other confusing announcements, Kibo has also, separately, announced a NPV and IRR for the mine. But if the project is to be 'integrated', as is the case in the Jan 23 IBFS, any figures for the mine are irrelevant. Its value depends on the internal transfer price for the coal, which can be arbitrary, while its 'profitability' is also irrelevant to the overall profitability of the whole project - which will be set by the Tanz Government via the PPA it allows. But if that $100m NPV does refer just to the mine and it really will be a stand-alone separate company, it would imply that Kibo has all of it, subject to funding its quoted $17m capex (the cheapest of 3 options ranging up to around $75m previously announced) for which it would have to raise the funds. $17m (£13m) would need 186m shares - making the total 581m. On paper that would mean $100m/581m = 17.2p NPV per Kibo share. But we haven't been told the discount rate to enable conversion to an earnings basis, and as explained extensively elsewhere, and from long running research, mining/project shares NEVER reach anywhere near their 'theoretical' NPV value (for perfectly logical reasons). So the most Kibo shares might reach for its mine alone (with only a token investment in the power side) is probably around 8p, assuming no more shares issued for a share of the power side. And that is all. If Kibo keeps the mine separate it has nothing else to contribute equity to the hard cash needed to build the power side. So if is to have any power share in addition, it will have to pay for it in cash - by issuing more shares. (Once again. Kibo cannot 'sell the power in advance (It doesn't own it anyway if GE is to have 60%) and it cannot sell part of the NPV to raise cash. There is no alternative than to issue shares. Assuming it wants the full '30%' that Kibo has 'hinted' it will 'retain', it will need to add another 18.4% of the full MCPP equity to its 97.5% of the mine, for which it will have to raise about $40m (£30m) - ie another 429m shares (It has 'headroom' to issue up to 650m) taking the total to around 1bn. Together with the mine's £75m NPV (we don't have the discount rate to turn it into a net profit equivalent) and 15% of the £56.5m project net cash flow (assuming it is for combined mine/power) -divided by 1bn shares gives NPV and cash flow per share as respectively 7.5p and 0.85p. If the latter is valued at 5x, the grand total is 11.75p. But, as ever, the NPV part won't be valued in the market at anywhere near its theoretical 7.65p, so bringing a realistic expectation for the share price to around 8p - as before. However the sums are done. Whatever assumptions are made about coal/power split. Taking everything announced by Kibo incl re the Sanderson stake, we can never make the likely Kibo share valuation post MCPP commissioning higher than around 8p. The calculations are logical and based on proper knowledge of investment analysis, maths, and project economics. Any experienced banker or project financier is welcome to comment. But they don't seem to exist on the Kibo BB's. Who in their right mind would pay more than the current 5p for a risky share that might not even double over the next four years ? They've probably taken a quick look and walked away. Just like, apparently, the shareholder regularly selling 100k share chunks daily for months now. He's probably one of the investors who rescued Kibo from its earlier mismanagement in 2012 with a eight-fold real share dilution, disguised with a 1:15 share consolidation at the same time. Or else he came in on the 2015 placings at 5 and 6p which, via Beaufort were specifically to fund MCPP work and probably attracted those particularly interested. But they have obviously been doing their sums and realise the puff they bought into was bogus.
02/9/2017
04:09
guitars4stars: Aim Chimp here's the post that you don't remember:AIMChimp - 30 Aug 2017 - 16:48 - 61 of 63 - 0It worth refreshing the thread here for the other view which some are trying to bury under non sense."And that other source of fantasy ? Doh!fort's bogus share price targetKibo shares falling today (Aug 22) after latest RNS - Selling by the knowledgeable could have been predicted. The mooted 'equity' funding package will, at last, show the fantasists that outside investors will be taking their overwhelming share of MCPP's returns, and that their 'projections' based on Kibo keeping all to itself will be exposed for the idiocies they are. Especially exposed will be Dohfort's 'target' share price in its latest (Aug 9th) puff - which is just a re-hash of its bogus 'targets' in 2015. So Why republish them Now ?Kibo's (Doh!-fort's) tame analyst is a petroleum geologist, probably steeped in oil exploration stocks. For those, to account for uncertainty how much oil, and how much investment (and share dilution) is needed to get it out of the ground, oil analysts use the 'risked' discount concept - they calculate their best estimate of the probable value of oil in the ground, and apply a discount (often plucked out of the air) to arrive at the shares' target value.That approach uses the current shares in issue to calculate per share value. The 'discount' is supposed to allow for the unknown new shares that will have to be issued to raise the development funds. The method therefore doesn't match what will happen in practice, but is the only one that can be used when there is so little information. But by plucking a 'discount' out of the air, an analyst can arrive at almost any value he likes, for which reason seasoned and institutional investors pay no notice unless they trust him to make an honest assessment of the appropriate 'discount'Doh!fort's analyst has used the same concept for Kibo, despite that, unlike for an uncertain oil (or other early stage mining) project, there is sufficient information from feasibility studies as to the upfront capex needed to build the MCPP, and, once built, its value in the form of its cash flows. So a fairly accurate calculation can be made as to the equity shares needed to be issued to raise the build funds (usually 30% of the capex by way of equity- the rest in loans), and the price investors will pay for them.But Dohfort hasn't done this for Kibo because it would highlight the unwelcome fact that it will have to issue many, many more shares to fund its share of the capex and retain any reasonable share of MCPP than the "50% discount" it has used implies.It makes no difference whether shares in the subsidiary MCPP project are issued to outside investors, or whether Kibo itself raises the funds to pay for its share (or indeed if an infrastructure fund buys the whole project from Kibo). The end result for Kibo shareholders and therefore the value of their shares, will be the same, regardless how many Kibo shares will then be in issue.With a build capex around £700m, compared with Kibo's current market cap around £20m (the same as its only real asset - the coal mine - and therefore almost fair value) the £210m equity needed for Kibo to retain 100% of MCPP would involve a 10-fold increase in its issued shares (9-fold at 7p - a higher price won't be warranted as shown later) - a near 90% discount instead of the 50% Dohfort uses - which would produce a '.target' of 6p instead of Dohfort's 28pIt is rather more complicated than that. Providers of the 70% loan will want a spread of strong 30% equity investors to bear the risk should anything go wrong, and Kibo having no other assets, they will want the bulk of the equity funding to come from stronger investors who will take their proportionate share of MCPP. So Kibo never could retain 100% or anything like it.These large complications are ignored by Dohfort. While keeping as its 'headline' the bogus target arrived at with a 50% discount on the Project NPV, it weasels out of responsibility for that fraudulent puff in its small print, which says its valuation is 'unrisked and 'ungeared' - terms the average investor won't understand but which mean that Doh-fort knows full well (as experienced investors also will) that there will be dilution (unknown) and execution risk, that it hasn't allowed for.It is this evasive language and bogus calculation that has misled a coterie on the bulletin boards (who won't brook any dissent or sensible discussion) to think (unrestrained by Kibo's CEO) that the whole (or a large part) of the project's NPVs will 'belong' to Kibo, at a share price which can never be remotely approached once the reality of its funding is taken into account.In practice there are numbers of other complications that Kibo has not shared with its investors. The Mbeya coal mine could perhaps be operated and owned separately from the power plant - which would lead to a probably better outcome for shareholders. However, all pointers are for the two being 'integrated' - probably because lenders will want the certainty of a 27 year coal supply - and calculations here assume this. And although global coal prices have risen, the Tanz government like all others will limit via its tariffs the profits it will allow MCPP to make to just enough to attract investors, so rising coal prices will not benefit Kibo. Any ability to sell coal outside the power station will depend on finding more reserves than set aside so far for the power plant, and will have extra cost.On the slightly plus side Kibo has the value of feasibility studies it has partly paid for to add to its $20m mine value in the balance sheet, as a non-cash contribution to the approx $700m MCPP project cost, which would give it around 4% - or perhaps 13-14% of the £219m equity - without issuing shares to pay for it. That would give it a share of the project's gross PV once built and financed worth in NPV10 terms about $60m - or 15p per present share against the 29-30p Dohfort 'targets'.That $60m coincides with what the 2.5% Sanderson stake in the MDC (not in Kibo) is said to be 'worth' and which some think points to Kibo's value. Unfortunately it doesn't, not only because the MDC isn't listed and so doesn't have a share price that Sanderson can sell into, but because it will be a totally different economic entity than Kibo itself with a different share and borrowing structure. So there is obviously some other route not disclosed to Kibo shareholders by which Sanderson can monetise its interest.And although Kibo says MDC has 100% of MCPP now, it won't have anything like that once it is financed by banks and he other necessary outside investors. In other words Kibo shareholders will definitely have their share in MCPP diluted. But Sanderson's share in MDC might not be - depending on how it is financed.Such 'NPV' based share values can only ever be a crude guide in any case, and for all sorts of good reasons are never approached in practice. At the 10% discount rate used for MCPP, most mining projects equity shares are rated by the market at only about half the theoretical NPV, even for fully financed projects. So Kibo's shares would only warrant about 7.5p, but not before MCPP is fully up and running in what looks like 4-5 years time.We don't have any of the detail necessary to estimate how MDC and MCPP will be fully financed, and the latest RNS promises some info soon. But before financial close, its funding partners will probably want Kibo to significantly bolster its balance sheet before accepting it as an equity partner, which would considerably dilute even that theoretical 15p. Last year Kibo expanded its authorised, unissued, share capital nearly 3-fold - so is obviously planning a large capital raise which will dilute its own shareholders, but won't necessarily dilute Sanderson's 2.5% in the MDC.But because Kibo would still be such a weak partner, my guess is that it will be encouraged to rid itself of the whole MCPP project and return to its roots as an explorer. It seems possible an interested infrastructure investor (such as AES) could buy it for its current value, which is about $30m or 7-8p per share, giving Kibo the cash to explore properly its Haneti nickel prospect.But the BB coterie can forget dreams of £1, 50p, or even 20p per share. These rely on a total misconception of what a project NPV is. They seem to think Kibo can sell MCPP (or a part of it) for its 'NPV'. That is nonsense because an NPV doesn't exist until a project has been built and fully funded, at which stage the shares will have been diluted by the necessary capital raise. Their dream is tantamount to thinking someone is going to give current Kibo shareholders around $250m 'for free', and demonstrates a dire lack of understanding of a balance sheet and its connection with a share price and a P&L account.Some also think Kibo will 'retain' 30% of MCPP. It may well have the chance to take up that share, but it will have to pay for it and raise the funds (around £65m) to do so - diluting existing shareholders some 3-fold. There is no way Kibo will be 'given' a 'free' 30%, because at the irr we have been told for the integrated project (21-22% - the 'norm') the other investors and lenders would see no return for themselves whatsoever or cover for the loan interest. The most 'free' share Kibo might get is to recognise the value of the mine and feasibility work. But they are non-cash, which will have to be made up through more equity.As for Katoro, See my explanation reposted below (written in April before its placing document) on how Dohfort also bumped up its 'target' price by using another fraudulent argument. But, as ever will be the case, the market now has Katoro more correctly valued - at 3.5p vs the 10.7p Dohfort 'projected' before its listing.So why the latest Kibo puff (and 'promise of news re funding) now ? - It's obvious. The latest Dec 2016 balance sheet showed Kibo running out of cash and remaining loan facilities from Sanderson by about now. Just as the Katoro 'research' was aimed (and failed) at puffing Katoro at its listing, so a two year old puff is being wheeled out again before an inevitable Kibo fund raise. (or maybe a 'partner', or another Sanderson, funding). Shareholders will be diluted either way.And although we have been promised news soon of equity funding, it's impossible to see how it can be finalised before any PPA agreement and subsequent financial close. The new interested investors can't have had time yet to vet the BFS, yet alone come up with their terms. So expect yet another fluffy bit of news with no useful detail.Reposted re Katoro share value.Previous post on Katoro (in April some time)Katoro Value - Someone (on the BB) askedFothcoming float (if it happens) won't be worth much to Kibo holders (if based on what has been published so far)Value to Opera of Kibo's gold assets as already annouced as £3.6m. ie 1p per Kibo share. Reflects low grades, open-ended funding requirement, and low standard of resource which is mainly inferred. Paid for by 61m Opera / Katoro shares at 6p.Existing Opera shares total 17.25m. On float at 6p, and placing to raise £1.7m, another 28.3m will be added taking Katoro shares initially in issue to 106.6m. of which Kibo will have 57.2%.The initial placing is only enough to fund float costs, new company costs, and studies necessary to plan a mine start up. As already announced, there will be a later, larger fund raise, where past announcements by Kibo and Lake Victoria Goldfields for their now abandoned merger indicated at least another $5m for drilling and technical studies before any mine could be developed, and another $8m to start up the then mooted joint Imweru/Imwelo venture.Assuming that applies for Katoro, the further fund raise (assuming 6p) would add another 133m shares, further diluting Kibo's holding to 25% - its maximum share of profits once up and running provided no more funding. By then Kibo's own shares will have significantly expanded if its going to take any share of MCPP, so expect Kibo to offload all its Katoro to its own shareholders beforehand.Before that don't expect experienced investors to show much interest in what is a small low -grade operation . Instead, expect Kibo to 'offer' participation to its own shareholders. Sensible ones will politely declineNo wonder Doh!-fort has been trying to ramp a value for Imweru higher than will be in the prospectus (which the FCA requires to be 'fair') by using blatantly exorbitant 'in-ground' values.Its March report purports to base an Imweru value on the '$35.6/oz average' of a set of pre-production 'peer' miners. But these are all much more advanced and have almost all their finance, while the exceptionally large and high grade Hot Maden prospect distorts the average skywards. Not only that, all Doh!fort's 'peers' are much larger, have resources measured to a higher standard than Imweru which is 80% inferred, and have much better gold grades. Any mining analyst should know that price per gold ounce for an 'in-ground' resource declines sharply the smaller the resource and the lower the grade. Imweru is well below the bottom of Doh!-fort's chart on both measures, so a fair value would be under $20/oz - taking what should be its own 'estimate' down to below even the $3.6m Opera/Katoro is paying. One wonders why Doh!fort is publishing such an unprofessional and biassed report unless it has been 'leaned' on to do so by someone desperate to get anyone to buy Katoro when listed."
30/8/2017
15:48
aimchimp: It worth refreshing the thread here for the other view which some are trying to bury under non sense."And that other source of fantasy ? Doh!fort's bogus share price targetKibo shares falling today (Aug 22) after latest RNS - Selling by the knowledgeable could have been predicted. The mooted 'equity' funding package will, at last, show the fantasists that outside investors will be taking their overwhelming share of MCPP's returns, and that their 'projections' based on Kibo keeping all to itself will be exposed for the idiocies they are. Especially exposed will be Dohfort's 'target' share price in its latest (Aug 9th) puff - which is just a re-hash of its bogus 'targets' in 2015. So Why republish them Now ?Kibo's (Doh!-fort's) tame analyst is a petroleum geologist, probably steeped in oil exploration stocks. For those, to account for uncertainty how much oil, and how much investment (and share dilution) is needed to get it out of the ground, oil analysts use the 'risked' discount concept - they calculate their best estimate of the probable value of oil in the ground, and apply a discount (often plucked out of the air) to arrive at the shares' target value.That approach uses the current shares in issue to calculate per share value. The 'discount' is supposed to allow for the unknown new shares that will have to be issued to raise the development funds. The method therefore doesn't match what will happen in practice, but is the only one that can be used when there is so little information. But by plucking a 'discount' out of the air, an analyst can arrive at almost any value he likes, for which reason seasoned and institutional investors pay no notice unless they trust him to make an honest assessment of the appropriate 'discount'Doh!fort's analyst has used the same concept for Kibo, despite that, unlike for an uncertain oil (or other early stage mining) project, there is sufficient information from feasibility studies as to the upfront capex needed to build the MCPP, and, once built, its value in the form of its cash flows. So a fairly accurate calculation can be made as to the equity shares needed to be issued to raise the build funds (usually 30% of the capex by way of equity- the rest in loans), and the price investors will pay for them.But Dohfort hasn't done this for Kibo because it would highlight the unwelcome fact that it will have to issue many, many more shares to fund its share of the capex and retain any reasonable share of MCPP than the "50% discount" it has used implies.It makes no difference whether shares in the subsidiary MCPP project are issued to outside investors, or whether Kibo itself raises the funds to pay for its share (or indeed if an infrastructure fund buys the whole project from Kibo). The end result for Kibo shareholders and therefore the value of their shares, will be the same, regardless how many Kibo shares will then be in issue.With a build capex around £700m, compared with Kibo's current market cap around £20m (the same as its only real asset - the coal mine - and therefore almost fair value) the £210m equity needed for Kibo to retain 100% of MCPP would involve a 10-fold increase in its issued shares (9-fold at 7p - a higher price won't be warranted as shown later) - a near 90% discount instead of the 50% Dohfort uses - which would produce a '.target' of 6p instead of Dohfort's 28pIt is rather more complicated than that. Providers of the 70% loan will want a spread of strong 30% equity investors to bear the risk should anything go wrong, and Kibo having no other assets, they will want the bulk of the equity funding to come from stronger investors who will take their proportionate share of MCPP. So Kibo never could retain 100% or anything like it.These large complications are ignored by Dohfort. While keeping as its 'headline' the bogus target arrived at with a 50% discount on the Project NPV, it weasels out of responsibility for that fraudulent puff in its small print, which says its valuation is 'unrisked and 'ungeared' - terms the average investor won't understand but which mean that Doh-fort knows full well (as experienced investors also will) that there will be dilution (unknown) and execution risk, that it hasn't allowed for.It is this evasive language and bogus calculation that has misled a coterie on the bulletin boards (who won't brook any dissent or sensible discussion) to think (unrestrained by Kibo's CEO) that the whole (or a large part) of the project's NPVs will 'belong' to Kibo, at a share price which can never be remotely approached once the reality of its funding is taken into account.In practice there are numbers of other complications that Kibo has not shared with its investors. The Mbeya coal mine could perhaps be operated and owned separately from the power plant - which would lead to a probably better outcome for shareholders. However, all pointers are for the two being 'integrated' - probably because lenders will want the certainty of a 27 year coal supply - and calculations here assume this. And although global coal prices have risen, the Tanz government like all others will limit via its tariffs the profits it will allow MCPP to make to just enough to attract investors, so rising coal prices will not benefit Kibo. Any ability to sell coal outside the power station will depend on finding more reserves than set aside so far for the power plant, and will have extra cost.On the slightly plus side Kibo has the value of feasibility studies it has partly paid for to add to its $20m mine value in the balance sheet, as a non-cash contribution to the approx $700m MCPP project cost, which would give it around 4% - or perhaps 13-14% of the £219m equity - without issuing shares to pay for it. That would give it a share of the project's gross PV once built and financed worth in NPV10 terms about $60m - or 15p per present share against the 29-30p Dohfort 'targets'.That $60m coincides with what the 2.5% Sanderson stake in the MDC (not in Kibo) is said to be 'worth' and which some think points to Kibo's value. Unfortunately it doesn't, not only because the MDC isn't listed and so doesn't have a share price that Sanderson can sell into, but because it will be a totally different economic entity than Kibo itself with a different share and borrowing structure. So there is obviously some other route not disclosed to Kibo shareholders by which Sanderson can monetise its interest.And although Kibo says MDC has 100% of MCPP now, it won't have anything like that once it is financed by banks and he other necessary outside investors. In other words Kibo shareholders will definitely have their share in MCPP diluted. But Sanderson's share in MDC might not be - depending on how it is financed.Such 'NPV' based share values can only ever be a crude guide in any case, and for all sorts of good reasons are never approached in practice. At the 10% discount rate used for MCPP, most mining projects equity shares are rated by the market at only about half the theoretical NPV, even for fully financed projects. So Kibo's shares would only warrant about 7.5p, but not before MCPP is fully up and running in what looks like 4-5 years time.We don't have any of the detail necessary to estimate how MDC and MCPP will be fully financed, and the latest RNS promises some info soon. But before financial close, its funding partners will probably want Kibo to significantly bolster its balance sheet before accepting it as an equity partner, which would considerably dilute even that theoretical 15p. Last year Kibo expanded its authorised, unissued, share capital nearly 3-fold - so is obviously planning a large capital raise which will dilute its own shareholders, but won't necessarily dilute Sanderson's 2.5% in the MDC.But because Kibo would still be such a weak partner, my guess is that it will be encouraged to rid itself of the whole MCPP project and return to its roots as an explorer. It seems possible an interested infrastructure investor (such as AES) could buy it for its current value, which is about $30m or 7-8p per share, giving Kibo the cash to explore properly its Haneti nickel prospect.But the BB coterie can forget dreams of £1, 50p, or even 20p per share. These rely on a total misconception of what a project NPV is. They seem to think Kibo can sell MCPP (or a part of it) for its 'NPV'. That is nonsense because an NPV doesn't exist until a project has been built and fully funded, at which stage the shares will have been diluted by the necessary capital raise. Their dream is tantamount to thinking someone is going to give current Kibo shareholders around $250m 'for free', and demonstrates a dire lack of understanding of a balance sheet and its connection with a share price and a P&L account.Some also think Kibo will 'retain' 30% of MCPP. It may well have the chance to take up that share, but it will have to pay for it and raise the funds (around £65m) to do so - diluting existing shareholders some 3-fold. There is no way Kibo will be 'given' a 'free' 30%, because at the irr we have been told for the integrated project (21-22% - the 'norm') the other investors and lenders would see no return for themselves whatsoever or cover for the loan interest. The most 'free' share Kibo might get is to recognise the value of the mine and feasibility work. But they are non-cash, which will have to be made up through more equity.As for Katoro, See my explanation reposted below (written in April before its placing document) on how Dohfort also bumped up its 'target' price by using another fraudulent argument. But, as ever will be the case, the market now has Katoro more correctly valued - at 3.5p vs the 10.7p Dohfort 'projected' before its listing.So why the latest Kibo puff (and 'promise of news re funding) now ? - It's obvious. The latest Dec 2016 balance sheet showed Kibo running out of cash and remaining loan facilities from Sanderson by about now. Just as the Katoro 'research' was aimed (and failed) at puffing Katoro at its listing, so a two year old puff is being wheeled out again before an inevitable Kibo fund raise. (or maybe a 'partner', or another Sanderson, funding). Shareholders will be diluted either way.And although we have been promised news soon of equity funding, it's impossible to see how it can be finalised before any PPA agreement and subsequent financial close. The new interested investors can't have had time yet to vet the BFS, yet alone come up with their terms. So expect yet another fluffy bit of news with no useful detail.Reposted re Katoro share value.Previous post on Katoro (in April some time)Katoro Value - Someone (on the BB) askedFothcoming float (if it happens) won't be worth much to Kibo holders (if based on what has been published so far)Value to Opera of Kibo's gold assets as already annouced as £3.6m. ie 1p per Kibo share. Reflects low grades, open-ended funding requirement, and low standard of resource which is mainly inferred. Paid for by 61m Opera / Katoro shares at 6p.Existing Opera shares total 17.25m. On float at 6p, and placing to raise £1.7m, another 28.3m will be added taking Katoro shares initially in issue to 106.6m. of which Kibo will have 57.2%.The initial placing is only enough to fund float costs, new company costs, and studies necessary to plan a mine start up. As already announced, there will be a later, larger fund raise, where past announcements by Kibo and Lake Victoria Goldfields for their now abandoned merger indicated at least another $5m for drilling and technical studies before any mine could be developed, and another $8m to start up the then mooted joint Imweru/Imwelo venture.Assuming that applies for Katoro, the further fund raise (assuming 6p) would add another 133m shares, further diluting Kibo's holding to 25% - its maximum share of profits once up and running provided no more funding. By then Kibo's own shares will have significantly expanded if its going to take any share of MCPP, so expect Kibo to offload all its Katoro to its own shareholders beforehand.Before that don't expect experienced investors to show much interest in what is a small low -grade operation . Instead, expect Kibo to 'offer' participation to its own shareholders. Sensible ones will politely declineNo wonder Doh!-fort has been trying to ramp a value for Imweru higher than will be in the prospectus (which the FCA requires to be 'fair') by using blatantly exorbitant 'in-ground' values.Its March report purports to base an Imweru value on the '$35.6/oz average' of a set of pre-production 'peer' miners. But these are all much more advanced and have almost all their finance, while the exceptionally large and high grade Hot Maden prospect distorts the average skywards. Not only that, all Doh!fort's 'peers' are much larger, have resources measured to a higher standard than Imweru which is 80% inferred, and have much better gold grades. Any mining analyst should know that price per gold ounce for an 'in-ground' resource declines sharply the smaller the resource and the lower the grade. Imweru is well below the bottom of Doh!-fort's chart on both measures, so a fair value would be under $20/oz - taking what should be its own 'estimate' down to below even the $3.6m Opera/Katoro is paying. One wonders why Doh!fort is publishing such an unprofessional and biassed report unless it has been 'leaned' on to do so by someone desperate to get anyone to buy Katoro when listed."
28/8/2017
07:29
aimchimp: And that other source of fantasy ? Doh!fort's bogus share price targetKibo shares falling today (Aug 22) after latest RNS - Selling by the knowledgeable could have been predicted. The mooted 'equity' funding package will, at last, show the fantasists that outside investors will be taking their overwhelming share of MCPP's returns, and that their 'projections' based on Kibo keeping all to itself will be exposed for the idiocies they are. Especially exposed will be Dohfort's 'target' share price in its latest (Aug 9th) puff - which is just a re-hash of its bogus 'targets' in 2015. So Why republish them Now ?Kibo's (Doh!-fort's) tame analyst is a petroleum geologist, probably steeped in oil exploration stocks. For those, to account for uncertainty how much oil, and how much investment (and share dilution) is needed to get it out of the ground, oil analysts use the 'risked' discount concept - they calculate their best estimate of the probable value of oil in the ground, and apply a discount (often plucked out of the air) to arrive at the shares' target value.That approach uses the current shares in issue to calculate per share value. The 'discount' is supposed to allow for the unknown new shares that will have to be issued to raise the development funds. The method therefore doesn't match what will happen in practice, but is the only one that can be used when there is so little information. But by plucking a 'discount' out of the air, an analyst can arrive at almost any value he likes, for which reason seasoned and institutional investors pay no notice unless they trust him to make an honest assessment of the appropriate 'discount'Doh!fort's analyst has used the same concept for Kibo, despite that, unlike for an uncertain oil (or other early stage mining) project, there is sufficient information from feasibility studies as to the upfront capex needed to build the MCPP, and, once built, its value in the form of its cash flows. So a fairly accurate calculation can be made as to the equity shares needed to be issued to raise the build funds (usually 30% of the capex by way of equity- the rest in loans), and the price investors will pay for them.But Dohfort hasn't done this for Kibo because it would highlight the unwelcome fact that it will have to issue many, many more shares to fund its share of the capex and retain any reasonable share of MCPP than the "50% discount" it has used implies.It makes no difference whether shares in the subsidiary MCPP project are issued to outside investors, or whether Kibo itself raises the funds to pay for its share (or indeed if an infrastructure fund buys the whole project from Kibo). The end result for Kibo shareholders and therefore the value of their shares, will be the same, regardless how many Kibo shares will then be in issue.With a build capex around £700m, compared with Kibo's current market cap around £20m (the same as its only real asset - the coal mine - and therefore almost fair value) the £210m equity needed for Kibo to retain 100% of MCPP would involve a 10-fold increase in its issued shares (9-fold at 7p - a higher price won't be warranted as shown later) - a near 90% discount instead of the 50% Dohfort uses - which would produce a '.target' of 6p instead of Dohfort's 28pIt is rather more complicated than that. Providers of the 70% loan will want a spread of strong 30% equity investors to bear the risk should anything go wrong, and Kibo having no other assets, they will want the bulk of the equity funding to come from stronger investors who will take their proportionate share of MCPP. So Kibo never could retain 100% or anything like it.These large complications are ignored by Dohfort. While keeping as its 'headline' the bogus target arrived at with a 50% discount on the Project NPV, it weasels out of responsibility for that fraudulent puff in its small print, which says its valuation is 'unrisked and 'ungeared' - terms the average investor won't understand but which mean that Doh-fort knows full well (as experienced investors also will) that there will be dilution (unknown) and execution risk, that it hasn't allowed for.It is this evasive language and bogus calculation that has misled a coterie on the bulletin boards (who won't brook any dissent or sensible discussion) to think (unrestrained by Kibo's CEO) that the whole (or a large part) of the project's NPVs will 'belong' to Kibo, at a share price which can never be remotely approached once the reality of its funding is taken into account.In practice there are numbers of other complications that Kibo has not shared with its investors. The Mbeya coal mine could perhaps be operated and owned separately from the power plant - which would lead to a probably better outcome for shareholders. However, all pointers are for the two being 'integrated' - probably because lenders will want the certainty of a 27 year coal supply - and calculations here assume this. And although global coal prices have risen, the Tanz government like all others will limit via its tariffs the profits it will allow MCPP to make to just enough to attract investors, so rising coal prices will not benefit Kibo. Any ability to sell coal outside the power station will depend on finding more reserves than set aside so far for the power plant, and will have extra cost.On the slightly plus side Kibo has the value of feasibility studies it has partly paid for to add to its $20m mine value in the balance sheet, as a non-cash contribution to the approx $700m MCPP project cost, which would give it around 4% - or perhaps 13-14% of the £219m equity - without issuing shares to pay for it. That would give it a share of the project's gross PV once built and financed worth in NPV10 terms about $60m - or 15p per present share against the 29-30p Dohfort 'targets'.That $60m coincides with what the 2.5% Sanderson stake in the MDC (not in Kibo) is said to be 'worth' and which some think points to Kibo's value. Unfortunately it doesn't, not only because the MDC isn't listed and so doesn't have a share price that Sanderson can sell into, but because it will be a totally different economic entity than Kibo itself with a different share and borrowing structure. So there is obviously some other route not disclosed to Kibo shareholders by which Sanderson can monetise its interest.And although Kibo says MDC has 100% of MCPP now, it won't have anything like that once it is financed by banks and he other necessary outside investors. In other words Kibo shareholders will definitely have their share in MCPP diluted. But Sanderson's share in MDC might not be - depending on how it is financed.Such 'NPV' based share values can only ever be a crude guide in any case, and for all sorts of good reasons are never approached in practice. At the 10% discount rate used for MCPP, most mining projects equity shares are rated by the market at only about half the theoretical NPV, even for fully financed projects. So Kibo's shares would only warrant about 7.5p, but not before MCPP is fully up and running in what looks like 4-5 years time.We don't have any of the detail necessary to estimate how MDC and MCPP will be fully financed, and the latest RNS promises some info soon. But before financial close, its funding partners will probably want Kibo to significantly bolster its balance sheet before accepting it as an equity partner, which would considerably dilute even that theoretical 15p. Last year Kibo expanded its authorised, unissued, share capital nearly 3-fold - so is obviously planning a large capital raise which will dilute its own shareholders, but won't necessarily dilute Sanderson's 2.5% in the MDC.But because Kibo would still be such a weak partner, my guess is that it will be encouraged to rid itself of the whole MCPP project and return to its roots as an explorer. It seems possible an interested infrastructure investor (such as AES) could buy it for its current value, which is about $30m or 7-8p per share, giving Kibo the cash to explore properly its Haneti nickel prospect.But the BB coterie can forget dreams of £1, 50p, or even 20p per share. These rely on a total misconception of what a project NPV is. They seem to think Kibo can sell MCPP (or a part of it) for its 'NPV'. That is nonsense because an NPV doesn't exist until a project has been built and fully funded, at which stage the shares will have been diluted by the necessary capital raise. Their dream is tantamount to thinking someone is going to give current Kibo shareholders around $250m 'for free', and demonstrates a dire lack of understanding of a balance sheet and its connection with a share price and a P&L account.Some also think Kibo will 'retain' 30% of MCPP. It may well have the chance to take up that share, but it will have to pay for it and raise the funds (around £65m) to do so - diluting existing shareholders some 3-fold. There is no way Kibo will be 'given' a 'free' 30%, because at the irr we have been told for the integrated project (21-22% - the 'norm') the other investors and lenders would see no return for themselves whatsoever or cover for the loan interest. The most 'free' share Kibo might get is to recognise the value of the mine and feasibility work. But they are non-cash, which will have to be made up through more equity.As for Katoro, See my explanation reposted below (written in April before its placing document) on how Dohfort also bumped up its 'target' price by using another fraudulent argument. But, as ever will be the case, the market now has Katoro more correctly valued - at 3.5p vs the 10.7p Dohfort 'projected' before its listing.So why the latest Kibo puff (and 'promise of news re funding) now ? - It's obvious. The latest Dec 2016 balance sheet showed Kibo running out of cash and remaining loan facilities from Sanderson by about now. Just as the Katoro 'research' was aimed (and failed) at puffing Katoro at its listing, so a two year old puff is being wheeled out again before an inevitable Kibo fund raise. (or maybe a 'partner', or another Sanderson, funding). Shareholders will be diluted either way.And although we have been promised news soon of equity funding, it's impossible to see how it can be finalised before any PPA agreement and subsequent financial close. The new interested investors can't have had time yet to vet the BFS, yet alone come up with their terms. So expect yet another fluffy bit of news with no useful detail.Reposted re Katoro share value.Previous post on Katoro (in April some time)Katoro Value - Someone (on the BB) askedFothcoming float (if it happens) won't be worth much to Kibo holders (if based on what has been published so far)Value to Opera of Kibo's gold assets as already annouced as £3.6m. ie 1p per Kibo share. Reflects low grades, open-ended funding requirement, and low standard of resource which is mainly inferred. Paid for by 61m Opera / Katoro shares at 6p.Existing Opera shares total 17.25m. On float at 6p, and placing to raise £1.7m, another 28.3m will be added taking Katoro shares initially in issue to 106.6m. of which Kibo will have 57.2%.The initial placing is only enough to fund float costs, new company costs, and studies necessary to plan a mine start up. As already announced, there will be a later, larger fund raise, where past announcements by Kibo and Lake Victoria Goldfields for their now abandoned merger indicated at least another $5m for drilling and technical studies before any mine could be developed, and another $8m to start up the then mooted joint Imweru/Imwelo venture.Assuming that applies for Katoro, the further fund raise (assuming 6p) would add another 133m shares, further diluting Kibo's holding to 25% - its maximum share of profits once up and running provided no more funding. By then Kibo's own shares will have significantly expanded if its going to take any share of MCPP, so expect Kibo to offload all its Katoro to its own shareholders beforehand.Before that don't expect experienced investors to show much interest in what is a small low -grade operation . Instead, expect Kibo to 'offer' participation to its own shareholders. Sensible ones will politely declineNo wonder Doh!-fort has been trying to ramp a value for Imweru higher than will be in the prospectus (which the FCA requires to be 'fair') by using blatantly exorbitant 'in-ground' values.Its March report purports to base an Imweru value on the '$35.6/oz average' of a set of pre-production 'peer' miners. But these are all much more advanced and have almost all their finance, while the exceptionally large and high grade Hot Maden prospect distorts the average skywards. Not only that, all Doh!fort's 'peers' are much larger, have resources measured to a higher standard than Imweru which is 80% inferred, and have much better gold grades. Any mining analyst should know that price per gold ounce for an 'in-ground' resource declines sharply the smaller the resource and the lower the grade. Imweru is well below the bottom of Doh!-fort's chart on both measures, so a fair value would be under $20/oz - taking what should be its own 'estimate' down to below even the $3.6m Opera/Katoro is paying. One wonders why Doh!fort is publishing such an unprofessional and biassed report unless it has been 'leaned' on to do so by someone desperate to get anyone to buy Katoro when listed.
23/8/2017
09:59
lurker5: And that other source of fantasy ? Doh!fort's bogus share price target Kibo shares falling today (Aug 22) after latest RNS - Selling by the knowledgeable could have been predicted. The mooted 'equity' funding package will, at last, show the fantasists that outside investors will be taking their overwhelming share of MCPP's returns, and that their 'projections' based on Kibo keeping all to itself will be exposed for the idiocies they are. Especially exposed will be Dohfort's 'target' share price in its latest (Aug 9th) puff - which is just a re-hash of its bogus 'targets' in 2015. So Why republish them Now ? Kibo's (Doh!-fort's) tame analyst is a petroleum geologist, probably steeped in oil exploration stocks. For those, to account for uncertainty how much oil, and how much investment (and share dilution) is needed to get it out of the ground, oil analysts use the 'risked' discount concept - they calculate their best estimate of the probable value of oil in the ground, and apply a discount (often plucked out of the air) to arrive at the shares' target value. That approach uses the current shares in issue to calculate per share value. The 'discount' is supposed to allow for the unknown new shares that will have to be issued to raise the development funds. The method therefore doesn't match what will happen in practice, but is the only one that can be used when there is so little information. But by plucking a 'discount' out of the air, an analyst can arrive at almost any value he likes, for which reason seasoned and institutional investors pay no notice unless they trust him to make an honest assessment of the appropriate 'discount' Doh!fort's analyst has used the same concept for Kibo, despite that, unlike for an uncertain oil (or other early stage mining) project, there is sufficient information from feasibility studies as to the upfront capex needed to build the MCPP, and, once built, its value in the form of its cash flows. So a fairly accurate calculation can be made as to the equity shares needed to be issued to raise the build funds (usually 30% of the capex by way of equity- the rest in loans), and the price investors will pay for them. But Dohfort hasn't done this for Kibo because it would highlight the unwelcome fact that it will have to issue many, many more shares to fund its share of the capex and retain any reasonable share of MCPP than the "50% discount" it has used implies. It makes no difference whether shares in the subsidiary MCPP project are issued to outside investors, or whether Kibo itself raises the funds to pay for its share (or indeed if an infrastructure fund buys the whole project from Kibo). The end result for Kibo shareholders and therefore the value of their shares, will be the same, regardless how many Kibo shares will then be in issue. With a build capex around £700m, compared with Kibo's current market cap around £20m (the same as its only real asset - the coal mine - and therefore almost fair value) the £210m equity needed for Kibo to retain 100% of MCPP would involve a 10-fold increase in its issued shares (9-fold at 7p - a higher price won't be warranted as shown later) - a near 90% discount instead of the 50% Dohfort uses - which would produce a '.target' of 6p instead of Dohfort's 28p It is rather more complicated than that. Providers of the 70% loan will want a spread of strong 30% equity investors to bear the risk should anything go wrong, and Kibo having no other assets, they will want the bulk of the equity funding to come from stronger investors who will take their proportionate share of MCPP. So Kibo never could retain 100% or anything like it. These large complications are ignored by Dohfort. While keeping as its 'headline' the bogus target arrived at with a 50% discount on the Project NPV, it weasels out of responsibility for that fraudulent puff in its small print, which says its valuation is 'unrisked and 'ungeared' - terms the average investor won't understand but which mean that Doh-fort knows full well (as experienced investors also will) that there will be dilution (unknown) and execution risk, that it hasn't allowed for. It is this evasive language and bogus calculation that has misled a coterie on the bulletin boards (who won't brook any dissent or sensible discussion) to think (unrestrained by Kibo's CEO) that the whole (or a large part) of the project's NPVs will 'belong' to Kibo, at a share price which can never be remotely approached once the reality of its funding is taken into account. In practice there are numbers of other complications that Kibo has not shared with its investors. The Mbeya coal mine could perhaps be operated and owned separately from the power plant - which would lead to a probably better outcome for shareholders. However, all pointers are for the two being 'integrated' - probably because lenders will want the certainty of a 27 year coal supply - and calculations here assume this. And although global coal prices have risen, the Tanz government like all others will limit via its tariffs the profits it will allow MCPP to make to just enough to attract investors, so rising coal prices will not benefit Kibo. Any ability to sell coal outside the power station will depend on finding more reserves than set aside so far for the power plant, and will have extra cost. On the slightly plus side Kibo has the value of feasibility studies it has partly paid for to add to its $20m mine value in the balance sheet, as a non-cash contribution to the approx $700m MCPP project cost, which would give it around 4% - or perhaps 13-14% of the £219m equity - without issuing shares to pay for it. That would give it a share of the project's gross PV once built and financed worth in NPV10 terms about $60m - or 15p per present share against the 29-30p Dohfort 'targets'. That $60m coincides with what the 2.5% Sanderson stake in the MDC (not in Kibo) is said to be 'worth' and which some think points to Kibo's value. Unfortunately it doesn't, not only because the MDC isn't listed and so doesn't have a share price that Sanderson can sell into, but because it will be a totally different economic entity than Kibo itself with a different share and borrowing structure. So there is obviously some other route not disclosed to Kibo shareholders by which Sanderson can monetise its interest. And although Kibo says MDC has 100% of MCPP now, it won't have anything like that once it is financed by banks and he other necessary outside investors. In other words Kibo shareholders will definitely have their share in MCPP diluted. But Sanderson's share in MDC might not be - depending on how it is financed. Such 'NPV' based share values can only ever be a crude guide in any case, and for all sorts of good reasons are never approached in practice. At the 10% discount rate used for MCPP, most mining projects equity shares are rated by the market at only about half the theoretical NPV, even for fully financed projects. So Kibo's shares would only warrant about 7.5p, but not before MCPP is fully up and running in what looks like 4-5 years time. We don't have any of the detail necessary to estimate how MDC and MCPP will be fully financed, and the latest RNS promises some info soon. But before financial close, its funding partners will probably want Kibo to significantly bolster its balance sheet before accepting it as an equity partner, which would considerably dilute even that theoretical 15p. Last year Kibo expanded its authorised, unissued, share capital nearly 3-fold - so is obviously planning a large capital raise which will dilute its own shareholders, but won't necessarily dilute Sanderson's 2.5% in the MDC. But because Kibo would still be such a weak partner, my guess is that it will be encouraged to rid itself of the whole MCPP project and return to its roots as an explorer. It seems possible an interested infrastructure investor (such as AES) could buy it for its current value, which is about $30m or 7-8p per share, giving Kibo the cash to explore properly its Haneti nickel prospect. But the BB coterie can forget dreams of £1, 50p, or even 20p per share. These rely on a total misconception of what a project NPV is. They seem to think Kibo can sell MCPP (or a part of it) for its 'NPV'. That is nonsense because an NPV doesn't exist until a project has been built and fully funded, at which stage the shares will have been diluted by the necessary capital raise. Their dream is tantamount to thinking someone is going to give current Kibo shareholders around $250m 'for free', and demonstrates a dire lack of understanding of a balance sheet and its connection with a share price and a P&L account. Some also think Kibo will 'retain' 30% of MCPP. It may well have the chance to take up that share, but it will have to pay for it and raise the funds (around £65m) to do so - diluting existing shareholders some 3-fold. There is no way Kibo will be 'given' a 'free' 30%, because at the irr we have been told for the integrated project (21-22% - the 'norm') the other investors and lenders would see no return for themselves whatsoever or cover for the loan interest. The most 'free' share Kibo might get is to recognise the value of the mine and feasibility work. But they are non-cash, which will have to be made up through more equity. As for Katoro, See my explanation reposted below (written in April before its placing document) on how Dohfort also bumped up its 'target' price by using another fraudulent argument. But, as ever will be the case, the market now has Katoro more correctly valued - at 3.5p vs the 10.7p Dohfort 'projected' before its listing. So why the latest Kibo puff (and 'promise of news re funding) now ? - It's obvious. The latest Dec 2016 balance sheet showed Kibo running out of cash and remaining loan facilities from Sanderson by about now. Just as the Katoro 'research' was aimed (and failed) at puffing Katoro at its listing, so a two year old puff is being wheeled out again before an inevitable Kibo fund raise. (or maybe a 'partner', or another Sanderson, funding). Shareholders will be diluted either way. And although we have been promised news soon of equity funding, it's impossible to see how it can be finalised before any PPA agreement and subsequent financial close. The new interested investors can't have had time yet to vet the BFS, yet alone come up with their terms. So expect yet another fluffy bit of news with no useful detail. Reposted re Katoro share value. Previous post on Katoro (in April some time) Katoro Value - Someone (on the BB) asked Fothcoming float (if it happens) won't be worth much to Kibo holders (if based on what has been published so far) Value to Opera of Kibo's gold assets as already annouced as £3.6m. ie 1p per Kibo share. Reflects low grades, open-ended funding requirement, and low standard of resource which is mainly inferred. Paid for by 61m Opera / Katoro shares at 6p. Existing Opera shares total 17.25m. On float at 6p, and placing to raise £1.7m, another 28.3m will be added taking Katoro shares initially in issue to 106.6m. of which Kibo will have 57.2%. The initial placing is only enough to fund float costs, new company costs, and studies necessary to plan a mine start up. As already announced, there will be a later, larger fund raise, where past announcements by Kibo and Lake Victoria Goldfields for their now abandoned merger indicated at least another $5m for drilling and technical studies before any mine could be developed, and another $8m to start up the then mooted joint Imweru/Imwelo venture. Assuming that applies for Katoro, the further fund raise (assuming 6p) would add another 133m shares, further diluting Kibo's holding to 25% - its maximum share of profits once up and running provided no more funding. By then Kibo's own shares will have significantly expanded if its going to take any share of MCPP, so expect Kibo to offload all its Katoro to its own shareholders beforehand. Before that don't expect experienced investors to show much interest in what is a small low -grade operation . Instead, expect Kibo to 'offer' participation to its own shareholders. Sensible ones will politely decline No wonder Doh!-fort has been trying to ramp a value for Imweru higher than will be in the prospectus (which the FCA requires to be 'fair') by using blatantly exorbitant 'in-ground' values. Its March report purports to base an Imweru value on the '$35.6/oz average' of a set of pre-production 'peer' miners. But these are all much more advanced and have almost all their finance, while the exceptionally large and high grade Hot Maden prospect distorts the average skywards. Not only that, all Doh!fort's 'peers' are much larger, have resources measured to a higher standard than Imweru which is 80% inferred, and have much better gold grades. Any mining analyst should know that price per gold ounce for an 'in-ground' resource declines sharply the smaller the resource and the lower the grade. Imweru is well below the bottom of Doh!-fort's chart on both measures, so a fair value would be under $20/oz - taking what should be its own 'estimate' down to below even the $3.6m Opera/Katoro is paying. One wonders why Doh!fort is publishing such an unprofessional and biassed report unless it has been 'leaned' on to do so by someone desperate to get anyone to buy Katoro when listed.
30/7/2017
10:42
aimchimp: An extract from the often reposted notes with some comments in CAPS. THE COMMENTS ARE OBSERVATIONS BASED ON WHAT HAS TRANSPIRED AND BEEN CONFIRMED BY THE COMPANY SINCE EARLY APRILSandersons -Can you give the exact repayment date of the current 2.9m loan facility?There is no set date and this is a very fluid arrangement. The distinct impressions I got was that there is alot more commitment between all these parties towards eachother than we give them credit for. Sandersons are not there to screw KIBO over for missed dates etc. From what LC said it seems very fluid and flexible. He seemed relaxed to the point of dismissing this as any issue whatsoever.I UNDERSTAND THE ANNUAL REPORT STATES THAT REPAYMENT IS ON RECEIPT OF CASH FROM SEPCO. SEEMS VERY STRANGE RESPONSE WITH THAT IN MIND> OF COURSE I CAN UNDERSTAND WHY THE ISSUE WOULD BE DISMISSED BUT IT DOES BEG THE QUESTION WHY BE VAGUE... OR COULD IT BE THAT THE NOTES GOT A BIT BEFUDDLEDHow much currently of the facility has been drawn?I found it hard to believe they didn't know the answer to this but felt it was more a point of not wanting to give any shareholders privileged information, therefore, as it stands we received no figure on this.ODD THAT THIS WOULD BE CONSIDERED PRIVILEDGED INFO... DRAWAING ON A FACILITY WHICH HAD NO PENALTY FEES PER DRAWDOWN OR INTEREST OTHER THAN THOSE ALREADY PAID (IN SHARES) PERHAPS IT COULD BE THE NOTES GOT A BIT MESSED UP AND THE REPORT WASNT ACCURATE?Given the slippage in timelines for FC what contingencies have you in place for settlement of monies drawn under the current Sandersons agreement and how can we best expect you to negotiate a solution to this?See above. Totally unworried, I suspect an alternative cash injection possibly from selling part of this his he MCPP down, potentially GE appeared the favourites imo.WHY WOULD CASH INJECTIONS FOR SETTLMENT AHEAD OF FC BE REQUIRED? I UNDERSTAND IT THE ANNUAL REPORT SHOWS THE REPAYMENT OF THE FACILITY IS WHEN KIBO IS IN RECEIPT OF THE CASH FROM SEPCO>> WHICH IS POST FINANCIAL CLOSE... PERHAPS THE NOTES MAY HAVE BEEN CONFUSED OR THE NOTE TAKER WASNT LISTENING MAYBE AND WROTE WHAT HE THOUGHT COULD HAVE BEEN SAID!Do you conceed that where Sandersons has the right to convert up to £1.5m of amount drawn down on the Facility into Kibo Shares at the 30 day VWAP prior to the repayment date of the total Facility amount that there is an interest in the KIBO share price being low going through this period for them?LC seemed to be of the opinion this wasn't in Sandersons interest to have a low share price. I asked him if maybe it was in their favour for a short time i.e the 30 day VWAP period at least to get the max shares for the upto 1.5m but LC seemed to say the it was at our discretion whether upto max 1.5m of the facility was repayable as shares.HOW VERY STRANGE THAT LC WASNT CLEAR ON THIS POINT.... THE RECENT DETAIL STATES THAT THE OPTION FOR SETTLMENT IN SHARES IN NOT AT KIBOS CHOICE BUT AT THE OPTION FOR SANDERSON.. AGAIN IT SEEMS THAT THE REPORT OUT DOES NOT ACTUALLY REFLECT THE FACTS... WHY WOULD LC TELL AN INVESTOR THIS? PERHAPS WHOEVER WAS LISTENING MISHEARD THESE ALTERNATIVE FACTS?I assume that as the deal and a repayment date seem flexible this maybe isn't a problem as previously explained but also I feel he has access to an alternate funding to eliminate this problem. I.e selling down a small stake in the MCPP possibly.AND THEN BACK TO THE SELLING DOWN OF A STAKE IN MCPP WHICH KEEPS BEING ROLLED OUT AS A POSSIBILITY>>> JUST FEELS LIKE A PLATFORM FOR SOMEONES HOPES AND THOUGHTS... PERHAPS IT WAS NOISY AND STRAINING TO HEAR RESPONSES MADE SOME POINTS FOGGY...
16/6/2017
11:33
bionictwat: UKIS 2017 KIBO NotesPolicy Changes -Can you explain the difference between the Tanzanian Energy and Policy Procurement Review that is underway, as per the recent presentation and the MEM Policy Review that is completed as per 23/3/17 RNS?These are two completely diffrent reviews. It's hard to put a linear %, in terms of how much of the TEPPR is completed but it's believed the main components have been completed and these aren't really a dealing factor to the ultimate delivery of the project. There is a gazetting process to ensure any changes don't conflict with any other laws etc before being made official.In your assessment how long will the Tanzainan Energy And Policy Procurement Review take to complete?Unable to accurately say but see above that the main bulk of the work has been completed already. So we should be on the home straight.As discussed last year, can you tell me of which, if either, KIBO have had direct input too?Yes they have had input into both of these. Therefore, I read they must have reasonable knowledge of the processes and there shaping of the future.Overall how do you expect all policy changes to benefit the MCPP?Kibo will be benefit for a more robust, solid and sustainable set of rules within the overall framework of reliability within Tanzania. I.e it will ensure all payments etc will be made as agreed which is important for a project like the MCPP which is going to, run for over 25 years.ESIA -What does the ESIA Certification process involve?Literally just a final check and a signing off process. There could be the odd question that may come back to KIBO or a confirmation of certain elements but basically it is what it is, a signing up process.Given the timelines for ESIA certification acquired by other companies, the ESIA certification for KIBO should be imminent. Is there anything else that is holding this up i.e hanging on outstanding policy changes and should we expect this any day now, by that reasoning?Yes KIBO are awaiting this to drop anytime now with nothing else holding this up.SML -Given the timelines for SML approval acquired by other companies, the SML approval for KIBO should be imminent. Is there anything else that is holding this up i.e hanging on outstanding policy changes and should we expect this any day now, by that reasoning?Again, yes KIBO are awaiting this to drop anytime now with nothing else holding this up.PPA -Given the phrases used in the RNS of the 23/3/17 of 'ensuring that a final PPA can be concluded ASAP'. Can we verify that preliminary PPA tariffs were applied to the facilitate the production of the IBFS and Financial Model?The conversation quickly negated this section of questions. LC explained that we have no figures to plug in anywhere and this method of thought is the direct opposite to what is actually happening in reality in this process. We are working this completely the other way around. We are saying what the tariff figures should be, driven from the independently produced figures via the feasibility studies completed. We have control and push negotiations to where we want them to be not the other way around. To me, this means we guarantee a profitable outcome for the project. If so, we're these preliminary PPA tarriffs agreed with Tanesco?N/AAgain, and if so, are the accuracy of these tariffs still withstanding given the policy reviews?N/AFC -Can we assume once we have an ESIA, SML and PPA we can advance straight to FC or are there any other workstreams that need completing that will hold up going to FC? Yes, although some parallel work means part of FC can already be in progress. It is possible to call a scenario of being in a Preliminary FC.Are SEPCO bound to pay you the $3.6m on entering FC or at the completion of FC?This will be on competition of FC but this is not seen to cause any problems in anyway.Will there be a news blackout during FC due to its sensitive nature?Once we reach FC, or more accurately on signing the PPA, that is when the real figures and detail can be released. LC seemed to allude on more than one occasion to look at the figures for the coal that you can workout to give a good pointer to the value that lies ahead. Therefore I don't see FC as requiring a suspension or news blackout.MCPP General -How our partners feel about the delays induced by the Government?They seem pretty understanding of the region and it's development. Obviously they have huge budgets and can outside these types of delays, so no issue here.Did Sandersons acquisition of part of the MCPP surprise you, especially vs their usual MO?LC agreed that obviously it isn't there normal line of business and that it probsbly surprised Sandersons themselves more than it did himself when they got so deeply involved. They have made a huge commitment that the believe they will benefit from.Are you any closer to knowing whether the project will be separated or integrated?No comment.What is your gut feel on which route you prefer to go down?No comment.Do you feel a 30% retention as previously alluded to is realistic or had that changed +/-?Yes this is entirely still possible and and therefore valid figure to base any calculations on.When Sandersons took their 2.5% valuing the MCPP at a discounted $100m, what was the agreed discount valued at?Although he couldn't recall the discounted figure he interesting said this value was based only on the figures from the mine. This took me back a touch as it was the complete opposite to what I expected. In fact, it may well, give rise to the fact my recent 25p a share figure for u the mine for each 300MW is too low. It puts it back to being more 35p and discounted at that !!! He must be expecting a much better price than $32.7mt for the coal being sold into the plant, imo.Can you confirm this 2.5% of the MCPP includes the mine. N/AHow does the MEN's statement that 30% of Tanzanian Mining Companies Share holding must be floated on the DSE affect all of our projects especially the MCPP?This would only affect projects that require an SML. Therfore only affect the MCPP. That said, LC was of the opinion that this would in all likelyhood NOT apply to us due to the National Strategic Importance of the project. Make of that, what you will.Can we still expect the MCPP to be spun out ala Katoro?It will either be spun out or in all likelyhood hood, Hanetti will be spun out leaving the MCPP on its own with KIBO.If so at what point would you need to initiate this?N/A. As an aside Noel seemed very excited about Hanetti. I had the feeling more work had been going on there than they have let on possibly.Sandersons -Can you give the exact repayment date of the current 2.9m loan facility?There is no set date and this is a very fluid arrangement. The distinct impressions I got was that there is alot more commitment between all these parties towards eachother than we give them credit for. Sandersons are not there to screw KIBO over for missed dates etc. From what LC said it seems very fluid and flexible. He seemed relaxed to the point of dismissing this as any issue whatsoever. How much currently of the facility has been drawn?I found it hard to believe they didn't know the answer to this but felt it was more a point of not wanting to give any shareholders privileged information, therefore, as it stands we received no figure on this.Given the slippage in timelines for FC what contingencies have you in place for settlement of monies drawn under the current Sandersons agreement and how can we best expect you to negotiate a solution to this?See above. Totally unworried, I suspect an alternative cash injection possibly from selling part of this his he MCPP down, potentially GE appeared the favourites imo.Do you conceed that where Sandersons has the right to convert up to £1.5m of amount drawn down on the Facility into Kibo Shares at the 30 day VWAP prior to the repayment date of the total Facility amount that there is an interest in the KIBO share price being low going through this period for them?LC seemed to be of the opinion this wasn't in Sandersons interest to have a low share price. I asked him if maybe it was in their favour for a short time i.e the 30 day VWAP period at least to get the max shares for the upto 1.5m but LC seemed to say the it was at our discretion whether upto max 1.5m of the facility was repayable as shares. I assume that as the deal and a repayment date seem flexible this maybe isn't a problem as previously explained but also I feel he has access to an alternate funding to eliminate this problem. I.e selling down a small stake in the MCPP possibly.How you you feel about this, as lot of investors feel uncomfortable with it and suspect some share price manipulation?They have and our investigating but so far have not found how or who is//could be causing any manipulation.Beaufort -Given the significant progress made with the MCPP, how do you feel when your house broker cannot upgrade their stock recommendation, despite your best efforts? Also how do you feel this looks to new or potential investors from the outside?Very small potatoes in the grand scheme of things.Government of TanzaniaWhat actually tangible evidence can you show investors as to the government being completely behind this project at this point?Look there isn't a letter or anything assigning KIBO any such special privileges. It's something that needs to happen and KIBO have got themselves to the front of the queue in terms of project development They have great relationships in terms of being completely transparent and honest with the Government and this extends both ways.Can we have some insight as to how KIBO benefits from a supposedly 'special' relationship with the Government?See aboveHave you any agreement with the government in any form that the MCPP will provide Stage 2 and 400MW for export via the ZTK?Yes this seems obviously where this second stage is going to go, however LC also and passionately pointed out this was not the only option. Only 300MW or Stage 1 can be evacuated into the grid as it stands now. However as an IPP'S he can sell Power to whomever he likes. It need not only be to Tanesco or into the ZTK. He can deal directly with the EAPP too for example or sell as to cement factories etc etc.Sepco III -:-) Can you confirm that KIBO initiated the revision to the original JDA agreement with SEPCO III for their best interests and not that Sepco the JDA was revised as they were not prepared to commit funds due to low IRRS of the Power side of the project.Emphatically and rightly pointed out by LC. Why would SEPCO enter into a deal for 1.8m plus 3.6m just for backcosts and nothing else when the original deal was $3m for 15%. There was no need for further discussion.NPV -Who verified or confirmed the RNS'D NPV figures?Tractebel, MINXCOM etc plus these were again independently assessed, produced and verified.Can you 100% confirm the NPV figures quoted of just shy of $500m per 300MW configuration are figures post debt interest, as I expect them to be.See above, do you really think these companies don't know how to calculate NPV that relates to the rest of the business world? Institutional Investors -You been on record as saying approx 50% of calls into you were from Investors wanting to get in on the MCPP. How come - barring Sandersons, we have no institutional investors notifiable in Kibo?LC was of the opinion that we are under the radar of serious II's. At a 30m cap they will become inerested and can invest. He has had alot of interest, so imo, on the back of significant news we won't possibly retrace next time we go past 10p, we might have bigger buyers buying into the price at the level for the reasons stated.Do you see this as an issue and are you attempting to address it?See above.Diversified Mining - What is the minimum mining permission needed for Kibo to start selling coal locally or will we be waiting for an all encompassing SML?It will be covered under the SML, already applied for.If less than an SML what is the minimum period to get it and can it be converted to an SML later?It will be covered under the SML already applied for.We know the Capex of the mine with regards the MCPP is $17m, what is the CAPEX for getting the mine into early production and how do you intend to raise this amount?The mine is the mine, it will take $17mWhat ia the current sell price per tonne of Tanzanian coal in local market?Amazingly $60/ $70 per mtWhat is the profit margin per tonne?No commentWhat is the nitial and potential sales potential for local domestic market?A lot of interest has been shown so far and still feeling out its full potential.Is there much competition in local market?Not much only one company he mentioned, he didn't seemed to know quite who Edenville would have as customers. Most other mines will have high transportation costs where as at Mbeya they are right on the train track therefore will be able to keep their costs down and provide coal still a lower price than other companies. LC was adamant no one would beat them for price.Is exporting of this coal feasible and being explored?Not impossible but for internal use only for now.CSR Program -What else will this entail and under what conditions were you required to run this?This was triggered via the ESIA but nothing else significant is planned for now.
12/6/2017
13:59
bionictwat: UKIS 2017 KIBO NotesPolicy Changes -Can you explain the difference between the Tanzanian Energy and Policy Procurement Review that is underway, as per the recent presentation and the MEM Policy Review that is completed as per 23/3/17 RNS?These are two completely diffrent reviews. It's hard to put a linear %, in terms of how much of the TEPPR is completed but it's believed the main components have been completed and these aren't really a dealing factor to the ultimate delivery of the project. There is a gazetting process to ensure any changes don't conflict with any other laws etc before being made official.In your assessment how long will the Tanzainan Energy And Policy Procurement Review take to complete?Unable to accurately say but see above that the main bulk of the work has been completed already. So we should be on the home straight.As discussed last year, can you tell me of which, if either, KIBO have had direct input too?Yes they have had input into both of these. Therefore, I read they must have reasonable knowledge of the processes and there shaping of the future.Overall how do you expect all policy changes to benefit the MCPP?Kibo will be benefit for a more robust, solid and sustainable set of rules within the overall framework of reliability within Tanzania. I.e it will ensure all payments etc will be made as agreed which is important for a project like the MCPP which is going to, run for over 25 years.ESIA -What does the ESIA Certification process involve?Literally just a final check and a signing off process. There could be the odd question that may come back to KIBO or a confirmation of certain elements but basically it is what it is, a signing up process.Given the timelines for ESIA certification acquired by other companies, the ESIA certification for KIBO should be imminent. Is there anything else that is holding this up i.e hanging on outstanding policy changes and should we expect this any day now, by that reasoning?Yes KIBO are awaiting this to drop anytime now with nothing else holding this up.SML -Given the timelines for SML approval acquired by other companies, the SML approval for KIBO should be imminent. Is there anything else that is holding this up i.e hanging on outstanding policy changes and should we expect this any day now, by that reasoning?Again, yes KIBO are awaiting this to drop anytime now with nothing else holding this up.PPA -Given the phrases used in the RNS of the 23/3/17 of 'ensuring that a final PPA can be concluded ASAP'. Can we verify that preliminary PPA tariffs were applied to the facilitate the production of the IBFS and Financial Model?The conversation quickly negated this section of questions. LC explained that we have no figures to plug in anywhere and this method of thought is the direct opposite to what is actually happening in reality in this process. We are working this completely the other way around. We are saying what the tariff figures should be, driven from the independently produced figures via the feasibility studies completed. We have control and push negotiations to where we want them to be not the other way around. To me, this means we guarantee a profitable outcome for the project. If so, we're these preliminary PPA tarriffs agreed with Tanesco?N/AAgain, and if so, are the accuracy of these tariffs still withstanding given the policy reviews?N/AFC -Can we assume once we have an ESIA, SML and PPA we can advance straight to FC or are there any other workstreams that need completing that will hold up going to FC? Yes, although some parallel work means part of FC can already be in progress. It is possible to call a scenario of being in a Preliminary FC.Are SEPCO bound to pay you the $3.6m on entering FC or at the completion of FC?This will be on competition of FC but this is not seen to cause any problems in anyway.Will there be a news blackout during FC due to its sensitive nature?Once we reach FC, or more accurately on signing the PPA, that is when the real figures and detail can be released. LC seemed to allude on more than one occasion to look at the figures for the coal that you can workout to give a good pointer to the value that lies ahead. Therefore I don't see FC as requiring a suspension or news blackout.MCPP General -How our partners feel about the delays induced by the Government?They seem pretty understanding of the region and it's development. Obviously they have huge budgets and can outside these types of delays, so no issue here.Did Sandersons acquisition of part of the MCPP surprise you, especially vs their usual MO?LC agreed that obviously it isn't there normal line of business and that it probsbly surprised Sandersons themselves more than it did himself when they got so deeply involved. They have made a huge commitment that the believe they will benefit from.Are you any closer to knowing whether the project will be separated or integrated?No comment.What is your gut feel on which route you prefer to go down?No comment.Do you feel a 30% retention as previously alluded to is realistic or had that changed +/-?Yes this is entirely still possible and and therefore valid figure to base any calculations on.When Sandersons took their 2.5% valuing the MCPP at a discounted $100m, what was the agreed discount valued at?Although he couldn't recall the discounted figure he interesting said this value was based only on the figures from the mine. This took me back a touch as it was the complete opposite to what I expected. In fact, it may well, give rise to the fact my recent 25p a share figure for u the mine for each 300MW is too low. It puts it back to being more 35p and discounted at that !!! He must be expecting a much better price than $32.7mt for the coal being sold into the plant, imo.Can you confirm this 2.5% of the MCPP includes the mine. N/AHow does the MEN's statement that 30% of Tanzanian Mining Companies Share holding must be floated on the DSE affect all of our projects especially the MCPP?This would only affect projects that require an SML. Therfore only affect the MCPP. That said, LC was of the opinion that this would in all likelyhood NOT apply to us due to the National Strategic Importance of the project. Make of that, what you will.Can we still expect the MCPP to be spun out ala Katoro?It will either be spun out or in all likelyhood hood, Hanetti will be spun out leaving the MCPP on its own with KIBO.If so at what point would you need to initiate this?N/A. As an aside Noel seemed very excited about Hanetti. I had the feeling more work had been going on there than they have let on possibly.Sandersons -Can you give the exact repayment date of the current 2.9m loan facility?There is no set date and this is a very fluid arrangement. The distinct impressions I got was that there is alot more commitment between all these parties towards eachother than we give them credit for. Sandersons are not there to screw KIBO over for missed dates etc. From what LC said it seems very fluid and flexible. He seemed relaxed to the point of dismissing this as any issue whatsoever. How much currently of the facility has been drawn?I found it hard to believe they didn't know the answer to this but felt it was more a point of not wanting to give any shareholders privileged information, therefore, as it stands we received no figure on this.Given the slippage in timelines for FC what contingencies have you in place for settlement of monies drawn under the current Sandersons agreement and how can we best expect you to negotiate a solution to this?See above. Totally unworried, I suspect an alternative cash injection possibly from selling part of this his he MCPP down, potentially GE appeared the favourites imo.Do you conceed that where Sandersons has the right to convert up to £1.5m of amount drawn down on the Facility into Kibo Shares at the 30 day VWAP prior to the repayment date of the total Facility amount that there is an interest in the KIBO share price being low going through this period for them?LC seemed to be of the opinion this wasn't in Sandersons interest to have a low share price. I asked him if maybe it was in their favour for a short time i.e the 30 day VWAP period at least to get the max shares for the upto 1.5m but LC seemed to say the it was at our discretion whether upto max 1.5m of the facility was repayable as shares. I assume that as the deal and a repayment date seem flexible this maybe isn't a problem as previously explained but also I feel he has access to an alternate funding to eliminate this problem. I.e selling down a small stake in the MCPP possibly.How you you feel about this, as lot of investors feel uncomfortable with it and suspect some share price manipulation?They have and our investigating but so far have not found how or who is//could be causing any manipulation.Beaufort -Given the significant progress made with the MCPP, how do you feel when your house broker cannot upgrade their stock recommendation, despite your best efforts? Also how do you feel this looks to new or potential investors from the outside?Very small potatoes in the grand scheme of things.Government of TanzaniaWhat actually tangible evidence can you show investors as to the government being completely behind this project at this point?Look there isn't a letter or anything assigning KIBO any such special privileges. It's something that needs to happen and KIBO have got themselves to the front of the queue in terms of project development They have great relationships in terms of being completely transparent and honest with the Government and this extends both ways.Can we have some insight as to how KIBO benefits from a supposedly 'special' relationship with the Government?See aboveHave you any agreement with the government in any form that the MCPP will provide Stage 2 and 400MW for export via the ZTK?Yes this seems obviously where this second stage is going to go, however LC also and passionately pointed out this was not the only option. Only 300MW or Stage 1 can be evacuated into the grid as it stands now. However as an IPP'S he can sell Power to whomever he likes. It need not only be to Tanesco or into the ZTK. He can deal directly with the EAPP too for example or sell as to cement factories etc etc.Sepco III -:-) Can you confirm that KIBO initiated the revision to the original JDA agreement with SEPCO III for their best interests and not that Sepco the JDA was revised as they were not prepared to commit funds due to low IRRS of the Power side of the project.Emphatically and rightly pointed out by LC. Why would SEPCO enter into a deal for 1.8m plus 3.6m just for backcosts and nothing else when the original deal was $3m for 15%. There was no need for further discussion.NPV -Who verified or confirmed the RNS'D NPV figures?Tractebel, MINXCOM etc plus these were again independently assessed, produced and verified.Can you 100% confirm the NPV figures quoted of just shy of $500m per 300MW configuration are figures post debt interest, as I expect them to be.See above, do you really think these companies don't know how to calculate NPV that relates to the rest of the business world? Institutional Investors -You been on record as saying approx 50% of calls into you were from Investors wanting to get in on the MCPP. How come - barring Sandersons, we have no institutional investors notifiable in Kibo?LC was of the opinion that we are under the radar of serious II's. At a 30m cap they will become inerested and can invest. He has had alot of interest, so imo, on the back of significant news we won't possibly retrace next time we go past 10p, we might have bigger buyers buying into the price at the level for the reasons stated.Do you see this as an issue and are you attempting to address it?See above.Diversified Mining - What is the minimum mining permission needed for Kibo to start selling coal locally or will we be waiting for an all encompassing SML?It will be covered under the SML, already applied for.If less than an SML what is the minimum period to get it and can it be converted to an SML later?It will be covered under the SML already applied for.We know the Capex of the mine with regards the MCPP is $17m, what is the CAPEX for getting the mine into early production and how do you intend to raise this amount?The mine is the mine, it will take $17mWhat ia the current sell price per tonne of Tanzanian coal in local market?Amazingly $60/ $70 per mtWhat is the profit margin per tonne?No commentWhat is the nitial and potential sales potential for local domestic market?A lot of interest has been shown so far and still feeling out its full potential.Is there much competition in local market?Not much only one company he mentioned, he didn't seemed to know quite who Edenville would have as customers. Most other mines will have high transportation costs where as at Mbeya they are right on the train track therefore will be able to keep their costs down and provide coal still a lower price than other companies. LC was adamant no one would beat them for price.Is exporting of this coal feasible and being explored?Not impossible but for internal use only for now.CSR Program -What else will this entail and under what conditions were you required to run this?This was triggered via the ESIA but nothing else significant is planned for now.RNS -General feedback is that RNS' need more proof reading, could include more numbers for the market to correctly value us on, along with maybe a little shine when we do things well, although I do think we attempt to hide not so good news well.It was noted but felt most issues were not related to the real material news.Q & A -Given the amount of mails sent into you that must take up valuable time, can we schedule a monthly Q & A through Vox Markets, as this seemed to be a great way of investors being able to interact with you on current issues and may not only cut down on your email inbox but act as great PR.Dedicated email address to be set up with a monthly Q and A sessions as previously conducted via Vox.SP Value -As much as we can see progressions on all project fronts and especially the MCPP, do you conceed that there is only a material increase in share price value when the share is consistently worth more this year than it was last year?Although I didn't ask this the general conversation regarding the share price led to the opinion there will be several significant catalysts for share price improvement coming over the next 2/3 months.To that end, what do you think will be the trigger for realising solid share price value with regard the MCPP, bar an offer being made for the project.See above.I have a value of approx $150-175m for selling a 300MW config with the coal, if retained being worth 25p at the 32.7mt price. Do you feel this is accurate?Approached the his in a slightly more round about way. They certainly didn't argue and I felt this wasn't far off of what they were thinking either.If sold, how do you I tend to make sure we don't end up selling a 1000MW plant for the price of a discounted 300MW plant.This was probably the most significant part of the his home day for me. Each 300MW will be sold as as separate company. Different level of ownership could be assigned over each stage. Therefore KIBO can benefit and realise from the full 1000MW. This IMO, significantly raises the value of the total investment we could realise given a longer term view. Assuming this does reach FC then alot more is at stake than a 300MW value. This alone as the most revealing part of the day. There is an absolutely massive value waiting to be unlocked. I also asked if now relationships between all parties had been established if a rinse and repeat of the whole project could be on the cards? LC just smiled and said, "Yes, of course it could".How do you best expect to materially realise value back to all share holders, would a special dividend vs income be your preferred method of distribution?A special dividend would always be a way to go, when realising share holder value.
Kibo Mining share price data is direct from the London Stock Exchange
Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:40 V: D:20171218 14:27:59