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Share Name Share Symbol Market Type Share ISIN Share Description
Kibo Energy Plc LSE:KIBO London Ordinary Share IE00B97C0C31 ORD EUR0.001
  Price Change % Change Share Price Shares Traded Last Trade
  -0.05 -18.18% 0.225 16,506,168 13:12:04
Bid Price Offer Price High Price Low Price Open Price
0.20 0.25 0.275 0.225 0.275
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining -4.04 -0.60 3
Last Trade Time Trade Type Trade Size Trade Price Currency
16:05:24 O 100,000 0.25 GBX

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DateSubject
14/8/2020
09:20
Kibo Energy Daily Update: Kibo Energy Plc is listed in the Mining sector of the London Stock Exchange with ticker KIBO. The last closing price for Kibo Energy was 0.28p.
Kibo Energy Plc has a 4 week average price of 0.18p and a 12 week average price of 0.18p.
The 1 year high share price is 1.15p while the 1 year low share price is currently 0.18p.
There are currently 1,272,272,188 shares in issue and the average daily traded volume is 48,477,932 shares. The market capitalisation of Kibo Energy Plc is £2,862,612.42.
10/8/2020
11:21
hedgehog 100: Hedgehog 100 12 Oct '14 - 20:34 - 12134 of 43003 Edit 0 0 0 "Thanks for the excellent research guys. The future certainly looks very positive here. And the chart looks poised for a rebound from 1.425p, with a possible double bottom at about this level." I feel more bullish about KIBO now than I have for about six years, when I was posting the above post. KIBO had just had a placing at 1.5p: 08/10/2014 08:15 UK Regulatory (RNS & others) Kibo Mining Plc Kibo Mining raises £855,725 in Share Placing LSE:KIBO Kibo Energy Plc "Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company is pleased to announce it has received commitments to a share placing of 57 048 352 new ordinary shares of Eur. 0.015 in the capital of the Company with clients of Kibo's UK Broker, Hume Capital Securities Plc and River Capital Partners LTD, at a placing price of 1.5p per share (the "Placing Shares"), to raise gross proceeds of GBP855,725 before expenses (the "Placing"). Kibo's directors and senior management are participating in the Placing for a cumulative amount of GBP55,725 and will be participating on the same terms as other investors. ..." https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Mining-Plc-Kibo-Mining-raises-855-725-in-Sha/63962052 And before the end of the year KIBO had rapidly multibagged to nearly 10p:
08/8/2020
17:05
hedgehog 100: cj41 7 Aug '20 - 12:40 - 3561 of 3563 0 2 0 "That’s excluding the other 650,000,000 warrants out there at 0.8 and 1.2p and that LC wants ‘headroom̵7; for 5 billion after a 10:1 consolidation I.e. 40 x current. If that doesn’t put off potential investors nothing will." Cj41, Warrants at 0.8p and 1.2p: compared to the current KIBO share price of 0.2p. I.e. warrants at 4 and 6 times the current s.p.: that's 300% and 500% higher. Well, I didn't get where I am today by being put off by warrants at hundreds of per cent higher than the current share price ... And if they're all exercised it'll probably mean that the share price has ten-bagged from current levels, as the warrant holders will want quite a bit of leeway. In addition, it'll bring in millions of pounds for KIBO to invest into its business.
18/7/2020
20:05
hedgehog 100: Lurker, Please note the following from the 18th. December RNS: "From this, we calculate the value of Kibo's equity share, after debt, the market value of minority interests and Kibo's share of the Developer's Premium is also considered." 18/12/2019 09:00 RNS Non-Regulatory Kibo Energy PLC Q&A Document LSE:KIBO Kibo Energy Plc "Are NPVs attached to each project? Yes, as part of the initial and ongoing economic feasibility assessment and financial modelling of each project, a key element is the assessment of the estimated inherent net present value ("NPV") of a project. In developing and operating large utility-scale power station projects, a 20-30-year view is required and forecasting the attributable cash flows over such a period is more of an art than a science. That said, cash flows can be valued for projects of this nature, utilising discounted cash-flow as a methodology to arrive at an NPV for unlevered free cash flow generated from Kibo's individual and combined power project portfolio. From this, we calculate the value of Kibo's equity share, after debt, the market value of minority interests and Kibo's share of the Developer's Premium is also considered. The most recent example of the foregoing can be seen in the First Equity Research Note as published over a year ago on 28 November 2018 and available on Kibo's website, which estimated the Company's combined projects' NPV at that time at US$1.9bn." https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Energy-PLC-Q-A-Document/81377676 That said, I agree that there will be some dilution to KIBO, but the current discount to NPV is factoring in dilution of well over a thousand-fold: i.e. dilution of well over 100,000%. I.e.:- KIBO's market cap at 0.225p is £2.912M. (1,294,490,188 shares in issue). KIBO's stake in KAT (96,138,738 shares) is worth £1.875M. at KAT's current share price of 1.95p. That means that the value being attributed to KIBO's non-KAT assets is just £1.037M. For projects with a combined net present value (NPV) of about £1.5 billion.
11/7/2020
22:10
hedgehog 100: Lurker, KIBO looks to have double-bottomed off 0.2p after its recent fundraising, and at 0.215p is now heading up. And history doesn't repeat, but it does rhyme. So remember that KIBO rapidly multibagged after its October 2014 placing at 1.5p: 08/10/2014 08:15 UK Regulatory (RNS & others) Kibo Mining Plc Kibo Mining raises £855,725 in Share Placing LSE:KIBO Kibo Energy Plc "Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company is pleased to announce it has received commitments to a share placing of 57 048 352 new ordinary shares of Eur. 0.015 in the capital of the Company with clients of Kibo's UK Broker, Hume Capital Securities Plc and River Capital Partners LTD, at a placing price of 1.5p per share (the "Placing Shares"), to raise gross proceeds of GBP855,725 before expenses (the "Placing"). Kibo's directors and senior management are participating in the Placing for a cumulative amount of GBP55,725 and will be participating on the same terms as other investors. ..." https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Mining-Plc-Kibo-Mining-raises-855-725-in-Sha/63962052 Before the end of the year KIBO had reached nearly 10p:
09/6/2020
08:12
yaki: A post on the other side. Very interesting for many reasons; I won't go into details but pretty much probably what the BoD think of latest debacle. Could the poster be one of them - Member since 6 Sep 2016 and only his SECOND post to date! Just 1 comment - "...Ignore the share price for a moment" - Is this why the BoD decided to issue lots of shares at the prevailing share price?!? And this all in the MIDST of pandemic when people losing loved ones, livelihoods, jobs, taking massive paycuts etc Or how many shares Sandersons and Shumba were issued that were sold into the market - 300-400m in my calcs. But much easier to blame s/hs who supported the company for many years and as a result are 90%+ down! ---------------------------------------------------------- LC is Kibo Started: grimt1, 09 Jun 2020 07:43 Last post: grimt1 09 Jun 2020 07:43 Based on the negative sentiment on this forum; the calls for LC's resignation etc: I can only come to the conclusion that many you are all invested in the wrong share. Kibo was never a pump and dump share for making a quick buck, a quick return. This sort of trading is what has driven the share price down to what it is today. Ignore the share price for a moment and consider what Kibo has achieved over the past ~8 years. Kibo has evolved from a junior explorer to a full fledged energy company with a number of BIG projects that are primed to deliver. This was no random evolution. I believe it was a well thought out strategy, executed with precision, in response to a changing political landscape in Tanzania, taking advantage of clear opportunities in the energy space in Africa and globally. Back to the share price – Kibo’s biggest problem, I believe, is the short term fickle nature of the average AIM investor. The company is severely undervalued. Why – because of the short term focus of the average AIM investor – parasites that gnaw away at the value of an otherwise robust company with long term goals. I’ve been invested in the company for 6 years now. I’m in for the long term – and I’m staying because of the great projects LC has added to Kibo. This is the true value of Kibo; I’m waiting till these projects start going on-line. Calling for LC’s resignation is killing the goose that lays the golden egg. I believe LC is Kibo In my opinion yesterdays NO vote was shareholders cutting of their nose to spite their own faces. The board will now be forced to employ far more costly means to funding the company. PS: The directors wouldn't have done so long without pay if they didn't have the best interests of Kibo in mind
09/1/2020
16:42
hedgehog 100: Yaki posted recently (on another KIBO thread) that just one of KIBO's multiple projects could give a market cap. of £0.5 billion: yaki 29 Oct '19 - 20:40 - 7737 of 7808 0 2 0 " ... Re project value -MCPP was quoted 8bln usd over 25 yrs, ie 320m. Assume 20% profit margin (which is quite low) - profit of 64m. Kibo past expenses + free carry - say 20% - 13m a year. From 1 project And this is just power element. Then we have coal element as well. Another 10m easily. PE of 20 - market cap of 500m easily. WITHOUT issuing any shares. And then we have 4 other projects ..." Note that the figure of £0.5bn. of market cap. for KIBO from one project takes account of the fact that KIBO won't own the project in full: i.e. just 20% ownership is assumed, which seems quite reasonable. And then KIBO's 18.12.19 RNS stated that the NPV of KIBO's combined projects is nearly £1.5 billion pounds (at the current sterling-dollar exchange rate of $1.3 per £): 18/12/2019 09:00 RNS Non-Regulatory Kibo Energy PLC Q&A Document LSE:KIBO Kibo Energy Plc "Are NPVs attached to each project? Yes, as part of the initial and ongoing economic feasibility assessment and financial modelling of each project, a key element is the assessment of the estimated inherent net present value ("NPV") of a project. In developing and operating large utility-scale power station projects, a 20-30-year view is required and forecasting the attributable cash flows over such a period is more of an art than a science. That said, cash flows can be valued for projects of this nature, utilising discounted cash-flow as a methodology to arrive at an NPV for unlevered free cash flow generated from Kibo's individual and combined power project portfolio. From this, we calculate the value of Kibo's equity share, after debt, the market value of minority interests and Kibo's share of the Developer's Premium is also considered. The most recent example of the foregoing can be seen in the First Equity Research Note as published over a year ago on 28 November 2018 and available on Kibo's website, which estimated the Company's combined projects' NPV at that time at US$1.9bn." https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Energy-PLC-Q-A-Document/81377676 There is clearly extraordinary undervaluation here at just 0.465p: market cap. £5.8M. And this fact, combined with the anticipated near-term positive newsflow, makes this a very compelling investment opportunity.
08/1/2020
19:11
hedgehog 100: Breakout is starting here. And history doesn't repeat, but it does rhyme. So remember that KIBO rapidly multibagged after its October 2014 placing at 1.5p: 08/10/2014 08:15 UK Regulatory (RNS & others) Kibo Mining Plc Kibo Mining raises £855,725 in Share Placing LSE:KIBO Kibo Energy Plc "Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company is pleased to announce it has received commitments to a share placing of 57 048 352 new ordinary shares of Eur. 0.015 in the capital of the Company with clients of Kibo's UK Broker, Hume Capital Securities Plc and River Capital Partners LTD, at a placing price of 1.5p per share (the "Placing Shares"), to raise gross proceeds of GBP855,725 before expenses (the "Placing"). Kibo's directors and senior management are participating in the Placing for a cumulative amount of GBP55,725 and will be participating on the same terms as other investors. ..." https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Mining-Plc-Kibo-Mining-raises-855-725-in-Sha/63962052 Before the end of the year KIBO had reached nearly 10p: In the most recent placing though KIBO directors and senior management have invested over four times as much as in the October 2014 placing: £239,701, rather than GBP55,725: 21/10/2019 06:00 UK Regulatory (RNS & others) Kibo Energy PLC Completed Placing LSE:KIBO Kibo Energy Plc https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Energy-PLC-Completed-Placing/80954086
09/12/2019
11:47
hedgehog 100: KIBO itself rapidly multibagged after its October 2014 placing at 1.5p: 08/10/2014 08:15 UK Regulatory (RNS & others) Kibo Mining Plc Kibo Mining raises £855,725 in Share Placing LSE:KIBO Kibo Energy Plc "Kibo Mining plc ("Kibo" or the "Company") (AIM: KIBO; AltX: KBO), the Tanzania focussed mineral exploration and development company is pleased to announce it has received commitments to a share placing of 57 048 352 new ordinary shares of Eur. 0.015 in the capital of the Company with clients of Kibo's UK Broker, Hume Capital Securities Plc and River Capital Partners LTD, at a placing price of 1.5p per share (the "Placing Shares"), to raise gross proceeds of GBP855,725 before expenses (the "Placing"). Kibo's directors and senior management are participating in the Placing for a cumulative amount of GBP55,725 and will be participating on the same terms as other investors. ..." https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Mining-Plc-Kibo-Mining-raises-855-725-in-Sha/63962052 Before the end of the year KIBO had reached nearly 10p: In the most recent placing though KIBO directors and senior management have invested over four times as much as in the October 2014 placing: £239,701, rather than GBP55,725: 21/10/2019 06:00 UK Regulatory (RNS & others) Kibo Energy PLC Completed Placing LSE:KIBO Kibo Energy Plc https://uk.advfn.com/stock-market/london/kibo-energy-KIBO/share-news/Kibo-Energy-PLC-Completed-Placing/80954086
26/6/2019
14:45
andymunchkin: Submit lurker523 Aug '17 - 10:59 - 1 of 1500 0 5 0 And that other source of fantasy ? Doh!fort's bogus share price target Kibo shares falling today (Aug 22) after latest RNS - Selling by the knowledgeable could have been predicted. The mooted 'equity' funding package will, at last, show the fantasists that outside investors will be taking their overwhelming share of MCPP's returns, and that their 'projections' based on Kibo keeping all to itself will be exposed for the idiocies they are. Especially exposed will be Dohfort's 'target' share price in its latest (Aug 9th) puff - which is just a re-hash of its bogus 'targets' in 2015. So Why republish them Now ? Kibo's (Doh!-fort's) tame analyst is a petroleum geologist, probably steeped in oil exploration stocks. For those, to account for uncertainty how much oil, and how much investment (and share dilution) is needed to get it out of the ground, oil analysts use the 'risked' discount concept - they calculate their best estimate of the probable value of oil in the ground, and apply a discount (often plucked out of the air) to arrive at the shares' target value. That approach uses the current shares in issue to calculate per share value. The 'discount' is supposed to allow for the unknown new shares that will have to be issued to raise the development funds. The method therefore doesn't match what will happen in practice, but is the only one that can be used when there is so little information. But by plucking a 'discount' out of the air, an analyst can arrive at almost any value he likes, for which reason seasoned and institutional investors pay no notice unless they trust him to make an honest assessment of the appropriate 'discount' Doh!fort's analyst has used the same concept for Kibo, despite that, unlike for an uncertain oil (or other early stage mining) project, there is sufficient information from feasibility studies as to the upfront capex needed to build the MCPP, and, once built, its value in the form of its cash flows. So a fairly accurate calculation can be made as to the equity shares needed to be issued to raise the build funds (usually 30% of the capex by way of equity- the rest in loans), and the price investors will pay for them. But Dohfort hasn't done this for Kibo because it would highlight the unwelcome fact that it will have to issue many, many more shares to fund its share of the capex and retain any reasonable share of MCPP than the "50% discount" it has used implies. It makes no difference whether shares in the subsidiary MCPP project are issued to outside investors, or whether Kibo itself raises the funds to pay for its share (or indeed if an infrastructure fund buys the whole project from Kibo). The end result for Kibo shareholders and therefore the value of their shares, will be the same, regardless how many Kibo shares will then be in issue. With a build capex around £700m, compared with Kibo's current market cap around £20m (the same as its only real asset - the coal mine - and therefore almost fair value) the £210m equity needed for Kibo to retain 100% of MCPP would involve a 10-fold increase in its issued shares (9-fold at 7p - a higher price won't be warranted as shown later) - a near 90% discount instead of the 50% Dohfort uses - which would produce a '.target' of 6p instead of Dohfort's 28p It is rather more complicated than that. Providers of the 70% loan will want a spread of strong 30% equity investors to bear the risk should anything go wrong, and Kibo having no other assets, they will want the bulk of the equity funding to come from stronger investors who will take their proportionate share of MCPP. So Kibo never could retain 100% or anything like it. These large complications are ignored by Dohfort. While keeping as its 'headline' the bogus target arrived at with a 50% discount on the Project NPV, it weasels out of responsibility for that fraudulent puff in its small print, which says its valuation is 'unrisked and 'ungeared' - terms the average investor won't understand but which mean that Doh-fort knows full well (as experienced investors also will) that there will be dilution (unknown) and execution risk, that it hasn't allowed for. It is this evasive language and bogus calculation that has misled a coterie on the bulletin boards (who won't brook any dissent or sensible discussion) to think (unrestrained by Kibo's CEO) that the whole (or a large part) of the project's NPVs will 'belong' to Kibo, at a share price which can never be remotely approached once the reality of its funding is taken into account. In practice there are numbers of other complications that Kibo has not shared with its investors. The Mbeya coal mine could perhaps be operated and owned separately from the power plant - which would lead to a probably better outcome for shareholders. However, all pointers are for the two being 'integrated' - probably because lenders will want the certainty of a 27 year coal supply - and calculations here assume this. And although global coal prices have risen, the Tanz government like all others will limit via its tariffs the profits it will allow MCPP to make to just enough to attract investors, so rising coal prices will not benefit Kibo. Any ability to sell coal outside the power station will depend on finding more reserves than set aside so far for the power plant, and will have extra cost. On the slightly plus side Kibo has the value of feasibility studies it has partly paid for to add to its $20m mine value in the balance sheet, as a non-cash contribution to the approx $700m MCPP project cost, which would give it around 4% - or perhaps 13-14% of the £219m equity - without issuing shares to pay for it. That would give it a share of the project's gross PV once built and financed worth in NPV10 terms about $60m - or 15p per present share against the 29-30p Dohfort 'targets'. That $60m coincides with what the 2.5% Sanderson stake in the MDC (not in Kibo) is said to be 'worth' and which some think points to Kibo's value. Unfortunately it doesn't, not only because the MDC isn't listed and so doesn't have a share price that Sanderson can sell into, but because it will be a totally different economic entity than Kibo itself with a different share and borrowing structure. So there is obviously some other route not disclosed to Kibo shareholders by which Sanderson can monetise its interest. And although Kibo says MDC has 100% of MCPP now, it won't have anything like that once it is financed by banks and he other necessary outside investors. In other words Kibo shareholders will definitely have their share in MCPP diluted. But Sanderson's share in MDC might not be - depending on how it is financed. Such 'NPV' based share values can only ever be a crude guide in any case, and for all sorts of good reasons are never approached in practice. At the 10% discount rate used for MCPP, most mining projects equity shares are rated by the market at only about half the theoretical NPV, even for fully financed projects. So Kibo's shares would only warrant about 7.5p, but not before MCPP is fully up and running in what looks like 4-5 years time. We don't have any of the detail necessary to estimate how MDC and MCPP will be fully financed, and the latest RNS promises some info soon. But before financial close, its funding partners will probably want Kibo to significantly bolster its balance sheet before accepting it as an equity partner, which would considerably dilute even that theoretical 15p. Last year Kibo expanded its authorised, unissued, share capital nearly 3-fold - so is obviously planning a large capital raise which will dilute its own shareholders, but won't necessarily dilute Sanderson's 2.5% in the MDC. But because Kibo would still be such a weak partner, my guess is that it will be encouraged to rid itself of the whole MCPP project and return to its roots as an explorer. It seems possible an interested infrastructure investor (such as AES) could buy it for its current value, which is about $30m or 7-8p per share, giving Kibo the cash to explore properly its Haneti nickel prospect. But the BB coterie can forget dreams of £1, 50p, or even 20p per share. These rely on a total misconception of what a project NPV is. They seem to think Kibo can sell MCPP (or a part of it) for its 'NPV'. That is nonsense because an NPV doesn't exist until a project has been built and fully funded, at which stage the shares will have been diluted by the necessary capital raise. Their dream is tantamount to thinking someone is going to give current Kibo shareholders around $250m 'for free', and demonstrates a dire lack of understanding of a balance sheet and its connection with a share price and a P&L account. Some also think Kibo will 'retain' 30% of MCPP. It may well have the chance to take up that share, but it will have to pay for it and raise the funds (around £65m) to do so - diluting existing shareholders some 3-fold. There is no way Kibo will be 'given' a 'free' 30%, because at the irr we have been told for the integrated project (21-22% - the 'norm') the other investors and lenders would see no return for themselves whatsoever or cover for the loan interest. The most 'free' share Kibo might get is to recognise the value of the mine and feasibility work. But they are non-cash, which will have to be made up through more equity. As for Katoro, See my explanation reposted below (written in April before its placing document) on how Dohfort also bumped up its 'target' price by using another fraudulent argument. But, as ever will be the case, the market now has Katoro more correctly valued - at 3.5p vs the 10.7p Dohfort 'projected' before its listing. So why the latest Kibo puff (and 'promise of news re funding) now ? - It's obvious. The latest Dec 2016 balance sheet showed Kibo running out of cash and remaining loan facilities from Sanderson by about now. Just as the Katoro 'research' was aimed (and failed) at puffing Katoro at its listing, so a two year old puff is being wheeled out again before an inevitable Kibo fund raise. (or maybe a 'partner', or another Sanderson, funding). Shareholders will be diluted either way. And although we have been promised news soon of equity funding, it's impossible to see how it can be finalised before any PPA agreement and subsequent financial close. The new interested investors can't have had time yet to vet the BFS, yet alone come up with their terms. So expect yet another fluffy bit of news with no useful detail. Reposted re Katoro share value. Previous post on Katoro (in April some time) Katoro Value - Someone (on the BB) asked Fothcoming float (if it happens) won't be worth much to Kibo holders (if based on what has been published so far) Value to Opera of Kibo's gold assets as already annouced as £3.6m. ie 1p per Kibo share. Reflects low grades, open-ended funding requirement, and low standard of resource which is mainly inferred. Paid for by 61m Opera / Katoro shares at 6p. Existing Opera shares total 17.25m. On float at 6p, and placing to raise £1.7m, another 28.3m will be added taking Katoro shares initially in issue to 106.6m. of which Kibo will have 57.2%. The initial placing is only enough to fund float costs, new company costs, and studies necessary to plan a mine start up. As already announced, there will be a later, larger fund raise, where past announcements by Kibo and Lake Victoria Goldfields for their now abandoned merger indicated at least another $5m for drilling and technical studies before any mine could be developed, and another $8m to start up the then mooted joint Imweru/Imwelo venture. Assuming that applies for Katoro, the further fund raise (assuming 6p) would add another 133m shares, further diluting Kibo's holding to 25% - its maximum share of profits once up and running provided no more funding. By then Kibo's own shares will have significantly expanded if its going to take any share of MCPP, so expect Kibo to offload all its Katoro to its own shareholders beforehand. Before that don't expect experienced investors to show much interest in what is a small low -grade operation . Instead, expect Kibo to 'offer' participation to its own shareholders. Sensible ones will politely decline No wonder Doh!-fort has been trying to ramp a value for Imweru higher than will be in the prospectus (which the FCA requires to be 'fair') by using blatantly exorbitant 'in-ground' values. Its March report purports to base an Imweru value on the '$35.6/oz average' of a set of pre-production 'peer' miners. But these are all much more advanced and have almost all their finance, while the exceptionally large and high grade Hot Maden prospect distorts the average skywards. Not only that, all Doh!fort's 'peers' are much larger, have resources measured to a higher standard than Imweru which is 80% inferred, and have much better gold grades. Any mining analyst should know that price per gold ounce for an 'in-ground' resource declines sharply the smaller the resource and the lower the grade. Imweru is well below the bottom of Doh!-fort's chart on both measures, so a fair value would be under $20/oz - taking what should be its own 'estimate' down to below even the $3.6m Opera/Katoro is paying. One wonders why Doh!fort is publishing such an unprofessional and biassed report unless it has been 'leaned' on to do so by someone desperate to get anyone to buy Katoro when listed. --------------- blastFromThePast
21/12/2018
11:20
lurker5: Another Bogus Broker 'target' Some cautionary reading over Xmas for the clappies - not that they'll be able to understand it. And they seem unable to work out why -when the interims (and the FE note) showed clearly that Kibo is fast running out of cash - FE has suddenly produced a 'research note' whose 'target' share price is grotesquely exaggerated. (Not that they'd notice that either) And in the face of the obvious cash raise coming, some of them are, unbelievably, still buying ! But for the intelligent who want to know why their shares are tanking here's the reason Not noted up to now as any sort of research house, FE's Nov 28 note piles three major mistakes one upon another. They are almost the same as made by Doh!fort - only worse. (only a coincidence of course that the analyst was at Doh!fort when it collapsed ?) Big Mistake 1) Kibo's project NPV's 2.4 times too high. FE makes its own 'estimates' from projecting its 'estimated' profits (plucked out of the air - no workings or evidence to show where it got them from) forward by 25 years, to arrive at a $1,900m NPV at a 10% discount rate for all three projects - 2.4 times higher than has already been published by Kibo's project consultants and much higher than assumed even by Doh!fort In Jan 2017 the IBFS for MCPP gave the irrs for the overall project, and also for the equity assuming a 25%/75% equity/loans split. While up-to-date capex was not given, using an informed estimate based on previous announcements ($650m including Kibo's mine and feasibliity costs) that is all that is necessary to reconstruct to reasonable accuracy the 25 year financial 'model' used by the consultants which will have produced the irr's announced, and will be the basis for tariff negotiations and Financial Close, This shows the MCPP project 10% NPV to be around $280m. We don't have up-to-date figures (courtesy, as usual, LC) but the results aren't likely to be very different because these CtP projects' economics all turn out much the same. Kibo in Dec 2014 also published results for MCPP's power only pre-feasibility study by Aurecon, showing a range of NPV between $230m - $280m on capex of $640-$780m. Irr's for project and equity were in line with the Jan 2017 IBFS. So we can take around $280m as the definitive NPV, because it is what has been calculated by the professional consultants. NPV's for Mabesekwa and Benga will be smaller - Kibo with only 85% of the former, and the latter having no captive coal mine. For the three projects therefore, the 10% NPV acc to professional consultants with access to all the project details, income, and costs, is unlikely to exceed $750m. For Mast Energy, FE assumes just one project (although five are needed to plug Kibo's cash drain) which the Aug RNS quoted as having NPV's of £16-£19m each for a 20MW plant, and irrs of 13-16% - from which can be deduced capex for each plant (not mentioned by LC) of at least £10m (confirmed by details from UK Power Reserve figures on Companies House).The figures also imply Kibo's 60% profit share from each plant after tax would be less than £0.8m. Thus the total NPV's acc to Kibo's own consultants will be less than $800m. FE arrives at $1,900m ! Big Mistake 2) Kibo's project shares, nearly three times too high. FE assumes that Kibo will have 80% of the projects' 'added value' ("which equates to a conservative 1.5* Developer Premium !") FE doesn't give any reasoning for its extraordinary assertion, which seems to have been chosen to give -surprise surprise - the same 'headline' result as did Doh!fort even though Kibo's whole make-up has changed. Apart from that, 'added value' is just an alternative term for an NPV, while 'development premiums' only exist for property construction which (usually) can be sold on completion at a profit. But power plants are built down to a price and a tariff, so that nowhere on the internet and among power conglomerates like AES Group can be found any power project which has been sold off at a profit on completion and could therefore have delivered its builders a 'development premium'. Apart from that, to assume Kibo has 80% of the NPV when at the most it will have spent (on a coal mine and feasibility) no more than 25% of the equity capex, while the major funders (like GE and Sepco ?) will put up 75% - would make the finances impossible for the latter. Nowhere can be found an example where the share of a project cash flows is not the same as the share of capital contributions - whether from past spending or not. See Oracle Power's Dec 20 announcement that it will have 12.2% of its Thar CtP project equity, with its historical spend contributing part of the 12.2%. This is the usual arrangement for such projects, and FE's assumption for Kibo is pure baloney. See Oracle's full announcement and you will understand Kibo's problem that LC has never made clear to his shareholders. So FE's exaggeration so far is 3 x 2.4 = 7.2 times the reality. Big Mistake 3) Kibo shares in issue when projects start to contribute almost certainly only half the reality Optimistically, the earliest any of Kibo's projects might start to generate revenue and, after running smoothly start to pay Kibo a dividend, is at least five years time, or 2023/24 at the earliest. FE assumes Kibo will issue no more shares at all over that five years, beyond 100m to Sepco (at 1.9p) - bringing the total now (and in 2024) to 730m. But Benga and Mabeseweka haven't got beyond their preliminary feasiblities. Full, detailed, bankable feasibility studies required by lenders and equity funders cost at least the $11m spent at MCPP each (maybe a bit less for experience gained, but not that much less), while if Kibo wants a bigger share than it will earn by funding feasibility, it is going to have to issue more shares to pay for it. (See Oracle above) On top of that is the £2-3m annually Kibo needs to keep the lights on (and pay the directors) quite apart from what it will be called on to keep its share of Katoro once it raises the funds to start any mine. The five 20MW Mast plants needed to plug Kibo's cash drain will cost £50m plus. Some might be borrowed (which will take away some of the £0.8m per plant they would contribute to Kibo) but one way or another Mast is going to cost Kibo at least £10-£15m before it provides any help. So we have probably well over £20m to be raised by Kibo before its projects can start contributing in five years time, compared with its market cap now of only £13m. No wonder Sepco is hesitating. Which means shares in issue will likely be twice the 730m assumed by FE in its 'target price'. Possibly more. Scale of exaggeration so far ! 2.4 x 3 x 2 = 14.4 times ! and that's without the basic fact that Big Mistake 4) NPV based 'targets' are never, ever approached in practice in the market. The reasons are a) what discount rate to use ? A NPV10% is 25% less than at 8%. A broker analyst paid to puff a share can take his pick ! A 12% discount rate (half the NPV at 8%) usually predicts share prices much more accurately. b) A NPV isn't a logical price to pay. A NPV is merely the total of all discounted future returns, so anyone paying it is paying up-front for 25 year of returns. If all goes to plan (which it never does) he would merely get his money back plus a 10% annual return. What fool would buy that ? My own research over 70 AIM miners in 2008-12, as does Edison recently, could not find any miner, even with funding arranged, at more than 1/3rd of its 'target' NPV based price. So why is FE peddling this 'incentive' to buy Kibo shares ? (Clue: even FE's forecast end 2018 Kibo balance sheet shows net cash of £0.3m - but only assuming it has received £1.9m from Sepco !) You work it out. I'll post a more correct, professional, calculation later.
Kibo Energy share price data is direct from the London Stock Exchange
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