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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Kibo Energy Plc | LSE:KIBO | London | Ordinary Share | IE00B97C0C31 | ORD EUR0.0001 (CDI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0375 | 0.035 | 0.04 | 0.0425 | 0.0375 | 0.0425 | 3,606,771 | 12:17:48 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Gold Ores | 1.04M | -9.78M | -0.0026 | -0.15 | 1.51M |
TIDMKIBO
RNS Number : 5558B
Kibo Energy PLC
11 June 2021
Kibo Energy PLC (Incorporated in Ireland) (Registration Number: 451931)
(External registration number: 2011/007371/10) Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 11 June 2021
Kibo Energy PLC ('Kibo' or the 'Company')
Results for the Year Ended 31 December 2020
Kibo Energy PLC ("Kibo" or the "Company"), the multi-asset, Africa focused energy company, is pleased to release its consolidated annual financial results for the year ended 31 December 2020. The Company's Annual Report, which contains the full financial statements is in the process of being prepared for dispatch to shareholders. A copy of this Annual Report is also available from the Company's website at www.kibo.energy at the following link http://kibo.energy/wp-content/uploads/Kibo-Annual-Report-2020-Final.pdf . The financial statements are set out below and should be read in conjunction with the 2020 Annual Report.
Details of the date and venue for this year's AGM will be announced in due course.
Overview
Financial (including the consolidated results of MAST Energy Developments Plc and Katoro Gold Plc)
-- Loss after tax GBP6,417,237 (2019: GBP3,903,116 loss)
o GBP2,448,710 of total loss for the period stems from consolidated results of Katoro Gold Plc, which is separately funded
-- Administrative expenditure year to year remains fairly consistent at GBP3,393,687 (2019: GBP2,922,927)
-- Listing and capital raising fees increased from GBP729,072 to GBP1,027,658 due to the MED listing;
-- Additional exploration expenditure of GBP1,122,676 incurred in 2020 by Kibo's subsidiary, Katoro, on the Blyvoor JV Project in South Africa;
-- Cash outflow from consolidated operating activities consistent year to year GBP2,374,684 (2019: GBP2,392,495 cash outflow), including the consolidated cash outflows of MAST Energy Developments Plc and Katoro Gold Plc respectively, both which are separately funded;
-- Cash outflow from company operating activities have declined year to year GBP396,994 (2019: GBP490,210 cash outflow);
-- Total net debt (cash less debt) GBP2,046,772 (2019: GBP1,456,217 net debt); -- Basic and diluted EPS GBP0.003 loss (2019: basic and diluted GBP0.004 loss).
Operational highlights in the 2020 year
-- Continued advancement of the development of our key projects: - the Benga Power Plant Project in Mozambique ("Benga Project"); - the Mabesekwa Coal Independent Power Project in Botswana ("MCIPP Project"); - the Mbeya Coal to Power Project in Tanzania ("Mbeya Project");
- the UK's Reserve Power Market Projects ( Bordesley Energy Project") held by Kibo's subsidiary MAST Energy Developments Plc; and
- the Blyvoor Gold Tailings Project ("the Project") and the Haneti Nickel Project held by Kibo's subsidiary Katoro Gold Plc.
-- The Benga Project, located in the Tete province of Mozambique, is the Company's highest development priority; it holds a 65% interest in the project with the remaining 35% held by a local company, Termoeléctrica de Benga. The project was developed for a c. 150 MW PPA with local state electric utility Electricidade de Moçambique ('EDM'). An updated Memorandum of Understanding was signed with EDM during 2020, which provides for its continued support and commitment to negotiate a PPA for power off-take for the national grid. The project is now in the process of being upgraded to accommodate a c. 20O MW additional private commercial off taker in the form of the Tete Steel and Vanadium Project with Baobab Resources Ltd ('Baobab'). To date, the Defined Feasibility Study was updated and optimised to satisfy EDM and Baobab's power off-take requirements with the incorporation of a grid impact assessment and integration studies as well as an updated technical and financial review of the project during the second half of 2020.
-- The MCIPP Project in Botswana sees Kibo assume a 35% equity interest in the total 761 Mt Mabesekwa Coal Resource while maintaining its 85% interests in the existing MCIPP project for the development of a 300 MW coal to power plant and participate as a 35%-40% partner with Shumba for the development of a second 300 MW power with electricity output directed solely to a petrochemical plant being developed by Shumba and other parties. The project is aligned with Shumba's progress and therefore assumes a low development priority in the Kibo portfolio.
-- The Mbeya Project, with its 120 Mt Coal Resource, developed to a 1,5 million tonnes per annum mine, holds seven mining rights over the coal resource that will provide fuel to the 300 MW MCPP thermal power plant. The MCPP Environmental Impact Assessment certification for both mine and power station remain valid. The Company continues to work closely with the Tanzanian Government, partners, and other stakeholders to identify and investigate alternative commercial opportunities both within Tanzania and regionally.
-- The Bordesley Energy Project progressed the Bordesley 5 MW base case with upward optimization capability of 19.12 MW, amongst other development work such as EPC Scope of Works, entering into a 20-year tenancy agreement with two 5-year extension periods with the landlord. This term is synchronous with gas reciprocating engine life expectancy and optimizes commercial and technical outcomes. Bordesley now has numerous optimization options to develop as a Reserve Power generation hub by virtue of shared infrastructure with Target 2, power generation off-take by proxy sales and economy of scale due to two close-by Reserve Power sites totalling 14.12 Mw of generating capacity which culminates in EPC and Balance of Plant ("BOP") economy of scale project costs and timelines.
-- Katoro, entered into a binding conditional agreement to form a 50/50 unincorporated joint venture in South Africa, focused on the reprocessing of an existing 1.34 million ounce of gold JORC compliant tailings resource, completed technical work related to the upgrade and restatement of the Blyvoor Gold Tailings Project resource statement and completed additional technical and financial work that was conducted in response to the recommendations and findings of the Blyvoor Scoping Study. Katoro is currently in the processes of finalizing a comprehensive funding package in accordance with the Blyvoor Joint Venture ("the JV") that will allow the construction, commissioning and operation of a mining and processing facility capable of processing 500,000 tonnes of tailings material per month, at an average Life of Mine ("LoM") gold grade of 0.29 g/t and confirmed recovery of 51%, before incorporating recovery gains from the latest metallurgical optimization tests. The optimization results indicated that overall recoveries of up to 60% can be achieved by milling the coarser fraction (+75um) of the feedstock which comprises around 30% of the total Run of Mine ("RoM").
-- Katoro, concluded the disposal of its Imweru and Lubando Gold Projects in Tanzania for a total staged cash consideration of up to US$1.0 million and a 1.5% Net Smelter Royalty.
-- Funding of GBP1.45 million through placing completed in late 2020 which has enabled the Company to continue with our project development plans and ongoing working capital requirements during 2021.
-- The Directors continue to consider it appropriate to prepare the financial statements on a going concern basis, as the Group has sufficient funds for its present working capital requirements for the foreseeable future due to the c. GBP698k funds secured from warrants exercised in Kibo Energy Plc in 2021 to date and Katoro Gold Plc in excess of GBP500k, and funds raised in excess of GBP5m from the recent listing of Mast Energy Developments Plc. This is further expanded on in the annual financial statements.
Post period highlights and Outlook
-- On the 14 April 2021, Mast Energy Developments Plc completed a successful IPO on the Official List of the London Stock Exchange by way of a Standard Listing raising GBP5.4m with a market capitalisation on admission of GBP23m. Kibo remains a majority shareholder at 55.4%. listed on the London Stock Exchange.
-- MAST Energy Developments Plc , has progressed the acquisition transaction announced in the RNS of 7 September 2020, to the point where it is now finalizing a definitive Share Purchase Agreement ("SPA") to acquire 100% of the 9MW flexible gas power project (the 'Acquisition').
-- Kibo and its local JV partners in the Benga Power Project recently attended a workshop with EDM in Maputo to discuss and agree the next steps towards the ultimate finalization of a PPA. During the meeting the final optimised definitive feasibility study, inclusive of the updated grid integration study, and a summary of an updated draft financial model was presented and discussed as the fundamentals that will guide and focus the further course of the PPA process. This will ensure that a final result is obtained at the earliest opportunity possible.
-- Kibo takes major step forward in execution of the Company's renewable energy strategy, by way of commencing an extensive due diligence process in relation to the potential acquisition of all or part of a prospective portfolio of UK renewable energy projects. The opportunity consists of several attractive standalone renewable energy projects in the UK, focusing on the generation and/or storage of electric power from renewable generation sources. The portfolio consists of several waste-to-energy projects in which the Company has negotiated exclusivity and a first right to acquire, subject to successful due diligence results and an agreement on commercial terms and conditions. Any successful acquisition(s) from the project portfolio will enhance Kibo's strategy, which is focused on transforming and integrating conventional energy generation into sustainable renewable energy, and in the process support the UK's Renewable Energy Strategy.
-- Kibo entered into an agreement with South Africa-based Industrial Green Solutions (Pty) Ltd ('IGES') to jointly develop a portfolio of Waste to Energy projects in South Africa ('the Agreement') with an initial target of generating more than 50 megawatts of electricity for sale to industrial users. The Agreement, which is subject to the satisfaction of certain conditions, is in line with Kibo's strategy to integrate renewable energy into its project pipeline, which includes three utility-scale power generation and mining projects.
-- We are very excited about our new renewable energy initiatives which is focussed on addressing the non-recyclable plastics crisis to reduce the amount ending up in landfill by addressing this problem through a process of Pyrolysis which converts plastic waste into syngas which in turn generates electricity. Our renewable generated electricity will be sold to offtake partners, and our substantial combined project pipeline of waste to energy projects in the UK and ZA with two near term targets which we aim to take into production, will greatly assist in the realisation of our strategy and value to shareholders.
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
For further information please visit www.kibo.energy or contact:
Louis Coetzee info@kibo .energy Kibo Energy Chief Executive Officer PLC Andreas Lianos +357 99 53 1107 River Group JSE Corporate and Designated Adviser --------------------------- ------------------ ---------------------------- Claire Noyce +44 (0) 20 3764 Hybridan LLP Broker 2341 --------------------------- ------------------ ---------------------------- Bhavesh Patel +44 20 3440 6800 RFC Ambrian NOMAD on AIM / Stephen Allen Ltd --------------------------- ------------------ ---------------------------- Isabel de Salis info@stbridespartners.co.uk St Brides Partners Investor and Media Relations / Charlotte Hollinshead Ltd Adviser --------------------------- ------------------ ----------------------------
CHAIRMAN'S REPORT
I am pleased to provide a review of our activities during the period and to present our full-year audited accounts for 2020.
Kibo's strategy remains to develop utility-level and standalone, sustainable, affordable energy solutions through the design, build, construction and operation of clean energy solutions, integrated with renewable and intelligent storage solutions. A cornerstone of this strategy is the integration of suitable, sustainable renewable technologies with proven clean low-cost coal base load technology in all our project development plans, with the assumption that base load energy plays a very important role in addressing the increasing demand for affordable, reliable and sustainable electricity in our geographic focus areas.
As we support the global strategic concept of sustainability, we continue to seek best of breed environmentally friendly technological solutions, working with our strategic development partners through existing collaboration agreements.
In this regard, during the year, we advanced the development of our key projects: the Benga Power Plant Project ("BPPP" or "Benga Project") in Mozambique; the Mabesekwa Coal Independent Power Project ("MCIPP" or "Mabesekwa Project") in Botswana; and the Mbeya Coal to Power Project ("MCPP") in Tanzania.
A key focus area, the entry into the UK's Reserve Power Market, has taken shape with the recent listing of MAST Energy Developments Plc ("MED") on the 14 April 2021. We have now sent MED off on its own path, as we did with Katoro Gold some years ago.
As we look back on 2020, while we set a solid platform for continued work in FY 2021, we were undoubtedly impacted by the ongoing impact of Covid-19. While the MCPP and MCIPP projects were most materially impacted, they remain in good standing and we continue to explore how we can extract best value from them.
In Mozambique, we made great strides developing the Benga Project, increasing our future off take potential by more than 100% through the inclusion of the Baobab development in the Benga portfolio.
We were also pleased with the progress of MED, and with its IPO and admission now completed, and Kibo's retention of the majority shareholding it continues to provide, now more than ever the prospect of short term revenue and real opportunities to participate in the development of alternative energy solutions.
On the corporate side, keeping the Company funded presented on-going challenges due to the low share price and the general uncertainty created by the Covid-19 pandemic. We have however steadied the ship and can see clearer waters ahead in 2021. In this regard, a GBP1 million convertible loan note facility with a first drawdown tranche of GBP300,000 in August was replaced with a broker sponsored placing with ETX Capital Limited in September for total proceeds of GBP1,450,000, meeting our working capital requirement to allow us to reach key development milestones, particularly for the Benga and MED projects, during the second half of 2020.
Being able to secure funding during this difficult period is testament to the belief in our company by investors and other stakeholders.
The result for the reporting period amounted to a loss of GBP6,417,237 for the year ended 31 December 2020 (31 December 2019: GBP3,903,116) as detailed further in the Statement of Profit or Loss and Other Comprehensive Income, and further details on financial activities are detailed elsewhere in the Annual Report.
In addition to our interest of c. 55.4% in MED, I would also like to mention our investment in Katoro Gold PLC (AIM: KAT/www.katorogold.com), which currently stands at 25.37%. Katoro is making excellent advances pursuing robust development opportunities in battery base metals and gold projects.
Both of these companies have a short term view to production and revenue and we look forward to their accelerated project plans for FY 2021.
We are optimistic and positive about the Kibo Group of companies. We have used 2020 to consolidate and refine planning and look forward to a year of success in FY 2021.
In closing, I would like to acknowledge the support of our shareholders, especially those who have helped the Company directly through the past year. Also, I would like to thank our Board and management under the strong leadership of our CEO, Louis Coetzee, for their hard work in guiding the Company through this challenging period.
They continue to show the skill and leadership to realise our strategy of becoming a successful global developer of sustainable energy projects in an industry in this transitional phase from fossil fuels to renewable energy generation.
_____________________________
Christian Schaffalitzky
Chairman
10 June 2021
REVIEW OF ACTIVITIES
Introduction
Kibo aims to be a significant regional broad based energy developer of sustainable power solutions, integrating clean-burning fossil fuel, renewable generation and energy storage technology. Its operational objectives for the period focused on project development and delivery as well as accelerating the integration of solutions that enable the Company to ultimately transition from using clean fossil fuel technology to renewable energy technology solutions and the implementation of a sustainable funding model to enable these objectives.
During FY 2020, Kibo continued to advance its African and UK energy projects, albeit at a slower pace than originally scheduled due to the impact of the Covid-19 pandemic on field operations. The Company has continued to maintain its business relationships and operational capability during this difficult period and is well positioned to quickly accelerate its development schedules in a post pandemic world.
Operations
Tanzania - Mbeya Project ("MCPP" or "Mbeya Project")
The MCPP remains a key project, being fully developed, funding ready and still acknowledged by the Tanzanian Government. The project suffered a minor setback from what we believe to be clumsy tendering procedure and efforts are on the way to get the project back on track in Tanzania. The untimely passing of the Tanzanian President unfortunately put a stop to all statutory proceedings.
The project, with its 120 Mt Coal Resource*, developed to a 1,5 million tonnes per annum mine, holds seven mining rights over the coal resource that will provide fuel to the 300 MW MCPP thermal power plant. The MCPP Environmental Impact Assessment certification for both mine and power station remain valid.
The Company continues to work closely with the Tanzanian Government, partners and other stakeholders to identify and investigate alternative commercial opportunities both within Tanzania and regionally.
*Kibo confirms that there has been no material change to the Mbeya Coal Resource since the Coal Resource estimate was first published as part of the RNS dated 11 April 2016 which is available on its website www.kibo.energy .
Mozambique - Benga Power Plant Project ("BPPP" or "Benga Project")
The Benga project, located in the Tete province of Mozambique, is the Company's highest development priority; it holds a 65% interest in the project with the remaining 35% held by a local company, Termoeléctrica de Benga.
The project was developed for a c. 150 MW PPA with local state electric utility Electricidade de Moçambique ('EDM'). An updated Memorandum of Understanding was signed with EDM during 2020, which provides for its continued support and commitment to negotiate a PPA for power off-take for the national grid.
The project is now in the process of being upgraded to accommodate a c. 20O MW additional private commercial off taker in the form of the Tete Steel and Vanadium Project with Baobab Resources Ltd ('Baobab') . To date, the DFS was updated and optimised to satisfy EDM and Baobab's power off-take requirements with the incorporation of a grid impact assessment and integration studies as well as an updated technical and financial review of the project during the second half 2020. The proposed power plant footprint was also increased with the acquisition of additional land increasing the project site by 345 hectares principally to provide for the incorporation of renewable energy technologies on-site. Discussions are also ongoing with regards to providing auxiliary power requirements for the first phase of a 250,000 tpa steel rolling mill of the Baobab Tete Steel Project, on a build, own and operate basis.
The Benga project is a key enabler of Tete Steel and Vanadium project, which in turn is a key enabler of the Mozambique Revuboe Industrial Free Zone ('RIFZ'), intended to bolster the economy in the resources rich Tete Province.
United Kingdom - Mast Energy Developments Plc ("MED")
MED, intending to participate in the UK Reserve Market, is an exciting addition to the Kibo stable.
The recent listing of the Company's now 55.42% subsidiary MED Plc on the London Stock Exchange on 14 April 2021 where it raised c. GBP5m as part of an IPO, will enable it to accelerate development and commissioning of its existing flexible power sites and allow acquisition of additional sites. MED's target is to assemble a portfolio of well-located flexible power sites in the UK, commencing with c. 50 MW in year one and building up to a portfolio of up to 300 MW of flexible power generating capacity over the next few years.
Botswana- Mabesekwa Project ("MCIPP" or "Mabesekwa Project")
Kibo negotiated a major re-structuring and expansion of its Botswana energy asset holdings in September 2019 in collaboration with Shumba Energy Limited. The binding Heads of Agreement saw Kibo assume a 35% interest in the total 761 Mt Mabesekwa Coal Resource* while maintaining its 85% interests in the existing MCIPP project for the development of a 300 MW coal to power plant and participate as a 35%-40% partner with Shumba for the development of a second 300 MW power with electricity output directed solely to a petrochemical plant being developed by Shumba and other parties. The project is aligned with Shumba's progress and therefore assumes a low development priority in the Kibo portfolio.
*The Company confirms that there has been no material change to the Mabesekwa Coal Resource since the Coal Resource estimate was first published as part of the announcement dated 21 June 2018 which is available on its
website www.kibo.energy
Corporate
During 2020, the Company undertook various funding initiatives to ensure the ongoing development of its projects. As part of this process, it embarked on aggressive austerity measures to preserve cash whilst being able to continue with core activities and raised c. GBP 1.4 million.
In preparation for, and to facilitate the listing of the MED Plc on the London Stock Exchange, recently completed, the Company undertook corporate restructuring within and between the Kibo and MED group companies during 2020. The latter part of 2020 was spent in preparation of the intended MED IPO, which was completed within budget and time. A regrettable delay in FCA approval pushed the time line out by more than three months.
_______________________________
Louis Coetzee
Chief Executive Officer
10 June 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are stated in Sterling GROUP ------------------------------------------- 31 December 31 December 2020 2019 ----------- ------------------------------ Audited Audited ---- Note GBP GBP ---- Revenue - - Administrative expenses (3,393,687) (2,922,927) Listing and capital raising fees (1,027,658) (729,072) Exploration expenditure (2,052,202) (897,039) ----------- ------------------------------ Operating loss 3 (6,473,547) (4,549,038) Investment and other income 2 78,945 645,922 Share of loss from associate 11 (332) - Finance costs (22,303) - Loss before tax 3 (6,417,237) (3,903,116) Taxation 6 - - ----------- ------------------------------ Loss for the period (6,417,237) (3,903,116) Other comprehensive loss: Items that may be classified subsequently to profit or loss: Exchange differences on translation of foreign operations 152,635 86,098 Exchange differences reclassified on disposal of foreign operation 121,670 - Other Comprehensive loss for the period net of tax 274,305 86,098 Total comprehensive loss for the period (6,142,932) (3,817,018) ----------- ------------------------------ Loss for the period (6,417,237) (3,903,116) ----------- ------------------------------ Attributable to the owners of the parent (4,726,286) (3,500,004) Attributable to the non-controlling interest (1,690,951) (403,112) Total comprehensive loss for the period (6,142,932) (3,817,018) ----------- ------------------------------ Attributable to the owners of the parent (4,451,981) (3,415,653) Attributable to the non-controlling interest (1,690,951) (401,365) Loss Per Share Basic loss per share 8 (0.003) (0.004) Diluted loss per share 8 (0.003) (0.004)
All activities derive from continuing operations.
The Group has no recognised gains or losses other than those dealt with in the Statement of Profit or Loss and Other Comprehensive Income.
The accompanying notes on pages 50-80 form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 10 June 2021 and signed on its behalf by:
On behalf of the Board
______________________________ ________________________ Christian Schaffalitzky Noel O'Keeffe CONSOLIDATED STATEMENT OF FINANCIAL POSITION GROUP All figures are stated in Sterling -------------------------------------------------- 31 December 31 December 2020 2019 ------------ ------------ Audited Audited ---- ------------ ------------ Note GBP GBP ---- ------------ ------------ Assets Non--Current Assets Property, plant and equipment 9 2,118 64,405 Intangible assets 10 18,491,105 18,491,105
Investments in associates 11 9,696,351 9,696,683 Other financial assets 12 - 37,661 Goodwill 14 300,000 300,000 Total non-current assets 28,489,574 28,589,854 ------------ ------------ Current Assets Other financial asset 12 - - Trade and other receivables 15 115,886 380,693 Cash 16 256,760 91,634 Total current assets 372,646 472,327 ------------ ------------ Assets classified as held for sale 17 - 794,074 Total Assets 28,862,220 29,856,255 ============ ============ Equity and Liabilities Equity Called up share capital 18 20,411,493 19,532,350 Share premium account 18 44,312,371 42,750,436 Control reserve 19 (18,329) (18,329) Share based payment reserve 20 1,728,487 1,504,513 Translation reserve 21 (598,637) (872,942) Retained deficit (39,019,856) (34,625,954) ------------ ------------ Attributable to equity holders of the parent 26,815,529 28,270,074 ------------ Non-controlling interest 22 (256,841) 27,073 ------------ Total Equity 26,558,688 28,297,147 ------------ Liabilities Current Liabilities Trade and other payables 23 1,444,986 1,024,126 Borrowings 24 858,546 523,725 Total Current Liabilities 2,303,532 1,547,851 ------------ ------------ Liabilities directly associated with assets held for sale 17 - 11,257 ------------ ------------ Total Equity and Liabilities 28,862,220 29,856,255
The accompanying notes on pages 50-80 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:
On behalf of the Board
______________________________ ________________________ Christian Schaffalitzky Noel O'Keeffe COMPANY STATEMENT OF FINANCIAL POSITION Company All figures are stated in Sterling ------------------------------------------ -------------------------- 31 December 31 December 2020 2019 ---- ------------ ------------ Note Audited Audited ---- ------------ ------------ GBP GBP ------------ ------------ Non--Current Assets Investments in group undertakings 25 46,664,160 43,318,643 Total Non- current assets 46,664,160 43,318,643 ------------ ------------ Current Assets Trade and other receivables 15 39,085 361,467 Cash 16 141,788 31,389 Total Current assets 180,873 392,856 ------------ ------------ Total Assets 46,845,033 43,711,499 ============ ============ Equity and Liabilities Equity Called up share capital 18 20,411,493 19,532,350 Share premium 18 44,312,371 42,750,436 Share based payment reserves 20 977,575 977,575 Retained deficit (19,419,674) (20,109,544) ------------ ------------ Total Equity 46,281,765 43,150,817 ------------ ------------ Liabilities Current Liabilities Trade and other payables 23 218,877 265,727 Borrowings 24 344,391 294,955 Total liabilities 563,268 560,682 ============ ============ Total Equity and Liabilities 46,845,033 43,711,499 ============ ============
Equity includes a profit for the year of the parent company of GBP689,870 (2019: loss of GBP1,832,539).
The accompanying notes on pages 50-80 form integral part of these financial statements.
The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:
On behalf of the Board
______________________________ ________________________ Christian Schaffalitzky Noel O'Keeffe CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ----------------------------------------------------------------------------------------------------------------------- Share Share Warrants Control Foreign Retained Non-controlling Total equity Capital premium and Share reserve currency deficit interest based translation payment reserve GROUP reserve ---------------- ---------- ---------- --------- -------- ----------- ------------ --------------- ------------ All figures are GBP GBP GBP GBP GBP GBP GBP GBP stated in Sterling ---------------- ---------- ---------- --------- -------- ----------- ------------ --------------- ------------ Balance as at 1 January 2019 17,240,017 39,205,318 41,807 (18,329) (656,622) (29,399,788) 409,171 26,821,574 ---------- ---------- --------- -------- ----------- ------------ --------------- ------------ Loss for the year - - - - - (3,500,004) (403,112) (3,903,116) Adjustment arising from change in non-controlling interest - - - - - (1,726,162) 19,267 (1,706,895) Other comprehensive income - exchange differences - - - - 84,351 - 1,747 86,098 Disposal of subsidiary - - - - (300,671) - - (300,671) Proceeds of share issue of share capital 2,292,333 3,545,118 - - - - - 5,837,451 Deferred vendor liability - equity settled - - 421,471 - - - - 421,471 Share options and warrants issued during the year - - 1,041,235 - - - - 1,041,235 ---------- ---------- 2,292,333 3,545,118 1,462,706 - (216,320) (5,226,166) (382,098) 1,475,573 ---------- ---------- --------- -------- ----------- ------------ --------------- ------------ Balance as at 31 December 2019 19,532,350 42,750,436 1,504,513 (18,329) (872,942) (34,625,954) 27,073 28,297,147 ========== ========== ========= ======== =========== ============ =============== ============ Loss for the year - - - - - (4,726,286) (1,690,951) (6,417,237) Other comprehensive income - exchange differences - - - - 152,635 - - 152,635 Shares issued 871,984 1,149,095 - - - - - 2,021,079 Shares issued to pay deferred vendor liability 7,159 412,840 (421,471) - - - - (1,472) Warrants issued by Katoro Gold plc - - 419,667 - - - - 419,667 Share Options issued by Katoro Gold plc - - 225,778 - - - - 225,778 Change in shareholding without a loss
of control - - - - - 332,384 1,407,037 1,739,421 Disposal of subsidiary - - - - 121,670 - - 121,670 879,143 1,561,935 223,974 - 274,305 (4,393,902) (283,914) (1,738,459) ---------- ---------- --------- -------- ----------- ------------ --------------- ------------ Balance as at 31 December 2020 20,411,493 44,312,371 1,728,487 (18,329) (598,637) (39,019,856) ( 256,841) 26,558,688 ========== ========== ========= ======== =========== ============ =============== ============ Note 18 18 20 19 21 22
The notes on pages 50-80 form part of the financial statements.
The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky Noel O'Keeffe COMPANY STATEMENT OF CHANGES IN EQUITY ---------------------------------------------------------------------------------------------------------------------- Share capital Share premium Share based Foreign currency Retained deficit Total equity payment reserve translation COMPANY reserve ------------------ ------------- ------------- ----------------- ----------------- ---------------- ------------ All figures are GBP GBP GBP GBP GBP GBP stated in Sterling ------------------ ------------- ------------- ----------------- ----------------- ---------------- ------------ Balance at 1 January 2019 17,240,017 39,205,318 977,575 - (18,277,005) 38,168,330 Loss for the year (1,832,539) (1,832,539) Share options and warrants issued during the year - - - - - 977,575 Proceeds of issue of share capital 2,292,333 3,545,118 - - - 5,837,451 2,292,333 3,545,118 977,575 - (1,832,549) 4,982,487 ------------- ------------- ----------------- ----------------- ---------------- ------------ Balance at 31 December 2019 19,532,350 42,750,436 977,575 - (20,109,544) 43,150,817 ============= ============= ================= ================= ================ ============ Profit for the year - - - - 689,870 689,870 Shares issued 871,984 1,149,095 - - - 2,021,079 Shares issued to pay deferred vendor liability 7,159 412,840 - - - 419,999 879,143 1,561,935 - - 689,870 3,130,948 ------------- ------------- ----------------- ----------------- ---------------- ------------ Balance at 31 December 2020 20,411,493 44,312,371 977,575 - (19,419,674) 46,281,765 ============= ============= ================= ================= ================ ============ Note 18 18 20 21
The accompanying notes on pages 50-80 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:
On behalf of the Board
______________________________ ________________________ Christian Schaffalitzky Noel O'Keeffe CONSOLIDATED STATEMENT OF CASH FLOWS All figures are stated in Sterling ----------------------------------------------------- GROUP ------------------------ 31 December 31 December 2020 2019 ----------- ----------- Audited Audited ----- Notes GBP GBP ----- Cash flows from operating activities Loss for the period before taxation (6,417,237) (3,903,116) Adjustments for: Loss/(Profit) from the loss of control of subsidiary - (320,349) Loss/(Profit) from the disposal of subsidiary 102,414 (270,639) Investments acquired not for cash 12 - (37,661) Warrants and options issued 697,006 1,041,235 Loss from equity accounted associate 332 - Exploration and development expenditure on a Joint Operation 1,122,676 - Impairment of financial asset receivable 640,821 - Depreciation on property, plant and equipment 9 5,686 20,596 Profit on sale of property, plant and equipment (53,574) - Cost settled through the issue of shares 436,076 721,555 (3,465,800) (2,748,379) ----------- ----------- Movement in working capital Decrease/(Increase) in debtors 15 108,872 (402,661) Increase in creditors 23 982,244 758,545 ----------- ----------- 1,091,116 355,884 ----------- ----------- Net cash outflows from operating activities (2,374,684) (2,392,495) ----------- ----------- Cash flows from financing activities Proceeds of issue of share capital 2,277,000 981,708 Proceeds from borrowings 1,370,000 952,465 Net cash proceeds from financing activities 3,647,000 1,934,173 ----------- ----------- Cash flows from investing activities Cash advanced to Joint Venture (1,122,676) - Cash received/(forfeited) on disposal of subsidiary 76,716 (8,329) Cash received on sale of plant and equipment 58,628 - ----------- ----------- Net cash flows investing activities (987,332) (8,329) ----------- ----------- Net increase/(decrease) in cash 284,984 (466,651) Cash at beginning of period 91,634 654,158 Exchange movement (119,858) (88,907) ----------- ----------- Cash at end of the period 16 256,760 98,600 ----------- ----------- Continuing operations 256,305 91,634 ----------- ----------- Assets classified as held for sale - 6,966 =========== ===========
The accompanying notes on pages 50-80 form an integral part of these financial statements.
COMPANY STATEMENT OF CASH FLOWS All figures are stated in Sterling -------------------------------------------- --------------------------- COMPANY --------------------------- 31 December 31 December 2020 2019 -------------- ----------- Audited Audited ----- -------------- ----------- Notes GBP GBP ----- -------------- ----------- Cash flows from operating activities Profit/(Loss)for the period before taxation Adjusted for: 689,870 (1,832,539)
Inter-company sales capitalised (174,000) - Reversal of impairment loss (1,586,957) - Share based payments 200,562 977,575 Expenses settled in shares 198,000 211,788 (672,525) (633,175) -------------- ----------- Movement in working capital Decrease / (Increase) in debtors 15 322,382 (27,690) (Decrease)/ Increase in creditors 23 (46,851) 170,655 -------------- ----------- 275,531 142,965 -------------- ----------- Net cash outflows from operating activities (396,994) (490,210) -------------- ----------- Cash flows from financing activities Proceeds of issue of share capital 18 940,000 981,708 Proceeds from borrowings 24 590,000 544,955 Net cash proceeds from financing activities 1,530,000 1,526,663 -------------- ----------- Cash flows from investing activities Cash advances to Group Companies 25 (1,022,607) (1,044,038) -------------- ----------- Net cash used in investing activities (1,022,607) (1,044,038) -------------- ----------- Net (decrease)/increase in cash 110,399 (7,585) Cash at beginning of period 31,389 38,974 Cash at end of the period 16 141,788 31,389 ============== ===========
The accompanying notes on pages 50-80 form an integral part of these financial statements.
1. Segment analysis
IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specific criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the Chief Operating decision maker. The Chief Executive Officer is the Chief Operating decision maker of the Group.
Management currently identifies individual projects as operating segments. These operating segments are monitored and strategic decisions are made based upon their individual nature, together with other non-financial data collated from exploration activities. Principal activities for these operating segments are as follows:
2020 Group Mast Energy Blyvoor 31 December Mabesekwa Mbeya Project Lake Joint 2020 (GBP) Benga Independent Coal & Sloane Victoria Venture Group Power Power to Power Development Haneti Gold Corporate ---------- ------------ ---------- ------------ ---------- ---------- ------------ ------------ ------------ Administrative cost (17,677) (10,182) (39,424) (219,821) (13,745) (909,306) (16,053) (2,190,113) (3,416,321) Listing and Capital raising fees - - - (161,743) - - - (865,915,) (1,027,658) Exploration expenditure (260,170) (8,557) (112,762) (276,000) (133,906) (59,041) (1,201,768) - (2,052,204) Investment and other income - 53,600 - - 2,628 6,943 15,775 78,946 Loss after tax (277,847) (18,739) (98,586) (657,564) (147,651) (965,719) (1,210,878) (3,040,253) (6,417,237) ---------- ------------ ---------- ------------ ---------- ---------- ------------ ------------ ------------ 2019 Group Mabesekwa Mbeya Lake 31 December Benga Independent Coal Mast Energy Victoria 2019 (GBP) Power Power to Power Development Haneti Gold Corporate Group ---------- ------------ ---------- ------------ --------- ---------- ------------ ------------ Administrative cost (88,396) (37,384) (272,399) (32,467) (8,670) (228,770) (2,683,617) (3,351,702) Listing and Capital raising fees - - - - - - (300,297) (300,297) Exploration expenditure (16,252) (17,393) (456,205) (306,000) (46,799) (54,390) - (897,039) Investment and other income - - 4,179 9 - 1,649 640,085 645,922 Loss after tax (104,648) (54,777) (724,424) (338,458) (55,469) (281,511) (2,343,829) (3,903,116) ---------- ------------ ---------- ------------ --------- ---------- ------------ ------------ 2020 Group Mabesekwa Lake Blyvoor 31 December Benga Independent Mbeya Coal Mast Energy Victoria Joint 2020 (GBP) Power Power to Power Development Haneti Gold Venture Corporate Group ------- ------------ ----------- ------------ ------- --------- -------- ---------------------------- Assets Segment assets 27,022 9,696,351 15,902,052 2,895,204 16,410 2,543 17,340 305,298 28,862,220 Liabilities Segment liabilities 93,245 10,297 152,155 470,507 66,731 21,603 5,738 1,483,256 2,303,532 Other Significant items Depreciation 141 - 5,117 - - - 427 5,685 2019 Group Mabesekwa Mbeya Lake 31 December Independent Coal to Mast Energy Victoria 2019 (GBP) Benga Power Power Power Development Haneti Gold Corporate Group ------------ ------------ ----------- ------------ ------- ------------ ---------- Assets Segment assets 835 9,697,694 15,965,122 3,129,305 3,938 23,745 1,035,616 29,856,255 Liabilities Segment liabilities 36,195 8,940 206,421 234,175 - 35,093 1,459,755 1,980,579 Other Significant items Depreciation 655 - 19,941 - - - - 20,596
Geographical segments
The Group operates in six principal geographical areas - Corporate (Ireland, Cyprus, South Africa & United Kingdom) and Mining (Tanzania, and Botswana).
Ireland, United 31 December Tanzania Botswana Cyprus South Africa Kingdom 2020 (GBP) Carrying value of segmented assets 21,910 9,696,351 76,398 19,744 19,047,817 28,862,220 Loss after tax (180,570) (332) (3,741,808) (1,196,471) (1,298,056) (6,417,237) ---------- ---------- ------------ --------------- ---------------- ------------ Ireland, United Kingdom, South 31 December 2019 Tanzania Botswana Cyprus Africa (GBP) Carrying value of segmented assets 69,017 9,377,323 15,868 20,394,047 29,856,255 Loss after tax (515,746) (18,220) (1,029,079) (2,340,071) (3,903,116) ---------- ---------- ------------ ---------------- ----------------- 2. Other Income 31 December 31 December 2020 (GBP) 2019 (GBP) Other income 25,371 54,862 Profit on sale of subsidiary - 591,060 Profit on sale of plant and equipment 53,574 - ------------ ------------ 78,945 645,922 ------------ ------------ 3. Loss on ordinary activities before taxation Operating loss is stated after the following key 31 31 December transactions: December 2019 (GBP)
2020 (GBP) Group Group Depreciation of property, plant and equipment of Group financial statements 5,685 20,596 Impairment of other financial assets - receivable 640,821 - from Lake Victoria Gold Impairment of other financial assets - unlisted 37,661 - investment in Lake Victoria Gold Loss on disposal of subsidiary-Reef Miners(Pty) 102,414 - Ltd Group auditors' remuneration for audit of Group and Company financial statements 45,000 45,000 Subsidiaries auditors remuneration audit of the financial statements of the company's subsidiaries 158,122 140,765 4. Staff costs (including Directors) Group Group Company Company 31 December 31 December 31 December 31 December 2020 (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Wages and salaries 1,028,318 644,903 38,595 273,632 Share based remuneration 225,778 405,345 - 202,060 1,254,096 1,050,248 38,595 475,692 ------------- ------------- ------------- -------------
The average monthly number of employees (including executive Directors) during the period was as follows:
Group Group Company Company 31 December 31 December 31 December 31 December 2020 (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Exploration activities 10 10 1 1 Administration 6 6 1 1 ------------- ------------- ------------- ------------- 16 16 2 2 ------------- ------------- ------------- ------------- 5. Directors' emoluments Group Group Company Company 31 December 31 December 31 December 31 December 2020 (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Basic salary and fees 434,823 323,306 38,595 273,632 Share based payments - 225,182 - 202,060 ------------- ------------- ------------- ------------- 434,823 548,488 38,595 475,692 ------------- ------------- ------------- -------------
The emoluments of the Chairman were GBP 27,837 (2019: GBP 43,588 ).
The emoluments of the highest paid director were GBP 170,190 (2019: GBP 245,291 ).
Following from the terms and conditions related to further funding advances from financiers, with effect from June 2020, the Directors agreed to reduce their salaries by 40%.
Directors received shares in the value of GBPNil during the year (2019: GBP151,003) in lieu of settlement of salaries not settled in cash.
Share warrants to the value of GBPNil (2019: GBP74,179) were issued to directors during the year.
Key management personnel consist only of the Directors. Details of share options and interests in the Company's shares of each director are shown in the Directors' report.
T he following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period:
31 December 2020 Salary and fees Salary settled Warrants and fees in shares issued Total GBP GBP GBP GBP Christian Schaffalitzky 27,837 - - 27,837 Louis Coetzee 170,190 - - 170,190 Noel O'Keeffe 66,085 - - 66,085 Lukas Maree 78,892 - - 78,892 Wenzel Kerremans 16,702 - - 16,702 Andreas Lianos 62,168 - - 62,168 Christiaan Schutte 12,949 - - 12,949 Total 434,823 - - 434,823 ---------- ----------- -------------- ------------ 31 December 2019 Salary and fees Salary settled Warrants and fees in shares issued Total GBP GBP GBP GBP Christian Schaffalitzky 17,517 17,483 8,588 43,588 Louis Coetzee 168,522 51,480 25,289 245,291 Noel O'Keeffe 49,674 15,505 7,616 72,796 Lukas Maree 57,626 20,185 9,915 87,726 Wenzel Kerremans 11,333 3,667 1,801 16,801 Andreas Lianos 18,634 42,683 20,970 82,287 ---------- ----------- -------------- ---------- Total 323,306 151,003 74,179 548,488 ---------- ----------- -------------- ----------
Director salaries and fees accrued as at 31 December 2020 amount to GBP474,267 (2019: GBP224,672).
6. Taxation
Current tax
31 December 31 December 2020 (GBP) 2019 (GBP) Charge for the period in Ireland, Republic - - of South Africa, Cyprus, United Kingdom and Republic of Tanzania ------------ ------------ Total tax charge - - ------------ ------------
The difference between the total current tax shown above and the amount calculated by applying the standard rate of corporation tax for various jurisdictions to the loss before tax is as follows:
2020 (GBP) 2019 (GBP) ------------ ------------ Loss on ordinary activities before tax (6,417,237) (3,903,116) ------------ ------------ Income tax expense calculated at blended rate of 14.9% (2019: 12.5%) (956,752) (487,890) ------------ ------------ Income which is not taxable (1,515,818) (80,740) Expenses which are not deductible 2,919,587 - Losses available for carry forward (447,017) 568,630 Income tax expense recognised in the Statement - - of Profit or Loss ------------ ------------
The effective tax rate used for the December 2020 and December 2019 reconciliations above is the corporate rate of 14.9% and 12.5% payable by corporate entities on taxable profits under tax law in that jurisdiction respectively.
No provision has been made for the 2020 deferred taxation as no taxable income has been received to date, and the probability of future taxable income is indicative of current market conditions which remain uncertain . At the Statement of Financial Position date, the Directors estimate that the Group has unused tax losses of GBP35,320,553 (2019: GBP28,903,316) available for potential offset against future profits which equates to an estimated potential deferred tax asset of GBP4,569,667 (2019: GBP3,612,915). No deferred tax asset has been recognised due to the unpredictability of the future profit streams. Losses may be carried forward indefinitely in accordance with the applicable taxation regulations ruling within each of the above jurisdictions.
7. Profit/(Loss) of parent Company
As permitted by Section 293 of the Companies Act 2014, the Statement of Profit or Loss of the parent Company has not been separately disclosed in these financial statements. The parent Company's profit for the financial period was GBP6 89,870 (2019: Loss of GBP 1,832,539 ).
8. Loss per share
Basic loss per share
The basic loss and weighted average number of ordinary shares used for calculation purposes comprise the following:
Basic Loss per share 31 December 31 December 2020 (GBP) 2019 (GBP) Loss for the period attributable to equity holders of the parent (4,726,286) (3,500,004) Weighted average number of ordinary shares for the purposes of basic loss per share 1,546,853,959 849,795,672 Basic loss per ordinary share (GBP) (0.003) (0.004)
As there are no instruments in issue which have a dilutive impact, the dilutive loss per share is equal to the basic
loss per share, and thus not disclosed separately.
9. Property, plant and equipment GROUP Furniture Motor Office I.T Plant & Right of Total and Vehicles Equipment Equipment Machinery use Fittings assets Cost (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) Opening Cost as at 1 January 2019 122,983 106,775 40,945 30,516 8,821 11,011 321,051 Disposals (112,286) (82,615) (34,255) (24,514) - - (253,669) Additions - - - - - 56,930 56,930 Exchange movements (8,162) 924 (1,619) (1,005) 2,441 - (7,422) Closing Cost as at 31 December 2019 2,535 25,084 5,071 4,997 11,262 67,941 116,890 --------- -------- --------- --------- --------- -------- --------- Opening cost at 1 January 2020 2,535 25,084 5,071 4,997 11,262 67,941 116,890 Disposals - (7,972) - - - (67,941) (75,913) Additions - - - - - - Exchange movements (99) (981) (101) (8) (2,661) - (3,850) Closing Cost as at 31 December 2020 2,436 16,131 4,970 4,989 8,601 - 37,127 --------- -------- --------- --------- --------- -------- --------- Furniture Motor Office I.T Plant & Right of Total and Vehicles Equipment Equipment Machinery use Fittings assets Accumulated (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) Depreciation ("Acc Depr") Acc Depr as at 1 January 2019 122,187 94,092 37,518 27,182 8,821 - 289,800 Disposals (111,482) (82,615) (31,851) (22,552) (116) - (248,615) Depreciation 99 5,553 1,119 605 481 12,739 20,596 Exchange Movements (8,269) 1,172 (2,395) (1,880) 2,077 - (9,295) Acc Depr as at 31 December 2019 2,535 18,202 4,392 3,355 11,263 12,739 52,486 --------- -------- --------- --------- --------- -------- --------- Disposals - (6,606) - - (12,739) (19,345) Depreciation - 5,117 141 427 - - 5,685 Exchange movements (99) (1,428) (135) 507 (2,662) - (3,817) Acc Depr as at 31 December 2020 2,436 15,285 4,398 4,289 8,601 - 35,009 --------- -------- --------- --------- --------- -------- --------- Furniture Motor Office I.T Plant & Right of Total and Vehicles Equipment Equipment Machinery use Fittings assets Carrying (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) Value --------- -------- --------- --------- --------- --------- Carrying value as at 31 December 2019 - 6,882 679 1,642 - 55,202 64,405 --------- -------- --------- --------- --------- -------- --------- Carrying value as at 31 December 2020 - 846 572 700 - - 2,118 --------- -------- --------- --------- --------- -------- ---------
.
10. Intangible assets
Intangible assets consist of separately identifiable prospecting and exploration assets or intellectual property (Bordersley Power) acquired either through business combinations or through separate asset acquisitions. These intangible assets are recognised at the respective fair values of the underlying asset acquired, or where the fair value of the underlying asset acquired is not readily available, the fair value of the consideration.
The following reconciliation serves to summarise the composition of intangible assets as at period end:
Mabesekwa Mbeya Coal Lake Bordersely Total Coal to to Power Victoria Power (GBP) ( GBP) Power Project Project Project ( GBP) ( GBP) ( GBP) Valuation as at 1 January 2019 9,376,312 15,896,105 787,108 - 26,059,525 --------------- ----------- ---------- ------------- ------------ Disposals of the Mabesekwa Coal Project (9,376,312) - - - (9,376,312) Acquisition of Bordersley Power Ltd - - - 2,595,000 2,595,000 Assets classified as held for sale - - (787,108) (787,108) Carrying value as at 1 January 2020 - 15,896,105 - 2,595,000 18,491,105 Impairments - - - - - Carrying value as at 31 December 2020 - 15,896,105 - 2,595,000 18,491,105 --------------- ----------- ---------- ------------- ------------
Intangible assets are not amortised, due to the indefinite useful life which is attached to the underlying prospecting rights and/ or intellectual property acquired, until such time that active mining operations/ power generation commence, which will result in the intangible asset being amortised over the useful life of the relevant project.
Intangible assets with an indefinite useful life are assessed for impairment on an annual basis, against the prospective fair value of the intangible asset. The valuation of intangible assets with an indefinite useful life is reassessed on an annual basis through valuation techniques applicable to the nature of the intangible assets.
One or more of the following facts or circumstances indicate that an entity should test an intangible asset for impairment:
-- the period for which the entity has the right to explore or develop the asset has expired during the period or will expire in the foreseeable future;
-- substantial expenditure on the asset in future is neither planned nor budgeted;
-- exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and
-- sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the development asset is unlikely to be recovered in full from successful development or by sale.
In assessing whether a write-down is required in the carrying value of a potentially impaired intangible asset, the asset's carrying value is compared with its recoverable amount. The recoverable amount is the higher of the asset's fair value less costs to sell and value in use. The valuation techniques applicable to the valuation of the abovementioned intangible assets comprise a combination of fair market values, discounted cash flow projections and historic transaction prices.
The following key assumptions influence the measurement of the intangible assets' recoverable amounts, through utilising the value in use calculation performed:
-- currency fluctuations and exchange movements applicable to model; -- commodity prices related to ore reserve and forward looking statements; -- expected growth rates in respect of production capacity; -- cost of capital related to funding requirements; -- applicable discounts rates, inflation and taxation implications; -- future operating expenditure for extraction and mining of measured mineral resources; and -- co-operation of key project partners going forward.
Through review of the project specific financial, operational, market and economic indicators applicable to the above intangible assets, as well as consideration of the various elements which contribute toward the indication of impairment of exploration and evaluation assets, it was concluded no impairment was necessary in the 2020 financial period. A summary of the assessment performed for each of the intangible assets are detailed below.
Mbeya Coal to Power Project
The Mbeya Coal to Power Project situated in the Mbeya region of Tanzania, which comprises the Mbeya Coal Mine, a potential 1.5Mt p/a mining operation, and the Mbeya Power Plant, a planned 300MW mine-mouth thermal power station. The Mbeya Coal Mine has a defined 120.8 Mt NI 43-101 thermal coal resource.
A Definitive Feasibility Study has been conducted on the project which underpinned its value and confirmed an initial rate of return of 69.2%. The 300MW mouth-of-mine thermal power station has long term scalability with the potential to become a 1000MW plant. The completed full Power Feasibility Study highlighted an annual power output target of 1.8GW based on annual average coal consumption of 1.5Mt.
An Integrated Bankable Feasibility Study report for the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an initial 25-year mine life, post-tax equity IRR between 21-22%, debt pay-back period of 11-12 years and a construction period of 36 months.
Subsequent to the completion of a compulsory tender process through TANESCO on the development of the Mbeya Coal to Power Project, the Group was informed that its bid to secure a Power-Purchase Agreement was unsuccessful in February 2019.
Further engagement with TANESCO has subsequently culminated in the receipt of a formal notice from TANESCO inviting the Group it to develop the Mbeya Coal to Power Project for the export market and thereby enabling the Company to engage with the African Power Pools regarding potential off-take agreements.
As at year end, taking into account the various aspects listed above, the Group concluded that none of the impairment indicators had been met in relation to the Mbeya Coal assets.
Lake Victoria Project
The Group entered into an agreement during August 2019 with Lake Victoria Gold Limited ("LVG") covering the proposed disposal of 100% of the equity interest held by Katoro in its wholly owned subsidiary, Reef Miners Limited ("Reef"), which owns the Imweru gold project and the Lubando gold project in northern Tanzania.
As at year end, the conditions precedent relating to the disposal had been met, and the disposal has thus been completed. (refer to Note 17).
Mabesekwa Coal Independent Power Project
On 3 April 2018, the Group completed the acquisition of an 85% interest in the Mabesekwa Coal Independent Power Project, located in Botswana. This acquisition was in line with the Group's strategy of positioning itself as a strategic regional electricity supplier in Southern Africa and creates many synergies with the MCPP in Tanzania.
As a result of the acquisition, 153,710,030 ordinary shares in Kibo were issued to Sechaba Natural Resources Limited ("Sechaba"). Sechaba retained a 15% interest in the Mabesekwa Coal Independent Power Project. The intangible asset was recognised at the fair value of the consideration paid, which emanates from the fair value of the equity instruments issued as at transaction date, being GBP 9,376,312.
The Mabesekwa Coal Independent Power Project ("MCIPP") is located approximately 40km east of the village of Tonata and approximately 50km southeast of Francistown, Botswana's second largest city. Certain aspects of the Project have been advanced previously by Sechaba Natural Resources Limited ("Sechaba"), including water and land use permits and environmental certification. Mabesekwa consists of a 300Mt subset of the current insitu 777Mt Coal Resource.
A pre-feasibility study on a coal mine and a scoping study on a coal fired thermal power plant has been completed. Kibo is in possession of a Competent Persons Report on the project, which includes a SAMREC-compliant Maiden Resource Statement on the excised 300 Mt portion of the Mabesekwa coal deposit.
In September 2019, Kibo and Shumba Energy Limited ("Shumba") signed a binding Heads of Agreement to reorganise the arrangements for the MCIPP and its associated coal asset in Botswana.
Under the reorganisation the MCIPP retained assets will be consolidated back into KEB and Kibo's interest in KEB will be reduced to 35% to maintain Kibo's look-through interest in the MCIPP resource and make sundry adjustments to recognise Kibo's project expenditure. A variety of shareholders' and joint development agreements govern the management of the various entities, including minority interest protections, with details of Kibo's final interests in these entities and the MCIPP resource to be advised upon completion of the reorganisation.
In exchange for the increase in the equity interest held by Shumba, Shumba would forego the previous claim it had against a portion of the MCIPP coal resources, thereby increasing the value of the interest held by KEB.
The transaction became effective on 5 December 2019 when Kibo concluded a shareholders agreement with KEB and Shumba whereby Kibo, through its wholly owned subsidiaries, Kibo Mining Cyprus Limited and Kibo Energy Botswana Limited would decrease their equity interest in KEB from 85% to 35%, effectively halving their interest in the MCIPP project.
As a result of the reorganisation, Kibo lost control of KEB and therefore derecognised the intangible asset previously recorded and simultaneously recognised an investment in associate equal to the fair value of the remaining interest retained in KEB (refer Note 11).
Bordersley Power Ltd
Kibo Energy PLC initially acquired an indirect 100% equity interest in shovel-ready reserve power generation project, Bordersley, which will comprise a 5MW gas-fuelled power generation plant for the consideration of GBP175,000 settled through the issue of shares.
Thereafter, Kibo acquired all of St' Anderton's direct and indirect interests (Royalty Agreements) in the Bordersley power project described above giving it a 100% economic and 100% equity interest in Bordersley (the 'Acquisition'). Consideration for the Acquisition consists of the allotment and issue of 46,067,206 ordinary shares in the capital of Kibo to St' Anderton at an issue price of GBP0.0525 per share and payable in five tranches ('Consideration Shares') such that the full consideration is only payable in the event that Bordersley is progressively derisked.
The issue price of the Consideration Shares and the associated number to be issued to St' Anderton was determined by using the methodology set out in the original MED vendor agreement as guidance, and was calculated as c. GBP2,420,000 comprising:
-- 100% of the net present value of the Project Royalties (being the royalty equal to 5% of the gross revenue less gas and trading costs) amounting to c. GBP370,000; and
-- 40% of the net present value of the Project Revenue (being net profit before tax) flowing to St' Anderton from Bordersley through MED amounting to c. GBP2,050,000.
11. Investment in associate
Mabesekwa Coal Independent Power Plant
Group (GBP) Company (GBP) 2020 2019 2020 2019 --------- --------- ------- ------ Balance at the beginning of the year 9,696,683 - - - Associate acquired during the period - 9,696,683 - - Share of loss for the year (332) Balance at the end of the year 9,696,351 9,696,683 - - ========= ========= ======= ======
The Group retained a 35% equity interest in Kibo Energy Botswana (Pty) Ltd as a result the reorganisation of its interests in the Mabesekwa Coal Independent Power Plant as disclosed in Note 10.
The value of the remaining equity interest in Kibo Energy Botswana (Pty) Ltd on initial recognition, was determined based on the fair value of the proportionate equity interest retained in the in the enlarged resource following the restructuring.
Summarised financial information of the associate is set out below:
Group (GBP) Group (GBP) 2020 2019 ------------ ------------ Non-Current assets 8,396,296 9,376,312 Current assets 869 1,011 Loss for the year (1,107) (18,220)
Kibo Energy Botswana (Pty) Ltd's principal place of business is Plot 2780, Extension 9, Gaborone, Botswana.
12. Other financial assets Group (GBP) Company (GBP) 2020 2019 2020 2019 --------- ---- ------- ------ Other financial assets consists of: Lake Victoria Gold receivable 640,821 - - - Impairment following from increase in credit risk (640,821) - - - - - - - ========= ==== ======= ======
Lake Victoria Gold Receivable
On 30 June 2020, the last condition precedent related to the disposal of Reef Miners Limited ("Reef") as per the SPA, comprising the Imweru gold project and the Lubando gold project in northern Tanzania, was met resulting in the effective disposal of the subsidiary to Lake Victoria Gold Limited ("LVG").
The amount receivable from Lake Victoria Gold will be due and payable on the following dates:
1. US$100,000 upon the satisfaction of the Condition Precedent; 2. US$100,000 upon registration of Reef in the name of LVG; 3. US$100,000 four months from the date of the SPA; 4. US$200,000 nine months from the date of the SPA; and
5. US$500,000 upon the earlier of the commissioning of the first producing mine of LVG in the Tanzania or the date 24 months from the date of the SPA.
As at 31 December 2020, funds of $100,000 have been received from Lake Victoria Gold in respect of the sale of Reef Miners Limited ("Reef")
The receivable in Lake Victoria Gold has been fully impaired due to the significant increase in credit risk, which is as a result of payments 1,3 and 4 not being received as they become due and is still outstanding after the year end.
Blyvoor Joint Operations
On 30 January 2020, the Group entered into a Joint Venture Agreement with Blyvoor Gold Mines (Pty) Ltd, whereby Katoro Gold plc and Blyvoor Gold Mines (Pty) Ltd would become 50/50 participants in a unincorporated Joint Venture.
In accordance with the requirements of the Joint Venture Agreement, the Katoro Group was to provide a ZAR15.0 million loan (approximately GBP790,000) to the JV ('the Katoro Loan Facility'), which will fund ongoing development work on the Project.
As at year end, the Group has advanced funding in the amount of GBP1,201,767 of which 100% relates to expenditure allocated to the Joint Venture operations, carried by the Katoro Gold plc Group.
The Katoro Loan Facility shall form part of the development capital project financing that Katoro shall procure in accordance with its obligations contained in the Agreement, as detailed below, provided that:
-- the balance of the Katoro Loan Facility then outstanding shall be subordinated to third party creditors participating in the development capital project financing;
-- the Katoro Loan Facility will bear interest at the 12-month London Inter-Bank Offered Rate, or its successor; and
-- the Katoro Loan Facility will be repayable within 12 months after:
- the last third-party creditor participating in the project financing shall have been paid; or
- any earlier date on which the Parties may agree.
At fair value through profit or loss
Group (GBP) Company (GBP) 2020 2019 2020 2019 -------- ------ ------- ------ Opening balance 37,661 - - - Fair value adjustment through profit or loss (37,661) 37,661 - - - 37,661 - - ======== ====== ======= ======
The investment represents 700,000 ordinary shares in Lake Victoria Gold Limited, incorporated in Australia, with a value of AUS$70,000. The shares were issued to Katoro Gold Plc in recognition of the company granting the extension to receipt of the first tranche of monies due under the term sheet. The shares were issued on 15 October 2019 and recorded using the spot rate between the British pound and Australian dollar at that date. The investment in Lake Victoria Gold has been fully impaired due to the significant increase in credit risk of Lake Victoria Gold Limited. In the prior year annual financial statements the disclosure in the accounting policies and the notes to the annual financial statements erroneously referred to the investments as being carried at fair value through other comprehensive income.
13. Acquisition and Disposal of interests in other entities
Reef Miners Limited - Imweru and Lubando gold project - 2020
On 30 June 2020, the last condition precedent related to the disposal of Reef Miners Limited ("Reef"), comprising the Imweru gold project and the Lubando gold project in northern Tanzania, was met, resulting in the effective disposal of the subsidiary to Lake Victoria Gold Limited ("LVG"). The assets and corresponding liabilities of Reef was recognised as part of the assets classified held for sale in the comparative financial period.
The following disposal of the subsidiary was recognised in the 2020 financial statements:
Group (GBP) Intangible assets (787,108) Cash and cash equivalents (336) Trade and other payables 9,136 Net assets value disposed off (778,308) Foreign currency translation reserve reclassified through profit or loss (121,670) Proceeds from disposal 797,564 ----------- Loss on disposal of subsidiary (102,414) Impairment of other financial asset receivable (640,821) ----------- Total loss (743,235)
Mabesekwa Coal Independent Power Project - 2019
In September 2019, Kibo and Shumba Energy Limited ("Shumba") signed a binding Heads of Agreement to reorganise the arrangements for the MCIPP and its associated coal asset in Botswana.
Under the reorganisation the MCIPP retained assets will be consolidated back into Kibo Energy Botswana (Pty) Ltd ("KEB") and Kibo's interest in KEB will be reduced to 35% to maintain Kibo's look-through interest in the MCIPP resource and make sundry adjustments to recognise Kibo's project expenditure. A variety of shareholders' and joint development agreements govern the management of the various entities, including minority interest protections, with details of Kibo's final interests in these entities and the MCIPP resource to be advised upon completion of the reorganisation.
In exchange for the increase in the equity interest held by Shumba, Shumba would forego the previous claim it had against a portion of the MCIPP coal resources, thereby increasing the value of the interest held by KEB.
The transaction became effective on 5 December 2019 when Kibo concluded a shareholders agreement with KEB and Shumba whereby Kibo, through its wholly owned subsidiaries, Kibo Mining Cyprus Limited and Kibo Energy Botswana Limited would decrease their equity interest in KEB from 85% to 35%, effectively halving their interest in the MCIPP project.
Benga Power Plant Project - 2019
Kibo entered into a Joint Venture Agreement with Mozambique energy company Termoeléctrica de Benga S.A. to participate in the further assessment and potential development of the Benga Independent Power Project ('BIPP'). The assets associated with the acquisition were transferred into a newly incorporated entity in which Kibo and Termoeléctrica hold initial participation interests of 65% and 35% respectively, which Kibo obtained for no consideration on commencement. As disclosed in the significant judgement section of the financial results, Kibo is not able to exercise control over the operations of the newly incorporated entity, therefore the investment is recognised as a Joint Venture for financial reporting purposes, which requires the recognition of the participants interest in the net revenue of the Joint Venture's operations.
In order to maintain its initial participation interest Kibo is required to ensure funding of a maximum amount of GBP1 million towards the completion of a Definitive Feasibility Study.
Bordersley Power Ltd - 2019
Kibo Energy PLC initially acquired an indirect 100% equity interest in shovel-ready reserve power generation project, Bordersley, which will comprise a 5MW gas-fuelled power generation plant for the consideration of GBP175,000 settled through the issue of shares.
Thereafter, Kibo acquired all of St' Anderton's direct and indirect interests (Royalty Agreements) in the Bordersley power project described above giving it a 100% economic and 100% equity interest in Bordersley (the 'Acquisition'). Consideration for the Acquisition consists of the allotment and issue of 46,067,206 ordinary shares in the capital of Kibo to St' Anderton at an issue price of GBP0.0525 per share and payable in five tranches ('Consideration Shares') such that the full consideration is only payable in the event that Bordersley is progressively derisked.
As there were no separately identifiable assets and/or liabilities acquired, the purchase price was allocated toward the Intellectual Property acquired, in the amount of GBP 2,595,000, as disclosed in Note 10.
14. Goodwill
MAST Energy Development Limited - 2019
In the previous financial period the Group acquired a 60% equity interest in MAST Energy Project Limited, previously known as MAST Energy Development Limited, for GBP300,000, settled through the issue of 5,714,286 ordinary shares in Kibo effective on 19 October 2018. The acquisition of MAST Energy Development Limited falls within the ambit of IFRS 3: Business Combinations. The net assets acquired were valued at Nil, with the resultant purchase price being allocated to Goodwill on date of acquisition.
Various "shovel ready" sites have already been identified in the UK, capable of sustaining gas fired power generators and ancillary structures from 20MW upwards. Financial modelling indicates projected IRRs of 13-16% and NPVs of GBP16-19 million for the initial assets.
Goodwill is assessed for impairment on an annual basis, against the recoverable amount of underlying Cash Generating Unit ("CGU"). The recoverable amount of the CGU, is the higher of its fair value less cost to sell and its value in use. The valuation techniques applicable to the valuation of the abovementioned CGU comprise a combination of fair market values, discounted cash flow projections and historic transaction prices.
Through review of the project specific financial, operational, market and economic indicators applicable to the above CGU, as well as consideration of the various elements which contribute toward the indication of impairment of similar projects, it was concluded no impairment was necessary in the 2020 financial period.
15. Trade and other receivables Group 2020 Group Company Company (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Amounts falling due within one year: Other debtors 115,886 380,693 39,085 361,467 115,886 380,693 39,085 361,467 -------- ------------ ------------ ------------
The nature of amounts owed by Group undertakings is such that the expected recovery thereof is in excess of one year, and is thus classified as amounts falling due after one year.
The carrying value of current trade and other receivables approximates their fair value.
Amounts owed by Group undertakings represent inter-company loans between the Company and its subsidiaries. They have no fixed repayment terms, bear no interest and are unsecured, resulting in the recognition of the receivable as a non-current asset due to settlement being extended beyond 12 months.
During the period the Board resolved to capitalise inter-company loans and convert the respective loans owed by subsidiaries into share capital in order to adhere to international transfer pricing regulation and this resulted in a corresponding decrease in amounts owed by group undertakings.
Trade and other receivables pledged as security
None of the above stated trade and other receivables were pledged as security at period end. Credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical repayment trends of the individual debtors.
16. Cash Group (GBP) Company (GBP) Cash consists of: 2020 2019 2020 2019 ------- ------ ------- ------ Short term convertible cash reserves 256,760 91,634 141,788 31,389 256,760 91,634 141,788 31,389 ======= ====== ======= ======
Cash has not been ceded, or placed as encumbrance toward any liabilities as at year end.
17. Assets classified as held for sale
On 22 August 2019, the Group entered into a term sheet with Lake Victoria Gold Limited ("LVG") covering the disposal of 100% of the equity interest held by subsidiary Katoro Gold Plc in its wholly owned subsidiary, Reef Miners Limited ("Reef"), which owns the Imweru gold project and the Lubando gold project in northern Tanzania. Although the sale and purchase agreement with LVG has not been entered into to date, and LVG have requested extensions on the payment tranches to be made in accordance with the term sheet, the Board feels that the sale of Reef is in the best interest of the Company at this time and the directors are of the opinion that the sale is highly probable. The assets, together with the associated liabilities of Reef have therefore been classified as held for sale in the comparative financial period.
The major classes of assets and liabilities in the disposal group classified as held for sale are as follows:
Assets 2019 Intangible assets 787,108 Cash and cash equivalents 6,966 ------------------- 794,074 Liabilities Trade and other payables 11,257
The disposal of Reef Miners Limited ("Reef") to Lake Victoria Gold Limited ("LVG") was completed effective from 30 June 2020, thus the assets classified as held for sale have been disposed of in the current financial period. Refer to note 13 for further detail on these transactions. The consideration receivable related to the disposal of Reef, amounting to GBP 797,564 was receivable in cash, with no non-cash element receivable.
The following loss from disposal of the subsidiary was recognised in the 2020 financial statements:
Group (GBP) Intangible assets (787,108) Cash and cash equivalents (336) Trade and other payables 9,136 Net assets value disposed off (778,308) Foreign currency translation reserve reclassified through profit or loss (121,670) Proceeds from disposal - receivable outstanding as at year end 720,848 Proceeds from disposal - cash received 76,716 ----------- Loss on disposal of subsidiary (102,414) Impairment of financial asset receivable (640,821) ----------- Total loss (743,235) 18. Share capital - Group and Company 2020 2019 Authorised equity 5,000,000,000 Ordinary shares of EUR0.001 each 1,000,000,000 deferred shares of EUR0.014 each EUR5,000,000 EUR2,000,000 3,000,000,000 deferred shares of EUR0.009 EUR14,000,000 EUR14,000,000 each EUR27,000,000 EUR27,000,000 EUR46,000,000 EUR43,000,000 Allotted, issued and fully paid shares (2020: 2,221,640,835 Ordinary shares of GBP 1,205,611 - EUR0.001 each ) (2019: 1,257,276,078 Ordinary shares of - GBP326,468 EUR0.001 each) 1,291,394,535 Deferred shares of EUR0.009 GBP9,257,075 GBP9,257,075 each 805,053,798 Deferred shares of EUR0.014 GBP9,948,807 GBP9,948,807 each --------------- --------------- GBP 20,411,493 GBP19,532,350 Ordinary Deferred Treasury Number of Share Capital Share Capital Share Premium shares Shares (GBP) (GBP) (GBP) (GBP) Balance at 31 December 2019 1,257,276,078 326,468 19,205,882 42,750,436 - -------------- --------------- --------------- -------------- --------- Shares issued during the period 964,364,757 879,143 - 1,561,935 - Balance at 31 December 2020 2,221,640,835 1,205,611 19,205,882 44,312,371 - -------------- --------------- --------------- -------------- ---------
All ordinary shares issued have the right to vote, right to receive dividends, a copy of the annual report, and the right to transfer ownership of their shares.
During the period, the Company resolved to increase the Ordinary Share capital from five billion Ordinary Shares to eight billion Ordinary Shares to ensure sufficient authorised Ordinary Share capital available to issue more Ordinary Shares when required.
19. Control reserve
The transaction with Opera Investments PLC in 2017 represented a disposal without loss of control. Under IFRS this constitutes a transaction with equity holders and as such is recognised through equity as opposed to recognising goodwill. The control reserve represents the difference between the purchase consideration and the book value of the net assets and liabilities acquired in the transaction with Opera Investments.
20. Share based payments reserve
The following reconciliation serves to summarise the composition of the share based payment reserve as at period end:
Group (GBP) --------------------------------- 2020 2019 ---------- --------------------- Opening balance of share based payment reserve 1,504,513 41,807 Issue of share options and warrants 645,445 1,041,235 Deferred vendor liability settled through the issue of shares (421,471) 421,471 Reclassification of share based payment reserve - - on expired share options ---------- --------------------- 1,728,487 1,504,513 ---------- --------------------- Company (GBP) -------------------------- 2020 2019 -------- ---------------- Opening balance of share based payment reserve 977,575 - Issue of share options and warrants - 977,575 Reclassification of share based payment reserve - - on expired share options -------- ---------------- 977,575 977,575 -------- ----------------
Share options and Warrants
Share Options
During the prior year, Katoro Gold Plc, a subsidiary of Kibo, implemented a share option plan whereby the Board and Management of the Company were issued 14,944,783 Ordinary shares, being 10% of the Company's issued share capital on 8 February 2019, at 1.3 pence per share. The options have an expiry date of the seventh anniversary date of the date of grant, with 50% vesting on issue and the remaining 50% vesting in one year.
During the current year, the company implemented a share option plan whereby the Board and Management of the Company were grant options over a total of 17,300,000 new ordinary shares of GBP0.01each in the capital of the Company. The Options are exercisable at 2.6 pence per Ordinary Share, constituting a c. 10% premium to the Company's recent closing share price on 28 August 2020. The Options have an expiry date of the seventh anniversary from the date of grant of 28 August 2020, with 50% vesting on issue and the remaining 50% vesting in one year.
The fair value of the share options issued have been determined using the Black-Scholes option pricing model.
The inputs to the Black-Scholes model were as follows:
Description of key input Key Assumptions Key Assumptions Date issued February August 2020 2019 Options granted 14,944,783 17,300,000 Stock price 1.3p 2.4p Exercise price 1.3p 2.6p Risk free rate 0.4% 0.3% Volatility 82% 142.84% Time to maturity 7 years 7 years
Expected volatility was determined using the historic average volatility in the company's share price over the past 2 to 3 years.
The weighted average fair value for the share options granted during year is 2.26p.
Warrants
The Group has the following warrants over its Ordinary Shares:
-- 1,208,333 warrants to Beaufort's (Beaufort Securities Limited, the former broker to the Group) in respect of the placing fees. Each warrant shall entitle Beaufort to subscribe for one new Ordinary Share and shall be exercisable at 6 pence per share for up to five years;
-- 10,000,000 warrants to African Battery Metals Plc in respect of the Nickel project facilitation fees. The warrants were issued over 2 tranches. The first tranche of 2,500,000 warrants were issued upon signature of the Option Agreement between the parties on 15 March 2019, with the remaining 7,500,000 issued on 15 May 2019. These warrants are exercisable within 3 years of issue date at a price of 1.25 pence per share;
-- 10,000,000 warrants to various funders in respect of placing and subscription of 10,000,000 ordinary shares of 1.0p each issued on 2 October 2019. Each warrant shall entitle the fundraisers to subscribe for a further new Ordinary Share at a price of 1.5p, with a life to expiry of 2 years.4,800,000 of these warrants have been exercised by 31 December 2020,with only 5,200,000 warrants left;
-- 17,200,000 warrants to various funders in respect of placing and subscription of 17,200,000 ordinary shares of 1.0p each issued on 31 March 2020. Each warrant shall entitle the fundraisers to subscribe for a further new Ordinary Share at a price of 2.0p, with a life to expiry of 2 years;
-- 36,666,666 warrants to various funders in respect of placing and subscription of 73,333,333 ordinary shares of 1.0p each issued on 25 June 2020. Each warrant shall entitle the fundraisers to subscribe for a further new Ordinary Share at a price of 3.0p, with a life to expiry of 3 years. The Directors also participated in the Fundraise, of which they acquired 3,333,333 ordinary shares and 1,666,666 warrants.
-- 663,333,420 warrants were issued with the share placing completed on 21 October 2019. Each share issued for this placing includes one warrant exercisable at 0.8 pence per share for the period of 18 months and half a warrant exercisable at 1.0 pence per share for the period of 36 months from the date of issue.
-- 362,500,000 warrants were issued with the share placing completed on 17 September 2020. For every two shares issued for this placing includes one warrant exercisable at 0.4 pence per share for the period of 36 months from the date of issue.
-- 240,000,000 warrants were issued with the early termination of convertible loan note completed on 17 September 2020. The warrants are exercisable at 0.25 pence per share for the period of 36 months from the date of issue.
-- 10,000,000 warrants were issued to the company's broker for broker fees relating to the share placing completed on 17 September 2020. The warrants are exercisable at 0.2 pence per share for the period of 36 months from the date of issue.
The fair value of the warrants issued have been determined using the Black-Scholes option pricing model.
The inputs to the Black-Scholes model were as follows:
Description Key Key Key Key Key Key of key input Assumptions Assumptions Assumptions Assumptions Assumptions Assumptions Beaufort African Financing Financing Financing Kibo Energy Battery shares shares shares Plc October Metals Plc 2019 placing Date issued April 2017 May 2019 October March 2020 June 2020 October 2019 2019 Warrants granted 1,208,333 10,000,000 10,000,000 17,200,000 36,666,666 442,222,280 Stock price 6p 1.3p 1.10p 1.35p 1.7p 0.45p Exercise price 6p 1.25p 1.5p 2p 3p 0.8p Risk free rate 0.1% 0.4% 0.4% 0.1% 0.1% 0.4% Volatility 70% 82% 82% 86.44% 148.29% 99% Time to 5 years 3 years 2 years 2 years 3 years 18 months maturity Description Key Assumptions Key Assumptions Key Assumptions Key Assumptions of key input Kibo Energy Kibo Energy Kibo Energy Kibo Energy Plc October Plc September Plc Broker CLN Termination 2019 placing 2020 placing shares Date issued October 2019 September September September 2020 2020 2020 Warrants granted 221,111,140 362,500,000 10,000,000 240,000,000 Stock price 0.5p 0.25p 0.25p 0.25p Exercise price 1p 0.4p 0.20p 0.25p Risk free rate 0.4% 0% 0% 0% Volatility 99% 144.5% 144.5% 144.5% Time to maturity 3 years 3 years 3 years 3 years
Expected volatility was determined using the historic average volatility in the company's share price over the past 2 to 3 years.
Expenses settled through the issue of shares
The Group recognised the following expense related to equity settled share based payment transactions:
2020 (GBP) 2019 (GBP) Geological expenditure settled 663,079 100,559 Listing and capital raising fees 178,000 252,854 Statutory fees - 144,013 Shares and warrants issued to directors and staff 225,778 405,345 1,066,857 902,771
At 31 December 2020 the Group had 32,244,781 share options and 1,341,308,419 warrants outstanding.
Exercisable as at 31 Exercise start Exercise December Date of Grant date Expiry date Price Number Granted 2020 08 Feb 2019 Options 8 Feb 2019 (50%) 7 Feb 2026 1.3p 14,944,783 14,944,783 08 Feb 2020 (50%) 28 Aug 2020 28 Aug 2020 (50%) 28 Aug 2027 2.6p 17,300,000 17,300,000 28 Aug 2020 (50%) 32,244,781 32,244,781 Warrants 04 Nov 2019 04 Nov 2019 03 May 2021 0.4p 442,222,280 442,222,280 04 Nov 2019 04 Nov 2019 03 Nov 2022 0.6p 221,111,140 221,111,140 17 Sept 17 Sept 2020 17 Sept 2020 2023 0.4p 362,500,000 362,500,000 17 Sept 17 Sept 2020 17 Sept 2020 2023 0.25p 240,000,000 240,000,000 17 Sept 17 Sept 2020 17 Sept 2020 2023 0.2p 10,000,000 10,000,000 April 2017 April 2017 April 2022 6p 1,208,333 1,208,333 15 May 2019 15 May 2019 15 May 2022 1.25p 10,000,000 10,000,000 02 Oct 2019 02 Oct 2019 02 Oct 2021 1.5p 5,200,000 400,000
31 Mar 2020 31 Mar 2020 31 Mar 2022 2p 17,200,000 17,200,000 25 Jun 2020 25 Jun 2020 25 Jun 2023 3p 36,666,666 36,666,666 1,346,108,419 1,341,308,419 Total Contingently Issuable shares 1,378,353,200 1,373,553,200
Reconciliation of the quantity of share options in issue:
Group Company 2020 2019 2020 2019 Opening balance 14,944,781 - - - New share options issued 17,300,000 14,944,781 - - Expiration of share options - - - - 32,244,781 14,944,781 - -
Reconciliation of the quantity of warrants in issue:
Group Company 2020 2019 2020 2019 Opening balance 663,333,420 - 663,333,420 - New warrants issued 682,774,999 663,333,420 612,500,000 663,333,420 Warrants exercised (4,800,000) - - - 1,341,308,419 663,333,420 1,275,833,420 663,333,420
The weighted average exercise price for warrants exercised in Katoro Gold plc during the year amounted to GBP0.015 per warrant with a weighted average share price at exercise date of GBP0.035 per share.
Deferred vendor liability
The amount due to vendors represents the balance of the purchase consideration owing in respect of the acquisition of Bordersley Power Limited from St' Anderton on Vaal Limited. The liability will be settled through the issue of ordinary shares in the Company, in four equal tranches of 6,000,000 at an issue price of GBP0.0525 each, as the project is progressively derisked, as detailed below:
-- Upon receiving confirmation from Mast Energy Development that a preliminary notice to proceed with construction of the Bordersley power site has been issued by the Owners Engineer for the construction and commissioning of the Bordersley site;
-- Upon receiving confirmation from Mast Energy Development that a final notice to proceed with construction of the Bordersley power site has been issued by the Owners Engineer for the construction and commissioning of the Bordersley site;
-- Upon receiving confirmation from Mast Energy Development that the Owners Engineer for the construction and commissioning of the Bordersley site has commenced with commissioning of the Bordersley power plant; and
-- Upon receiving confirmation from Mast Energy Development that the Owners Engineer for the construction and commissioning of the Bordersley site has confirmed steady state production at the Bordersley power plant.
The fair value of the deferred vendor liability is calculated in accordance with the anticipated purchase consideration payable, at the fair value of the shares on the date of the transaction.
The amount payable has been settled during the current year through the issue of ordinary shares.
21. Translation reserves
The foreign exchange reserve relates to the foreign exchange effect of the retranslation of the Group's overseas subsidiaries on consolidation into the Group's financial statements, taking into account the financing provided to subsidiary operations is seen as part of the Group's net investment in subsidiaries.
Group Company 2020 (GBP) 2019 (GBP) 2020 2019 (GBP) (GBP) Opening balance (872,942) (656,622) - - Movement during the period 152,635 (216,320) - - Disposal of subsidiary 121,670 - Closing balance (598,637) (872,942) - - 22. Non -controlling interest
The non-controlling interest carried forward relates to the minority equity attributable to Katoro Gold PLC and its subsidiaries.
Group 2020 (GBP) 2019 (GBP) Opening balance 27,073 409,171 Change of interest in subsidiary without loss of control 1,407,037 19,267 Loss for the year allocated to non-controlling interest (1,690,951) (401,365) ---------- Closing balance of non-controlling interest 256,841 27,073 ----------
The summarised financial information for significant subsidiaries in which the non-controlling interest has an influence, namely Katoro Gold PLC as at ended 31 December 2020, is presented below:
Katoro plc Group Katoro plc Group 2020 (GBP) 2019 (GBP) Statement of Financial position Total assets 353,682 295,116 Total liabilities (231,806) (117,402) Statement of Profit and Loss Revenue for the period - - Loss for the period (2,561,114) (668,659) Statement of Cash Flow Cash flows from operating activities (1,039,035) (580,727) Cash flows from investing activities (1,027,925) - Cash flows from financing activities 2,129,800 202,934 23. Trade and other payables Group Group Company Company 2020 (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Amounts falling due within one year: Trade payables 1,444,986 1,024,126 218,877 265,727 1,444,986 1,024,126 218,877 265,727
The carrying value of current trade and other payables equals their fair value due mainly to the short term nature of these receivables.
24. Borrowings Group Group Company Company 2020 (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Amounts falling due within one year: Short term loans 858,546 523,725 344,391 294,955 858,546 523,725 344,391 294,955 Group Group Company Company 2020 (GBP) 2019 (GBP) 2020 (GBP) 2019 (GBP) Reconciliation of borrowings: Opening balance 523,725 - 294,955 - Raised during the year 1,370,000 1,613,715 590,000 544,955 Repaid during the year (25,000) - (25,000) - Consulting fees 276,000 - - - Facilitation fees 264,200 - 250,000 - Reclassification shareholder contribution to debt 41,155 - - - (1,591,534 Settled through the issue of shares ) (1,090,000) (765,564) (250,000) Closing balance 858,546 523,725 344,391 294,955
Short term loans
Short term loans relate to the unsecured interest free loan facility from Sanderson Capital Partners Limited and various high net worth clients of SI Capital which is repayable either through the issue of ordinary shares or payment of cash by the Company.
25. Investment in group undertakings
Breakdown of investments at 31 December 2020
Subsidiary undertakings (GBP) Kibo Mining (Cyprus) Limited 42,796,376 Mbeya Developments Limited 1,706,896 Katoro Gold Plc 2,160,888 Total cost of investments 46,664,160
Breakdown of investments at 31 December 2019
Subsidiary undertakings (GBP) Kibo Mining (Cyprus) Limited 40,048,442 Sloane Developments Limited 2,643,558 Katoro Gold Plc 626,643 Total cost of investments 43,318,643 Subsidiary undertakings (GBP) Investments at Cost At 1 January 2019 37,890,651 Additions in Kibo Mining (Cyprus) Limited 2,642,265 Additions in Katoro Gold PLC 2,643,558 Provision for impairment 142,169 At 31 December 2019 (GBP) 43,318,643
Additions in Kibo Mining Cyprus Limited 2,747,934 Mbeya Developments Limited 1,706,896 Disposal in Sloane Developments Limited (2,643,558) Reversal of impairment in Katoro Gold PLC 1,534,245 Provision for impairment - At 31 December 2020 (GBP) * 46,664,160
The reversal of the impairment in Katoro Gold PLC is due to the significant improvement in the share price, which results in the recoverable amount of the investment in Katoro Gold PLC increasing considerably.
At 31 December 2020 the Company had the following undertakings:
Subsidiary, Interest Interest Description associate, Activity Incorporated held held Joint Ops in (2020) (2019) Directly held Investments Kibo Mining (Cyprus) Limited Subsidiary Treasury Function Cyprus 100% 100% Mineral Katoro Gold Plc Subsidiary Exploration United Kingdom 29.25% 55.53% Indirectly held Investments MAST Energy Development Plc Subsidiary Power Generation United Kingdom 100% - Sloane Developments Limited Subsidiary Holding Company United Kingdom 100% 100% MAST Energy Projects Limited Subsidiary Power Generation United Kingdom 60% 60% Bordersley Power Limited Subsidiary Power Generation United Kingdom 100% 100% Kibo Gold Limited Subsidiary Holding Company Cyprus 29.25.% 55.53% Savannah Mining Mineral Limited Subsidiary Exploration Tanzania 29.25% 55.53% Reef Miners Mineral Limited Subsidiary Exploration Tanzania 0% 55.53% Kibo Nickel Limited Subsidiary Holding Company Cyprus 29.25% 55.53% Eagle Exploration Mineral Limited Subsidiary Exploration Tanzania 29.25% 55.53% Katoro (Cyprus) Mineral Limited Subsidiary Exploration Cyprus 29.25% - Katoro South Africa Mineral Limited Subsidiary Exploration South Africa 29.25% - Blyvoor Joint Mineral Venture Joint Operation Exploration South Africa 29.25% - Mbeya Holdings Limited Subsidiary Holding Company Cyprus 100% 100% Mbeya Development Limited Subsidiary Holding Company Cyprus 100% 100% Mbeya Mining Company Limited Subsidiary Holding Company Cyprus 100% 100% Mbeya Coal Mineral Limited Subsidiary Exploration Tanzania 100% 100% Rukwa Holding Limited Subsidiary Holding Company Cyprus 100% 100% Mbeya Power Tanzania Limited Subsidiary Power Generation Tanzania 100% 100% Kibo Mining South Africa (Pty) Ltd Subsidiary Treasury Function South Africa 100% 100% Kibo Exploration Limited Subsidiary Treasury Function Tanzania 100% 100% Kibo MXS Limited Subsidiary Holding Company Cyprus 100% 100% Mzuri Exploration Services Exploration Limited Investment Services Tanzania 4.78% 4.78% Protocol Mining Exploration Limited Investment Services Tanzania 4.78% 4.78% Jubilee Resources Mineral Limited Subsidiary Exploration Tanzania 100% 100% Kibo Energy Botswana Limited Subsidiary Holding Company Cyprus 100% 100% Kibo Energy Botswana Mineral (Pty) Ltd Associate Exploration Botswana 35% 35% Kibo Energy Mozambique Limited Subsidiary Holding Company Cyprus 100% 100% Pinewood Resources Mineral Limited Subsidiary Exploration Tanzania 100% 100% BENGA Power Plant Limited Joint Venture Power Generation Tanzania 65% 65% Makambako Resources Mineral Limited Subsidiary Exploration Tanzania 100% 100%
The Group has applied the approach whereby loans to Group undertakings and trade receivables from Group undertakings were capitalised to the cost of the underlying investments. The capitalisation results in a decrease in the exchange fluctuations between Group companies operating from various locations.
26. Related party transactions
Related parties of the Group comprise subsidiaries, joint ventures, significant shareholders, the Board of Directors and related parties in terms of the listing requirements.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.
Board of Directors/ Key Management
Name Relationship (Directors of:) A. Lianos River Group, Boudica Group and Namaqua Management Limited
Other entities over which directors/key management or their close family have control or significant influence:
River Group River Group provide corporate advisory services and is the Company's Designated Advisor. Boudica Group Boudica Group provides secretarial services to the Group. St Anderton on Vaal Limited St Anderton on Vaal Limited provides consulting services to the Group. The directors of St Anderton on Vaal Limited are also directors of Mast Energy Developments Limited.
Kibo Mining Plc is a shareholder of the following companies and as such are considered related parties:
Directly held subsidiaries: Kibo Mining (Cyprus) Limited
Katoro Gold Plc
Indirectly held subsidiaries: Kibo Gold Limited Kibo Mining South Africa Limited Savannah Mining Limited Reef Mining Limited Kibo Nickel Limited Katoro (Cyprus) Limited Katoro South Africa Limited Kibo Energy Botswana Limited Kibo Energy Mozambique Limited Eagle Exploration Mining Limited Mzuri Energy Limited Rukwa Holdings Limited Mbeya Holdings Limited Mbeya Development Company Limited Mbeya Mining Company Limited Mbeya Coal Limited Mzuri Power Limited Kibo Exploration Limited Mbeya Power Tanzania Limited Kibo MXS Limited Kibo Energy Mozambique Limited Pinewood Resources Limited Makambako Resources Limited Jubilee Resources Limited Kibo Energy Botswana Limited MAST Energy Developments Limited MAST Energy Projects Limited Sloane Developments Limited Bordersley Power Limited
The transactions during the period between the Company and its subsidiaries included the settlement of expenditure to/from subsidiaries, working capital funding, and settlement of the Company's liabilities through the issue of equity in subsidiaries. The loans to/ from group companies do not have fixed repayment terms and are unsecured.
The following transactions have been entered into with related entities, by way of common directorship, throughout the financial period.
River Group was paid GBP37,500 (2019: GBP35,384) for designated advisor services, corporate advisor services and corporate financer fees during the year settled through cash. No fees are payable to River Group as at year end. The expenditure was recognised in the Company as part of administrative expenditure.
St Anderton on Vaal Limited was paid GBP276,000 (2019: GBP297,000) during the year for consulting services rendered to Mast Energy Project Limited.
During the year, Namaqua Management Limited or its nominees, was paid GBP365,027 (2019: GBP472,153) for the provision of administrative and management services. GBPNil was payable at the year-end (2019: GBP247,836).
The Boudica Group was paid GBPNil (2019: GBP32,400) for corporate services during the current financial period. No fees are payable to Boudica Group at year end.
27. Financial Instruments and Financial Risk Management
The Group and Company's principal financial instruments comprises trade payables and borrowings. The main purpose of these financial instruments is to provide finance for the Group and Company's operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.
It is, and has been throughout the 2020 and 2019 financial period, the Group and Company's policy not to undertake trading in derivatives.
The main risks arising from the Group and Company's financial instruments are foreign currency risk, credit risk, liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below.
2020 (GBP) 2019 (GBP) Financial instruments of Loans and Financial Loans and Financial the Group are: receivables liabilities receivables liabilities Financial assets at amortised cost Trade and other receivables 86,719 - 380,693 - Cash 256,760 - 91,634 - Financial liabilities at amortised cost Trade payables - 1,444,986 - 1,024,126 Borrowings - 858,546 - 523,725 ------------ 343,479 2,303,532 472,327 1,547,851 2020 (GBP) 2019 (GBP) Financial instruments of Loans and Financial Loans and Financial the Company are: receivables liabilities receivables liabilities Financial assets at amortised cost Trade and other receivables - current 27,602 - 361,467 - Cash 141,788 - 31,389 - Financial liabilities at amortised cost Trade payables - current - 218,877 - 227,237 Borrowings - 344,391 - 294,955 ------------ 169,390 563,268 392,856 522,192
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies and exposures to exchange rate fluctuations therefore may arise. Exchange rate exposures are managed by continuously reviewing exchange rate movements in the relevant foreign currencies. The exposure to exchange rate fluctuations for the Group/Company is limited to foreign currency translation of subsidiaries, which is not material, as the Group/Company does not hold any significant foreign denominated monetary assets or liabilities.
At the period ended 31 December 2020, the Group had no outstanding forward exchange contracts.
Exchange rates used for conversion of foreign subsidiaries undertakings were:
2020 2019 ZAR to GBP (Spot) 0.0499 0.0542 ZAR to GBP (Average) 0.0469 0.0543 USD to GBP (Spot) 0.7325 0.7623 USD to GBP (Average) 0.7798 0.7837 EURO to GBP (Spot) 0.8984 0.8537 EURO to GBP (Average) 0.8894 0.8772
The executive management of the Group monitor the Group's exposure to the concentration of fair value estimation risk on a monthly basis.
Group Sensitivity Analysis
As the Group/Company has no material monetary assets denominated in foreign currencies, the impact associated with a change in the foreign exchange rates is not expected to be material to the Group/Company.
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. As the Group does not, as yet, have any sales to third parties, this risk is limited.
The Group and Company's financial assets comprise receivables and cash and cash equivalents. The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Group and Company's exposure to credit risk arise from default of its counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in its consolidated statement of financial position. Expected credit losses were not measured on a collective basis. The various financial assets owed from group undertakings were evaluated against the underlying asset value of the investee, taking into account the value of the various projects undertaken during the period, thus validating, as required the credit loss recognised in relation to amounts owed by group undertakings.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are connected or related entities.
Financial assets exposed to credit risk at period end were as follows:
Financial instruments Group (GBP) Company (GBP) 2020 2019 2020 2019 Trade & other receivables 86,719 380,693 39,085 361,467 Cash 256,760 91,634 141,788 31,389
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group and Company's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group.
The Group and Company's financial liabilities as at 31 December 2020 were all payable on demand.
Less than Greater than Group (GBP) 1 year 1 year At 31 December 2020 Trade and other payables 1,444,986 - Borrowings 858,546 - At 31 December 2019 Trade and other payables 1,024,126 - Borrowings 523,725 Company (GBP) At 31 December 2020 Trade and other payables 218,877 - Borrowings 344,391 - At 31 December 2019 Trade and other payables 265,727 - Borrowings 294,955
Interest rate risk
The Group and Company's exposure to the risk of changes in market interest rates relates primarily to the Group and Company's holdings of cash and short term deposits.
It is the Group and Company's policy as part of its management of the budgetary process to place surplus funds on short term deposit in order to maximise interest earned.
Group Sensitivity Analysis:
Currently no significant impact exists due to possible interest rate changes on the Company's interest bearing instruments.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the period ended 31 December 2020. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses as disclosed in the consolidated statement of changes in equity.
Fair values
The carrying amount of the Group and Company's financial assets and financial liabilities recognised at amortised cost in the financial statements approximate their fair value.
Hedging
At 31 December 2020, the Group had no outstanding contracts designated as hedges.
28. Post Statement of Financial Position events
Warrant Exercise and Share Issues
During 2021 to date, Kibo issued an additional 188,431,556 shares all of which resulted from the exercise of a similar amount of warrants by warrant holders whereupon they received one Kibo share for each warrant exercised. The warrants were exercisable at prices of GBP0.002 to GBP0.004 and yielded proceeds of GBP697,726 to the Company. The Company also issued 65,276,346 shares at a deemed share price of GBP0.0026 to Sanderson Capital Partners Limited in payment of 50% of the outstanding balance of GBP339,437 on a Debt Factoring Agreement original signed on the 20 December 2016. The remaining balance of GBP169,718.5 is to be paid in cash of which GBP25,000 has already been paid.
Listing of Mast Energy Developments Plc on the LSE
On the 14 April 2021, Mast Energy Developments Plc listed on the London Stock Exchange. Coincident with listing, Kibo's 100% shareholding in MED of 104,496,960 shares held through its wholly owned subsidiary Kibo Mining (Cyprus) Limited reduced to 55.42%. This resulted from the execution of a share sale agreement whereby MED's wholly owned subsidiary, Sloane Developments Limited purchased the 40% minority interest in Mast Energy Projects Limited that it did not already hold from Guernsey company St. Anderton on Vaal Ltd in exchange for 36,917,076 newly issued shares in MED. MED also issued an additional 47,150,000 new shares to subscribers to the IPO.
This resulted in Kibo Mining (Cyprus) Limited holding 104,496,960 of the 188,564,036 shares issued in MED post IPO (55.42% shareholding).
Migration of Companies Dematerialised Shares to Euroclear Bank
On the 22 February 2021, the shareholders of Kibo approved resolutions to permit the migration of the Company's dematerialised shares held through CREST to Euroclear Nominees Limited. This was required to allow shareholders continue to hold the Company shares in dematerialised form following the UK's exit from the EU. The migration successfully occurred on the 12 March 2021.
2nd Production-Ready Site Approaching Operational Status for Commercial Production
Sloane Developments Ltd ('Sloane'), has progressed the acquisition transaction announced in the RNS of 7 September 2020, to the point where it is now finalizing a definitive Share Purchase Agreement ("SPA") to acquire 100% of the 9MW flexible gas power project (the 'Acquisition').
The decision was largely influenced by the rapid progress made in getting the site ready to commence with commercial production. Latest reports from the project vendor and onsite engineers state that the site will be in electricity generation readiness pending finalization of the SPA. The site and equipment will then settle into steady state electricity generation and commensurate revenue creation as planned for the project life cycle.
Kibo advances Benga power project
Kibo and its local JV partners recently attended a workshop with EDM in Maputo to discuss and agree the next steps towards the ultimate finalization of a PPA. During the meeting the final optimised definitive feasibility study, inclusive of the updated grid integration study, and a summary of an updated draft financial model was presented and discussed as the fundamentals that will guide and focus the further course of the PPA process. This will ensure that a final result is obtained at the earliest opportunity possible.
The very productive discussions during the workshop, amongst others, also included an agreement reached between the parties to integrate specific EDM inputs into the Financial Model and the immediate initiation of a formal EPC process towards finalizing an advanced Financial Model that reflects firm numbers on key commercial parameters.
Agreement to co-develop renewable projects in South Africa
The Company entered into an agreement with South Africa-based Industrial Green Solutions (Pty) Ltd ('IGES') to jointly develop a portfolio of Waste to Energy projects in South Africa ('the Agreement') with an initial target of generating more than 50 megawatts of electricity for sale to industrial users. The Agreement, which is subject to the satisfaction of certain conditions, is in line with Kibo's strategy to integrate renewable energy into its project pipeline, which includes three utility-scale power generation and mining projects.
29. Commitments and Contingencies
Benga Power Project
Kibo entered into a Joint Venture Agreement (the 'Benga Power Joint Venture' or 'JV') with Mozambique energy company Termoeléctrica de Benga S.A. to participate in the further assessment and potential development of the Benga Independent Power Project ('BIPP'). In order to maintain its initial participation interest Kibo is required to ensure funding of a maximum amount of GBP1 million towards the completion of a Definitive Feasibility Study, however this expenditure is still discretionary.
Other than the commitments and contingencies noted above, the Group does not have identifiable material commitments and contingencies as at the reporting date. Any contingent rental is expensed in the period in which it is incurred.
30. Going Concern
The Company and Group's ability to continue as a going concern is dependent on the sourcing of additional funding by the directors for the foreseeable future. The future of the Company and the Group is dependent on the successful future outcome of its short- and medium-term ability to raise new equity funding and the successful development of its energy development assets and of the availability of further funding to bring these interests to production. All these dependencies are subject to material uncertainty but in preparing the financial statements, the Directors consider that they have taken into account all information that could reasonably be expected to be available. Consequently, they consider that it is appropriate to prepare the financial statements on the going concern basis.
The directors are following an active approach to continuously reduce administrative costs in order to alleviate the pressure on cash flow, most notably the 40% reduction in the remuneration of directors and management that were implemented effective June 2020.
The directors have reviewed budgets, projected cash flows and other relevant information, and on the basis of this review, are confident that the Company and the Group will have adequate financial resources to continue in operational existence for the foreseeable future.
Accounting policy
Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary shares in issue during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as required by Circular 1/2021 issued by the South African Institute of Chartered Accountants (SAICA).
Reconciliation of Headline earnings per share
Headline loss per share
Headline loss per share comprises the following:
Reconciliation of headline loss per share: 31 December 31 December 2020 (GBP) 2019 (GBP) Loss for the period attributable to normal shareholders (4,726,286) (3,500,004) Adjustments Loss/(profit) on disposal of subsidiaries 102,414 (591,060) Profit on disposal of motor vehicle (53,574) - Headline loss for the period attributable to normal shareholders (4,677,446) (4,091,064) Headline loss per ordinary share (0.003) (0.005) Weighted average number of shares in issue: 1,546,853,959 849,795,672 Headline loss per share, on a per-share basis:Reconciliation of headline loss per 31 December 31 December share: 2020 (GBP) 2019 (GBP) Loss for the period attributable to normal shareholders (0.0030) (0.0041) Adjustments Loss/(profit) on disposal of subsidiaries 0.00003 (0.0007) Profit on disposal of motor vehicle (0.00003) - Impairments (0.00008) Headline loss for the period attributable to normal shareholders (0.00308) (0.0048) Headline loss per ordinary share (0.003) (0.005) In order to accurately reflect the weighted average number of ordinary shares for the purposes of basic earnings, dilutive earnings and headline earnings per share as at year end, the weighted average number of ordinary shares was adjusted retrospectively. **S** Johannesburg 11 June 2021 Corporate and Designated Adviser River Group
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June 11, 2021 02:00 ET (06:00 GMT)
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