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Natural Resource PartnersAnnuAl RepoRt And Accounts 2012 highlights 2012 LAKE VICTORIA ACQUISITION OF MAJOR THERMAL COAL RESOURCE, THE RUKWA DEPOSIT ( 109 MILLION TONNE JORC-COMPLIANT RESOURCE) ACQUISITION OF LARGE URANIUM LICENCE PORTFOLIO - THE PINEWOOD PROJECT COMPLETION OF STAGE 1 EXPLORATION PROGRAMME AT THE LAKE VICTORIA, HANETI AND MOROGORO PROJECTS DRILL TARGETS DEVELOPED ON ALL PROJECTS FROM STAGE 1 EXPLORATION PROGRAMME COMPLETION OF JV AGREEMENT ON HANETI WITH MAJOR BRAZILIAN INDUSTRIAL GROUP, VOTORANTIM TANZANIAN GOVERNMENT SUPPORT FOR RUKWA COAL TO POWER PROJECT LAKE VICTORIA contents Chairman’s Statement Review of Activities Financial Statements for the 15 month period ended 31 December 2012 Financial Statements – Contents Notice of Annual General Meeting Form of Proxy Programme for 2013-2014 IV VI 1 2 48 50 54 i KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 Rukwa (COAL) Pinewood (URANIUM, COAL) Exploration Projects KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 ii Rukwa (COAL) Pinewood (URANIUM, COAL) iii KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 chairman’s statement Dear Shareholder, Investments I am pleased to report that your Company has made significant progress during 2012 on both the corporate and exploration fronts. In April 2012 we announced the acquisition of two private companies, Mzuri Energy Ltd and Mayborn (Pty) Limited. These Resource acquisitions required the suspension of our shares on AIM and the JSE on the 11th May 2012, re- admission on the 15th August 2012 and approval by Shareholders at EGM on the 6th September 2012. The transaction was formally completed on the 1st October 2012 and brings to your Company substantial coal and uranium assets which complement our existing gold and base metal projects. Kibo is now positioned as a major multi-commodity mineral explorer and developer in Tanzania. The transaction was accompanied by changes on our Board with the resignation of William Payne and Des Burke (Des resigned in January 2013) and the appointment of Cecil Bond and Bernard Poznanski. I wish to thank William and Des for their valuable contribution to Kibo during their directorships. Exploration Exploration on our Tanzanian mineral projects continued throughout the 15 month reporting period commencing with the implementation of a Stage 1 exploration programme in the last quarter of 2011 and continuing throughout 2012. Our exploration teams have now defined trenching and drill targets at the Lake Victoria, Haneti and Morogoro projects. I am particularly pleased that our Haneti Ni-PGM-Gold project has attracted the attention of major Brazilian industrial group, Votorantim Metaís Participações Ltda (“Votorantim”), resulting in our announcement of a Joint Venture on the 12 December 2012. The joint venture provides an option for Votorantim to expend GBP 2.7 million on exploration over a three-year period to earn a 50% interest in the project and I am glad to report that as I write (June 2013), our field team in conjunction with Votorantim have commenced field operations. A budget of £0.5M will be expended at Haneti during the remainder 2013. Equally encouraging is the recent inclusion of the Company’s Rukwa Coal to Power Project (“Rukwa”) as a strategic component of the Tanzanian Government’s National Energy Strategy and its commitment to proactively support development of the infrastructure to support the project. Securing Tanzanian Government support for the project has been a major milestone in our development path and this has increased the level of interest from third parties wishing to become partners in the project. Therefore, the Company’s announcement on the 24th April 2013 that it has selected Korean East West Power Co. Ltd (“EWP”), a globally operating power company owned by the South Korean Government, as its preferred development partner at Rukwa is another major step. The board looks forward to negotiating a definitive partnership agreement with EWP to the benefit of all stakeholders, not least for Tanzania for which Rukwa should make a valuable contribution towards addressing the country’s future energy needs. In order to best manage its resources for 2013, your Company has prioritised the Rukwa and Haneti projects and is deferring any significant exploration work at Lake Victoria, Morogoro and Pinewood to 2014. A Scoping Study at Rukwa will commence during the second half of 2013 which will run in parallel with completing a full strategic partnership agreement with EWP. Exploration at Haneti, fully funded by Votorantim, will continue for the remainder of 2013 and it is planned to KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 iv chairman’s statement commence initial drilling at the project later in 2013 or early in 2014. As a further measure to reduce costs and focus on priority areas, the Board has recently elected to relinquish almost 50% of its grass roots exploration interests (includes licences, offers and applications) across all projects save for Rukwa. The majority of this ground comprises early stage licence applications considered by Company geologists as low priority from desktop and field assessments. This need for the Company to implement this reduction in our licence portfolio results both from recent substantial increases in licence rental costs in Tanzania and the imperative to focus resources on priority areas which offer the greatest chance of exploration success. Corporate The financial accounts cover the 15-month period to the 31 December 2012. This follows our decision to change the Company’s financial year end from 30 September to 31 December and so align it with the calendar year and with the financial year ends of the Group’s non-Irish subsidiaries. The challenging global economic conditions and turbulent markets of 2011 continued into 2012, making it a difficult year for the exploration and mining sector. Junior exploration companies found it particularly difficult to raise equity funds and had to accept funding at severely discounted prices or through alternative funding methods, all of which contributed to significant shareholder dilution and value erosion in many instances. Unfortunately, Kibo was not immune to this adverse macroeconomic environment and we saw a decline in our share price during the year to levels that we do not believe reflect in our mineral assets. the Consequently, we found it increasingly difficult throughout 2012 to raise funds for our exploration and development programmes to match our ambitious implementation schedule. However, we inherent value are fortunate to have the support of our largest shareholder, Mzuri Capital Group Limited, which fully subscribed to a £750,000 Placing in February 2012. This allowed us to implement first stage exploration programmes over our substantial Tanzanian mineral licence portfolio over the reporting period. Broker sponsored placings of £750,000 in January 2013 and £780,000 in April 2013, together with funds of £50,000 drawn downs under our SEDA agreement with Yorkville Advisors, are allowing us to continue advancing both our near-term corporate and exploration objectives in the early part of 2013, albeit at a slower pace that we had planned. In conclusion, while acknowledging the challenging economic environment in which your company now operates, I remain confident that our mineral assets present an attractive investment option, particularly bolstered by our 109 million tonne Rukwa coal deposit and plans to develop a mouth of mine thermal coal plant. I would like to thank our shareholders for their continued support as we strive to bring this project to fruition. Also I would like to thank our CEO, Louis Coetzee and his management team for their substantial work in successfully completing our corporate acquisitions during 2012 while simultaneously keeping field exploration moving forward. Louis now has the challenging task of leading the team in realising value across all our commodity streams in 2013 and beyond. Christian Schaffalitzky Chairman v KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 review of activities Introduction 2012 marked a further expansion of the Company’s commitment to Tanzania with the acquisition of a significant in-situ thermal coal resource of 109 million tonnes, the Rukwa deposit, and a large early stage uranium and coal licence project, the Pinewood project . Both projects are located in the south of Tanzania in a region which the Tanzanian Government has prioritised for infrastructural development owing to its demonstrated potential for the discovery of large coal and uranium deposits. The Tanzania Government considers the development of these minerals and the construction of accompanying power generating plants (nuclear and thermal coal) through public private partnerships as a cornerstone of its strategy to address the current and increasing shortage of power generating capacity within the country as demand outpaces supply. Kibo acquired these projects through the reverse takeover of private Canadian and South African companies, Mzuri Energy Ltd and Mayborn Resource Investments (Pty) Ltd respectively, a transaction completed in October 2012 following a re-admission of the Company’s shares on AIM and the JSE in August 2012. The Rukwa deposit provides Kibo with its most advanced project and underpins its strategy to develop a coal mine in conjunction with a 300- 350 megawatt mouth of mine thermal coal plant. This ambitious and capital intensive development will require the support of both well-funded and experienced thermal coal plant operators through joint venture with Kibo and the support of the Tanzanian Government. The Company has shown substantial progress on these two fronts during 2012. In May 2012, the Company announced the signing of a Memo of Understanding (MOU) between Mzuri Energy Ltd (now 100% Kibo subsidiary) and an unnamed Asian conglomerate to negotiate a definitive agreement on becoming Kibo’s development partner on the Rukwa Power project. Kibo also continued to keep the Tanzanian Government updated on its plans during 2012 and following an invitation and presentation to senior officials at the Tanzanian Ministry of Energy, the Company received a formal letter of support for the project on the 8th March 2013. This letter states that the Rukwa Coal to Power project will be included as a strategic component of the Government’s National Energy Strategy. Furthermore the Government confirmed that would participate proactively in the establishment of the necessary infrastructure in the Mbeya region to support the project and that it would support the expedited development of the project with Kibo and its chosen development partner. This Government support marks a significant boost for the project and drew interest from a number of potential development partners. As the exclusivity period on the MOU with the Asian conglomerate has now expired, the Company has recently (April 2013) signed a letter of Intent with a South Korean Government owned power producer EWP to become its preferred development partner at Rukwa. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 vi review of activities addition expanding programme to focus its In and mineral commodity in Tanzania tenement holdings through acquisition, corporate the Company also commenced exploration on its existing projects at Lake Victoria, Haneti, Morogoro North and Morogoro South. This work commenced with a Stage 1 during exploration October 2011 to March 2012 period and further follow up work during the remainder of 2012 resolved trenching and drill targets on a number of licences. Significantly, Kibo’s work to date at Haneti has attracted Brazilian conglomerate and major nickel producer, Votorantim, who signed a joint venture on the project with the Company in December 2012 and field work is now in progress. Regional location of Kibo projects in Tanzania (Venmyn CPR 2012) vii KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 Review of Activities review of activities Rukwa Coal Project The Rukwa coal project is located in southern Tanzania 70 kilometres north of the regional town of Mbeya and bordering Lake Rukwa. It comprises two Prospecting Licences and two Prospecting Licence Applications forming a contiguous block of 1,500 km2. The PLs contain a JORC-Inferred thermal coal resource of 109 million tonnes. The coal is located within Karoo Age rocks of the Songwe Basin and comprises seven coal seams striking Northwest and dipping at 30 degrees Northeast. Seam thicknesses vary between 0.5 -5 metres and have been drilled in detail over a strike length of 9 kilometres. The resource was discovered and drilled out by Mzuri Energy Limited in the period 2008 -2011. The prospective stratigraphy at Rukwa continues to the northwest and southeast and Kibo is confident that it can significantly increase the current resource by additional drilling. Rukwa Project: Local Geology and Simplified Strataigraphic Column (Source: Venmyn CPR 2012) KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 viii review of activities Rukwa Coal Resource – Prepared by Gemecs (Ltd) of South Africa (April 2012) Rukwa Coal to Power Project The Rukwa coal resource provides the basis for Kibo’s medium term objective to develop the coal resource in conjunction with a mouth of mine power plant. The recent support of the Tanzanian Government for the project and the selection of South Korean Government owned mult- national power company EWP mark significant milestones on the Company’s path to develop Rukwa. Tanzanian Government support is key to the development of the project as a number of licencing permits will need to be negotiated for the development to proceed and will include both an independent power producer licence and a power purchase agreement with the relevant Tanzanian authorities. The Company is benefitting from the fact that Rukwa is located in southern Tanzania close to the Mtwara Corridor project, a multi-national co-operation agreement between Tanzania, Malawi and Zambia that plans to link lake ports on Lake Nyassa in the east with the Indian ocean port of Mtwara in the west. This will focus strategic infrastructure investment inthis part of Tanzania and within the bordering regions ix KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 review of activities The San Juan Generating Plant, New Mexicio USA, example of Mine Mouth Power Plant of the other participant countries. The anticipated increase in energy mineral development in this part of Africa provides significant impetus to these infrastructural developments. The inclusion of the Rukwa Coal to Power project as a strategic component of the Government’s National Energy Strategy and its commitment to proactively support development of the infrastructure to support the project integrates Kibo’s development plans with the Government’s own regional development plans for southern Tanzania. Lake Victoria Project The Lake Victoria Goldfield is Tanzania’s primary gold producing region and the third largest goldfield in Africa after the Witwatersrand (South Africa) and Tarkwa (Ghana). It is the source of most of Tanzania’s official gold production of approximately 40 tonnes per year (Central Bank of Tanzania, 2011 production), predominantly from its two world class gold deposits, Bulyanhulu and Geita. Kibo has inherited a large tenement position in this region through its acquisition of Mzuri Gold Limited in early 2011comprising 2,716 square kilometres of prospecting licences and prospecting licence applications. During the reporting period, the Company undertook field exploration programmes over many of these areas as part of its Stage 1 exploration commencing in October 2011. Desktop and field evaluation work included, regional aeromagnetic interpretation, soil sampling, prospecting, geological mapping and inspection of active and historic artisanal workings. Most field survey activity was carried out within the Mhangu Block in the eastern part of the project following up on existing anomalous soil results from previous surveys. The principal component of the field work in these KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 x review of activities 31.50E 320E 32.50E 330E Geita North North Geita West Geita Mines Geita East Tulawaka Central Block Bulyanhulu UN Road Block Mhangu Block 30S 3.50S Licence Legend Geology Legend PL Issued PL Application PL Offered PL Under Tender Mbuga/Neogene Soils Greenstone Tulawaka Operating Gold Mine Granitic Gneiss Banded Ironstone 0 8 16 24 Significant Gold Prospect Other Gold Showing Scale : Kilometres 30S 3.50S Lake Victoria Project: Licence status at 31 December 2012 & Regional Geology areas was in-fill shallow soil sampling surveys to resolve in more detail gold-in-soil anomalies identified from regional soil sampling surveys carried out during 2008 by the previous operators. Prospecting licences (PLs) sampled comprise PL 6283/2010, PL 7589/2010, PL 7590/2012 on the Mhangu Block and and PL 5243/2008 on the Central Block. Approximately 1,200 samples were taken on these PLs for gold and multi-element analyses. The results outlined a number of gold-in-soil anomalies on the Mhangu Block coinciding in part with banded ironstone ridges and the Company has established targets for trenching and drilling. The soil results from PL 5243/2008 on the Central Block were not anomalous. Based on the encouraging results from the infill soil sampling on the Mhangu Block, follow up programmes of trenching, sampling and further soil sampling programmes were initiated during the last quarter of 2012. Further field work during 2013 at Lake Victoria has been postponed until 2014 in line with the Company’s strategy of focusing resources on the Rukwa project. Concurrent with field exploration, the Company concluded a desktop and field evaluation of its entire mineral right portfolio across all projects during the review period. In support of cost containment, Kibo is currently reducing its overall tenement position on Lake Victoria and its other projects which will result in a significant reduction in its total licence area than shown on the accompany project maps which are current at the reporting period end of 31 December 2012. xi KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 review of activities PL 7587/8755 North Geology Legend Nyanzaga ~6 Moz / 5g/t African Barrick PL 6385/8757 Kitongo ~7.3 Moz / 8g/t Brightstar Resources Mwamazengo (No resource publ.) Currie Rose Resources PL &579/8758 PL 75&9/8758 PL 7975/8758 PL 7575/8755 Luhala ~7.5 Moz / 8 g/t Tanzanian Royalty PL 7996/58 PL 7597/8758 PL 5579 /877& PL 68&3 /8757 PL 6388/8757 Golden Ridge ~7.6 M oz/ 8.& g/t African Barrick PL 7995 /8758 MHANGU BLOCK 7 6 & 58 Scale : Kilometres Mbuga/Neogene Soils Granitic Gneiss Greenstone Banded Ironstone Significant Gold Prospect Other gold showing Geology Legend Geology Legend Sampling Legend Areas of anomalous gold-in-soil from 8777 regional survey selected for detailed infill soil sampling In-fill soil sampling completed in 8758 In-fill soil sampling in progress Trenching, Pitting & detailed geological mapping in progress (potential RAB drill targets being developed) Licence Legend PL Application PL Offerred PL Issued Mhangu Block (Lake Victoria): Licence Status, Geology & Exploration at 31 December 2012 Haneti Project The Haneti Project, located between Tanzania’s official capital Dodoma and the regional town of Singida comprises an approximate 7,000 square kilometre contiguous block of licences. The project straddles a major sheared contact zone between the Archaean age (>2.5 billion years) Tanzanian Craton to the southwest and a Proteozoic age (~0.5 to 2.5 billion years) orogenic belt to the northeast. The primary exploration target is Ni-PGM-Cu style mineralisation within the Haneti Itiso Ultramafic Complex, a 70 to 80 kilometres belt of mafic and ultramafic rocks located in the west of the project KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 xii review of activities area. Kibo’s field work over the last few years has provided significant encouragement for this style of mineralisation both as primary sulphide, and nickel laterite within the regolith. During 2012, Kibo continued to advance the project and carried out pitting and ground geophysical surveys as part of its Stage 1 exploration programme. This pitting survey comprised 14 hand dug test pits over an area of 10 square kilometres in the central part of the belt with the objective of characterising the laterite profile and testing for economic nickel grades. The pit profiles showed poor laterite development with low nickel grades and bedrock was encountered at shallow depths of less than 5 metres. These results indicated poor potential for economic laterite mineralisation over this small test area, but as the test area represents just 10% of the ~80 km long target zone, the potential for the discovery of economic grades and volumes of nickel laterite mineralisation has not been discounted. The results from the ground geophysical surveying (Ground EM & magnetics) were more promising and results indicated two NW-SE trending conductors of 800m and 400m in length respectively at the Mwaka Hill locality where Kibo had already encountered anomalous nickel from soil sampling and trenching during earlier exploration. At Mihanza Hill, where the Company has previously reported results of up to 13% nickel and 2.3 grams per tonne combined platinum and palladium, a large formational conductor has been indicated. This conductor is likely to be associated with serpentinised ultramafics but there may also be an association with nickel sulphide mineralisation. in December 2012, affirms The finalisation of a Joint Venture Agreement on Haneti with Brazilian industrial conglomerate, Votorantim the Company’s belief in the mineral potential of Haneti and gives a renewed impetus to exploration. Votorantim is obliged to spend £500,000 on exploration during 2013 on the project. This is the initial commitment under the JV which requires Votorantim to expend a total £2.7 million over a three year period at which point it will have an option to vest a 50% interest in the project. xiii KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 review of activities j~K E Singida Project (Shanta Mining) ~ 2 M oz8 gold at 28~ g/t j~8~KE j/K E Prospective Area for Nickel-PGM-Cu Style mineralisation N Artisanal Gold Mining Geology Legend Gneiss & granite (Dodoman System) Amphibolite & "greenstone" assemblages Cataclasites (sheared contact zone) Gneisses (Usagaran System) Ultramafic Complex Granite (with amphibolite dykes) PL Status PL Issued PL Offered PL Application Haneti Project: Geology Legend Silicified & Feruginised Serpentinite Serpentinite Post or late synorogenic granite Bubu Cataclasites Amphibolite Quartz-Feldspar Biotite Gneisses Solid colour = outcrop: shaded colour=interpreted sub-crop Faults Airborne Survey magnetic amomalies (Geosurvey International 7967-7979) ~8~K S Haneti Project: Licence Status and Geology at 31 December 2012 Main Area of Kibo Exploration NK2N (Refer Detailed Map) /K S :69 E K / 2N 2- Scale : Kilometres )97) Ground EM & Magnetic Survey Blocks EM Drill Targets )97) Pitting Survey Area Pit Location N N(N9 S 9 7 ) : Scale : Kilometres KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 xiv review of activities Morogoro North Project The Morogoro North project is located north and east of the regional centres of Morogoro and Dodoma respectively and comprises a total area of approximately 4,000 square kilometres of Prospecting Licences and Prospecting Licence Applications. It forms the northern part of Kibo’s greater Morogoro project which also includes Morogoro South discussed below. Morogoro represent a relatively new region of gold exploration in Tanzania not historically regarded as a gold prospective area because of the extensive high grade metamorphic complexes which dominate the geology. Gold discoveries by a vanguard of artisanal and small scale miners from about 2000 onwards has re-focused attention on the region with the most notable high profile discovery in recent years being the Handeni (Magambazi) deposit by Canadian company, Canaco Resources Ltd. As part of its 2012 Stage 1 exploration programmes, Kibo undertook regional stream sediment sampling surveys over PLs 6717/2010 and 6598/2010 in the southern part of Morogoro North. The survey encompassed an area of about 200 square kilometres and was sampled on a regional basis first followed by more detailed sampling around anomalous initial sampling results produced a number of low level anomalies, detailed sampling around these anomalies gave disappointing results and these PLs are being re- evaluated to ascertain if further work is warranted. locations. While The areas sampled to date represent less than 5% of the total Morogoro North tenement areas and sampling programmes ended in the last quarter of 2012 will not now resume until 2014 in line with the Company’s strategy of prioritising resources to the Rukwa project. Morogoro North Project: Licence Status , Geology & Exploration at 31 December 2012 S " b b ' b ~ b . S " b b ' . @ b . S " b b ' b b b R S " b b ' . z b R S " b b ' b ~ Gold prospective area Artisanal Mining sites Copper prospective area Copper occurrence (some artisanal workings) Prospecting Licence issued Prospecting Licence offered Prospecting Licence application Mining claim blocks PL RRbz/Dbz Xx Nz Xx z@R PL 7997/DbzD PL RD@9/Dbb9 z@ HANDENI GOLD AREA Magambazi Gold Deposit ~ DD Mt @ z.@ g/t gold Canaco Resources PL RD.b/Dbb9 Xx Nz North Geology Legend Neogene to Quaternary Nz: Surficial deposits of soil, gravel and mbuga Paleoproterozoic (Usagaran System) Xxb: Migmatic biotite gneiss (+/- garnet, kyanite) with bands of quartzite and pyroxene amphibolite Xxc: (calcareous in parts) Xx: High grade biotite, amphibole, pyroxene and garnet gneisses and granulites Xx Xx Xx Xx zR. PL R.89/Dbzb PL R7z7/Dbzb PL R.99/Dbzb zR@ Xxb Xxb Xxb Xx Xx Nz zRR DbzD Stream Sediment Ssmpling Nz Nz Nz b R Nz zD z8 Scale : Kilometres Stream Sediment Sampling in progress b R ~Rb ~b' bb"E ~Rb @.' bb"E ~7b bb' bb"E ~7b z.' bb"E ~7b ~b' bb"E ~7b @.' bb"E ~8b bb' bb"E xv KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 review of activities Morogoro South Project The Morogoro South project is located south and west of Morogoro and comprises a total area of 4,900 square kilometres of Prospecting Licences and Prospecting Licence Applications. Similar to Morogoro North, the geology is dominated by high grade metamorphic complexes which up to recent years were not considered prospective for gold. Kibo’s work to date has concentrated on the southern part of the project (Uluguru mountains) in an area where artisanal gold mining activity is on-going. Specifically, the Company has targeted the Ruvu Nappe, a north-south trending geological structure (thrust fault zone) along and close to which occur a number of artisanal alluvial and hard rock gold workings. Kibo’s licences cover an approximately 15 kilometre strike length of the gold prospective geological structure in this region. During late 2011 and 2012, as part of its Stage 1 exploration programme, Kibo carried out regional and detailed soil sampling surveys, prospecting surveys, and reconnaissance of artisanal workings over this area. The results of Kibo’s field exploration during 2012 are encouraging and, most significantly, have resolved a well defined gold-in-soil geochemical anomaly over an area of approximately 0.5 square kilometres on PL 5625/2009, a licence over which Kibo have an option with local company Comuta Advertising Limited to earn a 90% interest. The gold anomaly is open to the north and the south and is broadly defined on values in the range 20 to 100 parts per billion (ppb) with a maximum value 551 ppb. The anomaly is also well correlated with anomalous arsenic, bismuth and antimony. A number of other weaker gold anomalies are also defined further south along the Ruvu Nappe and these show variable correlation with anomalous arsenic, bismuth, antimony, copper and barite. These results provide ample encouragement for the Company to continue its work in this area and have provide targets for trenching and drilling which will commence in 2014. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 xvi review of activities S " K K ' K 3 K 6 S " K K ' 5 4 K 6 S " K K ' K K K 7 S " K K ' 5 1 K 7 S " K K ' K 3 K 7 36K 3K' KK"E N Drilling Target ' S . . . 5 ' S . O . 5 Xxb PL 6622/2K1K Xxb XXc 181 Xxc Xxb Xxb Xxb Nz Xxc Nz Nz Nz Nz 183 Nz NzNz North Neogene to Quaternary Nz Nz Nz: Surficial deposits of soil gravel and mbuga Geology Legend Nz Xebg Carboiferous- Jurassic 183 Xgh Xebg Xgh Xeb Xgh PL 6541/2K1K Ks: Sandstones, shales & conglomerates (part of Karoo Supergroup) Paleoproterozoic (Usagaran System) Xxb: Migmatic biotite gneiss (+/- garnet, kyanite) with bands of quartzite and pyroxene amphibolite (Xxc :calcareous in parts ). Xebg: Garnet biotite gneiss Xgh: Hornblende-biotite granulite with graphitic bands Xmb: Anorthosite Xggd: Garnet-diopside-hornblende granulite Xybh: Migmatitic qtz.-feld. gneiss & granulitic biotite-garnet gneiss Xeh: Qtz/-feld. biotite gneiss Xeb: Thinly bedded marbles, granulite biotite gneiss (+/- garnet), amphibolites and skarns Xgd: Banded pyroxene granulites & thin calcite marbles Gold prospective area Artisanal Mining sites Copper prospective area Copper occurrence (some artisanal workings) Nickel/PGM prospective area PL 6613/2K1K Xgd Xeh Xybh Prospecting Licence issued Prospecting Licence offered Prospecting Licence application Xeh Xeh Xggd PL 5885//2KK9 Xmb PL 5625/2KK9 Xeb Ks Ks PL 66K2/2K1K Xybh Xgd 311 Xgh 2K1 PL 58K3/2KK9 Xeb Iron occurrence Mining claim blocks Xybh Coal prospective area K 7 14 21 Scale : Kilometres Xgd Nz Ks Nz 36K 45' KK"E Ruvu Nappe, Kibo Exploration 2012 37K KK' KK"E 37K 15' KK"E 37K 3K' KK"E 37K 45' KK"E 38K KK' KK"E Morogoro South Project: Licence Status , Geology & Exploration at 31 December 2012 Geology Legend Licence Issued Licence Applic. v Reef Gold Alluvial Gold with Catchment GEOLOGY Alluvium, Mbuga & Residual Soils Karoo Supergroup (Tulo Beds) Sandstone & Conglomerates Artisanal Mining C o v e r i S e d m e n t s Q u a t e r n a r y A g e C a r b o n d e r o u s i t o Unconformity Lukangazi Meta-norite Matombo Group - Dolomitic Marble Uluguru Meta-anorthosite Lukwangule Group - Pyroxene & Hornblende Gneisses Morogoro Acid Gneiss Group U s a g a r a n B a s e m e n t P r o t i e r o z o c A g e Faults incl. some shear zones Thrust Faults Ilmenite Occurrence Silicified Marble Exploration Q.OQ Regional Soil Sampling Lines Detail Soil Sampling Blocks >5. ppb gold-in-soil >Q. ppb gold-in-soil Morogoro South Project: Licence Status, Geology & Exploration at 31 December 2012 E5. Y.'E E5. 5.'E E0. ..'E . Q Y > 0 O. Kilometres xvii KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 season (access to many of the areas is difficult during this period). As the Company’s short term objective is to focus resources on Rukwa, exploration on Pinewood will be deferred to 2014 at which time it is hoped that there will be a recovery in the uranium market which currently is at a very low level. Exploration at Pinewood, when it does commence will initially comprise an airborne and radiometric survey over some of the more prospective areas with subsequent field follow up of radiometric anomalies and identification of prospective coal bearing Karoo sequences by geological mapping and sampling. review of activities Pinewood Project The Pinewood project is located in southern Tanzania and comprises an 18,000 square kilometre portfolio of licences and applications prospective for uranium and coal. The Company has divided the licences into five separate blocks based on geographic location. The geology of this region comprises early Precambrian basement rocks overlain by late Precambrian to Phanerozoic sedimentary sequences. Of these, the late Carboniferous to Jurassic Karoo sequences host significant coal deposits throughout Southern Africa and are also considered prospective for Roll-Front style uranium deposits. Karoo Age sequences outcrop to variable extents on most of the licence blocks but it is postulated that they may be preserved to a much greater extent under Mezozoic and sediments Caenozoic ash and sequences. volcanic acquired the Kibo projects Pinewood as part of its 2012 corporate acquisitions completed in October 2012. Scheduling did not permit field exploration to commence prior to the onset of the wet Pinewood Project: Licence Status, Licence Status at 31 December 2012 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 xviii FINANCIAL STATEMENTS FOR THE 15 MONTH PERIOD ENDED 31 DECEMBER 2012 1 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 xix KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 Financial Statement Contents Corporate Directory Directors’ Report Independent Auditor’s Report Summary Of Significant Accounting Policies Consolidated Statement Of Comprehensive Income Consolidated Statement Of Financial Position Company Statement Of Financial Position Consolidated Statement Of Changes In Equity Company Statement Of Changes In Equity Consolidated Statement Of Cash Flows Company Statement Of Cash Flows Notes To The Consolidated And Company Financial Statements 3 4 13 15 23 24 25 26 27 28 29 30 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 2 Secretary Noel O’Keeffe Solicitors Corporate Directory Directors Christian Schaffalitzky-Non-Executive Chairman Louis Coetzee - Chief Executive Officer Noel O’Keeffe - Technical Director Tinus Maree - Non-Executive Director Wenzel Kerremans -Non-Executive Director Cecil Bond - Non-Executive Director Bernard Poznanski -Non-Executive Director Registered Office 27 Hatch Street Lower Dublin 2 Auditors Business Address LHM Casey McGrath Chartered Certified Accountants Statutory Auditors 6 Northbrook Road Dublin 6 Ireland Ireland: Sirius Centre Northpoint Tuam Road Galway +353 (0)91 865367 Tanzania: Amani Place 10th floor, Wing A Ohio Street Dar es Salaam +255 (0)22 2127857 Website www.kibomining.com Nominated Advisor (AIM) Old Change House RFC Ambrian 128 Queen Victoria Street London EC4V 4BJ Designated River Group Advisor Advisor (JSE) 2nd floor Parc Nouveay & Corporate 225 Veale Street Advisor Brooklyn Pretoria 0181 South Africa Principal Bankers Allied Irish Bank Tuam Road Galway Joint Brokers Northland Capital Partners Limited 60 Gresham Street London EC2V 7BB Public Relations Share Registrars XCAP Securities PLC 24 Cornhill London EC3V 3ND Forthbridge Consulting UK 17 St George’s Square London SW1V 2HX Ireland: McEvoy Partners 27 Hatch Street Lower Dublin 2 UK: Ronaldson’s LLP 55 Gower Street London WCIE 6HQ Tanzania: Rex Attorneys Rex House 145 Magore Street P.O. Box 7495 Dar es Salaam Ireland & UK Computershare Investor Services (Ireland) Ltd Heron House Corrig Road Sandyford Industrial Estate Dublin 18 South Africa: Computershare Investor Services (Pty) Ltd 70 Marshall Street Johannesburg 2001 (P.O. Box 61051, Marshalltown 2107) Registered Number 451931 Date of Incorporation 17 January 2008 3 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC DIRECTORS’ REPORT FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Directors present their Annual Report together with the audited financial statements for the 15 month period ended 31 December 2012 of Kibo Mining Plc (“the Company”) and its subsidiaries (collectively “the Group”). Principal Activity Kibo Mining Plc is a holding Company of a number of subsidiary multinational exploration companies. The primary activity of the Group is the acquisition, exploration and development of coal and other mineral resources in Tanzania. Review of Business and Future Developments As set out in the Chairman’s Report and review of activities, as well as continuing with its exploration program, the Group significantly increased its exploration ground holdings in Tanzania during the period through the acquisition of Mzuri Energy Limited and its subsidiary undertakings as well as Mayborn Resource Investments Proprietary Limited. Principal Risks and Uncertainties The realisation of exploration and evaluation assets is dependent on the discovery and successful development of economic mineral reserves and is subject to a number of significant potential risks summarised as follows: Commodity price fluctuations; Foreign exchange risks; Uncertainties over development and operational costs; Political and legal risks, including arrangements with governments for licences, profit sharing and taxation; Currency exchange fluctuations and restrictions; Foreign investment risks including increases in taxes, royalties and renegotiation of contracts; and Liquidity risks. In addition to the above there can be no assurance that current exploration program will result in profitable mining operations. The recoverability of the carrying value of exploration and evaluation assets is dependent on the successful discovery of economically recoverable reserves, the achievement of profitable operations, and the ability of the Group to raise additional financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write downs of the carrying value of the Group’s assets. Financial instrument risk The Company and Group are exposed to risks arising from financial instruments held. These are discussed in Note 20. Strategic risk Significant and increasing competition exists for mineral acquisition opportunities throughout the world. As a result of this competition, the Group may be unable to acquire rights to exploit additional attractive mining properties on terms it considers acceptable. Accordingly, there can be no assurance that the Group will acquire any interest in additional operations that would yield reserves or result in commercial mining operations. The Group expects to undertake sufficient due diligence where warranted to help ensure opportunities are subjected to proper evaluation. Commercial risk The mining industry is competitive and there is no assurance that, even if commercial quantities of minerals are discovered, a profitable market will exist for the sale of such minerals. There can be no assurance that the quality of the minerals will be such that the Group’s properties can be mined at a profit. Factors beyond the control of the Group may affect the marketability of any minerals discovered. Mineral prices are subject to volatile price changes from a variety of factors including international economic and political trends, expectations of inflation, global and regional demand, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. Ultimately, the Group expects that prior to a development decision; a project could be the subject of a feasibility analysis to ensure there exists an appropriate level of confidence in its economic viability. 4 4 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC DIRECTORS’ REPORT Funding risk FINANCIAL STATEMENTS AT 31 DECEMBER 2012 In the past the Group has raised funds via equity contributions from new and existing shareholders, thereby ensuring the Company remains a going concern until such time that revenues are earned through the sale or development and mining of a mineral deposit. There can be no assurance that such funds will continue to be available on reasonable terms, or at all in future. The directors regularly review cash flow requirements to ensure the Company can meet financial obligations as and when they fall due. Operational risk Mining operations are subject to hazards normally encountered in exploration, development and production. These include unexpected geological formations, rock falls, flooding, dam wall failure and other incidents or conditions which could result in damage to plant or equipment or the environment and which could impact any future production throughout. Although it is intended to take adequate precautions to minimise risk, there is a possibility of a material adverse impact on the Group’s operations and its financial results. The Group will develop and maintain policies appropriate to the stage of development of its various projects. Staffing and Key Personnel Risks Recruiting and retaining qualified personnel is critical to the Group’s success. The number of persons skilled in the acquisition, exploration and development of mining properties is limited and competition for such persons is intense. While the Group has good relations with its employees, these relations may be impacted by changes in the scheme of labour relations which may be introduced by the relevant governmental authorities. Adverse changes in such legislation may have a material adverse effect on the Group's business, results of operations and financial condition. Staff are encouraged to discuss with management, matters of interest to the employees and subjects affecting day-to-day operations of the Group. Speculative Nature of Mineral Exploration and Development Development of the Group’s mineral exploration properties is, amongst others, contingent upon obtaining satisfactory exploration results and securing additional adequate funding. Mineral exploration and development involves substantial expenses and a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to adequately mitigate. The degree of risk reduces substantially when a Group’s properties move from the exploration phase to the development phase. The discovery of mineral deposits is dependent upon a number of factors including the technical skill of the exploration personnel involved. The commercial viability of a mineral deposit, once discovered, is also dependent upon a number of factors, including the size, grade and proximity to infrastructure, metal prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. In addition, several years can elapse from the initial phase of drilling until commercial operations are commenced. Political Stability The Group is conducting its activities in Tanzania. The Directors believe that the Government of Tanzania supports the development of natural resources by foreign investors and actively monitor the situation. However, there is no assurance that future political and economic conditions in Tanzania will not result in the Government of Tanzania adopting different policies regarding foreign development and ownership of mineral resources. Any changes in policy affecting ownership of assets, taxation, rates of exchange, environmental protection, labour relations, repatriation of income and return of capital, may affect the Group’s ability to develop the projects. Uninsurable Risks The Group may become subject to liability for accidents, pollution and other hazards against which it cannot insure or against which it may elect not to insure because of prohibitive premium costs or for other reasons, such as amounts which exceed policy limits. Results and Dividends The result for the period after providing for depreciation and taxation amounted to a loss of £4,483,079 (restated 2011: loss £2,449,007). During the period the Company acquired the entire interest in Mzuri Energy Limited for £20.4m by issuing 680,297,733 ordinary shares. The Company also acquired the entire interest of Mayborn Resource Investments Proprietary Limited for £0.8m by issuing 26,666,667 ordinary shares, with effect from 1 October 2012. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 5 5 KIBO MINING PLC DIRECTORS’ REPORT Funding risk FINANCIAL STATEMENTS AT 31 DECEMBER 2012 KIBO MINING PLC DIRECTORS’ REPORT Post Balance Sheet Events FINANCIAL STATEMENTS AT 31 DECEMBER 2012 In the past the Group has raised funds via equity contributions from new and existing shareholders, thereby ensuring the Company remains a going concern until such time that revenues are earned through the sale or development and mining of a mineral deposit. There can be no assurance that such funds will continue to be available on reasonable terms, or at all in future. The directors regularly review cash flow requirements to ensure the Company can meet financial obligations as and when they fall due. Operational risk Mining operations are subject to hazards normally encountered in exploration, development and production. These include unexpected geological formations, rock falls, flooding, dam wall failure and other incidents or conditions which could result in damage to plant or equipment or the environment and which could impact any future production throughout. Although it is intended to take adequate precautions to minimise risk, there is a possibility of a material adverse impact on the Group’s operations and its financial results. The Group will develop and maintain policies appropriate to the stage of development of its various projects. Staffing and Key Personnel Risks Recruiting and retaining qualified personnel is critical to the Group’s success. The number of persons skilled in the acquisition, exploration and development of mining properties is limited and competition for such persons is intense. While the Group has good relations with its employees, these relations may be impacted by changes in the scheme of labour relations which may be introduced by the relevant governmental authorities. Adverse changes in such legislation may have a material adverse effect on the Group's business, results of operations and financial condition. Staff are encouraged to discuss with management, matters of interest to the employees and subjects affecting day-to-day operations of the Group. Speculative Nature of Mineral Exploration and Development Development of the Group’s mineral exploration properties is, amongst others, contingent upon obtaining satisfactory exploration results and securing additional adequate funding. Mineral exploration and development involves substantial expenses and a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to adequately mitigate. The degree of risk reduces substantially when a Group’s properties move from the exploration phase to the development phase. The discovery of mineral deposits is dependent upon a number of factors including the technical skill of the exploration personnel involved. The commercial viability of a mineral deposit, once discovered, is also dependent upon a number of factors, including the size, grade and proximity to infrastructure, metal prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. In addition, several years can elapse from the initial phase of drilling until commercial operations are commenced. Political Stability The Group is conducting its activities in Tanzania. The Directors believe that the Government of Tanzania supports the development of natural resources by foreign investors and actively monitor the situation. However, there is no assurance that future political and economic conditions in Tanzania will not result in the Government of Tanzania adopting different policies regarding foreign development and ownership of mineral resources. Any changes in policy affecting ownership of assets, taxation, rates of exchange, environmental protection, labour relations, repatriation of income and return of capital, may affect the Group’s ability to develop the projects. Uninsurable Risks The Group may become subject to liability for accidents, pollution and other hazards against which it cannot insure or against which it may elect not to insure because of prohibitive premium costs or for other reasons, such as amounts which exceed policy limits. Results and Dividends The result for the period after providing for depreciation and taxation amounted to a loss of £4,483,079 (restated 2011: loss £2,449,007). During the period the Company acquired the entire interest in Mzuri Energy Limited for £20.4m by issuing 680,297,733 ordinary shares. The Company also acquired the entire interest of Mayborn Resource Investments Proprietary Limited for £0.8m by issuing 26,666,667 ordinary shares, with effect from 1 October 2012. There have been no material post balance sheet events other than those disclosed in Note 21 to the financial statements. Please refer to the Chairman’s Report for information on the Company’s current and future developments. Directors Interests The interests of the Directors and Secretary and their families who held office at the date of approval of the financial statements, in the share capital of the Company are as follows: Ordinary Shares 28/06/13 31/12/12 30/09/11 Directors Christian Schaffalitzky Noel O’Keeffe Louis Coetzee Tinus Maree Wenzel Kerremans Cecil Bond Bernard Poznanski Secretary Noel O’Keeffe Directors Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Tinus Maree Wenzel Kerremans Cecil Bond Bernard Poznanski 1,715,910 714,865 3,087,329 1,104,069 32,309 817,356 202,183 25,336,976 9,582,577 41,439,936 14,882,439 - 11,742,534 2,514,936 25,336,976 9,582,577 5,178,333 - - Appointed 06/09/2012 Appointed 06/09/2012 714,865 28/06/13 Share Options 9,582,577 31/12/12 9,582,577 30/09/11 100,000 100,000 100,000 100,000 100,000 - - 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 - - 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Appointed 06/09/2012 Appointed 06/09/2012 The above share options are exercisable at a price of £0.0388 at any time up to 31 March 2016. Subsequent to year end the Company underwent a Capital Reorganisation, which led to the decrease in the quantity of shares and share options held by each individual Director. For additional information pertaining to the above refer to the Post balance sheet events as stipulated in Note 21. Transactions Involving Directors There have been no contracts or arrangements of significance during the period in which Directors of the Company were interested other than as disclosed in Note 19 to the financial statements. 5 6 6 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC DIRECTORS’ REPORT Directors meetings FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Company held 8 (eight) Board meetings during the reporting period and the number of meetings attended by each of the directors of the Company during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Desmond Burke (Resigned 31/1/13) Tinus Maree William Payne (Resigned 6/09/12) Wenzel Kerremans Cecil Bond (Appointed 06/09/2012) Bernard Poznanski (Appointed 06/09/2012) Non-Executive Chairman Chief Executive Officer Technical Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director 8 8 8 6 8 6 7 1 1 8 8 8 8 8 7 8 1 1 In terms of the Companies Memorandum & Articles of Association, one third of Directors are required to retire by rotation from the Board on an annual basis, through resignation at the Annual General Meeting. Committee meetings The Company held 3 (three) Audit Committee meetings during the reporting period and the number of meetings attended by each of the members during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position Christian Schaffalitzky William Payne (Resigned 6/09/12) Wenzel Kerremans Non-Executive Chairman Non-Executive Director Non-Executive Director 3 3 3 3 3 3 The Company held 3 (three) Remuneration Committee meetings during the reporting period and the number of meetings attended by each of the members during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position Christian Schaffalitzky Desmond Burke (Resigned 31/1/13) Tinus Maree Non-Executive Chairman Non-Executive Director Non-Executive Director 3 3 3 3 3 3 The Company held 3 (three) Governance Committee meetings during the reporting period and the number of meetings attended by each of the members during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position Christian Schaffalitzky Wenzel Kerremans Non-Executive Chairman Non-Executive Director 3 3 3 3 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 7 7 KIBO MINING PLC DIRECTORS’ REPORT Directors meetings FINANCIAL STATEMENTS AT 31 DECEMBER 2012 KIBO MINING PLC DIRECTORS’ REPORT Substantial Shareholdings FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Company held 8 (eight) Board meetings during the reporting period and the number of meetings attended by each of the directors of the Company during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position The Company has been informed that, in addition to the interests of the Directors, at 31 December 2012 and at the date of this report, the following shareholders own 3% or more beneficial interest of the issued share capital of the Company, which is considered significant for disclosure purposes in the Annual Report: Percentage of issued share capital 28/06/13 31/12/12 30/09/11 Mzuri Capital Group Sun Mining Limited 17.99% 5.55% 25.35% 7.89% 18.31% 5.15% The Directors are not aware of any other holding of 3% or more of the share capital of the Company. Subsidiary Undertakings Details of the Company’s subsidiaries are set out in Note 18 to the financial statements. Political Donations During the period, the Group made no charitable or political contributions (2011: £ nil). Going Concern The Directors have reviewed budgets, projected cash flows and other relevant information, and on the basis of this review, are confident that the Company and the Group will have adequate financial resources to continue in operational existence for the foreseeable future. Additionally significant capital-raising subsequent to year end has provided additional cash resources in order to ensure prospecting activities are continued as planned without interruption. For additional information of capital-raising subsequent to year end refer to material post balance sheet events disclosed in Note 21 to the financial statements. The future of the Company and the Group is dependent on the successful future outcome of its short and medium term ability to raise new equity funding and the successful development of its exploration interests and of the availability of further funding to bring these interests to production. The Directors consider that in preparing the financial statements they have taken into account all information that could reasonably be expected to be available. Consequently, they consider that it is appropriate to prepare the financial statements on the going concern basis. Change in Accounting Policy During the current financial period the Company and Group effected a change in accounting policy in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources, whereby exploration and development costs previously capitalised have been expensed. The change in accounting policy is anticipated to produce reliable and more relevant information about the effects of transactions, other events or conditions on the Groups financial position, financial performance and future cash flows. This adjustment has been reflected retrospectively in the financial statements in terms of financial reporting framework. The summarised effect is stipulated in the table below: Effect of Change in Accounting Policy Previously Stated Restatement Restated 2010 Movement Restatement Restated 2011 30 September 2011 Intangible assets £4,266,062 (£1,242,553) £3,023,509 (£412,512) £1,242,553 £3,853,550 Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Desmond Burke (Resigned 31/1/13) Tinus Maree William Payne (Resigned 6/09/12) Wenzel Kerremans Cecil Bond (Appointed 06/09/2012) Bernard Poznanski (Appointed 06/09/2012) Non-Executive Chairman Chief Executive Officer Technical Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director In terms of the Companies Memorandum & Articles of Association, one third of Directors are required to retire by rotation from the Board on an annual basis, through resignation at the Annual General Meeting. Committee meetings The Company held 3 (three) Audit Committee meetings during the reporting period and the number of meetings attended by each of the members during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position Christian Schaffalitzky William Payne (Resigned 6/09/12) Wenzel Kerremans Non-Executive Chairman Non-Executive Director Non-Executive Director The Company held 3 (three) Remuneration Committee meetings during the reporting period and the number of meetings attended by each of the members during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position 8 8 8 6 8 6 7 1 1 3 3 3 3 3 3 3 3 8 8 8 8 8 7 8 1 1 3 3 3 3 3 3 3 3 Christian Schaffalitzky Desmond Burke (Resigned 31/1/13) Tinus Maree Non-Executive Chairman Non-Executive Director Non-Executive Director Christian Schaffalitzky Wenzel Kerremans Non-Executive Chairman Non-Executive Director 7 The Company held 3 (three) Governance Committee meetings during the reporting period and the number of meetings attended by each of the members during the period to 31 December 2012 are: Number of Meetings Attended Number of Meetings Eligible to Attend Director Name Position Basic / Diluted earnings per share (pence) Environmental responsibility The Group recognises that its activities require it to have regard to the potential impact that it, its subsidiaries and partners may have on the environment. Where exploration and development works are carried out, care is taken to limit the amount of disturbance and where any remediation works are required they are carried out as and when required. 8 8 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 Restated 2010 (0.82) Restated 2011 (0.74) £1,063,119 £1,242,553 £2,305,672 £3,691,560 (£1,242,553) £4,754,679 Retained loss/ (earnings) KIBO MINING PLC DIRECTORS’ REPORT Dividends FINANCIAL STATEMENTS AT 31 DECEMBER 2012 There have been no dividends declared or paid during the current financial period (2011: £ nil). Change in the year end In order to align the year ends of the various Companies within the expanded Group the Company had decided to change its financial year end from 30 September to 31 December, providing more meaningful financial information to the stakeholders of the Kibo Group as at 31 December 2012. Corporate Governance Policy The Group subscribes to the values of good corporate governance at all levels and is committed to conduct business with discipline, integrity and social responsibility. In terms of the JSE & AIM Listings Requirements, the Group is required to report in respect of the third King Report (“King III”) for its financial period ended 31 December 2012, on the extent to which it has complied with the principles as set out in King III. The Board of Directors is firmly committed to promoting Kibo Mining Plc’s adherence to the principles contained in the Code of Corporate Practices and Conduct as set out in the King III. The Code is constantly being reviewed and the directors are implementing the Code in a phased manner. The directors are committed to the implementation of the principles and non-compliance is limited to the matter listed in this report. Internal Audit The Group does not have an internal audit function. Currently the operations of the Group does not warrant an internal audit function, however the Board is assessing the need to establish an internal audit department considering future prospects as the Group’s operations increase. During the period the Board has taken responsibility to ensure effective governance, risk management and that the internal control environment is maintained. Role of Directors All Board members ensure that appropriate governance procedures are adhered to and there is a clear division of responsibilities at Board level to ensure a balance of power and authority so that no one individual has unfettered powers of decision making. The role of chairman and CEO are not held by the same director. The chairman is a non-executive director. Board and Audit Committee meetings have been taking place periodically and the executive directors manage the daily Company operations with the Board meetings taking place on a regular basis throughout the financial period. During the current reporting period the Board met 8 (eight) times and provided pertinent information to the Executive Committee of the Company. The Board is responsible for effective control over the affairs of the Company, including: strategic and policy decision-making financial control, risk management, communication with stakeholders, internal controls and the asset management process. Although there was no specific committee tasked with identifying, analysing and reporting on risk during the financial period, this was nevertheless part of the everyday function of the directors and was managed at Board level. Directors are entitled, in consultation with the Chairman to seek independent professional advice about the affairs of the Company, at the Company’s expense. Audit Committee The members of the Audit committee at 28 June 2013 are Christian Schaffalitzky, Wenzel Kerremans and Cecil Bond. The committee meets at least twice a year to review its strategy. The Audit committee has set out its roles and responsibilities within its charter and ensured that it is aligned to good financial governance principles. These include: the establishment of an Audit Committee to guide the audit approach, as well as its modus operandi and the rules that govern the audit relationship; assess the processes relating to and the results emanating from the Group’s risk and control environment; oversee the financial reporting process; evaluate and co-ordinate the external audit process; foster and improve open communication and contact with relevant stakeholders of the Group; and review the independence of the External Auditors. 9 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 9 KIBO MINING PLC DIRECTORS’ REPORT Dividends FINANCIAL STATEMENTS AT 31 DECEMBER 2012 KIBO MINING PLC DIRECTORS’ REPORT FINANCIAL STATEMENTS AT 31 DECEMBER 2012 There have been no dividends declared or paid during the current financial period (2011: £ nil). Change in the year end The audit committee further sets the principles for recommending the external auditors for non-audit services use. In order to align the year ends of the various Companies within the expanded Group the Company had decided to change its financial year end from 30 September to 31 December, providing more meaningful financial information to the stakeholders of the Kibo Group as at 31 December 2012. Corporate Governance Policy The Group subscribes to the values of good corporate governance at all levels and is committed to conduct business with discipline, integrity and social responsibility. In terms of the JSE & AIM Listings Requirements, the Group is required to report in respect of the third King Report (“King III”) for its financial period ended 31 December 2012, on the extent to which it has complied with the principles as set out in King III. The Board of Directors is firmly committed to promoting Kibo Mining Plc’s adherence to the principles contained in the Code of Corporate Practices and Conduct as set out in the King III. The Code is constantly being reviewed and the directors are implementing the Code in a phased manner. The directors are committed to the implementation of the principles and non-compliance is limited to the matter listed in this report. Internal Audit The Group does not have an internal audit function. Currently the operations of the Group does not warrant an internal audit function, however the Board is assessing the need to establish an internal audit department considering future prospects as the Group’s operations increase. During the period the Board has taken responsibility to ensure effective governance, risk management and that the internal control environment is maintained. Role of Directors All Board members ensure that appropriate governance procedures are adhered to and there is a clear division of responsibilities at Board level to ensure a balance of power and authority so that no one individual has unfettered powers of decision making. The role of chairman and CEO are not held by the same director. The chairman is a non-executive director. Board and Audit Committee meetings have been taking place periodically and the executive directors manage the daily Company operations with the Board meetings taking place on a regular basis throughout the financial period. During the current reporting period the Board met 8 (eight) times and provided pertinent information to the Executive Committee of the Company. The Board is responsible for effective control over the affairs of the Company, including: strategic and policy decision-making financial control, risk management, communication with stakeholders, internal controls and the asset management process. Although there was no specific committee tasked with identifying, analysing and reporting on risk during the financial period, this was nevertheless part of the everyday function of the directors and was managed at Board level. Directors are entitled, in consultation with the Chairman to seek independent professional advice about the affairs of the Company, at the Company’s expense. Audit Committee The members of the Audit committee at 28 June 2013 are Christian Schaffalitzky, Wenzel Kerremans and Cecil Bond. The committee meets at least twice a year to review its strategy. The Audit committee has set out its roles and responsibilities within its charter and ensured that it is aligned to good financial governance principles. These include: the establishment of an Audit Committee to guide the audit approach, as well as its modus operandi and the rules that govern the audit relationship; assess the processes relating to and the results emanating from the Group’s risk and control environment; oversee the financial reporting process; evaluate and co-ordinate the external audit process; review the independence of the External Auditors. 9 foster and improve open communication and contact with relevant stakeholders of the Group; and The audit committee has satisfied itself of the suitability of the financial controller, and that the financial controller holds the necessary expertise and has the relevant experience. Remuneration Committee The members of the Remuneration Committee at 28 June 2013 are Christian Schaffalitzky, Wenzel Kerremans and Tinus Maree. The committee is empowered by the Board to set short, medium and long-term remuneration for the executive directors. More generally, the committee is responsible for the assessment and approval of a Board remuneration strategy for the Group. The committee’s policy is to meet at least twice a year to review the strategy. Governance Committee The members of the Governance Committee at 28 June 2013 are Christian Schaffalitzky, Bernard Poznanski and Cecil Bond. The committee meets at least twice a year to review its strategy. The Governance Committee has set out its roles and responsibilities within its charter and ensured that it is aligned to good financial governance principles. These include: Governance of IT monitor the compliance of the Group with legal requirements and the Group’s Code of Ethics. The Board is responsible for IT governance as an integral part of the Group’s governance as a whole. The IT function is not expected to significantly change in the foreseeable future. The Board has the required policies and procedures in place to ensure governance of IT is adhered to. Integrated and Sustainability Reporting KING III defines Integrated Reporting as a “holistic and integrated representation of the Group’s performance in terms of both its finances and its sustainability”. The Group currently does not have a separate integrated report. The Board and it’s sub-committees are in the process of assessing the principles and practices of integrated reporting and sustainability reporting as outlined in KING III to ensure that adequate information about the operations of the Group, the sustainability issues pertinent to its business, the financial results and the results of its operations and cash flows are disclosed in a single report. 10 10 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC DIRECTORS’ REPORT Statement of Directors Responsibility T FINANCIAL STATEMENTS AT 31 DECEMBER 2012 he Directors are responsible for preparing the Annual Report and the Group and Company financial statements in accordance with applicable law and Regulations. Company law requires the Directors to prepare Group and parent Company financial statements for each financial period. As permitted by Company law, the directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU IFRS) and have elected to prepare the Company financial statements in accordance with EU IFRS, as applied in accordance with the provisions of the Irish Companies Acts, 1963 to 2012 (‘the Companies Acts’). The Group and Company financial statements are required by law and EU IFRS to present fairly the financial position and performance of the Group. The Companies Acts provide in relation to such financial statements that reference in the relevant parts of the Acts to financial statements giving a true and fair view are references to their achieving a fair presentation. In preparing each of the Group and Company financial statements, the Directors are required to: select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business. The directors confirm they have complied with the above requirements in preparing these accounts. Under applicable law the Directors are also responsible for preparing a Directors’ Report and reports relating to Directors’ remuneration and corporate governance that comply with that law and those rules. The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that its financial statements are prepared in accordance with International Financial Reporting Standards, and comply with the Companies Acts, 1963 to 2012, and European Communities (Companies: Group Accounts) Regulations 1992 and all regulations to be construed as one with those acts. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Corporate Governance The Directors are committed to maintaining the highest standards of corporate governance commensurate with the size, stage of development and financial status of the Group. The Board The Board is responsible for the supervision and control of the Company and is accountable to the shareholders. The Board has reserved decision-making on a variety of matters, including determining strategy for the Group, reviewing and monitoring executive management performance and monitoring risks and controls. The Board has seven Directors, comprising two executive Directors and five non-executive Directors. The Board met formally on 8 (eight) occasions during the period ended 31 December 2012. An agenda and supporting documentation was circulated in advance of each meeting. All the Directors bring independent judgement to bear on issues affecting the Group and all have full and timely access to information necessary to enable them to discharge their duties. The Directors have a wide and varying array of experiences in the industry. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 11 11 KIBO MINING PLC DIRECTORS’ REPORT Statement of Directors Responsibility T FINANCIAL STATEMENTS AT 31 DECEMBER 2012 KIBO MINING PLC DIRECTORS’ REPORT Books of account FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The measures taken by the directors to ensure compliance with the requirements in Section 202 of the Companies Act 1990, regarding proper books of account are the implementation of necessary policies and procedures for recording transactions, the employment of competent accounting personnel with appropriate expertise and the provision of adequate resources to the financial function. The books of account of the Company are maintained at Sirius Centre, Northpoint, Tuam Road, Galway. Auditors The auditors, LHM Casey McGrath, have indicated their willingness to continue in office in accordance with Section 160(2) of the Companies Act, 1963. On behalf of the Board Director ________________________ Date: 28 June 2013 Director ________________________ Date: 28 June 2013 he Directors are responsible for preparing the Annual Report and the Group and Company financial statements in accordance with applicable law and Regulations. Company law requires the Directors to prepare Group and parent Company financial statements for each financial period. As permitted by Company law, the directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU IFRS) and have elected to prepare the Company financial statements in accordance with EU IFRS, as applied in accordance with the provisions of the Irish Companies Acts, 1963 to 2012 (‘the Companies Acts’). The Group and Company financial statements are required by law and EU IFRS to present fairly the financial position and performance of the Group. The Companies Acts provide in relation to such financial statements that reference in the relevant parts of the Acts to financial statements giving a true and fair view are references to their achieving a fair presentation. In preparing each of the Group and Company financial statements, the Directors are required to: select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business. The directors confirm they have complied with the above requirements in preparing these accounts. Under applicable law the Directors are also responsible for preparing a Directors’ Report and reports relating to Directors’ remuneration and corporate governance that comply with that law and those rules. The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that its financial statements are prepared in accordance with International Financial Reporting Standards, and comply with the Companies Acts, 1963 to 2012, and European Communities (Companies: Group Accounts) Regulations 1992 and all regulations to be construed as one with those acts. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Corporate Governance The Directors are committed to maintaining the highest standards of corporate governance commensurate with the size, stage of development and financial status of the Group. The Board The Board is responsible for the supervision and control of the Company and is accountable to the shareholders. The Board has reserved decision-making on a variety of matters, including determining strategy for the Group, reviewing and monitoring executive management performance and monitoring risks and controls. The Board has seven Directors, comprising two executive Directors and five non-executive Directors. The Board met formally on 8 (eight) occasions during the period ended 31 December 2012. An agenda and supporting documentation was circulated in advance of each meeting. All the Directors bring independent judgement to bear on issues affecting the Group and all have full and timely access to information necessary to enable them to discharge their duties. The Directors have a wide and varying array of experiences in the industry. 11 12 12 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS AT 31 DECEMBER 2012 We have audited the Group and Company financial statements of Kibo Mining Plc for the 15 month period ended 31 December 2012 which comprise of the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Cash Flows, Company Statement of Cash Flows, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity and the related notes. These financial statements have been prepared under the accounting policies set out on pages 15 to 22. This report is made solely to the Company’s members as a body in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in the audit report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company or the Company’s members as a body for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International Financial Reporting Standards as adopted by the European Union (IFRSs) are set out in the Statement of Directors’ Responsibilities on page 11. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the Group financial statements give a true and fair view, in accordance with International Financial Reporting Standards as adopted by the European Union and are properly prepared in accordance with the Companies Acts 1963 to 2012. We also report to you whether in our opinion: proper books of account have been kept by the Company; whether at the balance sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the Company; and whether the information given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit and whether the financial statements are in agreement with the books of account. We report to the shareholders if, in our opinion, any information specified by law regarding Directors’ remuneration and Directors’ transactions is not given and, where practicable, include such information in our report. We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Directors’ Report and the Chairman’s Report and Review of Activities. We consider the implications for our audit report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. Basis of opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 13 13 KIBO MINING PLC INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS AT 31 DECEMBER 2012 KIBO MINING PLC INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS AT 31 DECEMBER 2012 We have audited the Group and Company financial statements of Kibo Mining Plc for the 15 month period ended 31 December 2012 which comprise of the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Cash Flows, Company Statement of Cash Flows, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity and the related notes. These financial statements have been prepared under the accounting policies set out on pages 15 to 22. This report is made solely to the Company’s members as a body in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in the audit report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company or the Company’s members as a body for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International Financial Reporting Standards as adopted by the European Union (IFRSs) are set out in the Statement of Directors’ Responsibilities on page 11. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the Group financial statements give a true and fair view, in accordance with International Financial Reporting Standards as adopted by the European Union and are properly prepared in accordance with the Companies Acts 1963 to 2012. We also report to you whether in our opinion: proper books of account have been kept by the Company; whether at the balance sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the Company; and whether the information given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit and whether the financial statements are in agreement with the books of account. We report to the shareholders if, in our opinion, any information specified by law regarding Directors’ remuneration and Directors’ transactions is not given and, where practicable, include such information in our report. We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Directors’ Report and the Chairman’s Report and Review of Activities. We consider the implications for our audit report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. Basis of opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial. Opinion In our opinion the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the Group’s affairs as at 31 December 2012 and of its loss for the period then ended; the Company financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU and as applied in accordance with the provisions of the Companies Acts, 1963 to 2012, of the state of the Company’s affairs as at 31 December 2012; and the financial statements have been properly prepared in accordance with the Companies Acts, 1963 to 2012. We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the Company. The Company Statement of Financial Position is in agreement with the books of account. In our opinion, the information given in the Directors’ Report is consistent with the financial statements. The net assets of the Company, as stated in the Company Statement of Financial Position on page 25, are more than half of the amount of its called up share capital and, in our opinion, on that basis there did not exist at 31 December 2012 a financial situation which under Section 40(1) of the Companies (Amendment) Act, 1983, may require the convening of an extraordinary meeting of the Company. Emphasis of Matter – Realisation of Assets Without qualifying our opinion, we draw your attention to notes 10, 11, 12 and 18 concerning the valuation of intangible assets, amounts due from Group undertakings and investments in group undertakings. The realisation of intangible assets of £21,054,614 (2011: £3,853,550), amounts due from Group undertakings of £24,462,066 (2011: £3,198,297) and investment in group undertakings of £4,326,511 (2011: £4,326,511) included in the Company Statement of Financial Position is dependent on the discovery and successful development of economic reserves including the ability of the Group to raise sufficient finance to develop the projects. Fergal McGrath ________________________________________________________ For and on behalf of LHM Casey McGrath Chartered Certified Accountants Statutory Audit Firm 6 Northbrook Road, Dublin 6, Ireland Date: 28 June 2013 13 14 14 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 General Information Kibo Mining Plc (“the Company”) is a Company incorporated in Ireland. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The principal activities of the Company and its subsidiaries are related to the exploration for and development of coal and other minerals in Tanzania. The figures in the financial statements are presented in Sterling unless otherwise stated. Statement of Compliance As permitted by the European Union, the Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU (IFRS). The individual financial statements of the Company (“Company financial statements”) have been prepared in accordance with the Companies Act, 1963 to 2012 which permits a Company that publishes its Company and Group financial statements together, to take advantage of the exemption in Section 148(8) of the Companies Act, 1963, from presenting to its members its Company Income Statement and related notes that form part of the approved Company financial statements. The IFRSs adopted by the EU as applied by the Company and the Group in the preparation of these financial statements are those that were effective at 31 December 2012. Statement of Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. Basis of Preparation The Group and Company financial statements are prepared on the historical cost basis. The accounting policies have been applied consistently by Group entities. The Group and Company financial statements have been prepared on a going concern basis as explained on page 8. Use of Estimates and Judgements The preparation of financial statements in conformity with EU IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. In particular, there are significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements in the following areas: Measurement of the recoverable amounts of intangible assets; and Utilisation of tax losses Exploration and evaluation expenditure The Group’s revised accounting policy for exploration and evaluation expenditure results in the capitalisation of certain intangible mineral resources which are identified through business combinations or equivalent acquisitions. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established based on the separately identified mineral resources. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the intangible mineral resources under the policy, a judgement is made that recovery of the intangible asset is unlikely, the relevant capitalised amount will be written off to the income statement. Taxation Assessing the recoverability of deferred income tax assets requires the Company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 15 15 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 General Information Revenue Recognition - Interest Revenue Kibo Mining Plc (“the Company”) is a Company incorporated in Ireland. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The principal activities of the Company and its subsidiaries are related to the exploration for and development of coal and other minerals in Tanzania. The figures in the financial statements are presented in Sterling unless otherwise stated. Statement of Compliance Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Consolidation As permitted by the European Union, the Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU (IFRS). The individual financial statements of the Company (“Company financial statements”) have been prepared in accordance with the Companies Act, 1963 to 2012 which permits a Company that publishes its Company and Group financial statements together, to take advantage of the exemption in Section 148(8) of the Companies Act, 1963, from presenting to its members its Company Income Statement and related notes that form part of the approved Company financial statements. The IFRSs adopted by the EU as applied by the Company and the Group in the preparation of these financial statements are those that were effective at 31 December 2012. Statement of Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. Basis of Preparation The Group and Company financial statements are prepared on the historical cost basis. The accounting policies have been applied consistently by Group entities. The Group and Company financial statements have been prepared on a going concern basis as explained on page 8. Use of Estimates and Judgements The preparation of financial statements in conformity with EU IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. areas: In particular, there are significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements in the following Measurement of the recoverable amounts of intangible assets; and Exploration and evaluation expenditure Utilisation of tax losses The Group’s revised accounting policy for exploration and evaluation expenditure results in the capitalisation of certain intangible mineral resources which are identified through business combinations or equivalent acquisitions. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established based on the separately identified mineral resources. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the intangible mineral resources under the policy, a judgement is made that recovery of the intangible asset is unlikely, the relevant capitalised amount will be written off to the income statement. Taxation Assessing the recoverability of deferred income tax assets requires the Company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted. The consolidated financial statements comprise the financial statements of Kibo Mining Plc and its subsidiaries for the 15 month period ended 31 December 2012. Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intragroup balances and any unrealised gains or losses or income or expenses arising from intragroup transactions are eliminated in preparing the Group financial statements, except to the extent they provide evidence of impairment. The Group accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity. The acquiree's identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business Combinations are recognised at their fair values at acquisition date. Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition date. Non-controlling interest arising from a business combination is measured either at their share of the fair value of the assets and liabilities of the acquiree or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination, and disclosed in the note for business combinations. Intangible Assets An intangible asset is recognised when: it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and the cost of the asset can be measured reliably. Intangible assets are carried at cost less accumulated amortisation and impairment. Irrespective of whether there is any indication of impairment, the Group also: tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period; and test goodwill by comparing its carrying value with its recoverable amount. 15 16 16 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Exploration & Evaluation Assets Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activity includes: • researching and analysing historical exploration data; • gathering exploration data through topographical, geochemical and geophysical studies; • exploratory drilling, trenching and sampling; • determining and examining the volume and grade of the resource; • surveying transportation and infrastructure requirements; and • conducting market and finance studies. Administration costs attributable to exploration activities are charged to the income statement. Licence costs paid in connection with a right to explore in an existing exploration area is charged to the income statement. Exploration and evaluation expenditure is charged to the income statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: • In respect of minerals activities: – the exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and measured at fair value on acquisition; or the existence of a commercially viable mineral deposit has been established. – Capitalised exploration and evaluation expenditure considered to be tangible is recorded as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recorded as an intangible. As the capitalised exploration and evaluation expenditure asset is not available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is indicated, assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash generating unit) to which the exploration is attributed. Exploration areas at which reserves have been discovered but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is under way or planned. Impairment Assets are reviewed for impairment at each reporting date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Comprehensive Income immediately. Property, Plant and Equipment Property, Plant and Equipment are stated at cost or valuation, less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows: Office equipment-between 12.5% to 37.5% straight line; Plant & machinery at 20% straight line; Furniture and fixtures at 12.5% straight line; Motor vehicles at 25% straight line; and I.T Equipment at 20% straight line The residual value and useful lives of the property, plant and equipment are reviewed annually and adjusted if appropriate at each Statement of Financial Position date. On disposal of property, plant and equipment the cost and the related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the Statement of Comprehensive Income. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 17 17 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Exploration & Evaluation Assets Income Tax Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activity Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Income Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. includes: • researching and analysing historical exploration data; • gathering exploration data through topographical, geochemical and geophysical studies; • exploratory drilling, trenching and sampling; • determining and examining the volume and grade of the resource; • surveying transportation and infrastructure requirements; and • conducting market and finance studies. Administration costs attributable to exploration activities are charged to the income statement. Licence costs paid in connection with a right to explore in an existing exploration area is charged to the income statement. Exploration and evaluation expenditure is charged to the income statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: • In respect of minerals activities: – – the exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and measured at fair value on acquisition; or the existence of a commercially viable mineral deposit has been established. Capitalised exploration and evaluation expenditure considered to be tangible is recorded as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recorded as an intangible. As the capitalised exploration and evaluation expenditure asset is not available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is indicated, assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash generating unit) to which the exploration is attributed. Exploration areas at which reserves have been discovered but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is under way or planned. Impairment Assets are reviewed for impairment at each reporting date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Comprehensive Income immediately. Property, Plant and Equipment Property, Plant and Equipment are stated at cost or valuation, less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows: Office equipment-between 12.5% to 37.5% straight line; Plant & machinery at 20% straight line; Furniture and fixtures at 12.5% straight line; Motor vehicles at 25% straight line; and I.T Equipment at 20% straight line The residual value and useful lives of the property, plant and equipment are reviewed annually and adjusted if appropriate at each Statement of Financial Position date. On disposal of property, plant and equipment the cost and the related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the Statement of Comprehensive Income. 17 Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. Foreign Currencies Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Sterling, which is the Group’s presentation currency. This is also the functional currency of the Group and Company and is considered by the Board also to be appropriate for the purposes of preparing the Group financial statements. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: Monetary assets and liabilities for each Statement of Financial Position presented are presented at the closing rate at the date of that Statement of Financial Position. Non-monetary items are measured at the exchange rate in effect at the historical transaction date and are not translated at each Statement of Financial Position date; Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transaction): and All resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to shareholders equity. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. Issue Expenses and Share Premium Account Issue expenses are written off against the premium arising on the issue of share capital. 18 18 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Financial Instruments Cash and Cash Equivalents Cash and Cash Equivalents in the Statement of Financial Position comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Trade and other receivables / payables Trade and other receivables and payables are stated at cost less impairment, which approximates fair value given the short dated nature of these assets and liabilities. Share based payments For such grants of share options, the fair value as at the date of grant is calculated using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that are likely to vest, except where forfeiture is only due to market based conditions not achieving the threshold for vesting. Shareholder warrants The shareholder warrants entitle shareholders to a number of common shares based upon the number of shares they subscribed for at the date of issue of the warrant instrument. The warrants relate to a transaction with the equity holders as opposed to a transaction in exchange for any goods or services. The equity component of the instrument is not considered material and there is no liability component arising as a result of these warrants. Upon exercise of the warrant the proceeds received, net of attributable transaction costs, are credited to share capital and where appropriate share premium. Share Capital Incremental costs directly attributable to the issue of ordinary shares and share options are recognised directly in equity. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 19 19 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Earnings per share NEW STANDARDS AND INTERPRETATIONS The Group’s financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period. Cash and Cash Equivalents in the Statement of Financial Position comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Trade and other receivables / payables IFRS 9: Financial Instruments New standard that forms the first part of a three-part Recognition and Measurement project to replace 1 January 2015 IAS 39 Financial Instruments: There following new standards, interpretations and amendments not yet effective have not been adopted by the Group and Company during the current financial period as these will be assessed on an individual basis as and when they become effective: Standards Details of amendment Annual periods beginning on or after IFRS 10: Consolidated Financial Statements IFRS 11: Joint Arrangements IFRS 12: Disclosure of Interests in Other Entities IFRS 13: Fair Value Measurement IAS 19: Employee Benefits IAS 27: Consolidated and Separate Financial Statements IAS 28: Investments in Associates IAS 32: Financial Instruments : Presentation IAS 34: Interim Financial Reporting IFRIC 20: Stripping Costs in the Production Phase of a Surface Mine New standard that replaces the consolidation requirements in SIC-12 Consolidation—Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements. Standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company and provides additional guidance to assist in the determination of control where this is difficult to assess New standard that deals with the accounting for joint arrangements and focuses on the rights and obligations of the arrangement, rather than its legal form. Standard requires a single method for accounting for interests in jointly controlled entities New and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles New guidance on fair value measurement and disclosure requirements Amendments to the accounting for current and future obligations resulting from the provision of defined benefit plans Consequential amendments resulting from the issue of IFRS 10,11 and 12 Consequential amendments resulting from the issue of IFRS 10,11 and 12 - Amendments require entities to disclose gross amounts subject to rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help investors understand the extent to which an entity has set off in its Statement of Financial Position and the effects of rights of set-off on the entity’s rights and obligations. - Annual Improvements 2009–2011 Cycle: Amendments to clarify the tax effect of distribution to holders of equity instruments. Annual Improvements 2009–2011 Cycle: Amendments to improve the disclosures for interim financial reporting and segment information for total assets and liabilities Capitalisation of stripping costs in the production phase of a surface mine until they meet the definition of inventory in IAS 2 : Inventories 20 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 20 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Financial Instruments Cash and Cash Equivalents Trade and other receivables and payables are stated at cost less impairment, which approximates fair value given the short dated nature of these assets and liabilities. Share based payments For such grants of share options, the fair value as at the date of grant is calculated using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that are likely to vest, except where forfeiture is only due to market based conditions not achieving the threshold for vesting. Shareholder warrants The shareholder warrants entitle shareholders to a number of common shares based upon the number of shares they subscribed for at the date of issue of the warrant instrument. The warrants relate to a transaction with the equity holders as opposed to a transaction in exchange for any goods or services. The equity component of the instrument is not considered material and there is no liability component arising as a result of these warrants. Upon exercise of the warrant the proceeds received, net of attributable transaction costs, are credited to share capital and where appropriate share premium. Share Capital Incremental costs directly attributable to the issue of ordinary shares and share options are recognised directly in equity. 19 KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Group have not yet assessed the impact of IFRS 9. Except for the amended disclosure requirements of IAS24 Revised, the above new standards, amendments and interpretations are not expected to materially affect the Group’s reporting or reported numbers. New IFRS issued by the IASB and applied in these financial statements are as follows: The amendments as set out below are considered not to be material: Details of amendment Standards IAS 1: Presentation of Financial Statements -Current/non-current classification of convertible instruments -Clarification of statement of changes in equity - New requirements to group together items within OCI that may be reclassified to the profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall performance of an entity. - Annual Improvements 2009–2011 Cycle: Amendments clarifying the requirements for comparative information including minimum and additional comparative information required. Annual periods beginning on or after 1 January 2010 1 January 2011 1 July 2012 1 January 2013 IAS 7: Statement of Cash Flows -Classification of expenditures on unrecognised 1 January 2010 assets IAS 1: Presentation of Financial Statements IAS 16: Property, Plant and Equipment IAS 24: Related Party Disclosures IAS 27: Amendment – Consolidated and separate financial statements IFRS3: Revised – Business Combinations IFRS 2: - Amendment - Group Cash -settled Share-based Payment Transactions IFRS 7: Financial Instruments: Disclosures New requirements to group together items within OCI that may be reclassified to the profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall performance of an entity. Annual Improvements 2009–2011 Cycle: Amendments to the recognition and classification of servicing equipment. -Simplification of the disclosure requirements for government-related entities -Clarification of the definition of a related party - Transition requirements for amendments arising as a result of IAS 27 Consolidated and Separate Financial Statements - Amendments to transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS - Clarification on the measurement of non-controlling interests - Additional guidance provided on un-replaced and voluntarily replaced share-based payment awards - Clarification of scope of IFRS 2 and IFRS 3 revised - Amendments relating to group cash-settled share- based payment transactions – clarity of the definition of the term “Group” and where in a group share based payments must be accounted for. - Amendments require additional disclosure on transfer transactions of financial assets, including the possible effects of any residual risks that the transferring entity retains. The amendments also require additional disclosures if a disproportionate amount of transfer transactions are undertaken 21 around the end of a reporting period KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 21 1 July 2012 1 January 2013 1 January 2011 1 July 2010 1 January 2011 1 July 2009 1 January 2010 1 July 2011 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES KIBO MINING PLC SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Group have not yet assessed the impact of IFRS 9. Except for the amended disclosure requirements of IAS24 Revised, the above new standards, amendments and interpretations are not expected to materially affect the Group’s reporting or reported numbers. New IFRS issued by the IASB and applied in these financial statements are as follows: The amendments as set out below are considered not to be material: Details of amendment Standards Annual periods beginning on or after IAS 12: Income Taxes - Amendments require entities to disclose gross amounts subject to rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help investors understand the extent to which an entity has set off in its Statement of Financial Position and the effects of rights of set-off on the entity’s rights and obligations. Rebuttable presumption introduced that an investment property will be recovered in its entirety through sale. 1 January 2013 1 January 2012 IAS 1: Presentation of Financial -Current/non-current classification of convertible 1 January 2010 Statements instruments -Clarification of statement of changes in equity - New requirements to group together items within OCI that may be reclassified to the profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall performance of an entity. - Annual Improvements 2009–2011 Cycle: Amendments clarifying the requirements for comparative information including minimum and additional comparative information required. 1 January 2011 1 July 2012 1 January 2013 IAS 7: Statement of Cash Flows -Classification of expenditures on unrecognised 1 January 2010 assets IAS 1: Presentation of Financial New requirements to group together items within Statements 1 July 2012 OCI that may be reclassified to the profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall performance of an entity. IAS 16: Property, Plant and Annual Improvements 2009–2011 Cycle: Equipment Amendments to the recognition and classification of 1 January 2013 servicing equipment. IAS 24: Related Party -Simplification of the disclosure requirements for Disclosures government-related entities 1 January 2011 -Clarification of the definition of a related party IAS 27: Amendment – - Transition requirements for amendments arising as 1 July 2010 Consolidated and separate a result of IAS 27 Consolidated and Separate Financial financial statements Statements IFRS3: Revised – Business - Amendments to transition requirements for Combinations contingent consideration from a business 1 January 2011 IFRS 2: - Amendment - Group - Clarification of scope of IFRS 2 and IFRS 3 revised 1 July 2009 Cash -settled Share-based Payment Transactions - Amendments relating to group cash-settled share- 1 January 2010 IFRS 7: Financial Instruments: - Amendments require additional disclosure on Disclosures 1 July 2011 combination that occurred before the effective date of the revised IFRS interests - Clarification on the measurement of non-controlling - Additional guidance provided on un-replaced and voluntarily replaced share-based payment awards based payment transactions – clarity of the definition of the term “Group” and where in a group share based payments must be accounted for. transfer transactions of financial assets, including the possible effects of any residual risks that the transferring entity retains. The amendments also require additional disclosures if a disproportionate amount of transfer transactions are undertaken 21 around the end of a reporting period 22 22 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FINANCIAL STATEMENTS AT 31 DECEMBER 2012 All figures are stated in Sterling Continuing operations Administrative expenses Exploration expenditure Share based payment charge Operating loss Investment income Loss on ordinary activities before tax Taxation (Loss) for the period Other comprehensive income: GROUP 15 month period ended 31 December 2012 Audited £ (2,295,936) (897,740) (1,290,446) (4,484,122) 1,043 (4,483,079) 12 month period ended 30 September 2011 Restated £ (831,342) (1,200,343) (424,570) (2,456,255) 7,248 (2,449,007) - (4,483,079) - (2,449,007) Note 2 3 6 Exchange differences on translation of foreign operations (3,830) (74, 656) Other Comprehensive income for the period net of tax Total comprehensive income for the period (3,830) (4,486,909) (74 656) (2,523,663) Loss for the period attributable to the owners of the parent Total comprehensive Income attributable to the owners of the parent (4,483,079) (4,486,909) (2,449,007) (2,523,663) Loss Per Share (pence) Basic earnings per share (pence) Diluted earnings per share (pence) 8 8 (0.83) (0.83) (0.74) (0.74) All activities derive from continuing operations. All losses and total comprehensive loss for the period are attributable to the owners of the Company. The Company has no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income. The Group’s activities during the period include the post- acquisition results of Mzuri Energy Limited and Mayborn Resource Investments Proprietary Limited. The accompanying notes on pages 30-47 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director ________________________ Date: 28 June 2013 Director ________________________ Date: 28 June 2013 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 23 23 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME KIBO MINING PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION FINANCIAL STATEMENTS AT 31 DECEMBER 2012 All figures are stated in Sterling All figures are stated in Sterling Assets Non-Current Assets Property, plant and equipment Intangible assets Goodwill Total non-current assets Current Assets Trade and other receivables Cash and cash equivalents Total current assets (2,449,007) Total Assets Equity and Liabilities Equity Called up share capital Share premium account Share based payment reserve Translation reserve Retained deficit Total Equity Liabilities Current Liabilities Trade and other payables Current tax ,liabilities Total Current Liabilities Total Equity and Liabilities GROUP 15 month period ended 31 December 2012 Audited £ (2,295,936) (897,740) (1,290,446) (4,484,122) 1,043 (4,483,079) 12 month period ended 30 September 2011 Restated £ (831,342) (1,200,343) (424,570) (2,456,255) 7,248 (2,449,007) - (4,483,079) - Note 2 3 6 Continuing operations Administrative expenses Exploration expenditure Share based payment charge Operating loss Investment income Loss on ordinary activities before tax Taxation (Loss) for the period Other comprehensive income: Exchange differences on translation of foreign operations (3,830) (74, 656) Other Comprehensive income for the period net of tax Total comprehensive income for the period (4,486,909) (3,830) (2,523,663) (74 656) Loss for the period attributable to the owners of the parent Total comprehensive Income attributable to the owners of the parent (4,483,079) (4,486,909) (2,449,007) (2,523,663) Loss Per Share (pence) Basic earnings per share (pence) Diluted earnings per share (pence) 8 8 (0.83) (0.83) (0.74) (0.74) All activities derive from continuing operations. All losses and total comprehensive loss for the period are attributable to the owners of the Company. The Company has no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income. The accompanying notes on pages 30-47 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director Director ________________________ Date: 28 June 2013 ________________________ Date: 28 June 2013 23 The Group’s activities during the period include the post- acquisition results of Mzuri Energy Limited and Mayborn Resource Investments Proprietary Limited. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board The accompanying notes on pages 30-47 form an integral part of these financial statements. Director ________________________ Date: 28 June 2013 Director ________________________ Date: 28 June 2013 24 24 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 31 December 2012 Audited £ GROUP 30 September 2011 30 September 2010 Restated £ Restated £ Note 9 10 11 12 13 14 14 15 16 17 10,654 21,054,614 3,307,757 1,306 3,023,509 - 24,373,025 3,853,550 3,024,815 - 3,853,550 - 75,438 98,678 174,116 52,965 937,084 990,049 22,981 421,359 444,340 24,547,141 4,843,599 3,469,155 9,192,046 21,879,748 977,543 (81,334) 2,132,295 3,533,115 32,250 (10,508) 22,730,245 4,736,202 3,381,480 (9,237,758) (4,754,679) (2,305,672) 3,231,898 5,887,327 456,820 (85,164) 22,730,245 4,736,202 3,381,480 1,783,668 33,228 1,816,896 94,735 12,662 85,575 2,100 24,547,141 4,843,599 3,469,155 87,675 107,397 KIBO MINING PLC COMPANY STATEMENT OF FINANCIAL POSITION FINANCIAL STATEMENTS AT 31 DECEMBER 2012 All figures are stated in Sterling Assets Non-Current Assets 31 December 2012 Audited £ COMPANY 30 September 2011 30 September 2010 Restated £ Restated £ Note Investments in group undertakings Total Non- current assets 18 4,326,511 4,326,511 4,326,511 2,626,511 Current Assets Trade and other receivables Cash and cash equivalents Total Current assets Total Assets Equity and Liabilities Equity Called up share capital Share premium Share based payment reserve Translation reserves Retained deficit Total Equity Liabilities Current Liabilities Trade and other payables Current tax liabilities Total current liabilities Total Equity and Liabilities 4,326,511 2,626,511 12 13 24,512,666 16,229 24,528,895 3,238,206 333,928 2,313,743 235,521 2,549,264 3,572,134 28,855,406 7,898,645 5,175,775 14 14 15 16 17 2,132,295 3,231,898 9,192,046 3,533,115 5,887,327 21,879,748 32,250 456,820 510,978 (9,255) (90,373) (19,754) 27,372,627 (572,930) (4,190,391) (1,654,268) 5,115,475 7,831,404 27,372,627 7,831,404 5,115,475 1,449,552 58,200 2,100 60,300 28,855,406 7,898,645 5,175,775 54,619 12,622 67,241 33,227 1,482,779 The accompanying notes on pages 30-47 form integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director ________________________ Date: 28 June 2013 Director ________________________ Date: 28 June 2013 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 25 25 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 COMPANY STATEMENT OF FINANCIAL POSITION Investments in group undertakings Total Non- current assets 18 4,326,511 4,326,511 4,326,511 2,626,511 All figures are stated in Sterling Assets Non-Current Assets Current Assets Trade and other receivables Cash and cash equivalents Total Current assets Total Assets Equity and Liabilities Equity Called up share capital Share premium Share based payment reserve Translation reserves Retained deficit Total Equity Liabilities Current Liabilities Trade and other payables Current tax liabilities Total current liabilities Total Equity and Liabilities 31 December 2012 Audited £ COMPANY 30 30 September September 2011 2010 Restated Restated £ £ Note 4,326,511 2,626,511 12 13 24,512,666 3,238,206 2,313,743 24,528,895 16,229 333,928 235,521 28,855,406 7,898,645 5,175,775 3,572,134 2,549,264 14 14 15 16 9,192,046 3,231,898 2,132,295 21,879,748 5,887,327 3,533,115 510,978 (19,754) 27,372,627 456,820 (90,373) 32,250 (9,255) (4,190,391) (1,654,268) (572,930) 27,372,627 7,831,404 5,115,475 7,831,404 5,115,475 1,449,552 17 1,482,779 33,227 54,619 12,622 67,241 58,200 2,100 60,300 28,855,406 7,898,645 5,175,775 The accompanying notes on pages 30-47 form integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director Director ________________________ Date: 28 June 2013 ________________________ Date: 28 June 2013 25 2 1 0 2 R E B M E C E D 1 3 T A S T N E M E T A T S L A I C N A N I F Y T I U Q E N I S E G N A H C F O T N E M E T A T S D E T A D I L O S N O C C L P G N I N I M O B I K , 4 3 0 4 2 6 4 , , ) 9 1 1 3 6 0 1 ( , , ) 3 5 5 2 4 2 1 ( , , ) 3 5 5 2 4 2 1 ( , , 0 8 4 1 8 3 3 , , ) 2 7 6 5 0 3 2 ( , 2 4 7 1 2 , ) 8 0 5 0 1 ( , - - 2 4 7 1 2 , ) 8 0 5 0 1 ( , 0 5 2 2 3 , - 0 5 2 2 3 , - , 0 1 4 5 6 6 5 , , 0 1 4 5 6 6 5 , , ) 7 0 0 9 4 4 2 ( , , ) 7 0 0 9 4 4 2 ( , , 3 5 5 2 4 2 1 , , 3 5 5 2 4 2 1 , , ) 1 6 5 1 9 6 3 ( , , ) 1 6 5 1 9 6 3 ( , - - ) 6 5 6 4 7 ( , 5 1 8 3 5 4 , , 3 - - - - ) 6 5 6 4 7 ( , ) 6 5 6 4 7 ( , - - - - - , 5 1 8 3 5 4 3 , - - - , 5 1 1 3 3 5 3 , - , 5 9 2 2 3 1 2 , , 5 1 1 3 3 5 3 , - - , 5 9 2 2 3 1 2 , , 2 1 2 4 5 3 2 , , 3 0 6 9 9 0 1 , d e t a t s e R d e t a t s e R £ £ l a t o T d e n i a t e R t i c i f e d s e v r e s e r d e t a t s e R £ e v r e s e r n o i t a l s n a r t e v r e s e r t n e m y a p l a t i p a c £ d e t a t s e R d e t a t s e R d e t a t s e R £ £ m u i m e r p d e t a t s e R £ l a t o T y c n e r r u c n g i e r o F d e s a b e r a h S e r a h s l a t o T e r a h S e r a h S l a t i p a C d e t a t s e R £ , , 2 0 7 0 5 2 4 6 2 3 4 7 4 , , 2 2 7 4 5 3 1 , 0 3 8 3 , , ) 9 7 0 3 8 4 4 ( , 5 6 5 6 6 4 , , 9 6 5 2 5 9 1 2 , - 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- - - - - 0 7 5 4 2 4 , - - ) 8 1 1 1 8 ( , ) 8 1 1 1 8 ( , 4 0 4 1 3 8 , , 7 ) 8 6 2 4 5 6 , , 1 ( 7 4 4 6 6 3 , ) 3 7 3 0 9 ( , 9 1 6 0 7 , , ) 3 2 1 6 3 5 2 ( , , 9 6 5 2 5 9 1 2 , 8 5 1 4 5 , , 3 2 2 1 4 5 9 1 , , 7 2 6 2 7 3 7 2 , - - , ) 3 2 1 6 3 5 2 ( , - 9 1 6 0 7 , - 8 5 1 4 5 , - - - 9 1 6 0 7 , , ) 3 2 1 6 3 5 2 ( , , ) 1 9 3 0 9 1 4 ( , 4 2 2 1 9 4 , 7 7 7 4 2 1 , 9 1 6 0 7 , ) 4 5 7 9 1 ( , - - - - - - 0 7 5 4 2 4 , 0 2 8 6 5 4 , 8 5 1 4 5 , - - - 8 5 1 4 5 , 8 7 9 0 1 5 , , 9 6 5 2 5 9 1 2 , , 4 9 7 1 7 0 1 3 , , 1 2 4 2 9 9 5 1 , , 8 4 7 9 7 8 1 2 , , 8 4 1 0 6 9 5 , , 6 4 0 2 9 1 9 , , 9 6 5 2 5 9 1 2 , , 1 2 4 2 9 9 5 1 , , 8 4 1 0 6 9 5 , l a t i p a c e r a h s f o e u s s i f o s d e e c o r P d e u s s i s n o i t p o e r a h S 2 1 0 2 r e b m e c e D 1 3 t a e c n a l a B e t o N - - - - - - s e c n e r e f f i d e g n a h c x e - e m o c n i e v i s n e h e r p m o c r e h t O d o i r e p e h t r o f ) s s o l ( / t i f o r P , 5 1 8 3 5 4 3 , , - 2 1 2 4 5 3 2 , , 3 0 6 9 9 0 1 , - - - 5 2 2 9 1 1 , , 9 7 2 3 7 8 8 , , 5 8 9 8 1 3 2 , , 3 l a t i p a c e r a h s f o e u s s i f o s d e e c o r P d e u s s i s n o i t p o e r a h S 1 1 0 2 r e b o t c O 1 t a e c n a l a B - - - - - - s e c n e r e f f i d e g n a h c x e - e m o c n i e v i s n e h e r p m o c r e h t O d o i r e p e h t r o f ) s s o l ( / t i f o r P 5 1 4 1 4 1 . s t n e m e t a t s l a i c n a n i f e s e h t f o t r a p l a r g e t n i n a m r o f 7 4 - 0 3 s e g a p n o s e t o n g n i y n a p m o c c a e h T y b f l a h e b s t i n o d e n g i s d n a 3 1 0 2 e n u J 8 2 n o s r o t c e r i D f o d r a o B e h t y b d e v o r p p a e r e w s d t n r a e o m B e t e a h t s t f l a o i c f l n a a h n e i f b e n h O T 3 _ 3 _ _ 1 _ 0 _ _ 2 _ _ e _ n _ _ u _ _ J _ 8 _ _ 2 _ _ : _ e _ t _ a _ _ D _ r o t c e r i D _ 3 _ _ 1 _ 0 _ _ 2 _ _ e _ n _ _ u _ _ J _ r 8 _ o _ 2 _ t _ c : _ e e _ t _ r a _ i _ D D _ 7 2 7 2 2 1 0 2 s t n u O C C A d n A t R O P e R L A u n n A C L P g n n M O B K I I I KIBO MINING PLC CONSOLIDATED STATEMENT OF CASH FLOWS All figures are stated in Sterling Cash flows from operating activities Loss for the period before taxation Adjustments for: Foreign exchange (gain) Depreciation Investment income Movement of exploration activities Share based payments Movement in working capital (Increase) in debtors Increase/ (Decrease) in creditors Net cash outflows from operating activities Cash flows from financing activities Proceeds of issue of share capital Investment income Net cash proceeds from financing activities Cash flows from investing activities Expenditure on exploration activities Net cash used in investing activities Purchase of property, plant and equipment Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period FINANCIAL STATEMENTS AT 31 DECEMBER 2012 FINANCIAL STATEMENTS AT 31 DECEMBER 2012 GROUP 15 month period ended 31 December 2012 Restated £ 12 Month period ended 30 September 2011 Restated £ Notes (4,483,079) (2,449,007) (83,871) 1,072 (1,043) 897,740 (2,378,735) 1,290,446 (22,473) 1,709,499 (691,709) 1,687,026 (74,656) 1,306 (7,248) 1,200,343 424,570 (904,692) (29,984) 19,722 (914,954) (10,262) 750,000 1,043 751,043 1,753,815 7,249 1,761,064 - (897,740) (897,740) (838,406) 937,084 98,678 (330,385) - (330,385) 515,725 421,359 937,084 The accompanying notes on pages 30-47 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director ________________________ Date: 28 June 2013 Director ________________________ Date: 28 June 2013 28 28 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC COMPANY STATEMENT OF CASH FLOWS All figures are stated in Sterling Cash flows from operating activities Loss for the period before taxation Adjustments for: Foreign exchange loss Investment income Share based payments Movement in working capital Decrease/(Increase) in debtors Increase in creditors Net cash outflows from operating activities Cash flows from financing activities Proceeds of issue of share capital Net cash proceeds from financing activities Investment income Cash flows from investing activities Net cash used in investing activities Cost of investment in subsidiary Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period FINANCIAL STATEMENTS AT 31 DECEMBER 2012 FINANCIAL STATEMENTS AT 31 DECEMBER 2012 COMPANY 15 month period ended 31 December 2012 Restated £ 12 month period ended 30 September 2011 Restated £ Notes (2,536,123) (1, 081, 338) (74,991) (1,116) 111,033 (2,501,197) (81, 118) (7, 248) 424, 570 (745 134) 16,844 1,415,538 (1,0,68,815) 1,432,382 (924, 463) 6, 941 (1, 662, 649) (917, 522) 750,000 751,116 1,116 1, 753, 815 1, 761, 063 7, 248 - - - - (317,699) 333,928 16,229 98, 407 235, 521 333, 928 The accompanying notes on pages 30-47 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director ________________________ Date: 28 June 2013 Director ________________________ Date: 28 June 2013 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 29 29 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 COMPANY STATEMENT OF CASH FLOWS Loss for the period before taxation (2,536,123) (1, 081, 338) Cash flows from operating activities Adjustments for: Foreign exchange loss Investment income Share based payments Movement in working capital Decrease/(Increase) in debtors Increase in creditors Net cash outflows from operating activities Cash flows from financing activities Proceeds of issue of share capital Net cash proceeds from financing activities Investment income Cash flows from investing activities Net cash used in investing activities Cost of investment in subsidiary Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period COMPANY 15 month period ended 31 December 2012 Restated £ 12 month period ended 30 September 2011 Restated £ Notes (74,991) (1,116) 111,033 (2,501,197) (81, 118) (7, 248) 424, 570 (745 134) 16,844 (924, 463) 1,415,538 (1,0,68,815) 1,432,382 (1, 662, 649) 6, 941 (917, 522) 750,000 751,116 1,116 1, 753, 815 1, 761, 063 7, 248 - - - - (317,699) 333,928 16,229 98, 407 235, 521 333, 928 The accompanying notes on pages 30-47 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 June 2013 and signed on its behalf by: On behalf of the Board Director Director ________________________ Date: 28 June 2013 ________________________ 28 June 2013 Date: All figures are stated in Sterling 1. Segment analysis Management currently identifies two divisions as operating segments – mining and corporate. These operating segments are monitored and strategic decisions are made based upon them together with other non-financial data collated from exploration activities. Principal activities for these operating segments are as follows: KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Mining – incorporates the acquisition, exploration and development of mineral resources in Tanzania; and Corporate – non mining and head office activities of the Group. Administrative cost Exploration expenditure Investment income Share based payments Loss after tax Tax Administrative cost Exploration expenditure Investment income Share based payments Loss after tax Tax Assets Segment assets Liabilities Segment liabilities Additions to segments Mining Corporate - (897,740) - - (897,740) (2,295,936) - 1,043 (1,290,446) - (3,585,339) Mining Corporate - (1,200,343) - - (1,200,343) - (831,342) - 7,248 (424,570) (1,248,664) - 15 month period ended 31 December 2012 (£) Group (2,295,936) (897,740) 1,043 (1,290,446) - (4,483,079) 12 month period ended 30 September 2011(£) Group (831,342) (1,200,343) 7,248 (424,570) (2,449,007) - 15 month period ended 31 December 2012 (£) Group Mining Corporate 24,373,025 174,116 24,547,141 - 1,816,896 1,816,896 Intangible assets - through business combination Property, plant and equipment’s - through business combination Other Significant items 24,362,371 10,654 - 24,362,371 10,654 - Depreciation 1,072 - - 29 30 30 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Assets Segment assets Liabilities Segment liabilities Disposals to segments Intangible assets Property, plant and equipment’s Additions to segments 12 month period ended 30 September 2011 (£) Group Mining Corporate 3,853,550 990,049 4,843,599 - - - 107,397 107,397 - (9,302) - (9,302) Intangible assets - through business combination Property, plant and equipment’s - through business combination Other Significant items 1,700,000 - - - 1,700,000 - Amortisation Depreciation Revenue from major products and services - - - 1,306 - 1,306 The only revenue that the Group received during the period related to bank interest, which has been allocated to Corporate. Geographical segments The Group operates in two principal geographical areas – [Ireland & United Kingdom] and [Tanzania, Canada & Cyprus]. 15 month period ended 31 December 2012 (£) Major Operational indicators Carrying value of segment assets Loss after tax Major Operational indicators Carrying value of segment assets Loss after tax KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 31 31 Tanzania, Canada & Cyprus Ireland & United Kingdom Group 24,479,065 (1,943,819) (2,539,260) 68,076 24,547,141 (4,483,079) 12 month period ended 30 September 2011 (£) Tanzania & Cyprus Ireland & United Kingdom Group 3,960,948 (1,200,343) 882,651 (1,248,664) 4,843,599 (2,449,007) KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 12 month period ended 30 September 2011 (£) Group Mining Corporate 2. Investment Income 3,853,550 990,049 4,843,599 Bank interest 15 month period ended 31 December 2012 (£) 12 month period ended 30 September 2011 (£) 1,043 7,248 Segment liabilities Disposals to segments 107,397 107,397 Investment income comprises interest on surplus cash reserves held during the current period on short term basis. 3. Loss on ordinary activities before taxation Operating loss is stated after charging: Depreciation of property, plant and equipment Auditors’ remuneration Re-admission expenses to AIM Admission expenses to Johannesburg Stock Exchange – ALTX Share based payments 4. Staff costs (including directors) 15 month period ended 31 December 2012 (£) 12 month period ended 30 September 2011 (£) 1,072 11,886 603,601 - 1,290,446 1,306 17,500 - 433,287 424,750 Group 15 month period ended 31 December 2012 (£) Group 12 month period ended 30 September 2011 (£) Company 15 month period ended 31 December 2012 (£) Company 12 month period ended 30 September 2011 (£) Wages and salaries including social security costs Share based payments 228,552 1,290,446 1518,998 132,797 424,570 557,367 189,185 - 189,185 41,018 424,570 465,588 Assets Segment assets Liabilities Intangible assets Property, plant and equipment’s Additions to segments - - - - - - (9,302) (9,302) - - - - - - - 1,306 1,306 Intangible assets - through business combination 1,700,000 1,700,000 Property, plant and equipment’s - through business combination Other Significant items Amortisation Depreciation Revenue from major products and services Corporate. Geographical segments Cyprus]. The only revenue that the Group received during the period related to bank interest, which has been allocated to The Group operates in two principal geographical areas – [Ireland & United Kingdom] and [Tanzania, Canada & Major Operational indicators Carrying value of segment assets Loss after tax Major Operational indicators Carrying value of segment assets Loss after tax 15 month period ended 31 December 2012 (£) (4,483,079) 12 month period ended 30 September 2011 (£) Group Tanzania, Canada & Ireland & United Cyprus Kingdom Group 24,479,065 68,076 24,547,141 (1,943,819) (2,539,260) Tanzania & Cyprus Ireland & United Kingdom 3,960,948 882,651 4,843,599 (1,200,343) (1,248,664) (2,449,007) Exploration activities Administration 10 6 16 10 6 16 1 1 2 1 1 2 31 32 32 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 The average monthly number of employees (including executive directors) during the period was as follows: Group 12 month period ended 30 September 2011 (£) Group 15 month period ended 31 December 2012 (£) Company 15 month period ended 31 December 2012 (£) Company 12 month period ended 30 September 2011 (£) KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 5. Directors’ emoluments Basic salary and fees Share based payments Group 15 month period ended 31 December 2012 (£) Group 12 month period ended 30 September 2011 (£) Company 15 month period ended 31 December 2012 (£) Company 12 month period ended 30 September 2011 (£) 228,552 - 228,552 103,997 335,196 439,193 189,185 - 189,185 85,997 335,196 421,193 The emoluments of the Chairman were £8,900 (2011: £6,020). The emoluments of the highest paid director were £92,184 (2011: £61,957). Key management personnel consist only of the directors. Details of share options and interests in the Company’s shares of each director are shown in the directors’ report on page 6. The following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period: 15 month period ended 31 December 2012 Salary and fees Share options Total Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Des Burke Tinus Maree William Payne Wenzel Kerremans 12 month period ended 30 September 2011 Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Des Burke William Payne Tinus Maree Wenzel Kerremans 6. Taxation Current tax £8,900 £92,184 £91,625 £8,900 £10,000 £12,000 £4,942 Salary and fees £6,020 £7,000 £61,957 £6,020 £12,000 £7,000 £4,000 - - - - - - - Share options £55,866 £55,866 £55,866 £55,866 £55,866 £55,866 - £8,900 £92,184 £91,625 £8,900 £10,000 £12,000 £4,942 Total £61,886 £62,866 £117,823 £61,866 £67,866 £62,866 £4,000 15 month period ended 31 December 2012 (£) 12 month period ended 30 September 2011 (£) Charge for the period in Ireland, Cyprus, England and Tanzania Total tax charge - - - - KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 33 33 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 2012 (£) 2011 (£) The difference between the total current tax shown above and the amount calculated by applying the standard rate of Irish corporation tax of 12.5% to the loss before tax is as follows: 5. Directors’ emoluments Group 15 month period ended 31 December 2012 (£) Group 12 month period Company 15 month period Company 12 month period ended 30 ended 31 ended 30 September December September 2011 (£) 2012 (£) 2011 (£) 228,552 - 228,552 103,997 335,196 439,193 189,185 - 189,185 85,997 335,196 421,193 Basic salary and fees Share based payments The emoluments of the Chairman were £8,900 (2011: £6,020). The emoluments of the highest paid director were £92,184 (2011: £61,957). shares of each director are shown in the directors’ report on page 6. The following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period: 15 month period ended 31 December 2012 Salary and fees Share options Wenzel Kerremans 12 month period ended 30 September 2011 Salary and £4,942 fees Share - options Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Des Burke Tinus Maree William Payne Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Des Burke William Payne Tinus Maree Wenzel Kerremans Taxation 6. Current tax Key management personnel consist only of the directors. Details of share options and interests in the Company’s Income tax expense recognised in the Statement Of Comprehensive Income - - Loss from Continuing operations (4,483,079) (2,449,007) Income tax expense calculated at 12.5% (2011: 12.5%) (560,385) (306,126) Expenses that are not deductible in determining taxable profits Other Income which is not taxable Different tax rates of subsidiaries operating in other jurisdictions Investment Income taxable at a different rate Losses available for carry forward 157,120 (217,296) - - 39,257 - 30,451 539 620,561 235,879 £8,900 £92,184 £91,625 £8,900 £10,000 £12,000 - - - - - - £6,020 £7,000 £61,957 £6,020 £12,000 £7,000 £4,000 £55,866 £55,866 £55,866 £55,866 £55,866 £55,866 - Total £8,900 £92,184 £91,625 £8,900 £10,000 £12,000 £4,942 Total £61,886 £62,866 £117,823 £61,866 £67,866 £62,866 £4,000 15 month period ended 31 December 2012 (£) 12 month period ended 30 September 2011 (£) The effective tax rate used for the December 2012 and September 2011 reconciliations above is the corporate rate of 12.5% payable by corporate entities in Ireland on taxable profits under tax law in that jurisdiction. No provision has been made for the 2012 deferred taxation as no taxable income has been received to date. At the Statement of Financial Position date, the Group had estimated unused tax losses of £9,086,808 (2011: £4,122,320) available for offset against future profits which equates to an estimated deferred tax asset of £1,135,381 (2011: £515,290). No deferred tax asset has been recognised due to the unpredictability of the future profit streams. Losses may be carried forward indefinitely. 7. Loss of parent Company As permitted by Section 148(8) of the Companies Act 1963, the statement of comprehensive income of the parent Company has not been separately disclosed in these financial statements. The parent Company’s loss for the financial period was £2,536,123 (2011: £1,081,338). 8. Loss per share Basic loss per share The basic and weighted average number of ordinary shares used in the calculation of basic earnings per share is as 12 month follows: period ended 30 September 2011 15 month period ended 31 December 2012 Loss for the period attributable to equity holders of the parent (£4,483,079) (£2,449,007) Weighted average number of ordinary shares for the purposes of basic earnings per share 541,336,221 331,040,217 (0.74) (0.83) Basic loss per ordinary share (pence) Diluted loss per share Charge for the period in Ireland, Cyprus, England and Tanzania Total tax charge - - - - There is no dilutive effect of share options or warrants on the basic loss per share. (0.83) (0.74) Diluted loss per ordinary share (pence) Headline loss per share 33 34 Headline loss per share, as per the JSE requirements, has been calculated to be the equivalent of the basic loss per share as displayed above. 34 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 9. Property, plant and equipment GROUP Cost (£) Opening Cost as at 1 October 2010 Additions Disposals Closing Cost as at 1 October 2011 Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Total - - - - - - - - - - - - 9,302 - (9,302) - - - - - 9,302 - (9,302) - 1,905 7,422 3,254 2,389 7,263 22,233 Additions through business combination Disposals Closing Cost as at 31 December 2012 - 1,905 - 7,422 - 3,254 - 2,389 - 7,263 22,233 - Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Total Accumulated Depreciation (“Acc Depr”) (£) Acc Depr as at 1 October 2010 Additions Disposals Depreciation Acc Depr as at 31 October 2011 - - - - - - - - - - - - - - - 7,996 - (9,302) 1,306 - - - - - - 7,996 - (9,302) 1,306 Additions through business combination Disposals Depreciation Acc Depr as at 31 December 2012 663 - 61 724 4,228 - 473 4,701 1,035 - 104 1,139 1,220 - 122 1,342 3,361 10,507 - 1,072 3,673 11,579 - 312 Carrying Value (£) Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Total Carrying value as at 30 September 2011 Carrying value as at 31 December 2012 - 1,181 - 2,721 - 2,115 - 1,047 - - 3,590 10,654 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 35 35 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 9. Property, plant and equipment 10. Intangible assets Furniture Motor Office I.T Plant & Total and Fittings Vehicles Equipment Equipment Machinery Intangible assets consist mostly of separately identifiable prospecting assets identified through business combinations, where these separately identifiable intangible assets will be recognised at fair value on acquisition date of said subsidiary. The following reconciliation serves to summarise the composition of intangible prospecting assets as at period end: Group 2012 (£) Group 2011 (£) Opening balance of Prospecting rights Additions of Intangible Assets through business combinations Acquisition of the Kibo Mining (Cyprus) Limited prospecting rights Acquisition of the Mzuri Energy Limited prospecting rights* Impairment of Intangible assets previously recognised 3,853,550 3,023,509 - 17,201,064 21,054,614 - 1,700,000 - 3,853,550 (869,959) Intangible assets are not amortised, due to the indefinite useful life which is attached to the underlying prospecting rights. As at the time of preparation of the financial statement, there were no indication that the intangible assets recognised is impaired. *During the reporting period the Company acquired the entire interest in Mzuri Energy Limited for £20.4m by issuing 680,297,733 ordinary shares. The Company also acquired the entire interest of Mayborn Resource Investments Proprietary Limited for £0.8m by issuing 26,666,667 ordinary shares, with effect from October 2012. As part of the business combination, the separately identifiable prospecting rights relating to the Ruwka Coal project acquired through Mzuri Energy Limited and its subsidiaries was recognised at £17,201,064. 11. Business Combinations Effective 2012, the Company acquired the entire interest in Mzuri Energy Limited for £20.4m by issuing 680,297,733 ordinary shares. The Company also acquired the entire interest of Mayborn Resource Investments Proprietary Limited for £0.8m by issuing 26,666,667 ordinary shares, with effect from 1 October 2012. The purpose of the acquisition was to increase the Kibo Group’s existing mineral projects in Tanzania, through the acquisition of Mzuri Energy Limited and Mayborn Resource Investments (Proprietary) Limited which hold Coal and Acquisition of Mzuri Uranium exploration projects respectively. Energy Limited and its related entities as a single indivisible transaction (£) Cost of investments on acquisition date: Acquisition of Mzuri Energy Limited and its subsidiaries# Acquisition of Mayborn Resource Investments (Pty) Ltd - Net asset value of subsidiaries acquired - Separately identifiable Intangible asset – Rukwa Coal Project at fair value Goodwill on acquisition of subsidiaries 20,408,932 800,000 (700,111) 20,508,821 (17,201,064) 3,307,757 # Related subsidiaries include Rukwa Holdings Limited, Rukwa Coal Limited, Mzuri Power Limited, Kibo Uranium Limited, Pinewood Resources Limited and Makambako Resources Limited. 36 36 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 GROUP Cost (£) Opening Cost as at 1 October 2010 Additions Disposals Closing Cost as at 1 October 2011 Accumulated Depreciation (“Acc Depr”) (£) Acc Depr as at 1 October 2010 Additions Disposals Depreciation Acc Depr as at 31 October 2011 Additions through business combination Disposals Closing Cost as at 31 December 2012 1,905 - 7,422 - 3,254 - 2,389 - 7,263 22,233 - - 1,905 7,422 3,254 2,389 7,263 22,233 Furniture Motor Office I.T Plant & Total and Fittings Vehicles Equipment Equipment Machinery 9,302 - 9,302 - (9,302) - (9,302) - - - - - - - - - - - - - - - - - - - 7,996 - (9,302) 1,306 - - - - - - - - - - - 7,996 (9,302) 1,306 - - Additions through business combination Disposals Depreciation Acc Depr as at 31 December 2012 663 - 61 724 4,228 - 473 4,701 1,035 - 104 1,139 1,220 - 122 1,342 3,361 10,507 3,673 11,579 1,072 312 Carrying Value (£) Furniture Motor Office I.T Plant & Total and Fittings Vehicles Equipment Equipment Machinery Carrying value as at 30 September 2011 - - - - - - Carrying value as at 31 December 2012 1,181 2,721 2,115 1,047 3,590 10,654 - - - - - - - - - 35 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Rukwa and Pinewood projects will provide Kibo shareholders with access to an attractive portfolio of strategic energy assets in Tanzania. The Rukwa project is substantially more advanced than Kibo’s existing exploration projects, with a significant Mineral Resource of thermal coal already defined. Goodwill recorded in connection with the above acquisitions during the 2012 financial period is primarily attributable to the synergistic benefits where the Kibo Group will be able to attribute the required financial support and management experience in order to develop the identified assets into profitable operations. 12. Trade and other receivables Group 2012 (£) Group 2011 (£) Company 2012 (£) Company 2011 (£) Amounts falling due after one year: Amounts owed by group undertakings Amounts falling due within one year: - - 24,462,066 3,198,297 Other debtors 75,438 75,438 52,965 24,512,666 3,238,206 52,965 39,909 50 600 The nature of amounts owed by Group undertakings is such that the expected recovery thereof is in excess of one year, and is thus classified as amounts falling due after one year. Trade and other receivables pledged as security None of the above stated trade and other receivables were pledged as security at period end. Credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical repayment trends of the individual debtors. Debtors have been individually assessed for any indication of impairment and a provision has been raised accordingly. The carrying value of trade and other receivables equals their fair value due mainly to the short term nature of these receivables. 13. Cash and Cash equivalents Cash and cash equivalents consist of: Short term convertible cash reserves Group (£) 2012 Company (£) 2012 98,678 98,678 2011 937,084 937,084 16,229 16,229 2011 333,928 333,928 Cash and cash equivalents have not been ceded, or placed as encumbrance toward any liabilities as at year end. 14. Share capital - Group and Company Authorised equity 3,000,000,000 Ordinary shares of €0.01 each (2011: 800,000,000 Ordinary shares of €0.01 each) Allotted, issued and fully paid ordinary shares 2012 2011 €30,000,000 €8,000,000 1,126,521,842 Ordinary shares of €0.01 each (2011: 377,629,511 Ordinary shares of €0.01 each) £9,192,046 £3,231,898 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 37 37 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The Rukwa and Pinewood projects will provide Kibo shareholders with access to an attractive portfolio of strategic energy assets in Tanzania. The Rukwa project is substantially more advanced than Kibo’s existing exploration projects, with a significant Mineral Resource of thermal coal already defined. Nature of consideration Balance at 30 September 2011 Number of Shares Share Capital Share Premium Goodwill recorded in connection with the above acquisitions during the 2012 financial period is primarily attributable to the synergistic benefits where the Kibo Group will be able to attribute the required financial support and management experience in order to develop the identified assets into profitable operations. 12. Trade and other receivables Group Group 2012 (£) 2011 (£) Company 2012 (£) Company 2011 (£) Amounts falling due after one year: Amounts owed by group undertakings Amounts falling due within one year: - - 24,462,066 3,198,297 Other debtors 75,438 75,438 52,965 24,512,666 3,238,206 52,965 50 600 39,909 The nature of amounts owed by Group undertakings is such that the expected recovery thereof is in excess of one year, and is thus classified as amounts falling due after one year. Trade and other receivables pledged as security Shares issued during period (net of expenses) Shares issued for acquisition of Mzuri Energy Limited & Balance at 31 December 2012 Mayborn Resource Investments Limited £5,887,327 377,629,511 £3,231,898 £393,958 £349,678 706,964,400 £5,610,470 £15,598,463 41,927,931 1,126,521,842 £9,192,046 £21,879,748 Consolidated Financial Fully paid ordinary shares, which have a par value of €0.01, carry one vote and carry a right to dividends. Share capital relates to the nominal value of the shares issued. The share premium relates to the excess of consideration paid over the nominal value of the shares after deducting related expenses. The Company issued 37,500,000 ordinary shares to the Mzuri Capital Group Limited at €0.01 each effective from 7 February 2012 at a placing price of 2p per ordinary share to raise £ 750,000 before placing expenditure. The Company has entered into an agreement with YA Global Master SPV Ltd, a specialist fund managed by Yorkville Advisors LLC, to provide a standby funding facility for a period of up to three years. Under the agreement YA Global Master SPV Ltd will subscribe for ordinary shares in the Company with minimum gross subscription proceeds of £500,000. The Company issued 4,427,931 ordinary shares in lieu of administrative expenditure payable as part of the YA Global Master SPV Ltd agreement, at €0.01 each effective from 14 August 2012 at a placing price of 1.2844p per ordinary totalling £ 56,875. None of the above stated trade and other receivables were pledged as security at period end. Credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical repayment trends of the individual debtors. Effective 2012, the Company acquired the entire interest in Mzuri Energy Limited for £20.4m by issuing 680,297,733 ordinary shares. The Company also acquired the entire interest of Mayborn Resource Investments Proprietary Limited for £0.8m by issuing 26,666,667 ordinary shares, with effect from October 2012. 15. Share based payments reserve Debtors have been individually assessed for any indication of impairment and a provision has been raised The carrying value of trade and other receivables equals their fair value due mainly to the short term nature of these The following reconciliation serves to summarise the composition of the share based payment reserve as at period end: Group (£) Opening balance of share based payment reserve Additions of share based payment reserve through business combinations Acquisition of the share based payment reserve through Mzuri Energy Limited’s business combination Issue of additional share options and share warrants within Company 2012 2011 456,820 32,250 466,565 977,543 54,158 Company (£) 2012 456,820 424,570 2011 Opening balance of share based payment reserve Issue of additional share options and share warrants within Company Costs associated with options issued as stated above. 456,820 510,978 54,158 32,250 456,820 424,570 The Group recognised the following expense related to equity settled share based payment transactions: 2012 (£) 2011 (£) 37 38 Share based payments 1,290,446 424,570 38 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 accordingly. receivables. 13. Cash and Cash equivalents Cash and cash equivalents consist of: Short term convertible cash reserves Authorised equity 3,000,000,000 Ordinary shares of €0.01 each (2011: 800,000,000 Ordinary shares of €0.01 each) Allotted, issued and fully paid ordinary shares Group (£) Company (£) 2012 2012 98,678 98,678 2011 2011 16,229 16,229 937,084 937,084 333,928 333,928 2012 2011 €30,000,000 €8,000,000 Cash and cash equivalents have not been ceded, or placed as encumbrance toward any liabilities as at year end. Share capital - Group and Company 14. 1,126,521,842 Ordinary shares of €0.01 each (2011: 377,629,511 Ordinary shares of €0.01 each) £9,192,046 £3,231,898 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The share based payment expenditure for the 2012 financial period relates to 3,125,659 ordinary shares issued by Mzuri Energy Limited as consideration for advisory services provided with regard to the acquisition of Mzuri Energy Limited, Mayborn Resource Investments (Proprietary) Limited and other related companies. As the issue of these shares in Mzuri Energy Limited is directly attributable to the financial advisory services provided with regard to the acquisition of the above companies, the expenditure was recognised at the fair market value of the services rendered, through consolidated statement of income. Additionally the Company also issued 4,427,931 ordinary shares at a placing price of £0.0128446 per share totalling £56,875, relating to the YA Global Master SPV Ltd Subscription Agreement where administrative costs would be settled through the issue of ordinary shares in the Company’s share capital. As the issue of these shares is directly attributable to the financial advisory services provided with regard to the above agreement, the expenditure was recognised at the fair market value of the services rendered through consolidated statement of income. The Company also issued 4,000,000 Share Options during the 2012 financial period, in lieu of payment toward RFC Ambrian for financial advisory services provided to the Company. These share options were valued using the Black- Scholes model at grant date. The share based payment reserve holds the equity element of the share option transactions adjusted for transfer on exercise, cancellation or expiry of options. At 31 December 2012 the Company had 17,939,258 options and 1,539,258 warrants outstanding for the issue of Ordinary shares as follows: 31 December 2012 Exercise start date Exercise Price Number Granted Date of Grant Expiry date Options Total Warrants 20 Apr 10 06 Apr 11 07 Sept 12 20 Apr 10 06 Apr 11 07 Sept 12 20 Apr 15 31 Mar 16 07 Sept 15 1.5p 3.88p 2.31p 2,539,258 11,400,000 17,939,258 4,000,000 2,539,258 11,400,000 17,939,258 4,000,000 Total Less exercised 20 Apr 10 20 Apr 10 20 Apr 10 20 Apr 10 10 Mar 11 20 Apr 15 20 Apr 15 1.5p 1.5p 1.5p 2,539,258 500,000 1,539,258 (1,500,000) 2,539,258 500,000 1,539,258 (1,500,000) Total Contingently Issuable shares 19,478,516 19,478,516 Options issued were valued using the following inputs to the Black-Scholes model: Kibo Mining Plc Share Option Information 2012 Kibo Mining Plc Share Option Information 2011 Mzuri Energy Limited Share Option Information 2011 Share price when options issued Expected volatility Expected life Risk free rate Expected dividends 2.31p 122% 3 years 1.21% Zero 4.1p 147% 5 years 2.73% Zero $ 0.20 84.85% 5 years 1.53% Zero KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 39 39 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The share based payment expenditure for the 2012 financial period relates to 3,125,659 ordinary shares issued by Mzuri Energy Limited as consideration for advisory services provided with regard to the acquisition of Mzuri Energy Limited, Mayborn Resource Investments (Proprietary) Limited and other related companies. As the issue of these shares in Mzuri Energy Limited is directly attributable to the financial advisory services provided with regard to the acquisition of the above companies, the expenditure was recognised at the fair market value of the services rendered, through consolidated statement of income. Additionally the Company also issued 4,427,931 ordinary shares at a placing price of £0.0128446 per share totalling £56,875, relating to the YA Global Master SPV Ltd Subscription Agreement where administrative costs would be settled through the issue of ordinary shares in the Company’s share capital. As the issue of these shares is directly attributable to the financial advisory services provided with regard to the above agreement, the expenditure was recognised at the fair market value of the services rendered through consolidated statement of income. The following detail is provided pertaining to the acquisition of Mzuri Energy Limited with effect from 1 October 2012, and its corresponding share based payment transaction: On 1 August 2011 Mzuri Energy Limited established a share option program that entitles key management personnel to purchase shares in the Company. In accordance with the program, holders of vested options are entitled to purchase shares at the market price of the shares at the date of grant. Disclosure of share option program and replacement awards: 2012 (£) Share options acquired through business combinations Movement during the period Balance as at 31 December 2012 466,565 - 466,565 The Company also issued 4,000,000 Share Options during the 2012 financial period, in lieu of payment toward RFC Ambrian for financial advisory services provided to the Company. These share options were valued using the Black- Scholes model at grant date. The fair value of the share-based payment is based upon the Black-Scholes formula, a commonly used option pricing model. The calculation of volatility used in the model is based upon an average of market prices against current market prices of listed companies operating in the mining industry. The share based payment reserve holds the equity element of the share option transactions adjusted for transfer on exercise, cancellation or expiry of options. At 31 December 2012 the Company had 17,939,258 options and 1,539,258 warrants outstanding for the issue of Ordinary shares as follows: Date of Grant Exercise start date Expiry date Exercise Price Number Granted December 2012 31 20 Apr 10 06 Apr 11 07 Sept 12 20 Apr 10 06 Apr 11 07 Sept 12 20 Apr 15 31 Mar 16 07 Sept 15 1.5p 3.88p 2.31p 2,539,258 2,539,258 11,400,000 17,939,258 4,000,000 11,400,000 17,939,258 4,000,000 Options Total Warrants Total Less exercised 20 Apr 10 20 Apr 10 20 Apr 10 20 Apr 10 10 Mar 11 20 Apr 15 20 Apr 15 1.5p 1.5p 1.5p 2,539,258 500,000 1,539,258 (1,500,000) 2,539,258 500,000 1,539,258 (1,500,000) The following factors are all taken into consideration when the option valuation as per the Black-Scholes model is used: Weighted average share price; Exercise price; Expected volatility; Option life; Expected dividends, and The risk-free interest rate, During the current period, the Group acquired the entire interest in Mzuri Energy Limited and its subsidiaries. Through its acquisition the Group assumed the responsibility relating to equity-settled share based payment transactions previously entered into by Mzuri Energy Limited. 16. Translation reserves The foreign exchange reserve relates to the foreign exchange effect of the retranslation of the Group’s overseas subsidiaries on consolidation into the Group’s financial statements. 17. Trade and other payables Group 2012 (£) Group 2011 (£) Company 2012 (£) Company 2011 (£) Total Contingently Issuable shares 19,478,516 19,478,516 Amounts falling due within one year: Options issued were valued using the following inputs to the Black-Scholes model: Kibo Mining Plc Kibo Mining Plc Share Option Information 2012 Share Option Information 2011 Mzuri Energy Limited Share Option Information 2011 Trade payables Amounts owed to group undertakings Other creditors Accruals and deferred income 1,677,851 - 14,095 91,722 1,783,668 34,898 - 494 59,343 94,735 1,338,299 36,090 - 75,163 1,449,552 15,667 - - 38,952 54,619 Share price when options issued Expected volatility Expected life Risk free rate Expected dividends 2.31p 122% 3 years 1.21% Zero 4.1p 147% 5 years 2.73% Zero $ 0.20 84.85% 5 years 1.53% Zero 39 40 40 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 18. Investment in group undertakings – Company Investments at Cost At 1 October 2010 Additions Disposals At 30 September 2011 (£) Additions Disposals At 31 December 2012 (£) At 31 December 2012 the Company had the following subsidiary undertakings: Activity Incorporated in Directly held subsidiaries Subsidiary undertakings 2,626,511 1,700,000 - 4,326,511 - - 4,326,511 Interest held (2012) Interest held (2011) Sloane Developments Limited Kibo Mining (Cyprus) Limited Indirectly held subsidiaries Holding Company Holding Company England Cyprus 100% 100% 100% 100% Aardvark Exploration Limited Eagle Gold Mining Limited Jubilee Resources Mining Limited Savannah Mining Limited Muri Energy Limited # Rukwa Holdings Limited # Rukwa Coal Limited # Mzuri Power Limited # Kibo Uranium Limited # Pinewood Resources Limited# Makambako Resources Limited# Mayborn Resource Investments (Proprietary) Limited# Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Holding Company Holding Company Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Dormant Company Tanzania Tanzania Tanzania Tanzania Canada Cyprus Tanzania Cyprus Cyprus Tanzania Tanzania South Africa 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - - - - - - - - #During the period the Company acquired the entire share capital of Mzuri Energy Limited, and its wholly owned subsidiaries Rukwa Holdings Limited (Previously “Mzuri Coal Limited”), Rukwa Coal Limited and Mzuri Power Limited through its wholly owned subsidiary Kibo Mining (Cyprus) Limited (Previously “Morogoro Gold Limited”) through the issue of ordinary shares to the value of £20.4million. Additionally Mzuri Energy Limited acquired the entire share capital of Kibo Uranium Limited (Previously “Mbeya Uranium Limited”) and its wholly owned subsidiaries Pinewood Resources Limited and Makambako Resources Limited, through the issue of ordinary shares for to the total consideration of CAD $1.2million. Also the entire interest of Mayborn Resource Investments Proprietary Limited incorporated in South Africa was acquired through the issue of ordinary shares to the value of £0.8million. These corporate acquisitions were financed entirely through the issue of ordinary shares as set out in Note 14. The value of the investments is dependent on the discovery and successful development of evaluation and exploration assets. Should the development of the evaluation and exploration assets prove unsuccessful, the carrying value in the statement of financial position will be written off. In the opinion of the directors’ the carrying value of the investments is appropriate. No impairment has been recognised to date in respect of the above 41 investments. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 41 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Capital and Reserves (£) Profit/(loss) for the period (£) The aggregate capital and reserves and results of the subsidiary undertakings for the last relevant financial period were as follows: Company – 2012 Financial Period 18. Investment in group undertakings – Company Investments at Cost At 1 October 2010 Additions Disposals At 30 September 2011 (£) Additions Disposals At 31 December 2012 (£) Subsidiary undertakings 2,626,511 1,700,000 4,326,511 - - - 4,326,511 At 31 December 2012 the Company had the following subsidiary undertakings: Incorporated Activity in Interest Interest held (2012) held (2011) Directly held subsidiaries Sloane Developments Limited Kibo Mining (Cyprus) Limited Indirectly held subsidiaries Holding Company Holding Company England Cyprus 100% 100% 100% 100% Aardvark Exploration Limited Eagle Gold Mining Limited Jubilee Resources Mining Limited Savannah Mining Limited Muri Energy Limited # Rukwa Holdings Limited # Rukwa Coal Limited # Mzuri Power Limited # Kibo Uranium Limited # Pinewood Resources Limited# Makambako Resources Limited# Limited# Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Holding Company Holding Company Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Mineral Exploration Tanzania Tanzania Tanzania Tanzania Canada Cyprus Tanzania Cyprus Cyprus Tanzania Tanzania 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - - - - - - - - Mayborn Resource Investments (Proprietary) Dormant Company South Africa #During the period the Company acquired the entire share capital of Mzuri Energy Limited, and its wholly owned subsidiaries Rukwa Holdings Limited (Previously “Mzuri Coal Limited”), Rukwa Coal Limited and Mzuri Power Limited through its wholly owned subsidiary Kibo Mining (Cyprus) Limited (Previously “Morogoro Gold Limited”) through the issue of ordinary shares to the value of £20.4million. Also the entire interest of Mayborn Resource Investments Proprietary Limited incorporated in South Africa was acquired through the issue of ordinary shares to the value of £0.8million. These corporate acquisitions were financed entirely through the issue of ordinary shares as set out in Note 14. The value of the investments is dependent on the discovery and successful development of evaluation and exploration assets. Should the development of the evaluation and exploration assets prove unsuccessful, the carrying value in the statement of financial position will be written off. In the opinion of the directors’ the carrying value of the investments is appropriate. No impairment has been recognised to date in respect of the above 41 investments. Sloane Developments Limited Kibo Mining (Cyprus) Limited Aardvark Exploration Limited Eagle Gold Mining Limited Jubilee Resources Mining Limited Savannah Mining Limited Muri Energy Limited # Rukwa Holdings Limited # Rukwa Coal Limited # Mzuri Power Limited # Kibo Uranium Limited # Pinewood Resources Limited# Makambako Resources Limited# Mayborn Resource Investments (Proprietary) Limited (1,487,376) 1,414,733 (1,083,138) (226,771) (483,895) (335,922) 19,123,884 339,109 (2,639,065) (736) (131,679) (120,256) (19,713) 10,271 (3,374) 1,393,517 (257,245) (300,231) (430,612) (328,649) (1,182,482) (12,101) (154,963) 4,093 (55,879) 5,790 (3,345) (6,513) # The profit and loss pertaining to newly acquired subsidiary undertakings has been included from the date of acquisition so as to prevent distortion of pre-acquisition profit and loss. Profit/(loss) for Company – 2011 Financial Period the period (£) Capital and Reserves (£) Sloane Developments Limited Kibo Mining (Cyprus) Limited * Aardvark Exploration Limited Eagle Gold Mining Limited Jubilee Resources Mining Limited Savannah Mining Limited *Previously Morogoro Gold Limited 19. Related party transactions Group companies 43,018 (18,000) (650,062) (52,635) (320) (256) (258,631) (18,000) (434,267) - (321) (257) Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. Kibo Mining Plc is the beneficial owner and controls the following companies and as such are considered related parties: Directly held subsidiaries: Sloane Developments Limited Kibo Mining (Cyprus) Limited Additionally Mzuri Energy Limited acquired the entire share capital of Kibo Uranium Limited (Previously “Mbeya Uranium Limited”) and its wholly owned subsidiaries Pinewood Resources Limited and Makambako Resources Limited, through the issue of ordinary shares for to the total consideration of CAD $1.2million. Indirectly held subsidiaries: Aardvark Exploration Limited Eagle Gold Mining Limited Jubilee Resources Mining Limited Savannah Mining Limited Mzuri Energy Limited Rukwa Holdings Limited Rukwa Coal Limited Mzuri Power Limited Kibo Uranium Limited Pinewood Resources Limited Makambako Resources Limited Mayborn Resources Investments (Proprietary) Limited 42 42 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The only transactions during the period between the Company and its subsidiaries were intercompany loans, which were interest free and payable on demand and include the following: Loans payable by Sloane Developments Limited and Aardvark Exploration Limited to Kibo Mining Plc amounted to £2,412,520 (2011: £2,454,894) and £1,114,114 (2011: £743,402) respectively. In addition to the above loans owed to the parent Company, Sloane Developments Limited is owed £604,978 (2011: £604,978) from Aardvark Exploration Limited and £1,771 (2011: £1,771) from Eagle Gold Mining Limited. In March 2011 the Company acquired Morogoro Gold Limited from Mzuri Gold Limited for consideration of £1.7m settled by the issue of 56,666,667 Ordinary shares in the Company. Mzuri Gold Limited also subscribed for cash for 16,666,667 Ordinary shares at that time at a price of 3 pence per share. Mzuri Gold Limited is a wholly owned subsidiary of Mzuri Capital Group Limited of which directors Tinus Maree and Louis Coetzee are also directors. During the period the Company acquired the entire share capital of Mzuri Energy Limited, and its wholly owned subsidiaries Rukwa Holdings Limited (Previously “Mzuri Coal Limited”), Rukwa Coal Limited and Mzuri Power Limited through its wholly owned subsidiary Kibo Mining Limited (Previously “Morogoro Gold Limited”) of which directors Tinus Maree, Louis Coetzee, and Bernard Poznanski are also directors. Additionally the Company acquired the entire share capital of Kibo Uranium Limited ( Previously “Mbeya Uranium Limited”) and its wholly owned subsidiaries Pinewood Resources Limited and Makambako Resources Limited through its wholly owned subsidiary Kibo Mining (Cyprus) Limited (Previously “Morogoro Gold Limited). Also the entire interest of Mayborn Resource Investments Proprietary Limited incorporated in South Africa was acquired. The Group’s exploration operations in Tanzania are administered by Mzuri Exploration Services Limited, a wholly owned subsidiary of Mzuri Capital Group Limited, a Company in which Company directors Louis Coetzee is also a director. These services are provided for in contract between the Company and Mzuri Exploration Services Limited dated 30 April 2011 at a cost to the Group of £313,849 for the 2012 financial period. At the year end the Company owed Mzuri Exploration Services Limited US$239,451 (2011: US$126,201). During the period ended December 2012, Wilkins Kennedy were paid £12,000 (2011: £12,000) in respect of his services as a director, and £51,450 (2011: £41,495) in respect of accounting and management services. At the year end the Group owed Wilkins Kennedy £nil (2011:£nil). Wilkins Kennedy resigned from the Board effective from 15 August 2012. 20. Financial Instruments and Financial Risk Management The Group and Company’s principal financial instruments comprise cash and cash equivalents. The main purpose of these financial instruments is to provide finance for the Group and Company’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has been throughout the 2012 and 2011 financial period, the Group and Company’s policy not to undertake trading in derivatives. The main risks arising from the Group and Company’s financial instruments are foreign currency risk, credit risk, liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 43 43 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 The only transactions during the period between the Company and its subsidiaries were intercompany loans, which were interest free and payable on demand and include the following: Loans payable by Sloane Developments Limited and Aardvark Exploration Limited to Kibo Mining Plc amounted to £2,412,520 (2011: £2,454,894) and £1,114,114 (2011: £743,402) respectively. In addition to the above loans owed to the parent Company, Sloane Developments Limited is owed £604,978 (2011: £604,978) from Aardvark Exploration Limited and £1,771 (2011: £1,771) from Eagle Gold Mining Limited. In March 2011 the Company acquired Morogoro Gold Limited from Mzuri Gold Limited for consideration of £1.7m settled by the issue of 56,666,667 Ordinary shares in the Company. Mzuri Gold Limited also subscribed for cash for 16,666,667 Ordinary shares at that time at a price of 3 pence per share. Mzuri Gold Limited is a wholly owned subsidiary of Mzuri Capital Group Limited of which directors Tinus Maree and Louis Coetzee are also directors. During the period the Company acquired the entire share capital of Mzuri Energy Limited, and its wholly owned subsidiaries Rukwa Holdings Limited (Previously “Mzuri Coal Limited”), Rukwa Coal Limited and Mzuri Power Limited through its wholly owned subsidiary Kibo Mining Limited (Previously “Morogoro Gold Limited”) of which directors Tinus Maree, Louis Coetzee, and Bernard Poznanski are also directors. Additionally the Company acquired the entire share capital of Kibo Uranium Limited ( Previously “Mbeya Uranium Limited”) and its wholly owned subsidiaries Pinewood Resources Limited and Makambako Resources Limited through its wholly owned subsidiary Kibo Mining (Cyprus) Limited (Previously “Morogoro Gold Limited). The Group’s exploration operations in Tanzania are administered by Mzuri Exploration Services Limited, a wholly owned subsidiary of Mzuri Capital Group Limited, a Company in which Company directors Louis Coetzee is also a director. These services are provided for in contract between the Company and Mzuri Exploration Services Limited dated 30 April 2011 at a cost to the Group of £313,849 for the 2012 financial period. At the year end the Company owed Mzuri Exploration Services Limited US$239,451 (2011: US$126,201). During the period ended December 2012, Wilkins Kennedy were paid £12,000 (2011: £12,000) in respect of his services as a director, and £51,450 (2011: £41,495) in respect of accounting and management services. At the year end the Group owed Wilkins Kennedy £nil (2011:£nil). Wilkins Kennedy resigned from the Board effective from 15 August 2012. 20. Financial Instruments and Financial Risk Management The Group and Company’s principal financial instruments comprise cash and cash equivalents. The main purpose of these financial instruments is to provide finance for the Group and Company’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its It is, and has been throughout the 2012 and 2011 financial period, the Group and Company’s policy not to undertake operations. trading in derivatives. The main risks arising from the Group and Company’s financial instruments are foreign currency risk, credit risk, liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below. 2012 (£) 2011 (£) Loans and receivables Financial liabilities Loans and receivables Financial liabilities Financial instruments of the Group are: Financial assets Trade and other receivables Cash and cash equivalents Financial liabilities 75,438 98,678 52,965 937,084 1,783,668 Trade payables 1,783,668 990,049 94,735 94,735 174,116 2012 (£) 2011 (£) Loans and receivables Financial liabilities Loans and receivables Financial liabilities Financial instruments of the Company are: Financial assets Also the entire interest of Mayborn Resource Investments Proprietary Limited incorporated in South Africa was acquired. Trade and other receivables Cash and cash equivalents Financial liabilities 24,512,666 16,229 3,238,206 333,928 Trade payables 24,528,895 1,449,552 1,449,552 3,572,134 54,619 54,619 Foreign currency risk The Group undertakes certain transactions denominated in foreign currencies and exposures to exchange rate fluctuations therefore arise. Exchange rate exposures are managed by continuously reviewing exchange rate movements in the relevant foreign currencies. The exposure to exchange rate fluctuations is limited as the Company’s subsidiaries operate mainly with Sterling, Euros, South African Rands, US Dollar and Tanzanian Shillings. At the period ended 31 December 2012, the Group had no outstanding forward exchange contracts. Exchange rates used for conversion of foreign subsidiaries undertakings were: 2012 0.07287 ZAR to GBP (Spot) 0.07691 ZAR to GBP (Average) 0.61850 USD to GBP (Spot) 0.63100 USD to GBP (Average) EURO to GBP (Spot) 0.81753 EURO to GBP (Average) 0.77800 CAD to GBP (Spot) 0.62043 0.63119 CAD to GBP (Average) Credit risk 43 Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. As the Group does not, as yet, have any sales to third parties, this risk is limited. The Group and Company’s financial assets comprise receivables and cash and cash equivalents. The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Group and Company’s exposure to credit risk arise from default of its 44 44 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in its consolidated statement of financial position. The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are connected or related entities. Financial assets exposed to credit risk at period end were as follows: Financial instruments Group (£) 2011 2012 Company (£) 2012 2011 Trade & other receivables Cash & cash equivalents Liquidity risk management 75,438 98,678 52,965 24,512,666 3,238,206 333,928 16,229 937,084 Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group and Company’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group. To date, the Group has relied on shareholder funding to finance its operations. The Group had no borrowing facilities at 31 December 2012. The Group and Company’s financial liabilities as at 31 December 2012 were all payable on demand. Group (£) At 31 December 2012 Less than 1 year Greater than 1 year Trade and other payables At 30 September 2011 Trade and other payables Company (£) At 31 December 2012 Trade and other payables At 30 September 2011 Trade and other payables Interest rate risk 1,783,668 94,735 1,449,552 54,619 - - - - The Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the Group and Company’s holdings of cash and short term deposits. It is the Group and Company’s policy as part of its management of the budgetary process to place surplus funds on short term deposit in order to maximise interest earned. Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the period ended 31 December 2012. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and 45 retained losses as disclosed in the consolidated statement of changes in equity. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 45 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in its consolidated statement of financial position. The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are connected or related entities. The carrying amount of the Group and Company’s financial assets and financial liabilities recognised at amortised cost in the financial statements approximate their fair value. Hedging At 31 December 2012, the Group had no outstanding contracts designated as hedges. 21. Post Balance Sheet events Financial assets exposed to credit risk at period end were as follows: Financial instruments Group (£) 2012 2011 Company (£) 2012 2011 Funding Fair values Trade & other receivables Cash & cash equivalents Liquidity risk management 75,438 98,678 52,965 24,512,666 3,238,206 937,084 16,229 333,928 Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group and Company’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group. To date, the Group has relied on shareholder funding to finance its operations. The Group had no borrowing facilities at 31 December 2012. The Group and Company’s financial liabilities as at 31 December 2012 were all payable on demand. Less than 1 Greater than 1 year year Group (£) At 31 December 2012 Trade and other payables At 30 September 2011 Trade and other payables Company (£) At 31 December 2012 Trade and other payables At 30 September 2011 Trade and other payables Interest rate risk 1,783,668 94,735 1,449,552 54,619 - - - - The Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the Group and Company’s holdings of cash and short term deposits. It is the Group and Company’s policy as part of its management of the budgetary process to place surplus funds on short term deposit in order to maximise interest earned. Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the period ended 31 December 2012. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses as disclosed in the consolidated statement of changes in equity. 45 Subsequent to the period end the Company raised £725,000 through the issue of 120,833,333 new ordinary shares at a price of 0.6p per share with Northland Capital Partners Limited. The Company also concluded a share placing to raise £780,000, before expenses, through the issue of 19,500,000 new ordinary shares of €0.015 at 4p per share. The Company issued 1,067,174 ordinary shares of €0.015 each in the capital of the Company at an issue price of 5.073p to YA Global Master SPV Ltd with effect from 26 April 2013. These Shares are being issued under the terms of a loan and special advance under the SEDA established by a Letter of Agreement dated 2nd April 2013. The Shares have been issued as payment of £54,137.75 to YA Global Master SPV Ltd pursuant to an initial drawdown of £50,000 under the SEDA and payment of £4,137.75 being the outstanding balance of the implementation fee due under the SEDA. The Shares will rank pari-passu with the Company’s existing issued Ordinary Shares. Capital Re-organisation Effective from 5 March 2013, the Company entered into a re-organisation and Issue of Equity agreement, whereby €160,994 was raised through the issue of 16,099,446 ordinary shares in the Company at a placing price of €0.01 per share, together with 16,099,466 free attached warrants to subscribe for one further share in the Company at a price of €0.01 at any time before 11 February 2014. The Company also settled the payment of certain advisory services to the value of £1,114,010 through the issue of 27,939,894 ordinary shares at a placing price of €0.01 and 12,027,394 free attached warrants to subscribe for one further share in the Company at a price of €0.01 at any time before 11 February 2014. Subsequent to the above issue of additional equity, the Company underwent a capital restructuring, comprising 1 new ordinary share for 15 previously held shares, at a reduction in the par value thereof. Under the Capital reorganisation, the Company subdivided each share of €0.01 into 1 new share of €0.001 and 1 deferred Ordinary share of €0.009, following which, every 15 shares of €0.001 were consolidated into 1 ordinary share of €0.015. The net result is that holders received 1 new share of €0.015 in lieu of every 15 existing shares held. The resolution was passed to effect the above capital reorganisation effective from 22 March 2013. Rukwa Coal to Power Project Additionally the Board announced that the Tanzanian Government has declared it’s support for the Rukwa Coal to Power project. Based on formal notification received from the Tanzanian Ministry of Energy and Minerals (“MEM”), in which , based on the MEM’s initial assessment of the project and the key role it could play as a regional power hub, notified the Company that: The Rukwa Coal to power project will, with immediate effect, be included as a strategic component of the Tanzanian Governments National Energy Strategy; The MEM undertakes to “participate proactively in procuring the establishment of this vial infrastructure node in the Mbeya region”; and The MEM confirms its support for the expedited development of the project to Kibo and its development partners. Pursuant to the decision by the Tanzanian Government to include the Company’s Rukwa Coal to Power Project as a key component of the Tanzanian National Energy Strategy (“NES”), it has now concluded its selection of Korean East-West Power Co. Ltd (“EWP”) as the preferred strategic participant in the Rukwa Coal to Power Project and negotiations are currently under way towards finalizing a formal joint venture agreement between the parties. 46 46 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 KIBO MINING PLC NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FINANCIAL STATEMENTS AT 31 DECEMBER 2012 Joint Venture with Votorantim Group The Company concluded a formal definitive joint venture agreement (“Joint Venture”) with VOTORANTIM METAIS PARTICIPAÇÕES LTDA, a subsidiary of the Brazilian industrial conglomerate Votorantim Group (“Votorantim”), to conduct a joint further exploration work program on its Haneti properties which are prospective for nickel and other base and precious metals. Under the Joint Venture, Votorantim will initially contribute a maximum of GBP 2.7 million over a period of three years (“Initial Period”), to fully fund an agreed work program budget at the Haneti Project. Upon expending the full GBP 2.7 million within the Initial Period, Votorantim will have earned a 50% interest. Once the Initial Period has concluded the parties will continue to contribute equally to the working capital requirements of the Joint Venture. During the Initial Period the JV will carry out exploration activities aiming at the identification of the mineral potential of Haneti, focusing initially on the exploration for nickel and PGEs in the extensive mafic-ultramafic belt, located at the proximity of Dodoma. Work conducted during this period will also aim at establishing an initial early stage JORC compliant mineral resource at Haneti. Following the Initial Period the Joint Venture will consider the further development of the project on the merits of the exploration results achieved. Subsequent to period end, the first drawdown against the £2.7 million funding package has been approved with regard to the agreed work program on the Haneti Project. Contingent corporate tax recoveries Mzuri Energy Limited has estimated corporate tax receivables to the value of £408,212 pertaining to recoveries with regard to certain expenses incurred through previous financial period’s operations. Trade payables Additionally the company also entered into an agreement whereby ordinary shares will be issued by the Company in lieu of advisory services to the value of £1,114,010 included as part of the Groups trade payables as at the Statement of Financial Position date. 22. Approval of financial statements The financial statements were approved by the Board on the 28 June 2013. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 47 47 KIBO MINING PLC FINANCIAL STATEMENTS AT 31 DECEMBER 2012 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Joint Venture with Votorantim Group The Company concluded a formal definitive joint venture agreement (“Joint Venture”) with VOTORANTIM METAIS PARTICIPAÇÕES LTDA, a subsidiary of the Brazilian industrial conglomerate Votorantim Group (“Votorantim”), to conduct a joint further exploration work program on its Haneti properties which are prospective for nickel and other base and precious metals. Under the Joint Venture, Votorantim will initially contribute a maximum of GBP 2.7 million over a period of three years (“Initial Period”), to fully fund an agreed work program budget at the Haneti Project. Upon expending the full GBP 2.7 million within the Initial Period, Votorantim will have earned a 50% interest. Once the Initial Period has concluded the parties will continue to contribute equally to the working capital requirements of the Joint Venture. During the Initial Period the JV will carry out exploration activities aiming at the identification of the mineral potential of Haneti, focusing initially on the exploration for nickel and PGEs in the extensive mafic-ultramafic belt, located at the proximity of Dodoma. Work conducted during this period will also aim at establishing an initial early stage JORC compliant mineral resource at Haneti. Following the Initial Period the Joint Venture will consider the further development of the project on the merits of the exploration results achieved. Subsequent to period end, the first drawdown against the £2.7 million funding package has been approved with regard to the agreed work program on the Haneti Project. Contingent corporate tax recoveries Mzuri Energy Limited has estimated corporate tax receivables to the value of £408,212 pertaining to recoveries with regard to certain expenses incurred through previous financial period’s operations. Trade payables Additionally the company also entered into an agreement whereby ordinary shares will be issued by the Company in lieu of advisory services to the value of £1,114,010 included as part of the Groups trade payables as at the Statement of Financial Position date. 22. Approval of financial statements The financial statements were approved by the Board on the 28 June 2013. 47 NOTICE OF ANNUAL GENERAL MEETING Company number 451931 KIBO MINING PUBLIC LIMITED COMPANy (the “Company”) NOTICE is hereby given that the Annual General Meeting of the Company will be held at 2 p.m. on Wednesday 31 July 2013 at the Conrad Hotel, Earlsfort Terrace, St Stephen’s Green, Dublin 2, Ireland for the purpose of considering, and if thought fit, passing the following resolutions of which resolutions numbered 1, 2, 3, 4 and 5 will be proposed as ordinary resolutions and resolutions numbered 6 and 7 will be proposed as special resolutions:- Ordinary Business 1 To receive, consider and adopt the accounts for the year ended 31 December 2012 together with the Directors and Auditors Reports thereon. 2 To re-appoint LHM Casey McGrath as Auditors of the Company and to authorise the Directors to fix the remuneration of the Auditors. 3 To re-elect Mr Louis Coetzee as a Director of the Company who retires by rotation in accordance with Regulation 84 of the Articles of Association of the Company. 4 To re-elect Mr Tinus Maree as a Director of the Company who retires by rotation in accordance with Regulation 84 of the Articles of Association of the Company. Special Business 5 That in substitution for all existing authorities of the Directors pursuant to Section 20 of the Companies (Amendment) Act, 1983 (the “1983 Act”), the Directors be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities (within the meaning of Section 20 of the 1983 Act) provided that such power shall be limited to the allotment of relevant securities up to a maximum aggregate nominal value equal to the nominal value of the authorised but unissued ordinary share capital of the Company from time to time. The authority hereby conferred shall expire on the date of the next annual general meeting of the Company held after the date of passing of this resolution, unless previously revoked, renewed or varied by the Company in General Meeting, save that the Company may before such expiry date make an offer or agreement which would or might require relevant securities to be allotted after such authority has expired and the Directors may allot relevant securities in pursuance of such offer or agreement as if the authority hereby conferred had not expired. 6 Subject to the passing of resolution number 5 above and in substitution for all existing authorities of the Directors pursuant to Sections 23 and 24 of the Companies (Amendment) Act, 1983 (the “1983 Act”), that the Directors be and are hereby empowered pursuant to Sections 23 and 24 (1) of the 1983 Act to allot equity securities (within the meaning of the said Section 23) for cash pursuant to the authority conferred by resolution number 5 above as if the said Section 23 does not apply to any such allotment provided that this power shall be limited to the allotment of equity securities (including, without limitation, any shares purchased by the Company pursuant to the provisions of the 1990 Act and held as Treasury Shares) up to a maximum aggregate nominal value equal to the nominal value of the authorised but unissued ordinary share capital of the Company from time to time. The authority hereby conferred shall expire at the conclusion of the next annual general meeting of the Company held after the date of passing of this resolution, save that the Company may before such expiry, make an offer or agreement which would or might require 48 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 relevant securities to be allotted after such authority has expired and the Directors may allot relevant securities in pursuance of such offer or agreement notwithstanding that the power hereby conferred had not expired. The authority hereby conferred may be renewed, revoked or varied by special resolution of the Company. that provided the authorities hereby conferred shall expire at the close of business on the earlier of the date of the next Annual General Meeting of the Company after the passing of this Resolution or 31 January 2015 unless previously revoked or renewed in accordance with the provisions of the 1990 Act. 7 That: By Order of the Board (a) the Company and/or any subsidiary (including a body corporate as referred to in the European Communities (Public Limited Companies: Subsidiaries) Regulations 1997) of the Company be and they are hereby generally authorised to make market purchases and overseas market purchases (as defined by Section 212 of the Companies Act 1990 (“the 1990 Act”)) of shares of any class of the Company on such terms and conditions and in such manner as the Directors may from time to time determine in accordance with and subject to the provisions of the 1990 Act and the following restrictions and provisions: (i) market purchases will be limited to a maximum price which will not exceed 5 per cent. above the average of the middle market quotations taken from the London Stock Exchange Official List, for the ten days before the purchase is made; (ii) the minimum price which may be paid for shares purchased pursuant to this Resolution will be the par value thereof; and (iii) the aggregate nominal value of shares purchased under this Resolution must not exceed 10 per cent. of the aggregate nominal value of the issued share capital of the Company as at the commencement of business on the day of the passing of this Resolution; and (b) the reissue price range at which any treasury shares (as defined by Section 209 of the 1990 Act) for the time being held by the Company may be reissued off market shall be the range between the par value thereof and 5 per cent above the average of the middle market quotations taken from the London Stock Exchange website at close of business on the 5 business days prior to the reissue; Noel O’Keeffe Director and Secretary Dated: 5 July 2013 Registered Office: 27 Hatch Street Lower Dublin 2 Ireland Notes: a. Any shareholder of the Company entitled to attend and vote may appoint another person (whether a member or not) as his/her proxy to attend, speak and vote on his/ her behalf. For this purpose a form of proxy is enclosed with this Notice. A proxy need not be a shareholder of the Company. Lodgement of the form of proxy will not prevent the shareholder from attending and voting at the meeting. b. Only shareholders, proxies and authorised representatives of corporations, which are shareholders, are entitled to attend the meeting. c. To be valid, the form of proxy and, if relevant, the power of attorney under which it is signed, or a certified copy of that power of attorney, must be received by the Company at Kibo Mining Plc, 27 Hatch Street Lower, Dublin 2, Republic of Ireland not less than 48 hours prior to the time appointed for the meeting. d. All South African shareholders must send their proxies to the transfer secretaries, Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg 2001 (PO Box 61051 Marshalltown 2107) not less than 48 hours prior to the time appointed for the meeting. e. In the case of joint holders, the vote of the senior holder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holder(s) and for this purpose seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 49 FORM OF PROXY KIBO MINING PUBLIC LIMITED COMPANy (the “Company”) Annual General Meeting Ordinary Business of the Meeting For Against I/We (See Note A turn over) ______________________________________________of 1 To receive, consider and adopt the accounts for the year ended 31 December 2012 and the Directors and Auditors Reports thereon. _______________________________________ being a shareholder of the Company, hereby appoint (See Note B turn over): (a) the Chairman of the Meeting; or ___________________________________________ (b) of ______________________________________ as my/ our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on Wednesday 31st July 2013 at 2 p.m. in the Conrad Hotel, Earlsfort Terrace, St Stephen’s Green, Dublin 2 , Ireland and at any adjournment thereof. Please indicate with an ‘‘X’’ in the space below how you wish your votes to be cast in respect of each of the resolutions detailed in the notice convening the Meeting. If no specific direction as to voting is given, the proxy will vote or abstain 2 To re-appoint LHM Casey McGrath as Auditors and to authorise the Directors to fix the remuneration of the auditors. 3 To re-elect Mr Louis Coetzee as a Director. 4 To re-elect Mr Tinus Maree as a Director. Special Business of the Meeting For Against 5 That the Directors be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities. 6 That the Directors be and are hereby pursuant empowered to Section 23 and 24 (1) of the Companies (Amendment) Act, 1983 to allot equity securities. 7 To authorise the Company and/ or any subsidiary to make market purchases and overseas market purchases of shares of any class of the Company. Dated this ___________day of __________________2013 from voting at his/her discretion. Signature or other execution by the shareholder (See Note C turn over): ____________________________________ 50 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 Notes: (A) A shareholder must insert his, her or its full name and registered address in type or block letters. In the case of joint accounts, the names of all holders must be stated. (B) If you desire to appoint a proxy other than the Chairman of the Meeting, please insert his or her name and address in the space provided and delete the words “the Chairman of the Meeting or”. (C) The proxy form must: (i) in the case of an individual shareholder be signed by the shareholder or his or her attorney; and (ii) in the case of a corporate shareholder be given either under its common seal or signed on its behalf by an attorney or by a duly authorized officer of the corporate shareholder. (D) In the case of joint holders, the vote of the senior holder who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding. (E) To be valid, the form of proxy and, if relevant, the power of attorney under which it is signed, or a certified copy of that power of attorney, must be received by the Company at Kibo Mining plc, 27 Hatch Street Lower, Dublin 2, Republic of Ireland not less than 48 hours prior to the time appointed for the meeting. 1. 2. All South African shareholders must send their proxies to the transfer secretaries, Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg 2001 (PO Box 61051 Marshalltown 2107) not less than 48 hours prior to the time appointed for the meeting. 3. 4. (F) A proxy need not be a shareholder of the Company but must attend the Meeting in person to represent his/her appointor (G) The return of a proxy form will not preclude any shareholder from attending and voting at the Meeting. SOUTH AFRICAN SHAREHOLDERS Notes to the Form of Proxy A KIBO shareholder may insert the name of a proxy or the names of two alternative proxies of the KIBO shareholder’s choice in the space/s provided, with or without deleting “the Chairperson of the General Meeting”, but any such deletion must be initialled by the KIBO shareholder concerned. The person whose name appears first on the form of proxy and who is present at the Annual General Meeting will be entitled to act as proxy to the exclusion of those whose names follow. Please insert an “X” in the relevant spaces according to how you wish your votes to be cast. However, if you wish to cast your votes in respect of a lesser number of shares than you own in KIBO, insert the number of ordinary shares held in respect of which you desire to vote. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the Annual General Meeting as he/she deems fit in respect of all the shareholder’s votes exercisable thereat. A KIBO shareholder or his/her proxy is not obliged to use all the votes exercisable by the KIBO shareholder or by his/her proxy, but the total of the votes cast and in respect whereof abstentions recorded may not exceed the total of the votes exercisable by the shareholder or by his/her proxy. The date must be filled in on this proxy form when it is signed. The completion and lodging of this form of proxy will not preclude the relevant KIBO KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 51 To be completed and mailed to: Computershare Investor Services (Pty) Ltd PO Box 61051 Marshalltown 2107 Johannesburg OR To be completed and hand delivered to: Computershare Investor Services (Pty) Limited Ground Floor 70 Marshall Street JOHANNESBURG shareholder from attending the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof. Where there are joint holders of shares, the vote of the senior joint holder who tenders a vote, as determined by the order in which the names stand in the register of members, will be accepted. the Documentary evidence establishing authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the transfer secretaries of KIBO or waived by the Chairperson of the Annual General Meeting of KIBO shareholders. Any alterations or corrections made to this form of proxy must be initialled by the signatory/ies. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the transfer secretaries of KIBO. Forms of proxy must be received by the transfer secretaries, Computershare Investor Services (Pty) Limited at 70 Marshall Street, Johannesburg, 2001 (P O Box 61051, Marshalltown, 2107) by not later than 10h00 on Monday, 27 July 2013. The Chairperson of the Annual General Meeting may accept or reject any form of proxy, in his absolute discretion, which is completed other than in accordance with these notes. 5. 6. 7. 8. 9. 10. If required, additional forms of proxy are available from the transfer secretaries of KIBO. 11. Dematerialised shareholders, other than by own name registration, must NOT complete this form of proxy and must provide their CSDP or broker of their voting instructions in terms of the custody 52 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 Blank Page for Notes: KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2012 53 PROGRAMME FOR 2013/2014 SCOPING STUDY ON RUKWA COAL PROJECT NEGOTIATION OF AGREEMENT WITH DEVELOPMENT PARTNER FOR RUKWA COAL TO POWER PROJECT COMPLETION OF INITIAL EXPLORATION PROGRAMME UNDER JV WITH VOTORANTIM TO INCLUDE DRILLING OF Ni-PGM TARGETS FIELD EXPLORATION TO CONTINUE ON PRIORITY AREAS ON LAKE VICTORIA AND MOROGORO PROJECTS TO INCLUDE TRENCHING AND DRILLING OF GOLD TARGETS IDENTIFIED TO DATE AERIAL GEOPHYSICAL SURVEY ON PINEWOOD PROJECTS 9 3 7 1 2 7 7 6 5 0 : s r e t n i r P n r e d o M y b t n i r P d n a n g i s e D
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