Share Name Share Symbol Market Type Share ISIN Share Description
Kibo Energy Plc LSE:KIBO London Ordinary Share IE00B97C0C31 ORD EUR0.015
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 0.85 176,701 08:00:00
Bid Price Offer Price High Price Low Price Open Price
0.80 0.90 0.85 0.85 0.85
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining -4.04 -0.60 7
Last Trade Time Trade Type Trade Size Trade Price Currency
13:15:40 O 125,967 0.8002 GBX

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DateSubject
23/7/2019
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 0.85p.
Kibo Energy Plc has a 4 week average price of 0.73p and a 12 week average price of 0.73p.
The 1 year high share price is 5.05p while the 1 year low share price is currently 0.68p.
There are currently 776,986,592 shares in issue and the average daily traded volume is 400,511 shares. The market capitalisation of Kibo Energy Plc is £6,604,386.03.
05/7/2019
09:26
yaki: lurker On your first point, let's agree to disagree. With a few other quals under my belt, I don't have any issues understanding simple middle school algebra that is involved in NPV, IRR etc On the KIBO point, why do you always assume that they will wait for dividends. There are other ways of bring forwards cashflows - securitisation, loans secured by stake, sell of a chunk of the stake etc. I won't be surprised if Bordersley which was brought in inhouse, is not sold at some point in the next 6-12 months, once in operation, to a yield hungry investor like a life insurer or pension fund. I personally advised on a few such deals in the past. lurker5 5 Jul '19 - 07:21 - 1656 of 1656 0 0 0 Yaki - my NPV and economic models were run in great detail, with many iterations of what had to be assumed (as is done in many engineering design processes) and checks for validity. On the other hand, I found your comments on the matter to show you had practically no experience and little understanding. As for Kibo value, you ought to be able to work that out for yourself. The fact is that, to get to the value (per Kibo share) that might be there in the end from Med Moz and Bots, Kibo has to spend much more cash than it has access to. My own estimates are that if it can raise the necessary equity (involving diluting present shares about twice) it might one day be worth 5p per share (no more) - but only assuming no more dilution than twice, and that investors will stump up. Both very dodgy assumptions. But even if Moz and Bots get up and running (in at least 5 years time) Kibo will only have a minority stake and no control over whether it gets any dividends from them. So what's the point of the whole strategy ? Its idiotic. It might survive on Med, but only after a long time, and its income will be peanuts compared with the burden of shares LC's grand vision has amassed. In other words, the shares will be lower even than today's. Its sad (and rather pathetic) to see, eg Stay Strong over in the chicken run thinking Kibo will be life-changing for his family. The poor man hasn't the slightest idea how Kibo works. He's in the same mindset that thought it was 'worth' MCPP's NPV !
05/7/2019
07:21
lurker5: Yaki - my NPV and economic models were run in great detail, with many iterations of what had to be assumed (as is done in many engineering design processes) and checks for validity. On the other hand, I found your comments on the matter to show you had practically no experience and little understanding. As for Kibo value, you ought to be able to work that out for yourself. The fact is that, to get to the value (per Kibo share) that might be there in the end from Med Moz and Bots, Kibo has to spend much more cash than it has access to. My own estimates are that if it can raise the necessary equity (involving diluting present shares about twice) it might one day be worth 5p per share (no more) - but only assuming no more dilution than twice, and that investors will stump up. Both very dodgy assumptions. But even if Moz and Bots get up and running (in at least 5 years time) Kibo will only have a minority stake and no control over whether it gets any dividends from them. So what's the point of the whole strategy ? Its idiotic. It might survive on Med, but only after a long time, and its income will be peanuts compared with the burden of shares LC's grand vision has amassed. In other words, the shares will be lower even than today's. Its sad (and rather pathetic) to see, eg Stay Strong over in the chicken run thinking Kibo will be life-changing for his family. The poor man hasn't the slightest idea how Kibo works. He's in the same mindset that thought it was 'worth' MCPP's NPV !
27/6/2019
11:19
lurker5: More on Bordersly The share price says it all. The clucking clappies got carried away - again - by LC's airy fairy hype. But not before some new headless chickens have scampered in to the chicken coop Of course we have the usual brainless contribution from the Wagger and his band. They've convinced themselves that '5.25p is the new floor' !! 1) that implies a market cap of £42m. (and as to be expected, Wombleville Man 'opines' a £100m market cap !) Sorry Chickkie-Biddies ! Kibo's net assets are £26.4m, of which £26.3m is the 'intangible' and uncertain book value of its projects. It has no income, and likely is currently in net debt, drawing down yet more from Sanderson. Its balance sheet hardly even supports a 1p share price. 2) Kibo got away with deeming a 5.25p share value to acquire Med and Bordersly only because that was the price when the deal (and obviously subsequent deals) was struck (LC has actually said so). Since then its only real 'asset' bolstering the shares, MCPP, has disappeared, hence they're now close to par where they're likely to stay. (Med will be hopping mad - to add to the already hopping mad Sechaba, and the hopping mmad Sanderson - all cheated out of the value they signed up to.) See later. But Wag opines that 'the co has 'decided' not to issue shares at below 5.25p. 'No' Mr Wag - 'The Market' will decide ! Another headless remark from the Great Panjandrum himself. "Bordersly will 'contribute significantly to Kibo's funding needs "! Sorry. Mr Panjandrum The £300,000 or so per annum (that the stated NPV now confirms is the approx cash flow - before tax - from 100% of Bordersly) is hardly 'significant' in light of £2m of Kibo running costs (not counting the extra $millions to develop and fund its projects if ever it is to benefit from them (£1m for Benga's feasibilty study alone) As for benefit to the balance sheet. ? Yes - as Kibo's first tangible producing asset, Bordersly might be valued around £6m (the seeming capex for the plant) but, being financed 'off balance sheet' there will be borrowings and minority shareholders to offset that. So it won't add much to Kibo's net asset value, especially after the 46m additional shares (5% more dilution) to acquire it. The other 26MW of sites in the pipeline will, of course (if financed and acquired in the same way - except that they probably won't be - see later) add another (if pro-rata) £1.5m pa - and that really will start to help Kibo's cash drain - but at the cost of the shares issued for them and not before another year at least of that drain. So that's at least another £2m to be found from shareholders meanwhile. But there might be a problem. MED has been shafted by taking shares valued at 5.25p when their true value now is par. The same for Sechaba whose shares in exchange for Mabeseweka are now worth only 1/6th the value it sold to Kibo (it will have to explain that to its own shareholders) Sanderson too is out of pocket - all due to the hype LC will have peddled when doing his deals with them (and, there is justice in the universe afer all ! - Sands was obviously taken in by his own analyst's bogus Kibo share 'target') Between them they now have 63% of Kibo, so 1) LC will be on a short leash 2) The next time Med has sites to sell on to Kibo, does anyone really think they will take shares a an inflated price ? Ergo - yet more 'significant' dilution for existing shareholders. Chickens of course, especially headless ones, can't read or do maths, or understand company accounts and balance sheets. How much longer will they keep clucking ?
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
26/6/2019
08:56
yaki: Before dive into the figures, a couple of points -signing first ever PPA is a big thing for an energy company, and I am sure will help the sentiment -next ones should be easier, as path is already walked on -running day to day energy business - again very useful experience -similar small scale project experience combined with Africa experience + solar and batteries- can be quite useful in Africa generally, but more importantly in mining projects energy supplies On your figures, I agree with them, based on what we know. So once porfolio is up and running Kibo share of dividends is 1.1m and given their losses, they shouldn't pay any tax on it. A small start, but tangible and will have many non financial benefits around experience, credibility etc lurker5 25 Jun '19 - 19:17 - 1383 of 1383 0 2 0 Expected return on Bordersley Clappies over there getting all excited on news that is merely progress on existing news ! As if signing PPA gets them anywhere knowing the value to Kibo. On announced figures the numbers are: Capex £3.6m. A gross return of £700,000 pa gives irr 16.2% - NPV (20yrs @5% disc rate) £4.6m - in line with announced by Kibo earlier. (£16-19m for a 20MW site) If 65% funded by loans (@5% as paid by PeakGen) loan repayment over 10 yrs = £290,000 pa. Rest of capex funded by 'outsiders' via equity or loan notes. They'll want equivalent of at least 8% return pa = £100,000 pa. Net cash income shared between Kibo and MED = £310,000 pa for first 10 years. of which 60% = £186,000 pa to Kibo. (ie- as I forecast - won't quite pay LC's salary !) On the remaining 26.3MW in the pipeline (assuming numbers are pro-rata) Kibo would get an additional £978,000 pa (All before tax - though there'll be breaks) So this first tranche will fill about half Kibo's cash drain before any spend developing other projects. But not for another year, assuming all goes to plan (others in peaking power say the market is getting tougher) So still a long way to go to avoid further share dilution just to keep the lights on and no contribution at all to developing Moz and Bots !
11/3/2019
09:52
lurker5: Most Dangerous Share in the whole market Maybe the clappies are learning. Only a small spike last week on 'news' they used to take as always good. Maybe they've learned to be wary whenever LC says "he's 'pleased' ---- " But if they think because bankruptcy seems to have been staved off, that Kibo has been saved and they'll get their money back, I've some bad news. a) Its not just that those who've done their sums know that LC has driven Kibo into a bind that it will never get out of, even if it doesn't go bust - too many shares already for any of his 'projects' ever to deliver enough to make their growing millions worth more than a few pence each.. It means that while LC might 'grow' 'his' company (and his salary) his investors' shares won't Why else hasn't he (and the chairman) bought any for years ? b) Its also that something just as bad as bankruptcy is on the cards. No-one seems to have realised the extent to which Kibo is now in hock to the arch Shylock, and the danger they're now in that he will take over Kibo and restructure it so as to get his money back . (Quite apart from the wishful thinking about Mbeya 's 'value'.) There's still £0.9m of Shylock's original loan outstanding (as of last June's balance sheet) which, on conversion at (say) 1p (whenever he likes) will take his holding up to 31.4% - meaning he'll have to bid. Together with Sechaba'a 16.5%, he'll have 47.9% - needing only another £350,000 (of the £500,000 LC is about to further draw down to keep his lights on, and his salary) to be converted to bring their combined holding to over 50%. Bearing in mind they each must be hopping mad with LC, what does anyone suppose they will do ? Kibo's cash burn last time was at least £1.8m pa just to keep the lights on, while development work took another £0.8m pa (halved since 2017) . So that £350,000 would keep LC his salary for a mere 2-3 months from now. And - surprise, surprise - to draw down more than another £500,000 in all (4 months life support) requires a 'case-by-case' agreement ! No scope there for LC to press on regardless with his necessary development spending on Med, Moz, and Bots. On top of it all, Sand has complete control over timing. He can chose when to convert, and so to gain control of Kibo and LC, with whom he will be hopping mad at the turn of events. If he does take Kibo private don't expect him to be satisfied with only a pound of LC's and Kibo's flesh. To get back his losses, he'll restructure Kibo to benefit himself, and leave the other shareholders to drown. Kibo must be about the most dangerous share on the whole stockmarket . As for residual value in Mbeya (and potential sale) - the 'clarification doesn't clarify, and where it does shows amazingly wonky thinking, leading to the usual gross over-valuation - showing every sign of the Doh!fort dodgy and bogus method. That was proved to be a grotesque exaggeration for both Katoro and Hummingbird, as well as for Kibo earlier. It takes 'market based multiples', where in those other cases Doh!fort selected the best looking, and ignored factors like distance from export markets or coal quality and other inconvenient 'peer group' evidence, to arrive at 2-4 times the values that the market has actually accorded them. And to take an 'average' of two conceptually different 'elements' (coal in ground and NPV) shows another brain dead muddle. Either the coal has a value 'as is' reflecting its potential to be marketed elsewhere (how that will match the 100,000 tonnes per month the power was to take is a mystery) OR it will have a value once built and paid for, reflecting use for the power station. As exhaustively explained already, an unbuilt project can't be sold for its NPV, otherwise the buyer will be paying twice over for the capex. A project NPV only exists once it is built and funded. So to take a ' blend' of these two chalk and cheese measures is a complete nonsense, which if LC believes it demonstrates a woeful ignorance, about the maths underlying project financing and therefore the nature of his own business. (Unfortunately apparent from some project stats he's published in the past that just don't add up.) It means to think the mine could be sold off for anywhere near $66m is total fantasy. It is nearly four times the price Kibo paid for it in 2012 when the outlook for coal wasn't much different from today and when the power project was already there, even allowing for some work done since (mostly on the power project and not benefiting the mine except as a power station supplier). That's why Kibo's professional auditors only show its balance sheet value as around £16m. If I were Sands, I'm not sure I'd sell anyway, because it would eliminate my scope to extend my usurious loan facility. Suppose it was sold for its balance sheet value though, it might pay Kibo's running costs only (not the large development costs which Kibo will have to spend if its to get any share of their profits) almost up to when MIPP or Moz (Med will be far too small) might be just about to deliver some cash flow. To repeat. Kibo must be about the most dangerous share in the whole stockmarket. Why else hasn't LC or the chairman Schaffalitsky bought any ? And why else is Sands, the person with power to break it up, the only one willing to take them ? I forecast everything that LC has now been forced to admit about the cash he needs now and the difficulty of raising it. And as for his explaining that he "could not possibly foresee" the Tanz debacle. Didn't he have some hint or insight from the PPA negotiations, dragging on as they did for nearly nine months ? The worst types of people you encounter on the stock market are the energetic and ambitious idiots. At every step, over the full 7 years since LC brought his toxic portfolio of hopeless projects into Kibo, he has shown himself out of his depth, and ignorant of what it takes to increase its share price. He's a master at avoiding any risk from his own shares though.
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.
02/11/2018
12:42
cemsmusic: KIBO share price on 8th August 2018... High: 4.85p Low: 4.65p
11/4/2018
12:55
lurker5: Another Nail in the Coffin Here is my latest 'contrary' (ie correct) Kibo view as asked for by several on the 'other' board. Apologies if a bit long winded - it has to be, to fully explain the logic, for anyone not familiar with share valuation, especially for companies with 'projects ' not yet financed. And, sorry. But someone has to put Kibo (its investors anyway) out of its misery . LC has shown over his whole stockmarket history that he has no idea (or doesn't care) how to create value for shareholders. So here's another nail in the coffin. Essentially, nothing has changed since my first post . Quite why anyone should think signing (or even publishing details of - very unlikely) the PPA will spur the shares is a total mystery. Ignoring for the moment the Mabesekwa acquisition (its unknown future development cost and share dilution is why the savvy have been selling) here's why Yaki's 25p value for MCPP 300MW was always nonsense. He based it on the idea that the mine alone is 'worth' $100m, which with other spending to date will 'buy' 40% of MCPP ! To understand why that is wrong, you have to know 1) how project financing, and NPV and irr calculations work. - complicated for some maybe. But necessary as the only way to calculate the forecast profit streams that make up the NPV's and irr - as in Kibo's Jan 2017 feasibility results . The PPA won't help, because estimating a profit needs far more detail about costs than any outsider (inc Doh!fort's naive late unlamented analyst - is he now helping SVS/Novum ramp the shares ?) can possibly know. The best and only guide is those feasibility figures, because they contain the answer already. That's the reason for doing them. And you have to understand 2) that even if the mine were to be 'worth' a 7 times multiple of future profits (as would only be the case if listed separately on a stockmarket and therefore unavailable to be 'paid' to anyone) there is no way it would be accepted by eg GE as a 'contribution' to building MCPP. That needs hard cash. Kibo (and other equity partners) will only get a share of the project by way of past, real, spending and cash (or borrowed money) now. That's how project financing works. Knowing the capex , and/or NPV and irr gives directly the average income over the MCPP project lifetime that produces them, and according to those Jan '17 figures, the mine alone 'looks' very profitable. (irr 69% on $17m capex - to produce which implies an average income before tax of $13.5m pa) Assuming 100% of the capex is borrowed, repayments would be $1.8m pa, leaving, after tax, a net cash flow around $9.3m pa for the first 12 years while borrowing is repaid - ie 1.5p per Kibo share. (on present shares - there'll be even more needing to be issued soon) But that's all. The mine wouldn't be part of an 'integrated' project, and can't buy Kibo any share of the power side. Kibo's past spending on feasibility etc might 'buy' a small (2-3%) share of power, but that's all. Any significant 'Free carry' or 'development premium' is completely unfeasible for these sorts of projects for reasons below. But a scenario where Kibo just owns the mine is totally contradicted by the 'integrated' figures in the same RNS Its either one or the other, and the figures show why all such mine-mouth power projects - having started out hinting they have a very profitable mine - have all switched to integrated projects - basically because the power side wouldn't be profitable enough if the mine takes such a large slice. In turn, that's because governments limit tariffs so that the overall profit return to equity investors (assuming a large element of bank loans) is just enough to attract them without causing too high electricity prices. For all such projects, that return has been around 21% irr at equity level if 75% of capex is borrowed (and about 14% at overall project level before the gearing effect of borrowing). And that accords with Kibo's figures in its RNS.of integrated project post-tax irr 15.3%, and post-tax irr for equity (assuming 75% borrowing) 'above 21%'. To make better estimates we need up to date capex, which isn't given, except as "21% lower than $640m-$760m in the 2014 PFS."(Most of that reduction looks due to choosing the much lower capex mine option, so isn't really a significant change) So a bit vague, but assuming project capex is now $550m, and $30m is added in past spending on the mine and IBFS, a 21.5% post-tax equity irr (ie geared up with 75% borrowing) requires annual net cash flow to the MCPP equity shareholders (who put up $145m) of around $32m pa for the first twelve years while borrowing is repaid.(which accords with the RNS 21.5% irr to equity) Working back from that to the 100% project level - ie before repaying borrowings - pre-tax income would be around $115m pa - which ties in with the 'all-in' margin 39% quoted by Kibo (but before corporate costs.) - and with a 15.3% post tax irr on the project's total $580m capex. So on those integrated figures (ie the most that the government approved irr would allow) if Kibo were to take $9.3m pa for a separately owned mine, there would only be $22.7m pa left for those putting up the capex for power. Yet the power capex is $550m vs $17-35m for the mine depending whether its original cost is included. So that scenario would be completely unbalanced and unworkable, and is probably a reason why Sepco withdrew its original offer of equity (which LC hasn't admitted). And also why MCPP like all others has been switched to an 'integrated' project - where the coal transfer price is immaterial and all that counts is overall costs for the whole project. Kibo's figures for a 69% irr 'mine alone' obviously depend on some assumed coal price. But what price ? Why would the power side pay a coal price that makes for such an unbalanced profit share ? The mine doesn't work without the power, which could build in a more convenient place and get its coal elsewhere if it has to pay a price too high to make its required return. So Kibo can't extract that sort of profit for just the mine. And neither can the power side get more profit to compensate through a higher PPA, because that will be limited by the government's allowed irr So an 'integrated' project treating the mine and station as one and effectively sharing the profit (and the risks and costs) more evenly according to equity contributions is the only realistic possibility. That is what Kibo's 'integrated' figures are all about. But it makes one wonder why it released a mine set of figures which make no sense if to be integrated with the power side. - Maybe LC's usual smoke and mirrors to bamboozle the inexperienced like Yaki - or maybe he's thinking of trying to keep the mine separate and squeezing his power partners on price. But for all sorts of reasons spelled out here, that still looks unfeasible. So instead of Yaki's ill-informed mine 'contribution' buying 40% we have to work out a more realistic scenario which accords with the Jan'17 RNS On that, assuming Kibo's mine acquisition cost and feasibility study is treated as part of it, the 25% equity contribution to project capex becomes about $145m, of which 20% is Kibo's past contribution. Any more will either be a 'gift' or 'free carry' from the other equity partners, or will have to be paid for by Kibo in hard cash. Working out NPV's and irr shows that for the other equity contributors (maybe GE, and a consortium of other investors) to give Kibo a 'free carry' (ie let it take, say 30% of profit but only pay 20% of cost) will rob them of part of the irr that the government will allow them to make overall, and which is set just high enough to attract them (and to cover their own loan interest). In other words, the government isn't going to allow a situation where Kibo takes a 'free carry' - which dents the return to other investors below what they will allow overall, (or which would involve a higher power tariff )- why should they ? So whatever share Kibo wants over 20% it will have to pay for. After the shares for Mabesekwa, and the latest cash raise, Kibo has about 400m. left unissued (unless shareholders authorise more - which they'll almost certainly be asked to do at the forthcoming AGM - to pay for LC's other 'expansion' plans and build up necessary working capital and maybe a development bond) Assuming Kibo uses 210m to raise say £15m cash - at 7p - it could 'buy' another 10% of MCPP equity to give it 30%. That would give it $9.6m pa (for the first 12 years) of the MCPP post loan repayments and tax income to equity shareholders. On the then 800m shares in issue, that is 0.85p per Kibo share. Bearing in mind that is before corporate etc costs, Kibo might be able to pay a 0.6p dividend. Perhaps Mr Yaki can tell us how that dividend will be valued in the stockmarket ? (for a no-growth, limited life, dividend paying annuity it would be valued on a 10% yield basis and certainly not on a 10x PER.) An alternative is that MCPP is directly funded by external investors or infrastructure funds. Although there won't be dilution for Kibo shareholders, the effect will be similar. Kibo will have only 20%, spread across the current 569m shares instead of 1,000m, which means 0.8p per Kibo share and, maybe, a 0.6p dividend. Even if my figures aren't quite accurate, they show how far off the mark are the Yaki-Clappie share price projections. (Yaki could have checked how wrong he is by thinking through how would a Kibo market cap of £141m at 25p be justified ? It has only £28m of assets now including Mabesewaka , no income to speak of for years to come, and no chance of more than a 20% share of MCPP unless it raises cash through yet more share issues. And he could have especially realised that the NPV even of the whole MCPP (of which Kibo could only have a 20-30% share) is only around £300m. And as I've proved elsewhere, the market never values such shares at more than 1/2 their NPV. But then, the clappies don't seem to 'do' thinking.) So whichever way you look, Kibo shares were unlikely ever to stay above 10p - even before it diluted everything recently by 49%. But even that would only have been once MCPP is up and running and paying a dividend - in probably five years time. So why would anyone pay more than the present 4 - (as it will be soon) -5-6p ? - Answer - only those who haven't done their sums. So why was Yaki (and fellow clappies) ramping such an unrealistic and unprofessional share target ? Apart from idiocy , could it be something to do with his and their boasted large shareholding ? Doesn't he realise that the FCA will expect him to have disclosed his holding every time he ramps 'an uninformed '25p share price' on a public board ? But we also have to explain how have these clappies so mislead themselves ? The answer is that they don't understand what a project is and its NPV and how they relate to its owner's assets and share price. They've had plenty of time to find out. At present all that Kibo owns is the plans and studies for MCPP, which won't have any value until it's built. Kibo hasn't any funds to build, so others are going to have to stump up, in return for which they will take their chunk of its profits. And there is no way the other equity shareholders will allow anything more than a notional 'free carry'. Or that Kibo can 'sell down' anything but a small part of MCPP. To summarise The overall costs and profits of the MCPP have already been more or less settled - as in the Jan 2017 IBFS. They show the 'integrated' project is much more likely than Kibo keeping a separate mine, and that after tax and repayments of a 75% loan for the capex (best outcome for shareholders) cash earnings per Kibo share won't be more than 1p pa. With Kibo valued as a non-growth dividend paying share, that means no more than a 8-10p share price after expanding shares to buy a 30% share of the project. And neither do the clappies understand that Kibo can't build a large 'Power Group without an immense expansion in issued shares, by just gathering together low return businesses such as power stations. You can only do that without damaging your share price, through acquisitions that are highly profitable and cash generating. Power Stations aren't. Their 15% returns wouldn't be enough for any miner. Their only attraction is for pension funds looking for a stable, if not very high, annuity like return which is guaranteed for 25 years by a government agency like Tanesco If there were any chance the shares will go much above current levels, do the clappies really think the institutions wouldn't be aboard ? (Mabesekwa's Botswana investors are hardly in the world league, and they had no option but to accept Kibo's offer) They may be interested in MCPP directly. But they'd be fools to invest in Kibo itself. And why did Kibo only have to pay c £12m for Mabesekwa ? Its said to be almost equivalent to and at the same stage as Mbeya ! Answers on a postcard.
29/3/2018
10:45
guitars4stars: Manipulation is also painting a picture of what - won't happen... any proof to back up your version of why over time the Kibo Share Price will never reach £ pounds? #Agenda.
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