Kibo Energy Share Discussion Threads

[yaki] 26/6/2019 16:05

Woolybadger62
Member since: 26 Jun 2019

So many of these joined on the day artists. I struggle to understand what they are up to. Strange world


Woolybadger62 26 Jun '19 - 15:45 - 1523 of 1524
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Etx guy moving fast

This ride is done
Woolybadger62 26 Jun '19 - 15:45 - 1524 of 1524
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Cudmore you will find out about Kibo soon enough
Lol

[woolybadger62] 26/6/2019 15:45

Cudmore you will find out about Kibo soon enough Lol

[woolybadger62] 26/6/2019 15:45

Etx guy moving fast This ride is done

[cudmore] 26/6/2019 15:40

Cheap as chips......topped up.

[aimchimp] 26/6/2019 15:38

UKN what were the free shares given for why do you not explain what they were given for as you and I both know the answers from the RNS.Traders starting to bail out now starting to tank.

[uknighted] 26/6/2019 15:34

But why would you be given shares, there’s no such thing as a free lunch - nor a free share? The shares have been given in lieu of something and that something had a value e.g. in lieu of a bonus, as payment for services provided etc. So tell me Chump where did these free shares come from?

[woolybadger62] 26/6/2019 15:29

Nt to sell any now Market order in and I'll take 1.2

[aimchimp] 26/6/2019 15:29

You are a bright old man you can work it out can't you? You don't need everything explained? But maybe it would do you good sometime to listen to what is being said and not just carry on talking to hear your own voice and be obstructive. You are given shares you have not paid for and sell them for cash. It's not hard.

[uknighted] 26/6/2019 15:21

So, I ask again, where have these “free” shares come from? I note it is end of day time at school so could you answer before your mum picks you up.

[uknighted] 26/6/2019 15:13

No chump you think about it - what “free” shares?

[aimchimp] 26/6/2019 15:13

UKN you won't be so smarmy when your holding is wiped out sunshine

[aimchimp] 26/6/2019 15:12

Are you stupid or just think? Free shares sold for any amount is cash in the hand moron.

[uknighted] 26/6/2019 15:12

AimCc“ you didn’t pay anything for it “ these are shares in lieu of something and that something definitely has a value! Still pulling in the cash with all your posts I see.

[aimchimp] 26/6/2019 15:11

Traders will leave this soon enough and the price will rank wonder if they will get the placing away before that happens

[woolybadger62] 26/6/2019 15:10

I have sold 2m today and 2m to go

[aimchimp] 26/6/2019 15:08

If you were given stock at 5.25p instead of being paid in cash then you have the opportunity to just sell x amount of stock to convert it to y cash it's not selling at a loss when you didn't pay anything for it in the first place you moron.

[zico01] 26/6/2019 14:54

Added more around 1.35p

Massive volume >>>>>>>>>> 2p+

[andymunchkin] 26/6/2019 14:45

Submit
lurker523 Aug '17 - 10:59 - 1 of 1500
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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.
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blastFromThePast