Kibo Energy Share Discussion Threads

[bionicmanfromwestham] 12/6/2017 12:35

I hope the share price stops declining week in week out as I'm gonna be skint at this rate ( LOL )Kindest regardsBMFWH

[patch13] 12/6/2017 12:23

Well your first factual inaccuarcy is that the NPV quoted is post debt interest

[lurker5] 12/6/2017 12:07

KIBO share value for dummies

WELL WELL - Once again tears and wailing as LC fails to answer. Especially my post 4004 June 12 with key questions re shares in issue and share value that he has already discussed - obscurely - in public.
He has alluded to 'retention' and 'significant stake' in MCPP - yet never in 3 1/2 years since promising 'Financial Close Soon' has he clarified information re funding and hence shareholder value once MCPP is financed - let alone built and let alone proper details about the economics he has deigned to 'release'.
Never also has he disclosed key information re Imweru (2015 PEA paid for by shareholders but kept dark and Katoro where no info at all about funding necessary to get it into production). Also lots of cherry picked MCPP economic figures without the full context needed to evaluate them.
Instead he has strung inexperienced investors along with gnomic statements like 'significant', and '30% retention' of a $700m MCPP.

Professionals know that is misleading and that outside funding for MCPP will involve share dilution for Kibo shareholders who will only 'retain' a fraction of MCPP's value.

LC has dangled so much in front of investors without clear explanation and seems deliberately to have allowed some to deceive themselves, that I believe he can be hauled up before the FCA. We'll see.

Meanwhile - here are the calculations any professional analyst would make.

They have to be rough because only bits of the IBFS have been published and previous info about capex etc will now be well out of date (if only because exchange rates have moved significantly)

With only bits of info, a professional will make estimates coming from different methods and check they produce roughly the same result. Ideally he would produce the sort of spreadsheet calcs that Yaki mentioned on the other side (without fully understanding it as far as I could see) giving a complete year by year breakdown of all cash flows, borrowings and repayments, and proceeds from share issues etc, with year by year profit and how it is shared between various shareholders and loan providers in MCPP and what is left for shareholders in Kibo (not the same) and hence earnings per share and dividends per Kibo share.

But that would be too voluminous to show here (although it has been done and checks out with what is next)

Most pi's seem to think in NPV's, so here are calcs showing the NPV per Kibo share once MCPP has been financed. NPV's are only a very rough guide because they depend on the discount rate used by institutional investors - depending on the risk they see, Most mining cost currently use 8% - which gives about double the NPV resulting from the 12% that I think they will use for Tanzania. But even an NPV per share is misleading because it is merely the value today at that discount rate of all earnings going forward 25 years. No sensible investor would pay that because he won't make any profit by doing so - which is why most mining shares stand at no more than 1/2 to 1/3rd their 'theoretical' NPV's per share.

Here goes. Roughly, the capex is $500m and the 'NPV8 is $250-300 m (assuming the mine is lumped in with the power station for the purposes of funding)

LC has said shareholders might 'retain' 30% of MPCC. We assume LC meant 30% of MPCC's equity.
The naive on LSE have taken this to mean the shares are worth 30% of the NPV. 'Fraid not. To keep 30% of the equity Kibo would have to put up 30%. Assuming the $500m capex is met by the usual 70% loan and 30% equity (the loan provider will insist on equity shareholders being there to shoulder the risk) then Kibo's 30% share would cost it $45m in real 'cash' (not in free shares given to eg Sanderson) or 12p per current Kibo share. Its possible the other $105m could be put up by Sepco or GE or someone similar)

To allow for issuing the necessary shares to raise cash Kibo increased its authorised capital last year to 1bn (against 375m now) . Lets assume it can raise the cash at a 5p share price. It would need to issue 900m new shares - more than it is allowed to. If at 10p it would need to issue 450m - which it could do. So lets assume it CAN issue shares at 10p so that eventual shares in issue will be 375m + 450m = 825m.

If $70% of the capex ($350m) is raised via loans, they + interest will have to be repaid from the profits generated by MCPP. At 10% interest and a 8% discount rate, this would be roughly an negative NPV of $340m.

Once the capex has been made and the plant built, the MCPP's NPV from that point will be $500m + $250m (lets say $300m) ie a total NPV of $800m to be shared between the providers of the capital, who will be the equity investors in MCPP, and the loan provider.

ie the NPV left for the equity shareholders will be $800m - $340m = $460m. Of this, Kibo will have 30% - ie $138m. That has to be shared between the 825m shareholders. ie 'theoretical' NPV per share is 16.7p.

BUT, remember that 1) the market never accords a value to a share more than about half a theoretical NPV and 2) That NPV is at a 8% discount rate - which is too low for an emerging, still politically risky, country. I think 12% is more appropriate which will halve that $800m out of which the loan will have to be repaid and equity investors rewarded. In other words, institutional investors will probably accord a NPV per share considerably less than that 16.7p - in addition to halving it as the price they would pay

Which is why and how all professionals who have looked at Kibo don't think the shares would be worth more than 10p even when the plant is up and running in ?? (now more than four years time). Around 10p is what one also gets from working detailed spreadsheets showing the yield investors will expect from a 25 year power station 'utility' in a developing country (more than 10%) and therefore the max price they would pay for their shares.

So bearing in mind the risk that it won't happen, and the time for an uncertain 10p to be realised, who on earth would pay more than 5p for the shares now ! - especially with the other risk that before financial close Kibo will have to raise more cash from Sanderson to keep itself running.

Sorry LC. But you have asked for this by refusing to answer sensible questions about funding, and refusing to clarify the vague comments you have made about 'significant retention' Investors who have bet the farm on your shares also need sensible info about their real value.

As for Kibo's c57% in Katoro. Once Katoro has produced its feasibility study and raised the funds it is going to need to get up and running, Kibo's share (which it can't afford to keep up) will be much reduced - probably to between 25% and 35%. So the share of its value flowing through to Kibo shareholders will be similarly reduced. (Another misleading statement by LC that its value in Katoro "won't be diluted' !) In a few years time if Katoro really has got value (we won't know until the fesibility study) then it might be worth a few extra pennies per Kibo share - and Kibo might distribute its Katoro shares to Kibo shareholders. But it will all take time, and depends on Katoro raising a lot more money.

[electrick] 12/6/2017 12:04

sells really coming through now... multiple 100k tranches following the 200 k tranches.. Nex nearly all sells and the share price is simply falling away...

What impact would a cash injection of £1.5million have to swell the company coffers.. whilst adding 10% additional shares to circulation...

Can see why LC is not highlighting it on investor Q&A ...

LC could show confidence and but a few million shares.. that would shut up the detractors

LC could unveil an investor into Mbeya Development Company Ltd at a percentage.. such a facility may inspire confidence... especially if it was a new investor... especially if it was for a significant sum of money

Confidence could be built if one or two signoffs were delivered.. even the ESIA .... which in all previous commentary has had work completed and simply needs ratification and sign off

I would think the ultimate would be the SML or the PPA finalised... but now the fantasy world is kicking in...

In the meantime it looks like people are selling up... looking for alternative locations to invest in... seemingly knowing that there will be plenty of opportunity to buy back in at the depressed prices which will surely arrive if the company further dilutes with a placing or more fee shares which will be sold quickly...

There aren't any more assets to call on... The gold is wrapped up.. the Sepco development cost refund has been spent... no revenues coming in.. future investment will be needed for project work... what else is their to hock to cover the salaries and general expenses?
Quick sale of Haneti? last option I guess.....

In the meantime drip drip drip

[kreature] 12/6/2017 11:49

I mixed up companies - will listen again

[bionicmanfromwestham] 12/6/2017 11:48

4.87 to buy

[bionicmanfromwestham] 12/6/2017 11:40

Huge drop once again nearly 12% down.One of these days I might just call it right but lost all confidence in this one ( LOL )" One day eh rodders "

[uknighted] 12/6/2017 11:28

LC seemed agitated answering the same questions which presumably means he has no new news to give.
I thought his vagueness about the 30% was surprising, you would have thought he would have clarified this earlier.
It's all about the licences and PPA, until we receive news on them the share price will continue to fluctuate.
Added more last week, may do so again this week.

[bionicmanfromwestham] 12/6/2017 11:25

Kreature....... Wise choice as I'm a fair bit down already since my purchase.I don't like this the way it's sliding every week and RED FLAG WARNING yes I agree. ( LOL )Kindest regardsBMFWH

[guitars4stars] 12/6/2017 11:18

Nice to see the 100K buyer back! :)

[bionicmanfromwestham] 12/6/2017 11:15

WIMBLEDON POST" Not looking good for ACA "IT'S not looking good for KIBO either NOT sure what you're point is ( LOL )

[bionicmanfromwestham] 12/6/2017 11:08

The thing that gives me confidence here is the fact that out of 3,600 listed stocks on the AIM market KIBO is one of the most WATCHED even though people are not buying the shares.How do we know this ?ANSWER Because SONIC told us ( LOL )

[yaki] 12/6/2017 11:02

MAB
Very much the case! The GoT needs electricity and MCPP can provide it!

[bionicmanfromwestham] 12/6/2017 10:56

LC.....Will have alot to answer for on the 29th and if I see him winking again as he previously did on April 1st at the investor show then I shall ask him " Are you actually taking the P--S now Louis ?( LOL )

[bionicmanfromwestham] 12/6/2017 10:51

This YAKI lad on LSE seems to think KIBO is more advanced than EDL and the markets are not seeing true value in the market cap of KIBO ?" Wake up lad "

[electrick] 12/6/2017 10:35

Stronger selling pressure.... looks like more and more are seeing the penny drop...

[electrick] 12/6/2017 10:30

Kibo Mining plc (“Kibo” or the “Company”;) (AIM: KIBO; AltX: KBO), the Tanzania focused mineral exploration and development Company is pleased to announce it has today entered into a loan facility (the “Facility̶1;) with Sanderson Capital Partners Limited (“Sanderson221;) for an amount up to £1,500,000 to be utilised by Kibo, at its sole discretion and election, for contingency funding, during the term of the Facility.

The Facility comprises the following:
•An unsecured, interest free, fixed term loan due for repayment no later than 31 August 2016;
•The loan can be drawn down in five £300,000 tranches no less than 40 days apart, with tranches three, four and five subject to successfully achieving certain specified project deliverables;
•A fee of up 7 million Ordinary Shares in Kibo, capped by a maximum value of £350,000 associated with the arrangement and implementation of the Facility, will become payable if the Facility is utilised (the “Arrangement Fee”);
•The Arrangement Fee will be payable on the day the Facility is activated by Kibo;
•In addition to the Arrangement Fee, a drawdown fee of £51,000 is payable to Sanderson in respect of each of the five £300,000 drawdown tranches
March 16 terms - re-neg. Sept 16

[electrick] 12/6/2017 10:28

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 today entered into a loan facility (the “Facility̶1;) with Sanderson Capital Partners Limited (“Sanderson221;) for an amount of £500,000 to be utilised by Kibo at its sole discretion and election during the 3 month term of the Facility. The Facility provides Kibo with access to funds which it will be able to use at the Company’s discretion as needed.

The Facility comprises an unsecured, interest free, fixed term loan. A fee of £150,000 associated with the arrangement and implementation of the Facility will become payable if the Facility is utilised (the “Arrangement Fee”). The Arrangement Fee will be paid one third in cash at repayment of the loan and two thirds in shares at a fixed price : Nov 15 terms

[electrick] 12/6/2017 10:26

So where are Kibo going to raise funds from this time around?

Interest Free bridge loans..... history says this is the preferred option having used Sandersons before..
It is interesting that LC tells shareholders that this is a positive method of raising cash.. and that the company is always looking to minimise dilution...

HOWEVER

these loans usually have the terms of 30%+ fees payable in shares at start or drawdown...
We know Sandersons sell these shares as they have holding currently of 10mm shares and have received 3x this amount from previous facilities...
Then of course the facility needs to be repaid.. more shares raised.. equates to a greater dilution than an initial placing!!

What alternatives?
Ask Beaufort to assess investor appetite for a more traditional placing.. As it was highlighted on the recent Katoro placing Kibo had to top up the funds to ensure sufficient capital could be raised!

The best option will be a version of the renegotiated settlement terms (1st Sept 16)

Sands provide £1.5mm to kibo for another 2.5% of Mbeya Development Company Ltd.
Obviously there will be a number of Kibo ordinaries for Sanderson to sell and make there fee... lets say 8million.. nice round number..

But what impact does this have?
Sandersons selling off their fee shares will of course drop or depress the price for several weeks / months...

Kibo lose another important slice of the project and have to use the funds for general expenses rather than material progress on the project.

Only £1.5m raised.. as we have seen... it really doesn't last too long... especially in the timescales Kibo are operating on...

in either case... the delays (increases in time to get strategic actions completed) are costing Kibo dear and the share price is going to reflect this...