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Annual Report
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KIBOMINING
HigHligHTs 2016
Mbeya Coal to Power (Coal)
• Re-statement of Coal Resource
• Completion of Definitive Power Feasibility Study
• Completion of Definitive Mining Feasibility Study
• Mining Right Application submitted to Tanzanian Ministry of Energy
& Minerals
• Collaboration Agreement signed with GE International Inc. (GE) for supply
of equipment, technology and services to the Mbeya power plant
• Appointment of ABSA/Barclays Bank as new Financial Advisor to MCPP
• Engineering-Procurement-Construction (EPC) & Other Equipment
Manufacturer (OEM) contracts awarded to SEPCO III & GE respectively
• Completion of Environmental & Social Impact Study
• Completion of Integrated Bankable Feasibility Study (announced
January 2017)
IMweru & lubando ProjeCt (Gold)
• Options investigated for spin-off of Kibo’s gold projects (Imweru &
Lubando) in Lake Victoria Region into separate gold mining company
• Heads of Agreement signed with Opera Investments PLC for the sale of
Imweru & Lubando in reverse takeover transaction (“Opera Transaction”)
• Opera Transaction completed (May 2017) with admission of Opera
to AIM, re-named Katoro Gold PLC and placing implemented which
raised £1.5m to advance Imweru towards gold production
• Re-statement of gold Mineral Resources at Imweru & Lubando
HanetI ProjeCt (nI-Cu-PGM)
• Haneti maintained in good standing pending availability of resource
to drill established drill targets
Kibo AnnuAl REpoRt 2016
TARgeT PRogRAmme
foR 2017/2018
MCPP
• Environmental Impact Assessment (Complete, awaiting certification)
• Negotiation of PPA with TANESCO (Target: Q2 2017 subject to
finalization of Tanzania Energy Policy Procurement Review
currently underway)
• Financial Close (2017 – dependent on finalizing PPA)
HanetI
• Implement drill programme at Haneti on priority targets at Mihanza
and Mwaka Hills contingent on resources being available
Katoro Gold PlC
IMweru
• Implement drill programme with objective of expanding and
upgrading existing Mineral Resource in order to complete mining
Pre-Feasibility Study (PFS)
• Contingent on favourable results from PFS, proceed to completion
of definitive bankable feasibility study which will incorporate:
• Geotechnical & Engineering studies
• Completion of Environmental and Social Impact Study
• Mining Licence Application
• Financial Modelling
• Bring the project to Financial Close
• Commence mine construction
• Implement follow-up exploration programmes on regional targets
with the objective of discovering and defining additional gold
resources
One of two new classrooms funded by Kibo -
Meheza & Mamkukwe villages, Songwe Region, Tanzania
Contents
Chairman’s Statement
Review of Activities
Annual Financial Statements for the 12 month period ended 31 December 2016
Notice of Annual General Meeting
Form of Proxy
IV
VII
XVI
56
59
Programme for 2016 - 2017
Inside Back Cover
I KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
Imweru & Lubando
(COAL TO POWER)
Geotechnical Drilling -MCPP
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 II
exploration & development
projeCts
Imweru & Lubando
(COAL TO POWER)
III KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
Handover of new school Classrooms to Regional &
District Commissioners for Songwe Region - March 2017
Chairman’s statement
Dear Shareholders,
Plc (renamed Katoro Gold PLC) which saw
Katoro acquire the Imweru and Lubando licence
2016 saw our Company build further on the
portfolios, be admitted to AIM and raise £1.5m for
milestones
reached during 2015 with
the
the advancement of a Definitive Feasibility Study
completion of a number of critical studies in
(“DFS”) at Imweru.
regard to our flagship Mbeya Coal to Power Project
(“MCPP”) and the spin-off of our key gold assets
The Mbeya Project remained the centre of our
(Imweru & Lubando) to a new gold focussed
focus during 2016 and I am glad to report that
company, Katoro Gold PLC (“Katoro”). These tasks
we have moved the project nearer to Financial
were achieved while simultaneously levering the
Close with the completion of the key feasibility
value created in the MCPP to arrange efficient
studies (mining & power) and the bringing on
funding mechanisms that minimised shareholder
board of key advisors and partners such as SEPCO
dilution.
III, GE, Norton Rose Fulbright and Absa/Barclays.
As you are aware, we had anticipated reaching
Kibo Mining’s main achievements are:
financial close on the project by the end of 2016
• The completion of definitive feasibility studies
but an on-going Tanzanian government review of
on both the proposed coal mine and its dedicated
electricity tariffs and a re-structuring of TANESCO,
power plant at the MCPP;
the national electricity supply company, has
• Signing of a collaboration agreement with
delayed negotiations on completion of a Power
multinational US based GE Electric International
Purchase Agreement (“PPA”) for the MCPP for now.
Inc. in November 2016 which provided for GE to
Kibo welcomes these re-structuring initiatives by
supply equipment, technology and services to
the Tanzanian Government which I believe will
the power plant;
ultimately benefit the outcome of negotiations
• The negotiation and awarding of the EPC contract
on a PPA by delivering us an agreement that will
for the power plant construction to SEPCO III and
ensure the long term operational and financial
the OEM contract to GE;
viability of the project.
• The completion of the Integrated Bankable
Feasibility Study on the MCPP (announced
I can assure shareholders that we continue to
January 2017); and
maintain a close relationship with the Tanzanian
• The completion
in May 2017 of a reverse
government both at central and regional levels who,
takeover transaction with Opera Investments
together with Kibo, recognise the role the MCPP
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 IV
will play in contributing to addressing the current
of the planned mine. The longer term strategy is
generating capacity shortages in the country. Our
to test the viability of another mine development
commitment is to work collaboratively with local
at Lubando by conducting an initial scoping study
communities in southern Tanzania to ensure a
on the current Mineral Resource and, if positive,
sustainable development that benefits people
follow-on pre-feasibility and feasibility studies.
directly and provide key power infrastructure that
The greater Imweru and Lubando licence portfolios
will facilitate other economic development in
also provide Katoro with a large area of additional
the area. An example of our social development
exploration ground on which surface geochemical
commitment to the Songwe Region, where the
surveys have already defined a number of robust
MCPP is located, is our on-going joint programme
drill targets.
between Kibo and the towns of Meheza and
Namkukwe for funding the refurbishment and
We continue to hold our Haneti (Ni-Cu-PGM)-
extension of school buildings. As we reported in
project as an important pipeline project in the
March 2017, the Company recently handed over
rationalised Kibo portfolio. Unfortunately, we did
two newly constructed school classrooms for these
not get the opportunity to complete our initial
towns to the Regional Commissioner for Songwe.
planned drilling programme on the project during
2016 but we continue to investigate funding
In the Lake Victoria region, we embarked during
options in order to complete this work as soon as
2016 on an assessment of options for advancing our
possible.
resource based gold assets, Imweru & Lubando. The
favoured option was a reverse takeover transaction
The increasing workload, funding requirements
with Opera Investments Plc. I am pleased to report
and focus now required for our two development
that, at the time of writing, this transaction has now
projects, the MCPP and Imweru, prompted us
been successfully completed and Kibo now holds a
to review our earlier stage exploration assets
57% interest in AIM-listed Katoro Gold PLC which
and commodity spread towards the end of 2016.
now holds the Imweru and Lubando projects. The
We thus, by mutual arrangement with our joint
admission of Katoro to AIM was accompanied by a
venture partner Metal Tiger Plc - terminated our
placing which raised proceeds of £1.5m to advance
joint ventures on the Pinewood (uranium) and
the completion of DFS at Imweru. Kibo had already
Morogoro (gold) projects and relinquished the
completed a preliminary economic assessment
underlying licence portfolios in January 2017. We
(scoping study) in 2015 at Imweru. This study
also recently (June 2017) relinquished a number of
indicates good potential for the establishment of
early stage gold exploration licences on our Lake
a gold mine at the site and the next phase of work
Victoria Project as part of a “tidying up” exercise
by Katoro at Imweru will be to complete a pre-
to ensure that only the most prospective areas i.e.
feasibility study for which a drilling programme is
the Imweru and Lubando licence portfolios were
currently in progress.
divested to Katoro for forward exploration and
Katoro’s short term strategy is to develop a gold
development.
mine at Imweru within the next 12-18 months while
On the corporate front, Kibo strived to minimize
expanding and upgrading the current Mineral
shareholder dilution by using the value in the
Resource in order to ensure the longer term viability
MCPP to negotiate a number of loans subsequently
V KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
repaid by combinations of cash, new shares issues
Finally, I wish to thank our CEO Louis Coetzee and
in Kibo and divestment of a small equity share
his management team for their continued efforts
in the MCPP itself. These loans were extended by
in bringing our development projects to fruition.
Sanderson Capital Partners with whom we have
We particularly look forward to bringing the MCPP
developed a solid relationship in the last couple
to financial close during 2017 and the completion
of years and who have recognised the inherent
of a DFS at Imweru by Katoro.
value in the MCPP. Our most recent financial
arrangement with Sanderson allows us an
advance on the outstanding funds due to us from
SEPCO III at financial close of the MCPP repayable
in cash (or shares at Sanderson’s option) when we
are in receipt of the funds. These loan facilities
have provided us with the funding to complete
Christian Schaffalitzky
Chairman
the integrated bankable feasibility study on the
26 May 2017
project without reverting to placings which would
be only available at significant discounts to our
share price which, disappointingly, is still not at a
level commensurate with the value in our projects.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 VI
Coal outcropping in River Bed – MCPP
review of aCtivities
Introduction
Operational
The following sections provide a summary of the
principal activities carried out by the Company on
Mbeya Coal to Power Project (MCPP)
The Company reached critical milestones on its
its projects during 2016. In line with its strategy,
development path for the MCPP during 2016
Kibo continues to evaluate, prioritise and rationalise
with the delivery of the definitive power and
its project licence portfolios in order to focus
mining feasibility studies and the signing of
resources on those areas the Company believes
key agreements with a number of world class
offers the best opportunities for exploration and
consultants and partners.
development success. Since
year end Kibo has terminated
its
joint ventures on the
Morogoro (gold) and Pinewood
(uranium) joint ventures by
mutual consent with Metal
Tiger Plc and relinquished
the licence portfolios. It has
also
rationalised
its
large
early stage gold exploration
licences within
its
Lake
Victoria Project and divested
the
remaining
licences
comprising the Imweru and
Lubando projects, to Katoro
Gold PLC which was admitted
to AIM on the 24 May 2017. This
rationalisation will enable the
Company to now focus on
its remaining Mbeya Coal to
Power and Haneti Projects as
well as offering critical project
support to Katoro on Imweru
and Lubando.
Regional Distribution of Kibo’s Projects in Tanzania
VII KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
The Definitive Power Feasibility Study (DPFS) for the
Following on from the completion of the DPFS,
construction of a 300 MW thermal power station
the Definitive Mining Feasibility Study (“DMFS”)
was delivered to the Company by its consultants
for the coal mining component of the MCPP was
Tractebel Engineering in early 2016. It confirmed
delivered to the Company by mining consultants
the strong financial and operational metrics of
Minxcon and, as expected,
it confirmed the
the earlier Power Prefeasibility Study (“PPS”)
viability of the coal mine evident from the earlier
completed in 2014 with the following highlights:
Mining Prefeasibility Study (“MPS”) completed in
• Base case layout (Circulating Fluidised Bed boiler
2014. Headline financial and operational metrics
technology/ 2 X 150 MW units) identified in PPS
from the DMFS include:
confirmed as optimal design;
• IRR of 69.2% (15% improvement from 53.9%
• DPFS annual power output target of 1,840 GWh
stated in the MPS);
& average coal consumption of 1.5 million tonnes
• Payback period 2.4 years (7% Improvement from
per year confirmed;
2.6 years stated in the MPS);
• Total estimated EPC project cost well below cost
• Peak funding requirement of USD17 million
estimate stated in PPS; and
(reduced by 54% from that identified in MPFS);
• DPFS includes provision for near term expansion
• All in cost margin of 39% (Reduced from 49% in
of the power station to at least 600 MW.
the MPS (All in cost margins of above 25% are
considered healthy));
MCPP-A Complex Process
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 VIII
Kibo & SEPCO III delegations at signing of EPC contract award
for MCPP power station construction- December 2016
• Power Station coal requirements reduced by
amount of US$ 5.5 million). The contract was
23% from that identified in the MPS bringing
awarded to SEPCO III in the last quarter of
significant environmental and cost benefits; and
2016 following a positive evaluation of the EPC
• Modified Terrace Mining confirmed as most
contract bid by Kibo and Tractebel Engineering.
accurate and cost effective for the coal mine (no
It is management’s expectation that the balance
blasting/free dig).
of the US$5.5 million development cost will be
repaid to Kibo at Financial Close, subject to formal
The DMFS utilised a re-statement for the Mbeya
agreement with SEPCO.
coal Resource, of 121 Mt (up from 109 Mt) following
a successful drilling programme in late 2015. The
Kibo also engaged ABSA/Barclays as financial
restatement placed 91% of the total Resource in
adviser on the MCPP project with a mandate to
the Indicated and Measured categories which
develop an integrated financial model for the
qualified this portion for inclusion in the coal
MCPP, assist it with the finalisation of all ancillary
Reserve statement of the DMFS. The drilling
agreements and to act as lead project finance co-
results and subsequent metallurgical testing
ordinator in bringing the MCPP to Financial Close. In
results also established the coal quality was within
addition, the Company agreed re-negotiated terms
specification for the power plant and that its ash
for the payback of a loan facility from Sanderson
and sulphur content was amenable to treatment
Capital Partners Ltd converting of the total loan
to keep sulphur dioxide emissions well within
amount of GBP 1.5 million to a 2.5% equity interest
international emission standards.
in the MCPP project company subject to payment
of a conversion fee in Kibo shares to Sanderson to
In the third quarter of 2016, the MCPP received a
a value of £150,000.
significant endorsement when Kibo announced
the signing of a new agreement with China based
The Company received a major endorsement
international energy developer SEPCO III. This
of the MCPP when it signed a collaboration
agreement granted SEPCO III the right to become
agreement with multinational US based GE Electric
the sole bidder for the EPC contract to build
International Inc. towards the end of 2016. This
the power plant under terms that included the
agreement provided for GE to supply, equipment,
repayment by it of 50% of the total development
technology and services to the MCPP power
costs incurred by Kibo to date on the project. The
plant and assist with supporting the Company
terms and conditions of the agreement were
in achieving Financial Close. This relationship
subsequently fulfilled and Kibo received the first
was further cemented when an OEM contract
tranche of the MCPP development expenditure
from GE to supply key critical components for the
repayment of US$1.8 million (from a total agreed
power plant was incorporated as an integral part
Ix KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
of the awarding of the EPC contract to SEPCO III.
The IBFS integrated the results of these feasibility
The Company also submitted its mining licence
studies with the results of an integrated financial
application for the MCPP mine in the last quarter
model from ABSA/Barclays and results from the other
of 2016 and received a first draft of the integrated
ancillary studies and contracts completed to date,
financial model from Barclays/ABSA.
providing updated metrics for the integrated project.
The following are the highlights from this work:
More recently (2017) the Company confirmed that
• Total capital requirements reduced by 21.1% from
the Environmental & Social Impact Assessment
original estimate in the Integrated Prefeasibility
(ESIA) scoping reports for the MCPP mine and
Study (IPS);
power plant had been accepted by the relevant
• Indicative MCPP total revenues of approximately
Tanzanian environmental authority and that the
US$ 7.5 to US$ 8.5 billion over assumed 25-year
majority of the work proposed in these reports had
mine life;
already been completed and certified compliant.
• Indicative post tax equity IRR between 21% and
The Company now awaits final certification for the
22%, an increase of 11% on the indicative IPS;
ESIA which is expected later in 2017.
• Post tax Project IRR ranging between 14.7% and 16%;
The Company also announced completion of the
years;
Integrated Bankable Feasibility (“IBFS”) for the MCPP
• Debt pay-back period 11 to 12 years; and
in early 2017 which confirmed the strong technical,
• MCPP can be constructed and commissioned
operational and financial fundamentals for the
within 36 months.
• Indicative post-tax equity payback period: 4 to 5
project previously reported from the results of the
earlier separate mining and power feasibility studies.
MCPP – Simplified Power Plant Flowchart (Source: Tractebel)
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 x
MCPP- World Class Consultants & Partners
The Company is now awaiting a review of the terms
for the output of the MCCP coal Resource. This has
of public private partnerships in the Tanzanian
recently resulted in the signing of a Memorandum
energy sector and the restructuring of the state-
of Understanding (MOU) with Mbeya Cement
owned electricity supply company, TANESCO, by the
Limited on a reciprocal supply agreement. This
Tanzanian Government. Completion of this work
MOU, subject to definitive agreements and
which commenced at the end of 2016 is necessary
contracts, provides for the MCPP to supply coal
before Kibo can re-engage with TANESCO and
and fly ash and power to the Mbeya Cement plant
other relevant government authorities in order to
and for Kibo to source its cement and limestone
finalise a Power Purchase Agreement (“PPA”) for the
requirements for the MCPP project from the
MCPP. The PPA is the final critical path agreement
company. This MOU also represents a first step in
that needs to be in place before the project can
Kibo’s regional collaboration strategy in southern
commence Financial Close.
Tanzania to leverage the socio-economic benefits
of the MCPP and integrate them in the regional
While awaiting finalisation of a PPA, the Company
economic development of the area.
has continued to investigate additional customers
xI KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
Lake Victoria, Mwanza Region, Tanzania
Lake Victoria Projects
Imweru & Lubando
During 2016, Kibo embarked on a major initiative
to divest these two gold projects to a separate gold
focussed AIM listed company in order to release
value in them for shareholders. This initiative
resulted in the Company undertaking a reverse
takeover transaction with Opera Investments Plc
Whereby Opera acquired the Imweru and Lubando
projects from Kibo for the issue of 61 million new
shares in Opera to Kibo thereby making Kibo
the largest shareholder in Opera with an initial
shareholding of 57%. As part of the transaction,
Opera was renamed Katoro Gold PLC and was
recently admitted to AIM on the 23rd May 2017.
The AIM admission was accompanied by a placing
of £1.5 million which will be used to advance gold
mine development at Imweru.
The placing proceeds are being used by Katoro
to complete the Pre-feasibility Study (“PFS”) at
Imweru which was commenced by Kibo in 2015
with the commissioning of a Preliminary Economic
Assessment (Scoping Study). This study established
good potential for the development of the existing
Mineral Resource at Imweru to sustain a mine life
of 7-10 years and conditional on further drilling
and Resource expansion to extend the mine life by
another 6 years. As part of the preparation for the
Opera transaction, a re-statement of the 2013 gold
Mineral Resource at both Imweru and Lubando was
carried out by independent geological consultants
Minxcon in early 2017. The updated Resource
figures show a current JORC-compliant Mineral
Resource of 11.6 Mt @1.38 g/t (515,110 oz.) at Imweru
and 6.8 Mt @1.10 g/t (239,870 oz.) at Lubando.
Katoro’s focus during 2017 will be on completing
the PFS and
follow-on-Definitive Feasibility
Study (DFS) at Imweru with a view to commence
mine construction in early 2018 and begin gold
production by late 2018 to early 2019. The first
phase of work at Imweru will comprise a drill
programme with the goal of further expansion
and upgrade of the existing Mineral Resource. This
drill programme will overlap with the completion
of the PFS for Imweru to be followed, contingent
on positive results, and further funding with
completion of the full DFS. Assuming favourable
results from the PFS, Katoro will also commence
an Environmental Social Impact Assessment (ESIA)
study for the projects and begin the application
process to secure a mining licence during 2017.
In addition to the established Mineral Resources
at Imweru & Lubando, the Katoro projects also
encompass a significant number of other earlier
stage mineral licences with excellent gold discovery
potential. These offer Katoro the opportunity to
potentially expand its gold Resource inventory
in this part of northern Tanzania (Lake Victoria
Goldfields) where a number of large gold mines
are already in production e.g. Bulyanhulu and
Geita. The immediate exploration interest is in
strong gold-in-soil anomalies west of the Imweru
Mineral Resource at Sheba which are at the drill-
ready stage and will be tested as part of Katoro’s
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 xII
Katoro’s Imweru & Lubando Projects
Imweru Phase 1 Drill Plan 2017
xIII KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
medium term exploration strategy for the area.
The greater Lubando project also comprises a large
area of gold prospective exploration ground both
Morogoro Gold and Pinewood Uranium
Projects
The Company recently (February 2017) terminated
east and west of the existing Lubando Mineral
by mutual consent its joint venture agreements
Resource at Pamba and Busolwa respectively.
with Metal Tiger Plc on these projects and
Haneti Project
Kibo had planned to conduct an initial drill
programme at Haneti during 2016 to test the well-
established nickel drill targets at Mihanza and
Mwaka Hills. However, the prioritisation of funding
and other resources to its flagship development
projects meant that this could not be achieved
during the year. Kibo maintains the project in good
standing and will continue to investigate funding
options to allow this first phase of drilling to be
implemented at the earliest opportunity.
relinquished the licence portfolios back to the
Tanzanian Ministry of Energy and Minerals. This
decision reflects a decision by Kibo to focus its
resources on its development and more advanced
projects (and those of Katoro) i.e. the MCPP, Haneti,
Imweru and Lubando projects. Morogoro and
Pinewood were early stage exploration projects
and their higher risk profile was considered
not compatible with Kibo’s current project
development status and the increased resources
(financial and operational) required to be allocated
to its development projects.
Haneti showing aeromagnetic interpretation & drill targets
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 xIV
Corporate
On the corporate front the Company continued to
in October 2016. This represented a significant
boost to the Company’s cash flow and allowed
manage its funding prudently by taking advantage
it to maintain momentum behind the MCPP in
of the value in its assets, particularly the MCPP,
particular and the completion of the Integrated
to source alternative funding opportunities. In
Bankable Feasibility Study.
this regard, it continued its relationship with
Sanderson Capital Partners LTD (“Sanderson”)
In late 2016 and following the award of the EPC
by availing of a loan to the value of £1.5 million
contract to SEPCO III the Company successfully
drawn down over the period March to August
negotiated another financial arrangement with
2016 on which it negotiated a conversion to a 2.5%
Sanderson where by the Company obtained a
equity interest in the MCPP project company as
discounted loan facility based on the balance of the
settlement for this loan in September 2016. These
US$3.7 million due from SEPCO III at financial close
funds allowed the Company to complete the key
on the project. This facility provides Kibo with the
feasibility studies during the period (mining &
option of obtaining cash payments up to a value
power) as well as advancing the interrelated work
of US$2.94 million to be drawn down in scheduled
streams such as the ESIA, financial modelling, EPC
tranches up to June 2017 for which it issued Kibo
& OEM contract negotiations and PPA negotiations
shares to Sanderson to the value of US$732,036.
with the Tanzanian government. The funding
Repayment of funds drawn down to Sanderson
also allowed the Company to explore options for
will occur when Kibo receives the balance of the
the divestment of its key gold assets, Imweru &
MCPP development costs refund from SEPCO III.
Lubando which has resulted in the recent reverse
This facility has the net effect of forward selling
takeover transaction with Opera Investments Plc
the balance of the funds receivable from SEPCO III
and admission of Katoro to AIM. The Company also
at a 20% discount.
settled a small number of invoices from current
service providers in Kibo shares as well as deferring
The dilutive effect of issuing shares in connection
costs under MCPP related engagement contracts
with loan arrangement fees and supplier invoice
until Financial Close. These financial arrangements
settlements was partly off-set by issuing shares
were possible as a result of strong confidence by
from the Company’s forfeited share account
all concerned in the Company’s ability to deliver
(treasury account) where 4.09 million shares
the MCPP following the strongly positive results
were held resulting from the entry of Hume
from the mining and power feasibility studies.
Capital Securities Plc into administration during a
Company placing in February 2015.
Following the
implementation of the new
agreement with SEPCO III granting it the right
as sole bidder for the MCPP power station EPC in
exchange for refunding 50% of the development
costs, the Company received the first tranche,
to the amount of USD1.8 million, of this refund
xV KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
finanCial
statements
KiBo mininG plC
annUal finanCial statements for
the Year ended 31 deCemBer 2016
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 xVI
KIBOMINING ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
Contents
CONTENTS
CHAIRMAN’S STATEMENT
REVIEW OF ACTIVITIES
CORPORATE DIRECTORY
DIRECTORS’ REPORT
INDEPENDENT AUDITOR’S REPORT
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
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
ANNEXURE 1: HEADLINE EARNINGS PER SHARE
ANNEXURE 2: NOTICE OF THE ANNUAL GENERAL MEETING
I
III
2
4
15
17
18
19
20
21
22
23
24
34
55
56
xVII KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
Financial StatementsKIBOMINING
KIBO MINING PLC
CORPORATE DIRECTORY
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS:
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Andreas Lianos
Lukas Maree
Wenzel Kerremans
Chairman (Non-Executive)
Chief Executive Officer (Executive)
Technical Director (Executive)
Chief Financial Officer (Executive)
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY:
Noel O’Keeffe
REGISTERED OFFICE:
BUSINESS ADDRESS - IRELAND:
BUSINESS ADDRESS - TANZANIA:
27 Hatch Street Lower
Dublin 2
Ireland
Gray Office Park
Galway Retail Park
Headford Road
Galway, Ireland
Telephone: +353 91 511463
Fax +353 91 450018
Email: info@kibomining.com
th
Floor, Wing A
Amani Place
10
Ohio Street
Dar es Salaam, Tanzania
Telephone: +255 22 2127857
Fax +255 22 2126049
AUDITORS
Saffery Champness LLP
71 Queen Victoria Street
London EC4V 4BE
STOCK EXCHANGE LISTING:
London Stock Exchange: AIM - (Share code: KIBO) – Primary
Johannesburg Stock Exchange: JSE Alt X - (Share Code: KBO) – Secondary
Ireland & United Kingdom
SHARE REGISTRARS:
Capita Registrars Ltd
2 Grand Canal Square
Dublin 2
D02 A342
South Africa
Terbium Financial Services Pty Ltd (formerly Trifecta)
31 Beacon Road
North Florida 1709
Johannesburg
South Africa
PRINCIPAL BANKERS:
Allied Irish Banks Plc
Tuam Road
Galway
Ireland
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 2
2
rd
Floor
Ronaldson’s LLP
3
55 Gower Street
London WC1E 6HQ
As to Tanzanian Law:
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
CORPORATE DIRECTORY
KIBO MINING PLC
CORPORATE DIRECTORY
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS:
Christian Schaffalitzky
Chairman (Non-Executive)
BROKERS:
Louis Coetzee
Noel O’Keeffe
Andreas Lianos
Lukas Maree
Wenzel Kerremans
Chief Executive Officer (Executive)
Technical Director (Executive)
Chief Financial Officer (Executive)
Non-Executive Director
Non-Executive Director
SOLICITORS:
Beaufort Securities Limited
131 Finsbury Pavement
London EC2A 1NT
United Kingdom
As to Irish Law:
McEvoy Partners
27 Hatch Street Lower
Dublin 2
Ireland
As to English Law:
COMPANY SECRETARY:
Noel O’Keeffe
REGISTERED OFFICE:
27 Hatch Street Lower
BUSINESS ADDRESS - IRELAND:
BUSINESS ADDRESS - TANZANIA:
AUDITORS
Dublin 2
Ireland
Gray Office Park
Galway Retail Park
Headford Road
Galway, Ireland
Telephone: +353 91 511463
Fax +353 91 450018
Email: info@kibomining.com
Amani Place
th
10
Floor, Wing A
Ohio Street
Dar es Salaam, Tanzania
Telephone: +255 22 2127857
Fax +255 22 2126049
Saffery Champness LLP
71 Queen Victoria Street
London EC4V 4BE
Capita Registrars Ltd
2 Grand Canal Square
Dublin 2
D02 A342
South Africa
31 Beacon Road
North Florida 1709
Johannesburg
South Africa
Tuam Road
Galway
Ireland
PRINCIPAL BANKERS:
Allied Irish Banks Plc
STOCK EXCHANGE LISTING:
London Stock Exchange: AIM - (Share code: KIBO) – Primary
Johannesburg Stock Exchange: JSE Alt X - (Share Code: KBO) – Secondary
Ireland & United Kingdom
SHARE REGISTRARS:
UK PUBLIC RELATIONS:
UK NOMINATED ADVISER:
JSE DESIGNATED ADVISER:
ENSafrica Tanzania Attorneys
6th floor, International House
cnr. Shaaban Robert Street and Garden Avenue
PO BOX 7495
Dar es Salaam
Tanzania
RFC Ambrian Limited
Level 5, Condor House
10 St Paul’s Churchyard
London, EC4M 8AL
River Group
211 Kloof Street
Waterkloof
Pretoria, South Africa
Bell Pottinger
Holborn Gate
330 High Holborn
London WCIV 7QD
Terbium Financial Services Pty Ltd (formerly Trifecta)
DATE OF INCORPORATION:
17 January 2008
REGISTERED NUMBER:
451931
WEBSITE:
www.kibomining.com
2
3 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
3
KIBO MINING PLC
DIRECTORS’ REPORT
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The Board of Directors present their Annual Report together with the audited annual financial statements for the year
ended 31 December 2016 of Kibo Mining Plc (“the Company”) and its subsidiaries (collectively “the Group”).
The Board comprises a Non-Executive Chairman, three Executive Directors and two Non-Executive Directors. As the
Company evolves, the Board will be reviewed and expanded if necessary to ensure appropriate expertise is in place
at all times to support its business activities.
The Board is responsible for formulating, reviewing and approving the Company's strategy, budgets, major items of
capital expenditure and acquisitions. An agenda and all supporting documentation is circulated to all Directors before
each Board Meeting. Open and timely access to all information is provided to all Directors to enable them to bring
independent judgement on issues affecting the Company and facilitate them in discharging their duties.
At the end of the financial year, and at the date of this report, the board of Directors comprised:
Christian Schaffalitzky - Chairman (Non-Executive)
Louis Coetzee - Chief Executive Officer (Executive)
Andreas Lianos - Chief Financial Officer (Executive)
Noel O’Keeffe - Technical Director (Executive)
Lukas Maree (Non-Executive Director)
Wenzel Kerremans (Non-Executive Director)
Christian Schaffalitzky, BA (Mod), FIMMM, PGeo, CEng, Age 63 – Chairman (Non-Executive)
Christian Schaffalitzky has over 40 years’ experience in mineral exploration. He is currently the managing director of
Eurasia Mining Plc, an AIM company developing platinum projects in Russia. From 1984-1992 he founded and
managed the international minerals consultancy CSA now CSA Global Pty Ltd. He was also a founder of Ivernia West
Plc where he led the exploration team and was instrumental in the discovery and development of the Lisheen zinc
deposit in Ireland. More recently, he was the managing Director of Ennex International Plc an Irish quoted mineral
exploration Company, focused on zinc development projects. He has also been engaged in precious and base metal
mineral exploration and development in the former Soviet Union and until recently an independent director on the
boards of Russian companies, Raspadskaya Coal Company and Chelyabinsk Zinc.
Louis Coetzee, BA, MBA, Age 53 – Chief Executive Officer (Executive)
Louis Coetzee has over 25 years’ experience in business development, promotion and financing in both the public and
private sector. In recent years, he has concentrated on the exploration and mining arena where he has founded,
promoted and developed a number of junior mineral exploration companies based mainly on Tanzanian assets. Louis
has tertiary qualifications in law and languages, project management, supply chain management and a MBA from
Bond University (Australia) specialising in entrepreneurship and business planning and strategy. He has worked in
various project management and business development roles mostly in the mining industry throughout his career.
Between 2007 and 2009, he held the position of Vice-President, Business Development with Canadian listed Great
Basin Gold (TSX: CBG).
Noel O’Keeffe, BSc (Hons), Geology, MBA, Age 53 – Technical Director (Executive) and Company Secretary
Noel O'Keeffe has over 30 years’ experience in mineral exploration and has worked on a variety of base metal and
gold projects in Ireland, Canada, Australia and Africa. Prior to co-founding Kibo in 2008 he worked as a quality co-
ordinator with Boston Scientific (Ireland) Ltd, a multinational medical device Company. He also worked part-time for
Irish geological services Group, Aurum Exploration Ltd during 2003 and early 2004. During the mid-nineties, he was
exploration manager with Ormonde Mining Plc in Tanzania, a Company currently listed on the Irish Stock Exchange
and on AIM. Previously Noel was a senior geological consultant with BDA Consultants Limited and worked on both
government and private sector contracts. Earlier in his career, Noel worked as a geologist for Burmin Exploration and
Development Plc and for its Canadian and Australian subsidiaries.
Lukas Marthinus Maree, BLC, LLB, Age 55 – (Non-Executive)
Lukas Maree is a lawyer by profession. He has served on the boards of a number of public companies including
Goldsource Mines Limited, Africo Resources Limited and Diamondworks Limited that have made significant
successful investments in exploration projects in Africa and North America, and has more recently served as the CEO
of private investment companies Rusaf Gold Limited and Mzuri Capital Group Limited, both of which have successfully
developed and sold mineral projects in Russia and Tanzania in the last seven years. He was also a founder principal
of River Group, Designated Advisors to the Listing of Kibo on the JSE, and was responsible for its Canadian office until
his retirement from the Group in 2013 to pursue personal interests.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 4
4
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS’ REPORT
KIBO MINING PLC
DIRECTORS’ REPORT
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Wenzel Kerremans, B. Proc, LLB, LLM, Adv. Dip. Age 59 – (Non-Executive)
Wenzel Kerremans is a lawyer by profession with over 25 years’ international legal experience in mining, banking,
project finance and international tax, advising clients who have invested in exploration and mining projects in Africa.
He has also originated and successfully sold Veremo Holdings Limited a billion ton titaneferous magnetite exploration
project for the production of iron and titanium slag. Wenzel is also the principal and director of a gold, graphite and
coal exploration project in Africa.
Andreas (Andrew) Lianos, CA, ACMA, Age 52 – Chief Financial Officer (Executive)
Andrew is a chartered accountant (CA (SA)), certified management accountant (ACMA), certified internal auditor
(CIA) and JSE qualified executive who started his professional career in 1989 with Grant Thornton International.
Andrew entered the corporate finance industry in 1994 by joining Deloitte & Touche Corporate Finance. In 1996, he
joined Smith Borkum Hare/Merrill Lynch Corporate Finance, and was part of the team that founded Labyrinth
Corporate Finance during 1997. He has substantial transaction experience in the resources, food and leisure
industries. Andrew has served on the boards of a number of private and public companies. Andrew co-founded the
River Group, Kibo’s JSE Designated and Corporate Advisor and is a director of River Capital Partners Ltd. He is also
currently a director of Boudica Trust Co Limited (trading as Boudica Group). Andrew has been involved in a number
of successful cross-border restructurings and resource transactions in Canada, the Central African Republic, Sierra
Leone, Angola, Zambia, Zimbabwe, Tanzania and South Africa.
Review of Business Developments
As set out in the Chairman’s Report and review of activities, as well as continuing with its exploration program, the
Company continued to decrease its exploration ground holdings in Tanzania during the period, and furthered the
development of its feasibility studies towards mining of the identifiable viable resources.
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, and
described further below:
Financial instrument & Foreign exchange risk ;
Strategic risk;
Funding risk;
Commercial risk;
Operational risk;
Staffing and Key Personnel Risks;
Speculative Nature of Mineral Exploration and Development;
Political Stability;
Uninsurable Risks; and
Foreign investment risks including increases in taxes, royalties and renegotiation of contracts.
Financial instrument and foreign exchange risk
The Company and Group are exposed to risks arising from financial instruments held and foreign exchange
transactions entered into throughout the period. These are discussed in Note 24 to the Annual Financial Statements.
Strategic risk
Significant and increasing competition exists for mineral acquisition opportunities throughout the world. As a result
of this competition, the Company 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 Company will acquire any interest
in additional operations that would yield reserves or result in commercial mining operations. The Company expects
to undertake sufficient due diligence where warranted to help ensure opportunities are subjected to proper
evaluation.
Funding risk
In the past the Company 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.
5 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
5
The Board of Directors present their Annual Report together with the audited annual financial statements for the year
ended 31 December 2016 of Kibo Mining Plc (“the Company”) and its subsidiaries (collectively “the Group”).
The Board comprises a Non-Executive Chairman, three Executive Directors and two Non-Executive Directors. As the
Company evolves, the Board will be reviewed and expanded if necessary to ensure appropriate expertise is in place
at all times to support its business activities.
The Board is responsible for formulating, reviewing and approving the Company's strategy, budgets, major items of
capital expenditure and acquisitions. An agenda and all supporting documentation is circulated to all Directors before
each Board Meeting. Open and timely access to all information is provided to all Directors to enable them to bring
independent judgement on issues affecting the Company and facilitate them in discharging their duties.
At the end of the financial year, and at the date of this report, the board of Directors comprised:
Christian Schaffalitzky - Chairman (Non-Executive)
Louis Coetzee - Chief Executive Officer (Executive)
Andreas Lianos - Chief Financial Officer (Executive)
Noel O’Keeffe - Technical Director (Executive)
Lukas Maree (Non-Executive Director)
Wenzel Kerremans (Non-Executive Director)
Christian Schaffalitzky, BA (Mod), FIMMM, PGeo, CEng, Age 63 – Chairman (Non-Executive)
Christian Schaffalitzky has over 40 years’ experience in mineral exploration. He is currently the managing director of
Eurasia Mining Plc, an AIM company developing platinum projects in Russia. From 1984-1992 he founded and
managed the international minerals consultancy CSA now CSA Global Pty Ltd. He was also a founder of Ivernia West
Plc where he led the exploration team and was instrumental in the discovery and development of the Lisheen zinc
deposit in Ireland. More recently, he was the managing Director of Ennex International Plc an Irish quoted mineral
exploration Company, focused on zinc development projects. He has also been engaged in precious and base metal
mineral exploration and development in the former Soviet Union and until recently an independent director on the
boards of Russian companies, Raspadskaya Coal Company and Chelyabinsk Zinc.
Louis Coetzee, BA, MBA, Age 53 – Chief Executive Officer (Executive)
Louis Coetzee has over 25 years’ experience in business development, promotion and financing in both the public and
private sector. In recent years, he has concentrated on the exploration and mining arena where he has founded,
promoted and developed a number of junior mineral exploration companies based mainly on Tanzanian assets. Louis
has tertiary qualifications in law and languages, project management, supply chain management and a MBA from
Bond University (Australia) specialising in entrepreneurship and business planning and strategy. He has worked in
various project management and business development roles mostly in the mining industry throughout his career.
Between 2007 and 2009, he held the position of Vice-President, Business Development with Canadian listed Great
Basin Gold (TSX: CBG).
Noel O’Keeffe, BSc (Hons), Geology, MBA, Age 53 – Technical Director (Executive) and Company Secretary
Noel O'Keeffe has over 30 years’ experience in mineral exploration and has worked on a variety of base metal and
gold projects in Ireland, Canada, Australia and Africa. Prior to co-founding Kibo in 2008 he worked as a quality co-
ordinator with Boston Scientific (Ireland) Ltd, a multinational medical device Company. He also worked part-time for
Irish geological services Group, Aurum Exploration Ltd during 2003 and early 2004. During the mid-nineties, he was
exploration manager with Ormonde Mining Plc in Tanzania, a Company currently listed on the Irish Stock Exchange
and on AIM. Previously Noel was a senior geological consultant with BDA Consultants Limited and worked on both
government and private sector contracts. Earlier in his career, Noel worked as a geologist for Burmin Exploration and
Development Plc and for its Canadian and Australian subsidiaries.
Lukas Marthinus Maree, BLC, LLB, Age 55 – (Non-Executive)
Lukas Maree is a lawyer by profession. He has served on the boards of a number of public companies including
Goldsource Mines Limited, Africo Resources Limited and Diamondworks Limited that have made significant
successful investments in exploration projects in Africa and North America, and has more recently served as the CEO
of private investment companies Rusaf Gold Limited and Mzuri Capital Group Limited, both of which have successfully
developed and sold mineral projects in Russia and Tanzania in the last seven years. He was also a founder principal
of River Group, Designated Advisors to the Listing of Kibo on the JSE, and was responsible for its Canadian office until
his retirement from the Group in 2013 to pursue personal interests.
4
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
DIRECTORS’ REPORT
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 Company properties can be mined at a profit. Factors beyond the control of the
Company 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
Company expects that prior to a development decision, a project would be the subject of a feasibility analysis to ensure
there exists an appropriate level of confidence in its economic viability.
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 Company’s operations and its financial results. The Company 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 Company’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 Company 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 Company’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 Company.
Speculative Nature of Mineral Exploration and Development
In addition to the above there can be no assurance that the current exploration programs 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 Company to
raise additional financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an
advantageous basis. Changes in market conditions could require material write downs of the carrying value of the
Company’s assets.
Development of the Company’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 Company’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 Company 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 Company’s ability to develop the projects.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 6
6
KIBO MINING PLC
DIRECTORS’ REPORT
Uninsurable Risks
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The Company 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.
Foreign investment risks including increases in taxes, royalties and renegotiation of contracts
The Group is subject to risk arising from the ever-changing economic environment in which its subsidiaries operate,
mainly driven by the changing regulatory environment governing corporate taxation, transfer pricing and other
investment related operational activities. The Group continues to re-assess its investment decisions in order to limit
exposure to the ever-changing regulatory environment in which it operates.
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS’ REPORT
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 Company properties can be mined at a profit. Factors beyond the control of the
Company 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
Company expects that prior to a development decision, a project would be the subject of a feasibility analysis to ensure
there exists an appropriate level of confidence in its economic viability.
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 Company’s operations and its financial results. The Company 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 Company’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 Company 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 Company’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 Company.
Speculative Nature of Mineral Exploration and Development
In addition to the above there can be no assurance that the current exploration programs 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 Company to
raise additional financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an
advantageous basis. Changes in market conditions could require material write downs of the carrying value of the
Company’s assets.
Development of the Company’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 Company’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 Company 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 Company’s ability to develop the projects.
6
7 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
7
KIBO MINING PLC
DIRECTORS’ REPORT
Results
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The result for the year after providing for depreciation and taxation amounted to a loss of £3,585,416 for the year
ended 31 December 2016 (31 December 2015: Profit £177,162).
Post Statement of Financial Position events
There have been no material post reporting date events other than those stated in Note 25 to these consolidated
annual financial statements.
Directors Interests
The interests of the Directors and Company Secretary (held directly and indirectly), who held office at the date of
approval of the financial statements, in the share capital of the Company are as follows:
Ordinary Shares (held directly and indirectly)
Directors & Secretary
10/05/17
31/12/16
31/12/15
Christian Schaffalitzky
Noel O’Keeffe
Louis Coetzee
Lukas Maree
Wenzel Kerremans
Andreas Lianos
Share Options (held directly and indirectly)
2,119,842
2,291,447
6,765,996
2,934,200
376,241
6,288,633
2,119,842
2,291,447
6,765,996
2,934,200
376,241
6,288,633
2,119,842
2,291,447
6,765,996
2,934,200
376,241
6,288,633
10/05/17
31/12/2016
31/12/15
Directors & Secretary
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Andreas Lianos
700,000
2,200,000
2,000,000
700,000
700,000
2,000,000
700,000
2,200,000
2,000,000
700,000
700 000
2,000,000
700,000
2,200,000
2,000,000
700,000
700,000
2,000,000
The above share options in issue are exercisable at a price of £0.050 at any time up to 1 June 2018.
For further detail surrounding the ordinary shares and share options in issue, refer to Notes 15 and 16 of the annual
financial statements.
Transactions Involving Directors
There have been no contracts or arrangements of significance during the period in which Directors of the Company,
or their related parties, were interested other than as disclosed in Note 23 to the annual financial statements.
Directors meetings
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 year to 31 December 2016 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Director Name
Position
Christian Schaffalitzky
Louis Coetzee
Andreas Lianos
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Chairman
Chief Executive Officer
Chief Financial Officer
Technical Director
Non-Executive Director
Non-Executive Director
7
8
8
8
6
8
8
8
8
8
8
8
In terms of the Company’s 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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 8
8
Director Name
Position
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
The Company held 1 (one) Remuneration Committee meeting during the reporting period and the number of meetings
attended by each of the members during the year to 31 December 2016 were:
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS’ REPORT
Results
KIBO MINING PLC
DIRECTORS’ REPORT
Committee meetings
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The Company held 1 (one) Audit Committee meeting during the reporting period and the number of meetings
attended by each of the members during the year to 31 December 2016 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Director Name
Position
Christian Schaffalitzky
Wenzel Kerremans
Lukas Maree
Chairman (Non-Executive)
Non-Executive Director
Non-Executive Director
1
1
1
1
1
1
The result for the year after providing for depreciation and taxation amounted to a loss of £3,585,416 for the year
ended 31 December 2016 (31 December 2015: Profit £177,162).
Post Statement of Financial Position events
There have been no material post reporting date events other than those stated in Note 25 to these consolidated
annual financial statements.
Directors Interests
The interests of the Directors and Company Secretary (held directly and indirectly), who held office at the date of
approval of the financial statements, in the share capital of the Company are as follows:
Ordinary Shares (held directly and indirectly)
10/05/17
31/12/16
31/12/15
Andreas Lianos
Share Options (held directly and indirectly)
6,288,633
10/05/17
31/12/2016
31/12/15
Directors & Secretary
Christian Schaffalitzky
Noel O’Keeffe
Louis Coetzee
Lukas Maree
Wenzel Kerremans
Directors & Secretary
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Andreas Lianos
2,119,842
2,291,447
6,765,996
2,934,200
376,241
700,000
2,200,000
2,000,000
700,000
700,000
2,000,000
2,119,842
2,291,447
6,765,996
2,934,200
376,241
6,288,633
700,000
2,200,000
2,000,000
700,000
700 000
2,000,000
2,119,842
2,291,447
6,765,996
2,934,200
376,241
6,288,633
700,000
2,200,000
2,000,000
700,000
700,000
2,000,000
The above share options in issue are exercisable at a price of £0.050 at any time up to 1 June 2018.
For further detail surrounding the ordinary shares and share options in issue, refer to Notes 15 and 16 of the annual
financial statements.
Transactions Involving Directors
There have been no contracts or arrangements of significance during the period in which Directors of the Company,
or their related parties, were interested other than as disclosed in Note 23 to the annual financial statements.
Directors meetings
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 year to 31 December 2016 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Christian Schaffalitzky
Louis Coetzee
Andreas Lianos
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Chairman
Chief Executive Officer
Chief Financial Officer
Technical Director
Non-Executive Director
Non-Executive Director
7
8
8
8
6
8
8
8
8
8
8
8
In terms of the Company’s 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.
Christian Schaffalitzky
Wenzel Kerremans
Lukas Maree
Chairman (Non-Executive)
Non-Executive Director
Non-Executive Director
1
1
-
1
1
1
The Company held 1 (one) Governance Committee meeting during the reporting period and the number of meetings
attended by each of the members during the year to 31 December 2016 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Director Name
Position
Christian Schaffalitzky
Wenzel Kerremans
Lukas Maree
Significant Shareholdings
Chairman (Non-Executive)
Non-Executive Director
Non-Executive Director
1
1
1
1
1
1
The Company has been informed that, in addition to the interests of the Directors, at 31 December 2016 and at the
date of this report, the following shareholders own 3% or more beneficial interest, either direct or indirect, of the
issued share capital of the Company, which is considered significant for disclosure purposes in the annual financial
statements:
Percentage of issued share capital
12/05/2017
31/12/2016
31/12/15
Sanderson Capital Partners Ltd
* Beneficial interest was below 3%, and thus considered not to be a significant shareholder under the regulatory rules.
3.02%
*
*
Director Name
Position
Subsidiary Undertakings
Details of the Company’s subsidiary undertakings are set out in Note 22 to the annual financial statements.
Political Donations
During the period, the Group made no charitable or political contributions (2015: £ nil).
8
9 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
9
KIBO MINING PLC
DIRECTORS’ REPORT
Going Concern
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
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.
The capital-raising through loan facility agreed with Sanderson Capital Partners Ltd prior to year-end has provided
further cash resources in order to ensure prospecting activities are continued as planned without interruption.
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.
Environmental responsibility
The Company 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.
Dividends
There have been no dividends declared or paid during the current financial period (2015: £ nil).
Corporate Governance Policy
The Board is aware of the importance to conform to its statutory responsibilities and industry good practice in relation
to corporate governance of the Group.
The Board is accountable to the shareholders for delivery of sustained value growth. In order to support its duties
and responsibilities the Board implements control procedures that assess and manage risk and ensure robust
financial and operational management within the Company. The principal risks that the Company is exposed to can
be classified under the general headings of exploration risk, commodity risk, price risk, currency risk and political
risk.
The Board also sets the Company’s core values and ethical standards of business conduct ensuring these are
effectively communicated to all staff and are monitored continuously by the Board.
The Board sets the Company’s strategy and monitors its implementation through management and financial
performance reviews. It also works to ensure that adequate resources are available to implement strategy in a timely
manner.
The Company subscribes to the values of good corporate governance at all levels and is committed to conduct business
with discipline, integrity and social responsibility. The Board of Directors is firmly committed to promoting Kibo
Mining Plc’s adherence to the principles contained in the King Code on Corporate Governance. 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.
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 Chief Executive Officer 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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 10
10
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
DIRECTORS’ REPORT
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS’ REPORT
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.
The capital-raising through loan facility agreed with Sanderson Capital Partners Ltd prior to year-end has provided
further cash resources in order to ensure prospecting activities are continued as planned without interruption.
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.
Environmental responsibility
The Company 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.
Dividends
There have been no dividends declared or paid during the current financial period (2015: £ nil).
Corporate Governance Policy
The Board is aware of the importance to conform to its statutory responsibilities and industry good practice in relation
to corporate governance of the Group.
The Board is accountable to the shareholders for delivery of sustained value growth. In order to support its duties
and responsibilities the Board implements control procedures that assess and manage risk and ensure robust
financial and operational management within the Company. The principal risks that the Company is exposed to can
be classified under the general headings of exploration risk, commodity risk, price risk, currency risk and political
risk.
manner.
The Board sets the Company’s strategy and monitors its implementation through management and financial
performance reviews. It also works to ensure that adequate resources are available to implement strategy in a timely
The Company subscribes to the values of good corporate governance at all levels and is committed to conduct business
with discipline, integrity and social responsibility. The Board of Directors is firmly committed to promoting Kibo
Mining Plc’s adherence to the principles contained in the King Code on Corporate Governance. 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.
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.
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 are Christian Schaffalitzky, Lukas Maree and Wenzel Kerremans.
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;
monitoring the integrity of the group’s integrated reporting and all factors and risks that may impact on
reporting;
annually reviewing the expertise, appropriateness and experience of the finance function;
annually nominating the external auditors for appointment by the shareholders;
reviewing developments in governance and best practice;
foster and improve open communication and contact with relevant stakeholders of the Group; and
assessing the external auditor’s independence and determining their remuneration.
The audit committee further sets the principles for recommending the external auditors for non-audit services use.
The audit committee has satisfied itself of the suitability of the chief financial officer, and that the chief financial officer
holds the necessary expertise and has the relevant experience.
The Board also sets the Company’s core values and ethical standards of business conduct ensuring these are
effectively communicated to all staff and are monitored continuously by the Board.
The committee met once during the current year as there was no need to review its strategy.
Remuneration Committee
The role of Chairman and Chief Executive Officer are not held by the same Director. The Chairman is a non-executive
The committee met once during the current year as there was no need to review its strategy.
The members of the remuneration committee are Christian Schaffalitzky, Wenzel Kerremans and Lukas Maree.
The purpose of the remuneration committee is to discharge the responsibilities of the board relating to all
compensation, including equity compensation of the Company’s executives. The remuneration committee establishes
and administers the Company’s executive remuneration with the broad objective of aligning executive remuneration
with Company performance and shareholder interests, setting remuneration standards aimed at attracting, retaining
and motivating the executive team, linking individual pay with operational and Company performance in relation to
strategic objectives; and evaluating compensation of executives including approval of salary, equity and incentive-
based awards.
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.
10
11 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
11
KIBO MINING PLC
DIRECTORS’ REPORT
Governance Committee
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The members of the governance committee are Christian Schaffalitzky, Lukas Maree and Wenzel Kerremans. The
committee only met once during the current year as there was no need 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:
monitor the compliance of the Group with legal requirements and the Group’s Code of Ethics; and
monitoring the integrity of the group’s integrated reporting and all factors and risks that may impact on
reporting.
Internal Audit
The Company does not have an internal audit function. Currently the operations of the Group do 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.
Health, Safety and Environmental Policy
The Group is committed to high standards of Health, Safety and Environmental performance across our business. Our
goal is to protect people, minimize harm to the environment, integrate biodiversity considerations and reduce
disruption to our neighbouring communities. We seek to achieve continuous improvement in our Health, Safety and
Environmental performance.
Corporate Social Responsibility Policy (CSR)
The Group’s policy is to conduct all our business operations to best industry standards and to behave in a socially
responsible manner. Our goal is to behave ethically and with integrity and to respect cultural, national and religious
diversity.
Governance of IT
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
Integrated Reporting is defined 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 its sub-committees are in the process of assessing the principles and practices of integrated reporting and
sustainability reporting 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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 12
12
DIRECTORS’ REPORT
Governance Committee
These include:
Internal Audit
reporting.
The Company does not have an internal audit function. Currently the operations of the Group do 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.
Health, Safety and Environmental Policy
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
Integrated Reporting is defined 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 its sub-committees are in the process of assessing the principles and practices of integrated reporting and
sustainability reporting 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.
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
DIRECTORS’ REPORT
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Statement of Directors Responsibility
The members of the governance committee are Christian Schaffalitzky, Lukas Maree and Wenzel Kerremans. The
committee only met once during the current year as there was no need to review its strategy.
The Directors are responsible for preparing the Group and Company financial statements in accordance with
applicable Laws and Regulations.
The Governance Committee has set out its roles and responsibilities within its charter and ensured that it is aligned
to good financial governance principles.
monitor the compliance of the Group with legal requirements and the Group’s Code of Ethics; and
monitoring the integrity of the group’s integrated reporting and all factors and risks that may impact on
Irish 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 (IFRS) as adopted by the European Union (EU IFRS) and
have elected to prepare the Company financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU IFRS), as applied in accordance with the provisions of the
Companies Act 2014.
The Group is committed to high standards of Health, Safety and Environmental performance across our business. Our
goal is to protect people, minimize harm to the environment, integrate biodiversity considerations and reduce
disruption to our neighbouring communities. We seek to achieve continuous improvement in our Health, Safety and
Environmental performance.
Corporate Social Responsibility Policy (CSR)
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 Group’s policy is to conduct all our business operations to best industry standards and to behave in a socially
responsible manner. Our goal is to behave ethically and with integrity and to respect cultural, national and religious
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.
diversity.
Governance of IT
The Directors confirm they have complied with the above requirements in preparing these accounts.
The Directors are responsible for keeping proper accounting records 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 Act 2014, 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 6 (six) Directors, comprising 3 (three) executive Directors and 3 (three) non-executive Directors. The
Board met formally on 8 (eight) occasions during the year ended 31 December 2016. 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.
12
13 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
13
KIBO MINING PLC
DIRECTORS’ REPORT
Accounting records
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The measures taken by the Directors to ensure compliance with the requirements in Sections 281 to 285 of the
Companies Act 2014, 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
Kolonakiou, 37, Linopetra, P.C. 4103, Limmasol.
Auditors
The auditors, Saffery Champness LLP, have been re-appointed as the auditors of the Company, and have indicated
their willingness to continue in office in accordance with section 382(2) of the Companies Act 2014.
On behalf of the Board
Christian Schaffalitzky
________________________
Date:
26 May 2017
Noel O’Keeffe
________________________
Date:
26 May 2017
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 14
14
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
DIRECTORS’ REPORT
Accounting records
The measures taken by the Directors to ensure compliance with the requirements in Sections 281 to 285 of the
Companies Act 2014, 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
Kolonakiou, 37, Linopetra, P.C. 4103, Limmasol.
Auditors
The auditors, Saffery Champness LLP, have been re-appointed as the auditors of the Company, and have indicated
their willingness to continue in office in accordance with section 382(2) of the Companies Act 2014.
On behalf of the Board
Christian Schaffalitzky
________________________
Date:
26 May 2017
Noel O’Keeffe
________________________
Date:
26 May 2017
We have audited the Group and Company financial statements of Kibo Mining Plc for the year ended 31 December
2016 which comprise the 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, Summary of
Significant Accounting Policies and the related notes on pages 34 to 54. The financial reporting framework that has
been applied in their preparation is Irish law and International Financial Reporting Standards (IFRS) as adopted by
the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies
Act 2014. 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 an Auditors’ 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 and 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
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with
Companies Act 2014. Our responsibility is to audit and express an opinion on the financial statements in accordance
with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are appropriate to the Group and Company's
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we
read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware
of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
the financial statements give a true and fair view of the state of affairs of the Group and Company as at 31
December 2016 and of the Group’s loss for the year then ended; and
the Group financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union; and
the Company financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union and as applied in accordance with the provisions of the Companies Act 2014; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2014.
Emphasis of Matter
In forming our opinion on the financial statements, which is not modified, we considered the adequacy of disclosures
made in Notes 11, 13 and 22 to the financial statements concerning the valuation of intangible assets, and investments
in Group undertakings. The realisation of intangible assets of £17,596,105 (2015: £17,596,105), amounts due from
Group undertakings of £26,998,867 (2015: £27,712,269) and investments in Group undertakings of £1,700,000
(2015: £1,700,000) included in the Company Statement of Financial Position are dependent on the economic
exploitation of gold and coal reserves including the ability of the Group to raise sufficient finance to develop these
projects.
14
15 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
15
KIBO MINING PLC
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Matters on which we are required to report by the Companies Act 2014
We have obtained all the information and explanations which we consider necessary for the purposes of our
audit.
In our opinion proper accounting records 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you
if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made.
Richard Collis
Statutory auditor
Saffery Champness LLP
For and on behalf of
Saffery Champness
71 Queen Victoria Street
London EC4V 4BE
Date: 26 May 2017
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 16
16
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS
KIBO MINING PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Matters on which we are required to report by the Companies Act 2014
audit.
We have obtained all the information and explanations which we consider necessary for the purposes of our
In our opinion proper accounting records have been kept by the Company.
The Company Statement of Financial Position is in agreement with the books of account.
Matters on which we are required to report by exception
In our opinion the information given in the Directors’ Report is consistent with the financial statements.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you
if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made.
Richard Collis
Statutory auditor
Saffery Champness LLP
For and on behalf of
Saffery Champness
71 Queen Victoria Street
London EC4V 4BE
Date: 26 May 2017
All figures are stated in Sterling
Continuing operations
Revenue
Administrative expenses
Capital raising fees
Net reversal of impairment of intangible assets
Exploration expenditure
Operating loss
Investment and other income
(Loss)/ profit on ordinary activities before tax
(Loss)/ profit
Taxation
for the period
Other comprehensive gain:
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Other Comprehensive gain for the period net of tax
Adjustment arising from change in non-controlling interest
Total comprehensive (loss)/ profit for the period
(Loss)/ profit for the period
Attributable to the owners of the parent
Attributable to the non-controlling interest
Total comprehensive (loss)/ profit for the period
Attributable to the owners of the parent
Attributable to the non-controlling interest
(Loss)/ Earnings Per Share
Basic (loss)/ earnings per share
Diluted (loss)/ earnings per share
GROUP
31 December
2016
Note
Audited
£
18,039
(1,653,152)
(1,648,004)
-
(1,716,967)
(5,000,084)
1,414,668
(3,585,416)
(3,585,416)
-
99,128
1,527,515
1,626,643
(1,958,773)
(3,585,416)
(3,611,496)
26,080
(1,986,288)
(1,984,853)
26,080
(0.010)
(0.010)
2
16
11
3
4
7
20
9
9
31 December
2015
Audited
£
44,181
(1,791,358)
-
3,182,240
(1,454,216)
(19,153)
196,315
177,162
-
177,162
16,366
-
16,366
193,528
177,162
-
-
193,528
-
-
0.001
0.001
All activities derive from continuing operations. All profits and total comprehensive profit for the period are
attributable to the owners of the Company.
The Group has no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income.
The accompanying notes on pages 34 - 54 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 26 May 2017 and signed on its behalf by:
On behalf of the Board
16
Christian Schaffalitzky
________________________
Noel O’Keeffe
________________________
17
17 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
KIBO MINING PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
All figures are stated in Sterling
Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Total 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 account
Treasury shares
Share based payment reserve
Translation reserve
Attributable to equity holders of the parent
Retained deficit
Total Equity
Non-controlling interest
Liabilities
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Total Equity and Liabilities
GROUP
31 December
2016
Audited
£
Note
31 December
2015
Audited
£
10
11
13
14
15
15
15
16
17
18
19
20
21
9,107
17,596,105
17,605,212
7,182
17,596,105
17,603,287
50,633
382,339
432,972
550,692
189,435
740,127
18,038,184
18,343,414
13,603,965
27,318,262
-
514,279
(285,491)
(23,625,367)
17,525,648
(1,435)
17,524,213
13,210,288
25,782,519
(44,464)
514,279
(384,619)
17,536,617
(21,541,386)
-
17,536,617
146,380
251,928
115,663
513,971
18,038,184
306,797
500,000
-
806,797
18,343,414
The accompanying notes on pages 34 - 54 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 26 May 2017 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
________________________
Noel O’Keeffe
________________________
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 18
18
GROUP
31 December
2016
Audited
31 December
2015
Audited
£
9,107
17,596,105
17,605,212
7,182
17,596,105
17,603,287
50,633
382,339
432,972
550,692
189,435
740,127
18,038,184
18,343,414
13,603,965
27,318,262
-
514,279
(285,491)
(23,625,367)
17,525,648
(1,435)
13,210,288
25,782,519
(44,464)
514,279
(384,619)
17,536,617
(21,541,386)
-
17,524,213
17,536,617
146,380
251,928
115,663
513,971
306,797
500,000
806,797
-
18,038,184
18,343,414
10
11
13
14
15
15
15
16
17
18
19
20
21
All figures are stated in Sterling
Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Total 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 account
Treasury shares
Share based payment reserve
Retained deficit
Total Equity
Non-controlling interest
Liabilities
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Total Equity and Liabilities
Translation reserve
Attributable to equity holders of the parent
Christian Schaffalitzky
________________________
Noel O’Keeffe
________________________
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
KIBO MINING PLC
COMPANY STATEMENT OF FINANCIAL POSITION
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
All figures are stated in Sterling
Note
£
Non-Current Assets
Investments in group undertakings
Trade and other receivables
Total 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
Treasury shares
Share based payment reserve
Translation reserves
Total Equity
Retained deficit
Liabilities
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total liabilities
Total Equity and Liabilities
Company
31 December
2016
Audited
£
1,700,000
26,998,867
28,698,867
31 December
2015
Audited
£
1,700,000
27,712,269
29,412,269
690
22,082
22,772
523,104
3,383
526,487
28,721,639
29,938,756
13,603,965
27,318,262
-
514,279
47,430
(13,164,891)
28,319,045
13,210,288
25,782,519
(44,464)
514,279
52,499
29,271,864
(10,243,257)
35,003
251,928
115,663
402,594
28,721,639
166,892
500,000
-
666,892
29,938,756
22
13
13
14
15
15
15
16
17
19
20
21
The accompanying notes on pages 34 - 54 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 26 May 2017 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
________________________
Noel O’Keeffe
________________________
The accompanying notes on pages 34 - 54 form integral part of these financial statements.
The financial statements were approved by the Board of Directors on 26 May 2017 and signed on its behalf by:
On behalf of the Board
18
19 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
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KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
CONSOLIDATED STATEMENT OF CASH FLOWS
All figures are stated in Sterling
Cash flows from operating activities
(Loss)/ profit for the period before taxation
Adjustments for:
Foreign exchange gain
Depreciation on property, plant and equipment
Investment income
Bargain purchase from business combinations
Loss on disposal of subsidiaries
Impairment of Goodwill recognised
Provisions
Liabilities settled in shares
Net reversal of impairment
Movement in working capital
Decrease/ (Increase) in debtors
(Decrease)/ Increase in creditors
Net cash outflows from operating activities
Cash flows from financing activities
Proceeds of issue of share capital
Repayment of borrowings
Proceeds from borrowings
Net cash proceeds from financing activities
Investment income
Cash flows from investing activities
Net cash flow from acquisition of subsidiaries
Net cash used in investing activities
Purchase of property, plant and equipment
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of the period
GROUP
31 December
2016
Audited
£
Notes
31 December
2015
Audited
£
(3,585,416)
124,884
8,228
(1,815)
-
-
-
115,663
1,648,004
-
(1,690,452)
500,059
(160,417)
339,642
(1,350,810)
-
(200,000)
1,751,928
1,815
1,553,743
(1,000)
(9,029)
(10,029)
192,904
189,435
382,339
177,162
16,366
21,685
(2,890)
(193,425)
5,762
20,057
-
596,287
(2,541,236)
(3,182,240)
(539,135)
(472,444)
66,691
(3,013,680)
2,453,286
-
500,000
2,955,176
2,890
61,492
61,492
-
2,988
186,447
189,435
10
3
3
4
21
16
11
13
19
15
3
12
14
The accompanying notes on pages 34 - 54 form an integral part of these financial statements.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 22
22
Cash flows from operating activities
(Loss)/ profit for the period before taxation
Adjustments for:
Foreign exchange gain
Investment income
Depreciation on property, plant and equipment
Bargain purchase from business combinations
Loss on disposal of subsidiaries
Impairment of Goodwill recognised
Provisions
Liabilities settled in shares
Net reversal of impairment
Movement in working capital
Decrease/ (Increase) in debtors
(Decrease)/ Increase in creditors
Net cash outflows from operating activities
Cash flows from financing activities
Proceeds of issue of share capital
Repayment of borrowings
Proceeds from borrowings
Net cash proceeds from financing activities
Investment income
Cash flows from investing activities
Net cash flow from acquisition of subsidiaries
Net cash used in investing activities
Purchase of property, plant and equipment
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of the period
GROUP
31 December
2016
Audited
£
31 December
2015
Audited
£
Notes
177,162
16,366
21,685
(2,890)
(193,425)
5,762
20,057
-
596,287
(2,541,236)
(3,182,240)
(539,135)
(472,444)
66,691
(3,013,680)
(3,585,416)
124,884
8,228
(1,815)
115,663
1,648,004
(1,690,452)
500,059
(160,417)
339,642
(1,350,810)
-
-
-
-
-
(200,000)
1,751,928
1,815
1,553,743
2,453,286
-
500,000
2,955,176
2,890
(1,000)
(9,029)
(10,029)
192,904
189,435
382,339
61,492
61,492
-
2,988
186,447
189,435
10
3
3
4
21
16
11
13
19
15
3
12
14
The accompanying notes on pages 34 - 54 form an integral part of these financial statements.
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
CONSOLIDATED STATEMENT OF CASH FLOWS
COMPANY STATEMENT OF CASH FLOWS
All figures are stated in Sterling
All figures are stated in Sterling
Cash flows from operating activities
Notes
Loss for the period before taxation
Adjusted for:
Liabilities settled in shares
Provisions
Foreign exchange gain
Movement in working capital
Decrease/ (Increase) in debtors
(Decrease)/ Increase in creditors
Net cash outflows from operating activities
Cash flows from financing activities
Proceeds of issue of share capital
Repayment of borrowings
Net cash proceeds from financing activities
Proceeds from borrowings
Cash flows from investing activities
Net cash used in investing activities
Cash advances to Group Companies
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of the period
16
21
13
19
15
13
14
COMPANY
31 December
2016
Audited
£
(2,921,634)
1,648,004
115,663
20,789
(1,137,178)
522,414
(131,867)
390,547
(746,631)
-
(200,000)
1,751,928
1,551,928
(786,598)
(786,598)
18,699
3,383
22,082
31 December
2015
Audited
£
(1,482,910)
515,897
-
(955,453)
11,559
(522,445)
(409,221)
113,224
(1,364,674)
2,453,286
-
2,953,286
500,000
(1,664,804)
(1,664,804)
(76,192)
79,575
3,383
The accompanying notes on pages 34 - 54 form an integral part of these financial statements.
22
23 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
23
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Information
Fair value determination
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 (IFRS) 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 2014 which permits a Company that
publishes its Company and Group financial statements together, to take advantage of the exemption in Section 293 of
the Companies Act 2014, from presenting to its members its Company Income Statement and related notes that form
part of the approved Company financial statements.
The IFRS 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 2016.
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
ii) Trade and other receivables
The Group and Company financial statements are prepared on the historical cost basis, except for the measurement
of certain financial instruments which is measured at fair value. The accounting policies have been applied
consistently by Group entities, except for the adoption of new standards and interpretations which became effective
in the current year. The Group and Company financial statements have been prepared on a going concern basis as
explained on page
Use of Estimates and Judgements
10
.
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.
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets held by the group is the current bid price. The
carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the group for similar financial instruments.
A number of the group’s accounting policies and disclosures require the determination of fair value, for both financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure
purposes based on the following methods. Where applicable, further information about the assumptions made in
determining fair values is disclosed in the notes specific to that asset or liability.
i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on market
values. The market value of property is the estimated amount for which a property could be exchanged on the date of
valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein
the parties had each acted knowledgeably, prudently and without compulsion. The fair value of items of plant,
equipment, fixtures and fittings is based on the market approach and cost approaches using quoted market prices for
similar items when available, and replacement cost when appropriate.
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the
market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
iii) Share-based payment transactions
The fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include
share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average
historic volatility, adjusted for changes expected due to publicly available information), weighted average expected
life of the instrument (based on the rules of the share incentive scheme), expected dividends, and the risk-free interest
rate (based on government bonds). Service and non-market performance conditions attached to the transactions are
not taken into account in determining fair value.
Residual values and useful lives of property, plant and equipment
The useful economic lives, depreciation method and residual values of items of property, plant and equipment and
tangible assets are estimated annually. The actual lives, depreciation method and residual values may vary depending
on a variety of factors and circumstances.
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.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable and represents the amounts
receivable for goods and services provided in the normal course of business, net of trade discounts and volume
rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method.
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.
25
The Group’s 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.
Recoverability of group loans in the parent Company
The realisation of amounts due from Group undertakings is dependent on the discovery of economic reserves
including the ability of the Group to raise sufficient finance to develop the projects in order to settle the group loan
balance receivable.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 24
24
Exploration and evaluation expenditure;
Recoverability of group loans in the parent Company;
Fair value determination;
Residual values and useful lives of property, plant and equipment; and
Taxation.
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:
Exploration and evaluation expenditure
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Fair value determination
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets held by the group is the current bid price. The
carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the group for similar financial instruments.
A number of the group’s accounting policies and disclosures require the determination of fair value, for both financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure
purposes based on the following methods. Where applicable, further information about the assumptions made in
determining fair values is disclosed in the notes specific to that asset or liability.
i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on market
values. The market value of property is the estimated amount for which a property could be exchanged on the date of
valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein
the parties had each acted knowledgeably, prudently and without compulsion. The fair value of items of plant,
equipment, fixtures and fittings is based on the market approach and cost approaches using quoted market prices for
similar items when available, and replacement cost when appropriate.
ii) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the
market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
iii) Share-based payment transactions
The fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include
share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average
historic volatility, adjusted for changes expected due to publicly available information), weighted average expected
life of the instrument (based on the rules of the share incentive scheme), expected dividends, and the risk-free interest
rate (based on government bonds). Service and non-market performance conditions attached to the transactions are
not taken into account in determining fair value.
Residual values and useful lives of property, plant and equipment
The useful economic lives, depreciation method and residual values of items of property, plant and equipment and
tangible assets are estimated annually. The actual lives, depreciation method and residual values may vary depending
on a variety of factors and circumstances.
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.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable and represents the amounts
receivable for goods and services provided in the normal course of business, net of trade discounts and volume
rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method.
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.
25 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
25
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
The consolidated financial statements comprise the financial statements of Kibo Mining Plc and its subsidiaries for
the year ended 31 December 2016, over which the Company has control.
Control is achieved when the Company:
has the power over the investee;
is exposed, or has rights, to variance return from its involvement with the investee; and
has the ability to use its power to affect its returns.
Intangible Assets
activities.
Intangible assets comprise the acquisition of rights to explore in relation to the Group’s exploration and evaluation
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
The Company reassesses whether or not it controls an investee if facts and circumstance indicate the there are
changes to one or more of the three elements of control listed above.
period.
Joint Arrangements
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.
Joint arrangements are arrangements in which the group has joint control, established by contracts requiring
unanimous consent for decisions on the activities that significantly affect the arrangements’ returns. They are
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Joint operation: when the group has rights to the assets and obligations for the liabilities relating to an
arrangement, each of its assets and liabilities, including its share of those held or incurred jointly, are accounted
classified and accounted for as follows:
for in relation to the joint operation;
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.
Joint venture: when the group has rights only to the net assets of the arrangements, its interest is accounted for
using the equity method, similar to the accounting treatment for associates.
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.
includes:
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.
Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity
transactions.
Upon the loss of control, the Company derecognises the assets and liabilities of the subsidiary, any non-controlling
interests and the other components of equity related to the subsidiary. Any resulting gain or loss is recognised in
profit or loss. If the Company retains any interest in the previous subsidiary, such interest is measured at fair value at
the date that control is lost.
Any gain from the acquisition of a subsidiary or gain/loss from the disposal of subsidiary will be recognised through
profit and loss in the current financial period.
Goodwill
Goodwill arising from the acquisition of a subsidiary represents the excess of the cost of the acquisition over the
Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary
recognised at the date of acquisition.
Goodwill is initially measured at cost and is subsequently measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment on an annual basis.
The company carries its investments in joint ventures at cost less accumulated impairment losses. The cost of
investments in joint ventures is the fair value at the date of acquisition or the fair value at the date of loss of control
of a former subsidiary where the company retains a joint venture interest in the former subsidiary.
Investments in joint ventures are accounted for using the equity method and are recognised initially at cost. Equity-
accounted income represents the group’s proportionate share of profits of those entities.
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
• 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.
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.
Intangible assets all relate to exploration and evaluation expenditure which are carried at cost with an indefinite
useful life and therefore are reviewed for impairment annually and when there are indicators 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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 26
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27
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Consolidation
Intangible Assets
The consolidated financial statements comprise the financial statements of Kibo Mining Plc and its subsidiaries for
the year ended 31 December 2016, over which the Company has control.
Intangible assets comprise the acquisition of rights to explore in relation to the Group’s exploration and evaluation
activities.
Control is achieved when the Company:
has the power over the investee;
is exposed, or has rights, to variance return from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstance indicate the there are
changes to one or more of the three elements of control listed above.
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.
Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity
transactions.
Upon the loss of control, the Company derecognises the assets and liabilities of the subsidiary, any non-controlling
interests and the other components of equity related to the subsidiary. Any resulting gain or loss is recognised in
profit or loss. If the Company retains any interest in the previous subsidiary, such interest is measured at fair value at
the date that control is lost.
Any gain from the acquisition of a subsidiary or gain/loss from the disposal of subsidiary will be recognised through
profit and loss in the current financial period.
Goodwill
Goodwill arising from the acquisition of a subsidiary represents the excess of the cost of the acquisition over the
Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary
recognised at the date of acquisition.
Goodwill is initially measured at cost and is subsequently measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment on an annual basis.
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.
Joint Arrangements
Joint arrangements are arrangements in which the group has joint control, established by contracts requiring
unanimous consent for decisions on the activities that significantly affect the arrangements’ returns. They are
classified and accounted for as follows:
Joint operation: when the group has rights to the assets and obligations for the liabilities relating to an
arrangement, each of its assets and liabilities, including its share of those held or incurred jointly, are accounted
for in relation to the joint operation;
Joint venture: when the group has rights only to the net assets of the arrangements, its interest is accounted for
using the equity method, similar to the accounting treatment for associates.
The company carries its investments in joint ventures at cost less accumulated impairment losses. The cost of
investments in joint ventures is the fair value at the date of acquisition or the fair value at the date of loss of control
of a former subsidiary where the company retains a joint venture interest in the former subsidiary.
Investments in joint ventures are accounted for using the equity method and are recognised initially at cost. Equity-
accounted income represents the group’s proportionate share of profits of those entities.
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.
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.
Intangible assets all relate to exploration and evaluation expenditure which are carried at cost with an indefinite
useful life and therefore are reviewed for impairment annually and when there are indicators 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.
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27 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
27
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment
Financial assets
Income Tax
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is
impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events had a
negative effect on the estimated future cash flows for that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between
its carrying amount, and the present value of the estimated future cash flows discounted at the original effective
interest rate.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in the profit or loss.
Non-financial assets
the reporting date.
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).
to pay the related dividend is recognised.
Employee benefits
Defined contribution plans
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 is stated at cost, less accumulated depreciation.
Cost includes expenditure that is directly attributable to the acquisition of the items of property, plant and equipment.
The cost of self-constructed items of property, plant and equipment includes the cost of materials and direct labour,
any other costs directly attributable to bringing the items of property, plant and equipment to a working condition
for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are
located.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
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 & fixtures at 12.5% straight line;
-
-
-
- Motor vehicles at 25% straight line; and
I.T. Equipment at 20% straight line
-
Depreciation methods, useful lives and residual values are reviewed at each reporting date. Useful lives are affected
by technology innovations, maintenance programmes and future economic benefits. Residual value assessments
consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
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 2016 28
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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.
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
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
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods
during which related services are rendered by employees. Pre-paid contributions are recognised as an asset to the
extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan
that are made more than 12 months after the end of the period in which the employees render the service are
discounted to their present value.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonuses or profit-sharing plans if
the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee and the obligation can be estimated reliably.
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.
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Impairment
Financial assets
Income Tax
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is
impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events had a
negative effect on the estimated future cash flows for that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between
its carrying amount, and the present value of the estimated future cash flows discounted at the original effective
interest rate.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in the profit or loss.
Non-financial assets
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 is stated at cost, less accumulated depreciation.
Cost includes expenditure that is directly attributable to the acquisition of the items of property, plant and equipment.
The cost of self-constructed items of property, plant and equipment includes the cost of materials and direct labour,
any other costs directly attributable to bringing the items of property, plant and equipment to a working condition
for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are
located.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
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 & fixtures at 12.5% straight line;
- Motor vehicles at 25% straight line; and
I.T. Equipment at 20% straight line
Depreciation methods, useful lives and residual values are reviewed at each reporting date. Useful lives are affected
by technology innovations, maintenance programmes and future economic benefits. Residual value assessments
consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
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.
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.
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.
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods
during which related services are rendered by employees. Pre-paid contributions are recognised as an asset to the
extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan
that are made more than 12 months after the end of the period in which the employees render the service are
discounted to their present value.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonuses or profit-sharing plans if
the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee and the obligation can be estimated reliably.
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.
28
29 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
29
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Group companies
Financial Instruments
Non-derivative financial assets
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.
Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the
lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction
of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted
for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is
confirmed.
Finance income and expense
Finance income comprises interest income on funds invested, dividend income, gains on the disposal of available-for-
sale financial assets, and changes in the fair value of financial assets at fair value through profit or loss. Interest income
is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit
or loss on the date that the group’s right to receive payment is established, which in the case of listed securities is the
ex-dividend date.
Finance expenses comprise interest expense on borrowings, unwinding of discount on provisions, changes in the fair
value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and losses
on forward exchange contracts that are recognised in profit or loss. All borrowing costs are recognised in profit or
loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 30
30
31
The group initially recognises loans and receivables on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the transaction date at
which the group becomes a party to the contractual provisions of the instrument.
The group derecognises a financial asset when the contractual right to the cash flows from the asset expires, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets
that are created or retained by the group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the group has a legal right to offset the amounts and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
The group classifies non-derivative financial assets into the following categories: financial assets at fair value, financial
assets at amortised cost, or loans and receivables.
Financial assets at amortised cost
A financial asset is classified at amortised cost if the asset is held within a business model whose objective is to hold
assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise, on specific
dates, to cash flows that are solely payments of principal and interest on principal amount outstanding. Financial
assets at amortised cost are initially measured at fair value plus any directly attributable transaction cost. Subsequent
to initial recognition, these financial assets are measured at amortised cost using the effective interest method, less
any impairment losses.
Loans and receivables
Loans and receivables comprise instalment sale assets and trade and other receivables. Cash and cash equivalents
comprise cash balances and call deposits with original maturities of three months or less.
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.
Non-derivative financial liabilities
The group initially recognises debt securities issued and subordinated liabilities on the date that they are originated.
All other financial liabilities are recognised initially on the transaction date at which the group becomes a party to the
contractual provisions of the instrument.
The group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest
The group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, and trade and
method.
other payables.
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Financial Instruments
Non-derivative financial assets
The group initially recognises loans and receivables on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the transaction date at
which the group becomes a party to the contractual provisions of the instrument.
The group derecognises a financial asset when the contractual right to the cash flows from the asset expires, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets
that are created or retained by the group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the group has a legal right to offset the amounts and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
The group classifies non-derivative financial assets into the following categories: financial assets at fair value, financial
assets at amortised cost, or loans and receivables.
Financial assets at amortised cost
A financial asset is classified at amortised cost if the asset is held within a business model whose objective is to hold
assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise, on specific
dates, to cash flows that are solely payments of principal and interest on principal amount outstanding. Financial
assets at amortised cost are initially measured at fair value plus any directly attributable transaction cost. Subsequent
to initial recognition, these financial assets are measured at amortised cost using the effective interest method, less
any impairment losses.
Loans and receivables
Loans and receivables comprise instalment sale assets and trade and other receivables. Cash and cash equivalents
comprise cash balances and call deposits with original maturities of three months or less.
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.
Non-derivative financial liabilities
The group initially recognises debt securities issued and subordinated liabilities on the date that they are originated.
All other financial liabilities are recognised initially on the transaction date at which the group becomes a party to the
contractual provisions of the instrument.
The group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest
method.
The group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, and trade and
other payables.
31 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
31
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
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 based payments
For such grants of share options qualifying as equity-settled share based payments, 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.
Share capital
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised directly in
equity.
Segment reporting
The group determines and presents operating segments based on the information that is internally provided to the
Chief Executive Officer, who is the chief operating decision maker. A segment is a distinguishable component of the
group that is engaged either in providing related products or services (business segment), or in providing products
or services within a particular economic environment (geographical segment), which is subject to risks and returns
that are different from those of the other segments. The group’s primary format for segment reporting is based on
business segments. The business segments are determined based on the reporting business units.
Treasury shares
The Company’s own equity instruments that are reacquired are recognised at cost and deducted from equity. No gain
or loss is recognised in the Income Statement on the purchase, sale, issue or cancellation of the Company’s own equity
instruments. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to
them.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 32
32
Shareholder warrants
threshold for vesting.
Share capital
equity.
Segment reporting
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 based payments
For such grants of share options qualifying as equity-settled share based payments, 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
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised directly in
The group determines and presents operating segments based on the information that is internally provided to the
Chief Executive Officer, who is the chief operating decision maker. A segment is a distinguishable component of the
group that is engaged either in providing related products or services (business segment), or in providing products
or services within a particular economic environment (geographical segment), which is subject to risks and returns
that are different from those of the other segments. The group’s primary format for segment reporting is based on
business segments. The business segments are determined based on the reporting business units.
Treasury shares
The Company’s own equity instruments that are reacquired are recognised at cost and deducted from equity. No gain
or loss is recognised in the Income Statement on the purchase, sale, issue or cancellation of the Company’s own equity
instruments. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to
them.
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
KIBO MINING PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NEW STANDARDS AND INTERPRETATIONS
Adoption of new and revised standards
During the financial year, there were no new IFRSs or IFRIC interpretations that are effective for the first time, which
have had a material impact on the group.
The following pronouncements have been adopted in the year and either had no impact on the financial statements
or resulted in changes to presentation and disclosure only:
Standard
Effective date, annual
period beginning on or
after
IAS 1 – Presentation to financial statements (Amendment) – Materiality,
disaggregation and subtotals
IAS 16 & IAS 38 – Property, plant and Equipment and Intangible Assets
(Amendment) – Applicable method of depreciation and amortisation
IAS 19 – Employee benefits – (Amendment) – Determining discount rates for
post-employment benefit plans
IAS 34 – Interim Financial Reporting – Clarification of disclosure requirements
IFRS 5 – Non-current assets held for sale (Amendment) – Reclassification within
the standard
IFRS 7 – Financial Instruments: Disclosure – (Amendment) – Servicing contracts
and interim financial statements
IFRS 10, IFRS 12 & IAS 28 – Consolidated Financial Statements and Investments
in Associates –(Amendment) – Applying consolidation exemption
IFRS 11 – Joint Arrangements (Amendments) – Application of business
combination requirements to acquires Joint operations constituting a business
Standards issued but not yet effective:
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
At the date of authorisation of these financial statements, the following standards and interpretations relevant to the
Group and which have not been applied in these financial statements, were in issue but were not yet effective.
In some cases, these standards and guidance have not been endorsed for use in the European Union.
Standard
Effective date, annual
period beginning on or
after
IAS 7 – Statement of Cash flow (Amendment) – Disclosure on changes in nature of
liabilities
IAS 12 – Income taxes (Amendment) – Unrealised losses on debt instruments
IAS 27 – Separate Financial Statements (Amendment) – Recognition of
investments at cost
IAS 28 – Investment in Associates and Joint Ventures (Amendment) – Clarification
on investment-by-investment measurement
IFRS 2 – Share Based Payments (Amendments) – Effect of vesting condition re-
measurements
IFRS 9 – Financial Instruments – Measurement, recognition and disclosure of
Financial Instruments
IFRS 12 – Disclosure of interest in other entities (Amendments) – Clarification of
the Scope of IAS 12
IFRS 15 – Revenue from Contracts from Customers
IFRS 16 – Leases – Single lease accounting model.
1 January 2017
1 January 2017
1 January 2017
1 January 2018
1 January 2018
1 January 2018
1 January 2017
1 January 2018
1 January 2019
Except for IFRS 15 and IFRS 9, the directors anticipate that the adoption of these Standards and Interpretations in
future periods will have no material impact on the financial statements of the Group. The potential impact of IFRS 15
and IFRS 9 is currently being evaluated.
32
33 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
33
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1.
Segment analysis
IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are
operating segments or aggregations of operating segments that meet specific criteria. Operating segments are
components of an entity about which separate financial information is available that is evaluated regularly by the
chief operating decision maker. The Chief Executive Officer is the Chief Operating decision maker of the Group.
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:
Corporate
Group
Mining and
Exploration
Group
31 December
2016 (£)
Group
2016 Group
Revenue
Administrative cost
Capital raising fees
Exploration expenditure
Investment and other income
Profit/ (Loss) after tax
Tax
2015 Group
Revenue
Administrative cost
Exploration expenditure
Net reversal of impairment of assets
Investment and other income
Profit/ (Loss) after tax
Tax
2016 Group
Assets
Segment assets
Liabilities
18,039
-
(1,716,967)
1,414,668
-
284,260
-
(1,653,152)
(1,648,004)
-
-
-
(3,301,156)
18,039
(1,653,152)
(1,648,004)
(1,716,967)
1,414,668
-
(3,585,416)
Mining and
Exploration
Group
Corporate
Group
31 December
2015 (£)
Group
44,181
-
(1,454,216)
3,182,240
2,890
-
1,775,095
-
(1,791,358)
-
-
193,425
-
(1,597,933)
44,181
(1,791,358)
(1,454,216)
3,182,240
196,315
-
177,162
Mining
Group
Corporate
Group
31 December
2016 (£)
Group
18,015,412
22,772
18,038,184
Segment liabilities
Other Significant items
111,376
402,595
513,971
Depreciation
8,228
-
8,228
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 34
34
35
2015 Group
Assets
Segment assets
Liabilities
Mining
Group
Corporate
Group
31 December
2015 (£)
Group
17,816,927
526,487
18,343,414
Segment liabilities
Other Significant items
139,905
666,892
806,797
Depreciation
Revenue from major products and services
21,685
-
21,685
The only income that the Group received during the period related to revenue from management fees earned in
Tanzania and bank interest, which has been allocated to the Mining & Exploration Group as defined in Note 1.
Geographical segments
The Group operates in six principal geographical areas – Corporate [Ireland, Cyprus, South Africa, Canada & United
Kingdom] and Mining [Tanzania].
Major Operational indicators
Carrying value of segmented assets
Profit/(loss) after tax
17,605,212
(393,624)
Ireland, United
Kingdom, South
Africa, Cyprus
31 December 2016
Tanzania
Group
and Canada
Group
(£)
Group
432,972
(3,191,792)
Ireland, United
Kingdom, South
Africa, Cyprus
and Canada
Group
18,038,184
(3,585,416)
31 December
2015 (£)
Tanzania
Group
Major Operational indicators
Carrying value of segmented assets
Profit/(loss) after tax
Revenue
2.
17,603,287
1,807,453
740,127
(1,630,291)
18,343,414
177,162
Management fees from exploration services
Management fee revenue relates to services provided to exploration and prospecting companies situated in Tanzania.
Investment and other Income
3.
31 December
31 December
2016 (£)
2015 (£)
18,039
18,039
44,181
44,181
31 December
31 December
2016 (£)
2015 (£)
1,332,306
80,547
-
1,414,668
1,815
-
-
193,425
196,315
2,890
Refund of exploration expenditure
Profit on foreign exchange
Bargain purchase on acquisition of subsidiary
Other income
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
2015 Group
Assets
Segment assets
Liabilities
Mining
Group
Corporate
Group
31 December
2015 (£)
Group
17,816,927
526,487
18,343,414
Segment liabilities
Other Significant items
139,905
666,892
806,797
Depreciation
Revenue from major products and services
21,685
-
21,685
The only income that the Group received during the period related to revenue from management fees earned in
Tanzania and bank interest, which has been allocated to the Mining & Exploration Group as defined in Note 1.
Geographical segments
The Group operates in six principal geographical areas – Corporate [Ireland, Cyprus, South Africa, Canada & United
Kingdom] and Mining [Tanzania].
Tanzania
Group
17,605,212
(393,624)
Tanzania
Group
17,603,287
1,807,453
Major Operational indicators
Carrying value of segmented assets
Profit/(loss) after tax
Major Operational indicators
Carrying value of segmented assets
Profit/(loss) after tax
Revenue
2.
Management fees from exploration services
Ireland, United
Kingdom, South
Africa, Cyprus
and Canada
Group
31 December 2016
(£)
Group
432,972
(3,191,792)
Ireland, United
Kingdom, South
Africa, Cyprus
and Canada
Group
18,038,184
(3,585,416)
31 December
2015 (£)
740,127
(1,630,291)
31 December
2016 (£)
18,343,414
177,162
31 December
2015 (£)
18,039
18,039
44,181
44,181
Management fee revenue relates to services provided to exploration and prospecting companies situated in Tanzania.
3.
Investment and other Income
Refund of exploration expenditure
Profit on foreign exchange
Bargain purchase on acquisition of subsidiary
Other income
31 December
2016 (£)
31 December
2015 (£)
1,332,306
80,547
-
1,414,668
1,815
-
-
193,425
196,315
2,890
35 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
35
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The Group recovered £1,332,306 (US$1.8million) relating to previously incurred exploration expenditure specific to
the Mbeya Coal project from SEPCO III. During the current financial period the Group entered into a revised agreement
with SEPCO III allowing the China based EPC contractor to become the sole bidder for the ECP Contract subject to
refunding the Group 50% of the total development cost incurred on the Mbeya Coal project, of which US$1.8million
was payable during September 2016.
4.
Profit on ordinary activities before taxation
Operating loss is stated after the following key transactions:
Depreciation of property, plant and equipment of Group financial statements
Auditors’ remuneration for audit of Group and Company financial statements
Auditors’ remuneration for audit of Sloane Developments Limited
Auditors’ remuneration for non-audit services:
Taxation advisory services
Other non-audit services
Impairment of goodwill on acquisition of Subsidiaries
Bargain purchase on acquisition of subsidiary
Net reversal of impairment of intangible assets
Staff costs (including Directors)
5.
31
December
2016 (£)
Group
31
December
2015 (£)
Group
8,228
35,000
2,500
1,750
2,000
-
-
-
21,685
35,000
2,500
3,200
2,000
20,057
193,425
(3,182,240)
Group
31 December
2016 (£)
Group
31 December
2015 (£)
Company
31 December
2016 (£)
Company
31 December
2015 (£)
Wages and salaries
Share based remuneration
709,714
709,714
-
809,223
1,356,500
547,277
472,315
472,315
-
378,020
778,888
400,868
The average monthly number of employees (including executive Directors) during the period was as follows:
Group
31 December
2016 (£)
Group
31 December
2015 (£)
Company
31 December
2016 (£)
Company
31 December
2015 (£)
Exploration activities
Administration
6.
Directors’ emoluments
10
6
16
10
6
16
1
1
2
1
1
2
Group
31 December
2016 (£)
Group
31 December
2015 (£)
Company
31 December
2016 (£)
Company
31 December
2015 (£)
Basic salary and fees
Share based payments
457,483
-
457,483
375,295
704,733
329,438
335,695
-
335,695
267,347
596,784
329,437
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 36
36
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The emoluments of the Chairman were £13,011 (2015: £44,743).
The emoluments of the highest paid director were £193,610 (2015: £235,384).
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 7. The following table summarises the remuneration
applicable to each of the individuals who held office as a director during the reporting period:
31 December 2016
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Total
Andreas Lianos
31 December 2015
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Total
Andreas Lianos
7.
Taxation
Current tax
Salary and
fees
£
13,011
193,610
121,787
13,011
13,011
457,483
103,051
Share
based
payments
£
-
-
-
-
-
-
-
Salary and
fees
£
Share
based
payments
£
8,743
156,810
108,544
9,166
9,015
375,295
83,017
36,000
78,574
71,431
36,000
36,000
329,438
71,432
Total
£
13,011
193,610
121,787
13,011
13,011
457,483
103,051
Total
£
44,743
235,384
179,975
45,166
45,015
704,733
154,449
31 December
2016 (£)
31 December
2015 (£)
Charge for the period in Ireland, Canada, Republic of South Africa,
Cyprus, United Kingdom and Republic of Tanzania
Total tax charge
-
-
-
-
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:
2016 (£)
(3,585,416)
2015 (£)
177,162
(Loss)/ Profit on ordinary activities before tax
Income tax expense calculated at 12.5% (2015: 12.5%)
(448,177)
22,145
Income which is not taxable
Expenses which are not deductible
Losses available for carry forward
Income tax expense recognised in the Statement of Comprehensive Income
-
209,235
238,942
-
(610,576)
201,508
386,923
-
37 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
37
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The effective tax rate used for the December 2016 and December 2015 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 2016 deferred taxation as no taxable income has been received to date, and the
probability of future taxable income is indicative of current market conditions which remain uncertain. At the
Statement of Financial Position date, the Directors estimate that the Group has unused tax losses of £18,074,432
(2015: £16,574,704) available for potential offset against future profits which equates to an estimated potential
deferred tax asset of £2,259,338 (2015: £2,020,396). No deferred tax asset has been recognised due to the
unpredictability of the future profit streams. Losses may be carried forward indefinitely in accordance with the
applicable taxation regulations ruling within each of the above jurisdictions.
8.
Loss of parent Company
As permitted by Section 293 of the Companies Act 2014, 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 £2,921,634 (2015: £1,482,910).
(Loss)/ Earnings per share
9.
Basic (loss)/ earnings per share
The basic (loss)/ earnings and weighted average number of ordinary shares used for calculation purposes comprise
the following:
Basic (Loss)/ Earnings per share
31 December
2016 (£)
31 December
2015 (£)
(Loss)/ Earnings for the period attributable to equity
holders of the parent
Weighted average number of ordinary shares for the
purposes of basic earnings per share
Basic (loss)/ earnings per ordinary share
Basic Dilutive (Loss)/ Earnings per share
(Loss)/ Earnings for the period attributable to equity
holders of the parent
(3,611,496)
177,162
351,080,645
(0.010)
316,986,334
0.001
31 December
2016 (£)
31 December
2015 (£)
(3,611,496)
177,162
Weighted average number of ordinary shares for the
purposes of basic earnings per share
351,080,645
(0.010)
316,986,334
0.001
Disposals
Depreciation
Additions through business combinations
126,035
22,057
(6,502)
433
8,603
-
529
-
-
15
156,695
(6,502)
8,227
Exchange movements
Acc Depr as at 31 December 2016
19,906
120,839
15,858
219,292
4,230
40,660
3,243
27,945
5,672 414,408
44,200
963
Basic (loss)/ earnings per ordinary share
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 38
38
39
10.
Property, plant and equipment
GROUP
Cost
Furniture
Motor
Office
Plant &
Total
and Fittings
Vehicles
Equipment
Equipment
Machinery
(£)
(£)
(£)
(£)
(£)
I.T
(£)
Opening Cost as at 1 January 2015
1,983
7,725
3,646
2,487
7,559
23,400
Additions through business combinations
98,438
69,305
16,957
12,965
102
-
-
(3,165)
197,767
(3,165)
Disposals of subsidiaries
Exchange movements
Closing Cost as at 31 December 2015
100,516
95
77,399
369
20,778
175
15,570
118
211
4,707 218,970
968
Additions
Disposals
Additions through business combinations
126,035
Exchange movements
Closing Cost as at 31 December 2016
20,595
121,309
15,858
219,292
4,646
22,513
(6,501)
4,257
45,693
4,185
8,603
-
3,191
31,549
-
-
-
9,029
157,151
(6,501)
5,672 423,515
44,866
965
Accumulated Depreciation (“Acc Depr”)
(£)
(£)
(£)
(£)
(£)
Furniture
Motor
Office
Plant &
Total
and Fittings
Vehicles
Equipment
Equipment
Machinery
I.T
(£)
Acc Depr as at 1 January 2015
1,250
7,725
2,596
2,487
5,581
19,639
Additions through business combinations
77,118
66,101
15,676
11,123
76
170,094
Disposals of subsidiaries
Depreciation
Exchange Movements
Acc Depr as at 31 December 2015
14,795
93,683
520
3,107
77,399
466
-
1,984
20,442
186
-
(1,187)
(1,187)
21,685
13
4,694 211,788
1,557
211
1,786
15,570
174
Carrying Value
Furniture
Motor
Office
Plant &
Total
and Fittings
Vehicles
Equipment
Equipment
Machinery
(£)
(£)
(£)
(£)
(£)
I.T
(£)
Carrying value as at 31 December 2015
Carrying value as at 31 December 2016
6,833
470
336
5,033
-
3,604
13
-
7,182
9,107
-
198
-
-
-
-
-
7,250
-
-
-
-
-
-
-
-
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
The effective tax rate used for the December 2016 and December 2015 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 2016 deferred taxation as no taxable income has been received to date, and the
probability of future taxable income is indicative of current market conditions which remain uncertain. At the
Statement of Financial Position date, the Directors estimate that the Group has unused tax losses of £18,074,432
(2015: £16,574,704) available for potential offset against future profits which equates to an estimated potential
deferred tax asset of £2,259,338 (2015: £2,020,396). No deferred tax asset has been recognised due to the
unpredictability of the future profit streams. Losses may be carried forward indefinitely in accordance with the
applicable taxation regulations ruling within each of the above jurisdictions.
Loss of parent Company
8.
As permitted by Section 293 of the Companies Act 2014, 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 £2,921,634 (2015: £1,482,910).
(Loss)/ Earnings per share
9.
Basic (loss)/ earnings per share
The basic (loss)/ earnings and weighted average number of ordinary shares used for calculation purposes comprise
the following:
Basic (Loss)/ Earnings per share
31 December
31 December
2016 (£)
2015 (£)
(Loss)/ Earnings for the period attributable to equity
(3,611,496)
177,162
holders of the parent
Weighted average number of ordinary shares for the
purposes of basic earnings per share
Basic (loss)/ earnings per ordinary share
Basic Dilutive (Loss)/ Earnings per share
351,080,645
316,986,334
(0.010)
0.001
31 December
31 December
2016 (£)
2015 (£)
(Loss)/ Earnings for the period attributable to equity
(3,611,496)
177,162
holders of the parent
Weighted average number of ordinary shares for the
purposes of basic earnings per share
351,080,645
316,986,334
(0.010)
0.001
Basic (loss)/ earnings per ordinary share
10.
Property, plant and equipment
GROUP
Cost
Furniture
and Fittings
(£)
Motor
Vehicles
(£)
Office
Equipment
(£)
I.T
Equipment
(£)
Plant &
Machinery
(£)
Total
(£)
Opening Cost as at 1 January 2015
1,983
7,725
3,646
2,487
7,559
23,400
Additions through business combinations
Disposals of subsidiaries
Exchange movements
Closing Cost as at 31 December 2015
98,438
-
95
100,516
69,305
-
369
77,399
16,957
-
175
20,778
12,965
-
118
15,570
102
(3,165)
211
197,767
(3,165)
968
4,707 218,970
Additions
Additions through business combinations
Disposals
Exchange movements
Closing Cost as at 31 December 2016
198
-
-
20,595
121,309
-
126,035
-
15,858
219,292
4,646
22,513
(6,501)
4,257
45,693
4,185
8,603
-
3,191
31,549
9,029
157,151
(6,501)
44,866
5,672 423,515
-
-
-
965
Accumulated Depreciation (“Acc Depr”)
Furniture
and Fittings
(£)
Motor
Vehicles
(£)
Office
Equipment
(£)
I.T
Equipment
(£)
Plant &
Machinery
(£)
Total
(£)
Acc Depr as at 1 January 2015
1,250
7,725
2,596
2,487
5,581
19,639
Additions through business combinations
Disposals of subsidiaries
Depreciation
Exchange Movements
Acc Depr as at 31 December 2015
77,118
-
14,795
520
93,683
66,101
-
3,107
466
77,399
15,676
-
1,984
186
20,442
11,123
-
1,786
174
15,570
76
(1,187)
13
211
170,094
(1,187)
21,685
1,557
4,694 211,788
Additions through business combinations
Disposals
Depreciation
Exchange movements
Acc Depr as at 31 December 2016
-
-
7,250
19,906
120,839
126,035
-
-
15,858
219,292
22,057
(6,502)
433
4,230
40,660
8,603
-
529
3,243
27,945
156,695
(6,502)
8,227
44,200
5,672 414,408
-
-
15
963
Carrying Value
Furniture
and Fittings
(£)
Motor
Vehicles
(£)
Office
Equipment
(£)
I.T
Equipment
(£)
Plant &
Machinery
(£)
Total
(£)
Carrying value as at 31 December 2015
Carrying value as at 31 December 2016
6,833
470
-
-
336
5,033
-
3,604
13
-
7,182
9,107
38
39 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
39
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
11.
Intangible assets
Reversal of impairment
Mbeya Coal Project
Intangible assets consist solely 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:
Reconciliation of Intangible Assets
Total (£)
Pinewood
Project
(£)
Mbeya Coal
Project (£)
Lake
Victoria
Project
(£)
- 12,713,865 1,700,000
Haneti
Project (£)
Valuation as at 1 January 2015
Impairment of prospecting licences
Carrying value as at 1 January 2016
Reversal of impairment of licences
-
-
-
- 15,896,105 1,700,000
-
3,182,240
-
Impairment of prospecting licences
Carrying value as at 31 December 2016
Reversal of impairment of licences
-
-
-
- 15,896,105 1,700,000
-
-
-
-
14,413,865
-
-
-
-
-
-
-
17,596,105
3,182,240
-
17,596,105
-
Intangible assets are not amortised, due to the indefinite useful life which is attached to the underlying prospecting
rights, until such time that active mining operations commence, which will result in the intangible asset being
amortised over the useful life of the relevant mining licences.
Intangible assets with an indefinite useful life are assessed for impairment on an annual basis, against the prospective
fair value of the intangible asset. The valuation of intangible assets with an indefinite useful life is reassessed on an
annual basis through valuation techniques applicable to the nature of the intangible assets.
In assessing whether a write-down is required in the carrying value of a potentially impaired intangible asset, the
asset’s carrying value is compared with its recoverable amount. The recoverable amount is the higher of the asset’s
fair value less costs to sell and value in use. The valuation techniques applicable to the valuation of the
abovementioned intangible assets comprise a combination of fair market values, discounted cash flow projections
and historic transaction prices.
The following key assumptions influence the measurement of the intangible assets recoverable amounts, through
utilising the value in use method in order to determine the recoverable amount:
Comparable market value of similar mineral statements;
Currency fluctuations and exchange movements;
Expected growth rates;
Cost of capital related to funding requirements;
Applicable discounts rates;
Future operating expenditure for extraction and mining of measured mineral resources; and
Co-operation of key project partners going forward.
Property, plant and equipment
Current taxation receivable
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Through review of the project specific financial, operational, market and economic indicators applicable to the above
intangible assets, impairment indicators were identified which required impairment of the intangible assets and
reversal of impairments recognised in respect of selective exploration projects.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 40
40
41
Following on from the completion of the DPFS, the Definitive Mining Feasibility Study (DMFS) for the coal mining
component of the MCPP was delivered to the Company by mining consultants Minxcon and, as expected, it confirmed
the viability of the coal mine evident from the earlier mining prefeasibility report (MPFS) completed in 2014. Headline
financial and operational metrics from the DMFS include:
IRR of 69.2% (15% improvement from 53.9% stated in MPFS);
Payback period 2.4 years (7% improvement from 2.6 years stated in MPFS);
Peak funding requirement of USD17 million (reduced by 54% from that identified in MPFS);
All in cost margin of 39% -reduced from 49% in MPFS (All in cost margins of above 25% are considered healthy);
Power Station coal requirements reduced by 23% from that identified in MPFS bringing significant
environmental and cost benefits; and
Modified Terrace Mining confirmed as most accurate and cost effective for the coal mine (no blasting/free dig).
As at year end the Group re-assessed the fair value of intangible assets with an indefinite useful life utilising the
resource estimation principles applicable to both the Mbeya Coal and Lake Victoria assets, concluding that there is no
impairment as the fair value of these intangible assets exceed the carrying value.
The previous impairment performed was based on Resource estimations and not on the net present value
determination as these became available from the latest Competent Persons Reports prepared during the current
financial period. Based on the updated results of the study, management had re-assessed the related intangible asset
which indicated a reversal of the last available previously recognised impairment amounting to £3,182,240.
Business Combinations
12.
On 31 December 2016, the Group acquired the entire shareholders interest in Protocol Mining Limited for cash
consideration equal to US$1,000 of the ordinary shares in issue, assuming all assets and liabilities fairly valued. On 1
January 2015, the Group acquired the entire shareholders interest in Kibo MXS Limited and Mzuri Exploration
Services Limited for cash consideration equal to £450 of the ordinary shares in issue, assuming all assets and liabilities
The fair value of assets acquired and liabilities assumed relating to the above business combinations is subject to
change should additional information become available within the 12-month re-measurement period from date of
fairly valued.
acquisition.
The following table provides detail relating to the fair value from acquisitions:
Group
Group
2016 (£)
2015 (£)
457
-
-
-
(8,769)
(9,226)
27,673
3,963
184,787
61,492
193,425
(84,490)
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Reversal of impairment
Mbeya Coal Project
Following on from the completion of the DPFS, the Definitive Mining Feasibility Study (DMFS) for the coal mining
component of the MCPP was delivered to the Company by mining consultants Minxcon and, as expected, it confirmed
the viability of the coal mine evident from the earlier mining prefeasibility report (MPFS) completed in 2014. Headline
financial and operational metrics from the DMFS include:
IRR of 69.2% (15% improvement from 53.9% stated in MPFS);
Payback period 2.4 years (7% improvement from 2.6 years stated in MPFS);
Peak funding requirement of USD17 million (reduced by 54% from that identified in MPFS);
All in cost margin of 39% -reduced from 49% in MPFS (All in cost margins of above 25% are considered healthy);
Power Station coal requirements reduced by 23% from that identified in MPFS bringing significant
environmental and cost benefits; and
Modified Terrace Mining confirmed as most accurate and cost effective for the coal mine (no blasting/free dig).
As at year end the Group re-assessed the fair value of intangible assets with an indefinite useful life utilising the
resource estimation principles applicable to both the Mbeya Coal and Lake Victoria assets, concluding that there is no
impairment as the fair value of these intangible assets exceed the carrying value.
The previous impairment performed was based on Resource estimations and not on the net present value
determination as these became available from the latest Competent Persons Reports prepared during the current
financial period. Based on the updated results of the study, management had re-assessed the related intangible asset
which indicated a reversal of the last available previously recognised impairment amounting to £3,182,240.
12.
Business Combinations
On 31 December 2016, the Group acquired the entire shareholders interest in Protocol Mining Limited for cash
consideration equal to US$1,000 of the ordinary shares in issue, assuming all assets and liabilities fairly valued. On 1
January 2015, the Group acquired the entire shareholders interest in Kibo MXS Limited and Mzuri Exploration
Services Limited for cash consideration equal to £450 of the ordinary shares in issue, assuming all assets and liabilities
fairly valued.
The fair value of assets acquired and liabilities assumed relating to the above business combinations is subject to
change should additional information become available within the 12-month re-measurement period from date of
acquisition.
The following table provides detail relating to the fair value from acquisitions:
Property, plant and equipment
Current taxation receivable
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Group
Group
2016 (£)
2015 (£)
457
-
-
-
(8,769)
(9,226)
27,673
3,963
184,787
61,492
193,425
(84,490)
41 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
41
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
13.
Trade and other receivables
Amounts falling due over one year:
Amounts owed by group undertakings
Amounts falling due within one year:
Other debtors
Group
2016 (£)
Group
2015 (£)
Company
2016 (£)
Company
2015 (£)
-
50,633
50,633
26,998,867
-
27,712,269
690
26,999,557
550,692
550,692
523,104
28,235,373
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.
The carrying value of current trade and other receivables equals their fair value due mainly to the short-term nature
of these receivables.
Amounts owed by group undertakings represent inter-company loans between the Company and its subsidiaries.
They have no fixed repayment terms, bear no interest and are unsecured, resulting in the recognition of the receivable
as a non-current asset due to settlement being extended beyond 12 months.
The net decrease in amounts owed by group undertakings relates to the settlement of the £1.5million Sanderson
borrowings during the current financial period, through the issue of shares in Mbeya Coal Development Company
Limited, a subsidiary of the Company, resulting in a non-cash based transaction.
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.
14.
Cash and Cash equivalents
Cash and cash equivalents consist of:
Short term convertible cash reserves
Group (£)
Company (£)
2016
2015
2016
2015
382,339
382,339
22,082
22,082
3,383
3,383
189,435
189,435
Cash and cash equivalents have not been ceded, or placed as encumbrance toward any liabilities as at year end.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 42
42
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
13.
Trade and other receivables
15.
Share capital - Group and Company
Group
2016 (£)
Group
2015 (£)
Company
2016 (£)
Company
2015 (£)
Authorised equity
2016
2015
Other debtors
550,692
550,692
523,104
28,235,373
(2016: 363,976,596 Ordinary shares of €0.015 each)
(2015: 330,928,714 Ordinary shares of €0.015 each)
1,291,394,535 Deferred shares of €0.009 each
£4,346,890
-
£13,603,965
£9,257,075
-
£3,953,213
£13,210,288
£9,257,075
1,000,000,000 (2015: 800,000,000) Ordinary shares of €0.015 each
3,000,000,000 deferred shares of €0.009 each
Allotted, issued and fully paid shares
€15,000,000
€12,000,000
€42,000,000 €39,000,000
€27,000,000
€27,000,000
Number of
Shares
Ordinary
Share
Capital
(£) *
Deferred
Share
Capital
(£)
Share
Premium
(£)
Treasury
shares
(£)*
Balance at 31 December 2015
330,928,714
3,953,213
9,257,075
25,782,519
(44,464)
Shares issued during the period
Balance at 31 December 2016
33,047,882
363,976,596
393,677
4,346,890
-
9,257,075
1,535,743
27,318,262
44,464
-
All ordinary shares issued have the right to vote, right to receive dividends, a copy of the annual report, and the right
to transfer ownership of their shares.
The Deferred Shares will not entitle holders to receive notice of, or attend or vote at any general meeting of the
Company or to receive a dividend or other distribution or to participate in any return on capital on a winding up other
than the nominal amount paid following a substantial distribution to the holders of the Ordinary Shares in the
Company. Accordingly, for all practical purposes the Deferred Shares will be valueless, and it is the board’s intention
at the appropriate time, to purchase the Deferred Shares at an aggregate consideration of €1.
*Included in the ordinary share capital were treasury shares relating to 4,090,000 ordinary shares placed during
February 2015 with Hume Capital Securities Plc ("Hume Capital") where Hume Capital was subsequently placed
under administration before the monies were received. An administrator was appointed in order to administer the
distribution of outstanding monies receivable and shares subscribed to with Hume Capital. During the current
financial period the allotment of 4,090,000 was completed and these shares are considered issued share capital
trading on the market.
Amounts falling due over one year:
Amounts owed by group undertakings
Amounts falling due within one year:
-
27,712,269
-
50,633
50,633
26,998,867
690
26,999,557
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.
The carrying value of current trade and other receivables equals their fair value due mainly to the short-term nature
of these receivables.
Amounts owed by group undertakings represent inter-company loans between the Company and its subsidiaries.
They have no fixed repayment terms, bear no interest and are unsecured, resulting in the recognition of the receivable
as a non-current asset due to settlement being extended beyond 12 months.
The net decrease in amounts owed by group undertakings relates to the settlement of the £1.5million Sanderson
borrowings during the current financial period, through the issue of shares in Mbeya Coal Development Company
Limited, a subsidiary of the Company, resulting in a non-cash based transaction.
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.
14.
Cash and Cash equivalents
Cash and cash equivalents consist of:
Short term convertible cash reserves
Group (£)
Company (£)
2016
2015
2016
2015
382,339
382,339
22,082
22,082
189,435
189,435
3,383
3,383
Cash and cash equivalents have not been ceded, or placed as encumbrance toward any liabilities as at year end.
42
43 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
43
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
16.
Share based payments reserve
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
Issue of share options and warrants
Reclassification of share based payment reserve on expired share options
Opening balance of share based payment reserve
Issue of share options and warrants
Reclassification of share based payment reserve on expired share options
Costs associated with options issued as stated above.
2016
514,279
2015
510,978
-
514,279
-
514,279
514,279
(510,978)
Company (£)
2016
514,279
-
-
514,279
2015
510,978
514,279
514,279
(510,978)
The Group recognised the following expense related to equity settled share based payment transactions:
2016 (£)
2015 (£)
Fair value of share options issued
Non-executive Directors emoluments settled
Geological expenditure settled
Capital raising fees
-
-
8,822
1,656,826
1,648,004
514,279
33,000
19,454
566,733
-
The Company recognised the following expense related to equity settled share based payment transactions:
2016 (£)
2015 (£)
Fair value of share options issued
Capital raising fees
Non-executive Directors emoluments settled
-
1,648,004
1,648,004
-
296,437
-
329,437
33,000
Exercisable
as at 31
December
2016
At 31 December 2016 the Company had 14,399,331 options and 10,000,000 warrants outstanding detailed below:
Date of
Grant
Exercise
start date
Expiry
date
Exercise
Price
Number
Granted
Options
Total
Warrants
Total
02 Jun 15
02 Jun 15
1 Jun 18
14,399,331 14,399,331
14,399,331
14,399,331
5p
20 Feb 15
20 Feb 15
20 Feb 18
10,000,000 10,000,000
10,000,000
10,000,000
9p
Total Contingently Issuable shares
24,399,333 24,399,333
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 44
44
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Reconciliation of the quantity of share options in issue:
Opening balance
Issue of share options
Expiration of share options
Reconciliation of the quantity of warrants in issue:
Opening balance
Warrants issued
Warrants exercised
Warrants lapsed
Group
Company
2016
14,399,333
2015
1,195,945
2016
14,399,333
2015
1,195,945
14,399,333
14,399,333 14,399,333
(1,196,945)
-
-
14,399,333
14,399,333 14,399,333
(1,196,945)
-
-
Group
Company
2016
10,000,000
2015
110,950
2016
10,000,000
2015
110,950
-
-
10,000,000
-
20,000,000
(10,000,000)
10,000,000
(110,950)
-
-
10,000,000
-
20,000,000
(10,000,000)
10,000,000
(110,950)
Weighted average remaining contractual life of warrants is 2.2 years, and options are 2.5 years. The average share
price during the year was £0.0557. The weighted average exercise price of the options and warrants outstanding at
year end was £0.05 and £0.09 respectively.
Options issued during the prior financial period were valued using the following inputs to the Black-Scholes model:
Kibo Mining Plc
Share price when options issued
Expected volatility
Expected life
Risk free rate
Expected dividends
4.88
127.37%
3 years
0.72%
-
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 10,000,0000 warrants exercisable at £0.09 and 14,399,333 options exercisable at £0.05 outstanding as at year
end were issued as incentive to joint-venture partners and employees respectively in order to retain fruitful continued
financial relationships with these stakeholders respectively. No fair value was allocated to the 10,000,000 warrants
in issue at year end as the Directors considered that no services were received in exchange for the issue of warrants.
17.
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.
Company
Group
Opening balance
Movement during the period
Closing balance of foreign currency translation reserve
2016 (£)
(384,619)
2015 (£)
2016 (£)
2015 (£)
(400,985)
52,499
39,321
(285,491)
99,128
(384,619)
16,366
47,430
(5,069)
52,499
13,178
45 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
45
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
18.
Non-controlling interest
The non-controlling interest relates to the 2.5% interest held by Sanderson Capital Partners Limited in the Mbeya
Coal Development Limited and its subsidiaries with effect from 1 September 2016.
Group
Opening balance
Disposal of interest in subsidiary without loss of control
Profit for the year allocated to non-controlling interest
Closing balance of non-controlling interest
19.
Trade and other payables
2016 (£)
-
2015 (£)
(27,515)
(1,435)
26,080
-
-
-
Amounts falling due within one year:
Group
2016 (£)
Group
2015 (£)
Company
2016 (£)
Company
2015 (£)
Trade payables
146,380
146,380
306,797
306,797
35,003
35,003
166,892
166,892
The carrying value of current trade and other receivables equals their fair value due mainly to the short term nature
of these receivables.
20.
Borrowings
Amounts falling due within one year:
Group
2016 (£)
Group
2015 (£)
Company
2016 (£)
Company
2015 (£)
251,928
251,928
Short term loans
251,928
500,000
500,000
251,928
500,000
500,000
The borrowings relate to the unsecured interest free loan facility from Sanderson Capital Partners Limited which was
repayable either through the issue of cash or ordinary shares in the Company. On 1 September 2016, the Company
renegotiated the settlement terms where Sanderson Capital Partners Limited agreed to convert the full loan amount
outstanding (£1.5million) into a 2.5% equity interest in the Mbeya Development Company Limited which is a 100%
held subsidiary of the Group, and holds 100% interest in the Mbeya Coal to Power Project.
21.
Provisions
Amounts falling due within one year:
Group
2016 (£)
Group
2015 (£)
Company
2016 (£)
Company
2015 (£)
Potential corporate transaction
115,663
115,663
-
-
115,663
115,663
-
-
Under the terms of the heads of terms agreement with Opera Investments Plc (“Opera”) on 23 September 2016, the
Group agreed to undertake due diligence and incur costs associated with the potential corporate transaction as
discussed in the subsequent events Note 25. As at 31 December 2016, the expenses that Opera had incurred but were
repayable by the Group totalled £115,641 (2015: £nil).
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 46
46
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
18.
Non-controlling interest
22.
Investment in group undertakings
The non-controlling interest relates to the 2.5% interest held by Sanderson Capital Partners Limited in the Mbeya
Coal Development Limited and its subsidiaries with effect from 1 September 2016.
Opening balance
Disposal of interest in subsidiary without loss of control
Profit for the year allocated to non-controlling interest
Closing balance of non-controlling interest
19.
Trade and other payables
Amounts falling due within one year:
2016 (£)
2015 (£)
Group
-
(27,515)
(1,435)
26,080
-
-
-
Investments at Cost
At 1 January 2015
Additions
Disposals
At 31 December 2015 (£)
Group
2016 (£)
Group
2015 (£)
Company
2016 (£)
Company
2015 (£)
Additions
Disposals
At 31 December 2016 (£) *
Subsidiary
undertakings
(£)
1,700,000
-
-
1,700,000
-
-
1,700,000
Trade payables
146,380
146,380
306,797
306,797
35,003
35,003
166,892
166,892
* The above investment in subsidiaries comprises the carrying value of the investments in Kibo Mining (Cyprus)
Limited and Sloane Developments Limited to the value of £1,700,000, and £- respectively.
The carrying value of current trade and other receivables equals their fair value due mainly to the short term nature
of these receivables.
Borrowings
20.
Amounts falling due within one year:
Group
Group
2016 (£)
2015 (£)
Company
2016 (£)
Company
2015 (£)
251,928
251,928
Short term loans
251,928
500,000
500,000
251,928
500,000
500,000
The borrowings relate to the unsecured interest free loan facility from Sanderson Capital Partners Limited which was
repayable either through the issue of cash or ordinary shares in the Company. On 1 September 2016, the Company
renegotiated the settlement terms where Sanderson Capital Partners Limited agreed to convert the full loan amount
outstanding (£1.5million) into a 2.5% equity interest in the Mbeya Development Company Limited which is a 100%
held subsidiary of the Group, and holds 100% interest in the Mbeya Coal to Power Project.
21.
Provisions
Amounts falling due within one year:
Group
Group
2016 (£)
2015 (£)
Company
2016 (£)
Company
2015 (£)
Potential corporate transaction
115,663
115,663
-
-
115,663
115,663
-
-
Under the terms of the heads of terms agreement with Opera Investments Plc (“Opera”) on 23 September 2016, the
Group agreed to undertake due diligence and incur costs associated with the potential corporate transaction as
discussed in the subsequent events Note 25. As at 31 December 2016, the expenses that Opera had incurred but were
repayable by the Group totalled £115,641 (2015: £nil).
46
At 31 December 2016 the Company had the following undertakings:
Subsidiary,
associate or
Joint
Venture
Activity
Incorporated
in
Interest
held
(2016)
Interest
held
(2015)
Description
Directly held subsidiaries
Sloane Developments Limited
Subsidiary
Holding Company
Kibo Mining (Cyprus) Limited
Indirectly held subsidiaries
Subsidiary
Treasury Function
United
Kingdom
Cyprus
100%
100%
100%
100%
Kibo Gold Limited
Savannah Mining Limited
Reef Miners Limited
Kibo Nickel Limited
Eagle Gold Mining Limited
Mzuri Energy Limited
Mbeya Holdings Limited
Mbeya Development Limited
Mbeya Mining Company Limited
Mbeya Coal Limited
Mzuri Power Limited
Mbeya Power Tanzania Limited
Kibo Mining South Africa (Pty) Ltd
Kibo
(Tanzania)
Limited
Kibo MXS Limited
Tourlou Limited
Mzuri
Limited
Protocol Mining Limited
Other interests held
Exploration
Exploration
Services
Jubilee Resources Limited
Kibo Jubilee (Cyprus) Limited
Kibo Uranium Limited
Pinewood Resources Limited
Makambako Resources Limited
Holding Company
Subsidiary
Subsidiary Mineral Exploration
Subsidiary Mineral Exploration
Subsidiary
Holding Company
Subsidiary Mineral Exploration
Holding Company
Subsidiary
Holding Company
Subsidiary
Holding Company
Subsidiary
Holding Company
Subsidiary
Subsidiary Mineral Exploration
Holding Company
Subsidiary
Power Generation
Subsidiary
Treasury Function
Subsidiary
Treasury Function
Subsidiary
Cyprus
Tanzania
Tanzania
Cyprus
Tanzania
Canada
Cyprus
Cyprus
Cyprus
Tanzania
Cyprus
Tanzania
South Africa
Tanzania
Holding Company
Subsidiary
Subsidiary
Holding Company
Subsidiary Exploration Services
Cyprus
Cyprus
Tanzania
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Subsidiary Exploration Services
Tanzania
100%
-%
Joint Venture Mineral Exploration
Joint Venture
Holding Company
Joint Venture Mineral Exploration
Joint Venture Mineral Exploration
Joint Venture Mineral Exploration
47
Tanzania
Cyprus
Cyprus
Tanzania
Tanzania
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
47 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
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.
During the previous financial period, the Company entered into Joint Ventures with Metal Tiger Plc specific to the
Uranium and Morogoro assets, where 50% of the ordinary share capital of the Kibo Uranium Group (Kibo Uranium
Limited, Pinewood Resources Limited and Makambako Resources Limited) and Kibo Jubilee Group (Kibo Jubilee
(Cyprus) Limited and Jubilee Resources Limited) would be disposed of at nominal value, and in turn Metal Tiger would
expense US$800,000 over a period of 3 years for each project. A minimum expenditure of US$300,000 but less than
US$800,000 would see Metal Tiger’s interest in a project revert to a 10% free carried interest, while any expenditure
by Metal Tiger less than US$300,000 would see Kibo regain a 100% interest in the project. During the financial period,
Metal Tiger contributed USD$57,930 (2015:US$37,665) toward the Morogoro asset and an additional USD$57,966
(2015: US$37,697) toward the Uranium project. The Groups equitable portion of the current period losses from the
Morogoro and Uranium projects relating to the Joint Venture operations are Nil (2015: £18,000) and Nil (2015:
£26,400) respectively.
The entire interest in the Kibo Uranium Group and Kibo Jubilee Group was disposed of with effect from 1 January
2015 onward, resulting in the recognition of a profit on disposal of these subsidiaries amounting to £5,762 in the
comparative financial period.
Group – 2016 Financial Period
The aggregate pre-consolidation capital and reserves and results of the subsidiary undertakings for the last relevant
financial period were as follows:
Profit/(loss)
for the
period (£)
Net Asset
Value/ (Net
Liability
Value)
(£)
Sloane Developments Limited
Kibo Mining (Cyprus) Limited
Kibo Gold Limited
Savannah Mining Limited
Reef Mining Limited
Kibo Nickel Limited
Eagle Gold Mining Limited
Mzuri Energy Limited
Mbeya
Rukwa Holdings Limited
Mbeya
Mbeya
Development Limited
Mining Company Limited
Coal Limited
Mzuri Power Limited
Mbeya Power Tanzania Limited
Kibo Mining South Africa Limited
Kibo Exploration (Tanzania) Limited
Kibo MXS Limited
Tourlou Limited
Mzuri Exploration Services Limited
Protocol Mining Limited*
(13,804)
(23,732,748)
(41,065)
(904,822)
(1,059,829)
(7,125)
(697,278)
(16,016)
(6,225)
181,326
165,535
(234,268)
(120,186)
-
9,030
(498,527)
(2,697)
(1,337)
(865,278)
-
(10,108)
4,179,701
(34,928)
(29,192)
(120,000)
(2,660)
(71,592)
(85)
(6,527)
(3,110)
(2,537)
327,056
(112,858)
-
(1,316)
262,499
(6,671)
(2,611)
(422,616)
-
* 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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 48
48
49
Group – 2015 Financial Period
Sloane Developments Limited
Kibo Mining (Cyprus) Limited
Kibo Gold Limited
Savannah Mining Limited
Reef Mining Limited
Kibo Nickel Limited
Eagle Gold Mining Limited
Mzuri Energy Limited
Rukwa Holdings Limited
Rukwa Development Limited
Rukwa Mining Company Limited
Rukwa Coal Limited
Mzuri Power Limited
Mbeya Power Tanzania Limited
Kibo Mining South Africa Limited
Kibo Exploration (Tanzania) Limited
Kibo MXS Limited*
Tourlou Limited*
Mzuri Exploration Services Limited*
Net Asset
Profit/(loss)
for the
period (£)
Value/ (Net
Liability
Value)
(£)
(3,696)
(3,189)
(24,077,092)
(2,091,436)
131,996
(724,355)
(770,250)
(3,738)
(513,466)
(12,320)
519
158,938
144,824
(492 468)
(1,830)
-
7,785
(631,724)
(3,925)
(22,856)
(333,707)
(2,931)
(30,721)
(69,833)
(2,701)
(106,046)
(153,857)
(3,600)
(14,813)
(3,222)
(514,149)
(2,110)
-
2,625
254,078
(3,239)
(3,384)
(406,881)
* 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.
Related party transactions
23.
Related parties of the Group comprise subsidiaries, joint ventures, significant shareholders, the Board of Directors
and related parties in terms of the listing requirements.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation.
Board of Directors/ Key Management
Name
Relationship (Directors of:)
Andreas Lianos
River Group, Boudica Group, Tsitato Trading Limited, Gattonside Trading Limited and
Other entities over which directors/key management or their close family have control or significant
Namaqua Management Limited
influence:
River Group
River Group provide corporate advisory services and is the Company’s
Designated Advisor.
Boudica Group
Boudica Group provides secretarial services to the Group.
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
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.
During the previous financial period, the Company entered into Joint Ventures with Metal Tiger Plc specific to the
Uranium and Morogoro assets, where 50% of the ordinary share capital of the Kibo Uranium Group (Kibo Uranium
Limited, Pinewood Resources Limited and Makambako Resources Limited) and Kibo Jubilee Group (Kibo Jubilee
(Cyprus) Limited and Jubilee Resources Limited) would be disposed of at nominal value, and in turn Metal Tiger would
expense US$800,000 over a period of 3 years for each project. A minimum expenditure of US$300,000 but less than
US$800,000 would see Metal Tiger’s interest in a project revert to a 10% free carried interest, while any expenditure
by Metal Tiger less than US$300,000 would see Kibo regain a 100% interest in the project. During the financial period,
Metal Tiger contributed USD$57,930 (2015:US$37,665) toward the Morogoro asset and an additional USD$57,966
(2015: US$37,697) toward the Uranium project. The Groups equitable portion of the current period losses from the
Morogoro and Uranium projects relating to the Joint Venture operations are Nil (2015: £18,000) and Nil (2015:
£26,400) respectively.
The entire interest in the Kibo Uranium Group and Kibo Jubilee Group was disposed of with effect from 1 January
2015 onward, resulting in the recognition of a profit on disposal of these subsidiaries amounting to £5,762 in the
comparative financial period.
financial period were as follows:
Group – 2016 Financial Period
The aggregate pre-consolidation capital and reserves and results of the subsidiary undertakings for the last relevant
Group – 2015 Financial Period
Sloane Developments Limited
Kibo Mining (Cyprus) Limited
Kibo Gold Limited
Savannah Mining Limited
Reef Mining Limited
Kibo Nickel Limited
Eagle Gold Mining Limited
Mzuri Energy Limited
Rukwa Holdings Limited
Rukwa Development Limited
Rukwa Mining Company Limited
Rukwa Coal Limited
Mzuri Power Limited
Mbeya Power Tanzania Limited
Kibo Mining South Africa Limited
Kibo Exploration (Tanzania) Limited
Kibo MXS Limited*
Tourlou Limited*
Mzuri Exploration Services Limited*
Net Asset
Value/ (Net
Liability
Value)
(£)
(3,696)
(24,077,092)
131,996
(724,355)
(770,250)
(3,738)
(513,466)
(12,320)
519
158,938
144,824
(492 468)
(1,830)
-
7,785
(631,724)
(3,925)
(22,856)
(333,707)
Profit/(loss)
for the
period (£)
(3,189)
(2,091,436)
(2,931)
(30,721)
(69,833)
(2,701)
(106,046)
(153,857)
(3,600)
(14,813)
(3,222)
(514,149)
(2,110)
-
2,625
254,078
(3,239)
(3,384)
(406,881)
* 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.
23.
Related party transactions
Related parties of the Group comprise subsidiaries, joint ventures, significant shareholders, the Board of Directors
and related parties in terms of the listing requirements.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation.
Board of Directors/ Key Management
Name
Relationship (Directors of:)
Sloane Developments Limited
Kibo Mining (Cyprus) Limited
Kibo Gold Limited
Savannah Mining Limited
Reef Mining Limited
Kibo Nickel Limited
Eagle Gold Mining Limited
Mzuri Energy Limited
Mbeya
Rukwa Holdings Limited
Mbeya
Mbeya
Development Limited
Mining Company Limited
Coal Limited
Mzuri Power Limited
Mbeya Power Tanzania Limited
Kibo Mining South Africa Limited
Kibo Exploration (Tanzania) Limited
Kibo MXS Limited
Tourlou Limited
Mzuri Exploration Services Limited
Protocol Mining Limited*
Net Asset
Profit/(loss)
for the
period (£)
Value/ (Net
Liability
Value)
(£)
(13,804)
(23,732,748)
(41,065)
(904,822)
(1,059,829)
(7,125)
(697,278)
(16,016)
(6,225)
181,326
165,535
(234,268)
(120,186)
-
9,030
(498,527)
(2,697)
(1,337)
-
(10,108)
4,179,701
(34,928)
(29,192)
(120,000)
(2,660)
(71,592)
(85)
(6,527)
(3,110)
(2,537)
327,056
(112,858)
(1,316)
262,499
(6,671)
(2,611)
-
-
* 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.
(865,278)
(422,616)
River Group
River Group provide corporate advisory services and is the Company’s
Designated Advisor.
Boudica Group
Boudica Group provides secretarial services to the Group.
48
49 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
49
Other entities over which directors/key management or their close family have control or significant
influence:
River Group, Boudica Group, Tsitato Trading Limited, Gattonside Trading Limited and
Namaqua Management Limited
Andreas Lianos
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Kibo Mining Plc is a shareholder of the following companies and as such are considered related parties:
Directly held subsidiaries:
Sloane Developments Limited
Kibo Mining (Cyprus) Limited
Indirectly held subsidiaries:
Joint Ventures:
Kibo Gold Limited
Kibo Mining South Africa Limited
Savannah Mining Limited
Reef Mining Limited
Kibo Nickel Limited
Eagle Gold Mining Limited
Mzuri Energy Limited
Rukwa Holdings Limited
Rukwa Development Limited
Rukwa Mining Company Limited
Rukwa Coal Limited
Mzuri Power Limited
Kibo Exploration (Tanzania) Limited
Mbeya Power Tanzania Limited
Kibo MXS Limited
Mzuri Exploration Services Limited
Tourlou Limited
Protocol Mining Limited
Kibo Uranium Limited
Pinewood Resources Limited
Makambako Resources Limited
Jubilee Resources Limited
Kibo Jubilee (Cyprus) Limited
The transactions during the period between the Company and its subsidiaries included the settlement of expenditure
to/from subsidiaries, working capital funding, and settlement of the Company’s liabilities through the issue of equity
in subsidiaries. The loans to/ from group companies do not have fixed repayment terms and are unsecured.
The following transactions have been entered into with related entities, by way of common directorship, throughout
the financial period.
River Group was paid £47,009 (2015: £41,892) for designated advisor services during the year settled through cash.
No fees are payable to River Group as at year end. The expenditure was recognised in the Company as part of
administrative expenditure.
During the year, Namaqua Management Limited or its nominees, was paid €702,034 (2015: €705,678) for the
provision of administrative and management services. No amount was payable at the year-end (2015: Nil).
The Boudica Group was paid €47,095 (2015: €36,000) in cash for corporate services during the current financial
period. No fees are payable to Boudica Group at year end.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 50
50
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
24.
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 2016 and 2015 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.
2016 (£)
2015 (£)
Loans and
receivables
Financial
liabilities
Loans and
receivables
Financial
liabilities
Financial instruments of the Group are:
Financial assets at amortised cost
Trade and other receivables
Cash and cash equivalents
Financial liabilities at amortised cost
50,633
382,339
-
-
550,692
189,435
-
-
Trade payables
Borrowings
-
432,972
-
146,380
398,308
251,928
-
740,127
-
306,797
806,797
500,000
2016 (£)
2015 (£)
Loans and
receivables
Financial
liabilities
Loans and
receivables
Financial
liabilities
Financial instruments of the Company are:
Financial assets at amortised cost
Trade and other receivables – non current
Trade and other receivables – current
Cash and cash equivalents
Financial liabilities at amortised cost
26,998,867
690
22,082
-
-
-
27,712,269
523,104
3,382
-
-
-
Trade payables – current
Borrowings
Foreign currency risk
-
27,021,639
-
35,003
286,931
251,928
-
28,238,755
-
166,892
666,892
500,000
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 Rand, US Dollar and Tanzanian Shillings.
At the period ended 31 December 2016, the Group had no outstanding forward exchange contracts.
51 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
51
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Exchange rates used for conversion of foreign subsidiaries undertakings were:
2016
2015
ZAR to GBP (Spot)
ZAR to GBP (Average)
USD to GBP (Spot)
USD to GBP (Average)
EURO to GBP (Spot)
EURO to GBP (Average)
CAD to GBP (Spot)
CAD to GBP (Average)
0.0594
0.0506
0.8127
0.7401
0.8563
0.8186
0.6033
0.5587
0.0438
0.0515
0.6745
0.6541
0.7374
0.7263
0.4864
0.5126
The executive management of the Group monitor the Group's exposure to the concentration of fair value estimation
risk on a monthly basis.
Group Sensitivity Analysis:
If the GBP:EURO/ EURO:USD exchange rate was to increase/decrease by 10%, the effect on foreign currency
translation would be £2.5 million (2015: £2.5 million) and
Credit risk
£0.42 million (2015: £0.61 million) respectively.
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
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 (£)
2016
2015
Company (£)
2016
2015
26,999,557
Trade & other receivables
Cash & cash equivalents
Liquidity risk management
50,633
382,339
550,692
189,435
22,082
28,235,373
3,383
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.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 52
52
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Exchange rates used for conversion of foreign subsidiaries undertakings were:
2016
2015
ZAR to GBP (Spot)
ZAR to GBP (Average)
USD to GBP (Spot)
USD to GBP (Average)
EURO to GBP (Spot)
EURO to GBP (Average)
CAD to GBP (Spot)
CAD to GBP (Average)
0.0594
0.0506
0.8127
0.7401
0.8563
0.8186
0.6033
0.5587
0.0438
0.0515
0.6745
0.6541
0.7374
0.7263
0.4864
0.5126
The executive management of the Group monitor the Group's exposure to the concentration of fair value estimation
risk on a monthly basis.
Group Sensitivity Analysis:
If the GBP:EURO/ EURO:USD exchange rate was to increase/decrease by 10%, the effect on foreign currency
translation would be £2.5 million (2015: £2.5 million) and
Credit risk
£0.42 million (2015: £0.61 million) respectively.
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
counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in its consolidated
statement of financial position.
The Group and Company’s financial liabilities as at 31 December 2016 were all payable on demand, other than the
Greater than 1
trade payables to other Group undertakings.
year
Group (£)
At 31 December 2016
Less than 1
year
Trade and other payables
Borrowings
At 31 December 2015
Trade and other payables
Borrowings
Company (£)
At 31 December 2016
Trade and other payables
Borrowings
At 31 December 2015
Trade and other payables
Borrowings
Interest rate risk
-
-
-
-
-
-
-
-
146,380
251,928
306,797
500,000
35,003
251,928
166,892
500,000
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.
Group Sensitivity Analysis:
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
Currently no significant impact exists due to possible interest rate changes on the Company’s interest bearing
instruments.
Capital risk management
they are connected or related entities.
Financial assets exposed to credit risk at period end were as follows:
Financial instruments
Group (£)
2016
2015
Company (£)
2016
2015
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.
Trade & other receivables
Cash & cash equivalents
Liquidity risk management
26,999,557
50,633
382,339
550,692
189,435
28,235,373
22,082
3,383
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 2016. 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.
Fair values
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.
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 2016, the Group had no outstanding contracts designated as hedges.
52
53 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
53
KIBO MINING PLC
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
ANNEXURE 1 – HEADLINE LOSS PER SHARE
Accounting policy
Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary shares in issue
during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as
required by Circular 2/2015 issued by the South African Institute of Chartered Accountants (SAICA).
Reconciliation of Headline earnings per share
Headline loss per share
Headline loss per share comprises the following:
Reconciliation of headline loss per share:
(Loss)/ Profit for the period attributable to normal shareholders
Reversal of impairment of Intangible assets/ (Impairment of Intangible assets)
Loss on disposal of subsidiaries
Bargain purchase from acquisition of Subsidiaries
Adjustment arising from change in non-controlling interest
Impairment of goodwill on acquisition of Subsidiaries
Headline loss for the period attributable to normal shareholders
Headline loss per ordinary share
31 December
31 December
2015 (£)
2016 (£)
(3,611,496)
-
-
-
-
-
177,162
(3,182,240)
5,762
(193,425)
-
20,057
(3,611,496)
(0.010)
(3,172,687)
(0.010)
In order to accurately reflect the weighted average number of ordinary shares for the purposes of basic earnings,
dilutive earnings and headline earnings per share as at year end, the weighted average number of ordinary shares was
adjusted retrospectively.
25.
Events after the reporting period
Mbeya Coal to Power Project
The Tanzania National Environmental Management Council (“NEMC”) approved and accepted both the Mbeya Coal
Mine and Mbeya Power Plant Environmental and Social Impact Assessment (“ESIA”) scoping reports.
Furthermore, the Integrated Bankable Feasibility Study has been finalised, which confirms the Directors’ assessment
that the Mbeya Coal to Power Project is a technically and operationally robust project:
Capital requirement for the integrated project reduced 21.1 % from the original integrated prefeasibility study;
MCPP total revenue over an assumed 25-year life of project approximately US$7.5billion;
Indicative Post Tax Equity IRR between 21% and 22%;
MCPP can be constructed and commissioned within the previously projected schedule duration of 36 months; and
Post tax Project IRR ranging between 14.7% and 16%.
Also, the Group signed a strategic Memorandum of Understanding with Mbeya Cement Company Ltd (“Mbeya
Cement”), to develop a strategic regional collaboration and reciprocal supply of materials agreement effective from
20 April 2017.
Cessation of Metal Tiger Joint Ventures
The Group has reached agreement with Metal Tiger Plc, the Company’s Joint Venture (“JV”) partner in Tanzania to
cease JV activities at the Pinewood and Morogoro Joint Ventures with immediate effect and relinquish the licences
back to the local authorities.
Acquisition by Opera of the Imweru and Lubando Gold Projects
On 23 September 2016, the Group entered into an agreement with Opera Investments Plc (“Opera”) relating to the
potential corporate transaction whereby Opera Investments PLC (“Opera”) conditionally agreed to acquire Kibo Gold
Limited (“Kibo Gold”), through which the Imweru and Lubando gold projects in Tanzania are held, from the Group for
a total consideration of £3.66 million (the “Acquisition”).
The consideration for the Acquisition was satisfied by the allotment and issue of 61,000,000 new ordinary shares in
Opera (“Ordinary Shares”) (“Consideration Shares”) to the Group at a price of 6 pence per Consideration Share.
Opera has also raised gross proceeds of £1.5 million, through the issue of 25,000,000 new Ordinary Shares (“Placing
Shares”) at 6 pence per Placing Share (the “Placing”). The Group subscribed for 833,333 Placing shares at a cost of
£50,000, funded from existing cash reserves.
The Acquisition constituted a reverse takeover of Opera for the purposes of the Listing Rules, for which Shareholder
approval was obtained at the General Meeting held on 23 May 2017 form the Opera Shareholders. On 24 May 2017,
the re-admission of the Opera Investments plc (Renamed “Katoro Mining PLC”) ordinary shared on AIM was
successfully completed.
Shares issued
The Company has issued 277,768 new Ordinary Kibo shares of €0.015 par value each in the capital of the Company
(the “Settlement Shares”) to service providers in settlement of invoices for a total amount of £13,194. The Settlement
Shares were issued in respect of invoices for recent geological and investor relations services to the Company and
were issued at a price of 4.75p per Kibo share.
26.
Going concern
The Group’s financial statements have been prepared on the basis of accounting policies applicable to a going concern.
This basis presumes that funds will be available to finance future operations and that the realisation of assets and
settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
27.
Commitments and Contingencies
The Group does not have identifiable material contingencies or commitments as at the reporting date. Any contingent
rental is expensed in the period in which it is incurred.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 54
54
55
KIBO MINING PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
ANNEXURE 1 – HEADLINE LOSS PER SHARE
Accounting policy
Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary shares in issue
during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as
required by Circular 2/2015 issued by the South African Institute of Chartered Accountants (SAICA).
Reconciliation of Headline earnings per share
Headline loss per share
Headline loss per share comprises the following:
Reconciliation of headline loss per share:
(Loss)/ Profit for the period attributable to normal shareholders
Reversal of impairment of Intangible assets/ (Impairment of Intangible assets)
Loss on disposal of subsidiaries
Bargain purchase from acquisition of Subsidiaries
Adjustment arising from change in non-controlling interest
Impairment of goodwill on acquisition of Subsidiaries
Headline loss for the period attributable to normal shareholders
Headline loss per ordinary share
31 December
2016 (£)
(3,611,496)
-
-
-
-
-
(3,611,496)
(0.010)
31 December
2015 (£)
177,162
(3,182,240)
5,762
(193,425)
-
20,057
(3,172,687)
(0.010)
In order to accurately reflect the weighted average number of ordinary shares for the purposes of basic earnings,
dilutive earnings and headline earnings per share as at year end, the weighted average number of ordinary shares was
adjusted retrospectively.
55 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
55
provisions of the 2014 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 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.
By Order of the Board
Noel O’Keeffe
Director and Company Secretary
Dated: 8 June 2017
Registered Office:
27 Hatch Street Lower
Dublin 2
Ireland
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
Company number 451931
Kibo Mining Public Limited Company
(“the Company”)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Annual General Meeting of the Company will be held at
on Friday 30
June 2017 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 resolution numbered 6 will be proposed as a special resolution:
10 a.m.
Ordinary Business
1
2
3
4
To receive, consider and adopt the financial statements for the year ended 31 December 2016
together with the Directors and Auditors Reports thereon.
To authorise the Directors to fix the remuneration of the Auditors.
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.
To re-elect Mr Andreas Lianos 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
Ordinary Resolution
5
The Directors be and are hereby generally and unconditionally authorised pursuant to Section 1021 of
the Companies Act 2014 (“2014 Act”), in substitution for all existing such authorities, to exercise all
powers of the Company to allot relevant securities (within the meaning of Section 1021 of the 2014
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.
Special Resolution
6
Subject to the passing of Resolution 5 above that the Directors be and are hereby empowered
pursuant to Section 1023 of the Companies Act 2014 (“2014 Act”), in substitution for all existing such
authorities, to allot equity securities (within the meaning of Section 1023 of the 2014 Act) for cash
pursuant to the authority conferred by resolution number 5 above as if Section 1022(1) of the 2014
Act, did 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
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 56
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
provisions of the 2014 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 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.
By Order of the Board
Noel O’Keeffe
Director and Company Secretary
Dated: 8 June 2017
Registered Office:
27 Hatch Street Lower
Dublin 2
Ireland
57 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
Notes:
a.
b.
c.
d.
e.
f.
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, an individual copy of which has also been mailed to each
shareholder together with an attendance card for admittance to the meeting. 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.
Only shareholders, proxies and authorised representatives of corporations, which are shareholders,
are entitled to attend the meeting.
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’s share registrar, Capita
Asset Services, Shareholder solutions (Ireland), 2 Grand Canal Square, Dublin 2 not less than 48 hours
prior to the time appointed for the meeting.
All South African shareholders must send their proxies to the transfer secretaries, Terbium Financial
Services, 31 Beacon Road, Florida North 1709, Johannesburg (PO Box 61272 Marshalltown 2107,
Johannesburg) or via e-mail at kibo@terbium.global not less than 48 hours prior to the time appointed
for the meeting.
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.
The Company, pursuant to Section 1095 of the Companies Act, 2014 and regulation 14 of the
Companies Act, 1990 (Uncertificated Securities) Regulations 1996 (as amended) specifies that only
those shareholders registered in the Register of Members of the Company (the “Register”) at the close
of business on the day which is two days before the date of the meeting, (or in the case of an
adjournment at the close of business on the day which is two days prior to the adjourned meeting),
shall be entitled to attend and vote at the meeting or any adjournment thereof in respect only of the
number of shares registered in their name at that time. Changes to entries in the Register after that
time will be disregarded in determining the rights of any person to attend and/or vote at the meeting.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 58
Notes:
b.
c.
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, an individual copy of which has also been mailed to each
shareholder together with an attendance card for admittance to the meeting. 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.
Only shareholders, proxies and authorised representatives of corporations, which are shareholders,
are entitled to attend the meeting.
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’s share registrar, Capita
Asset Services, Shareholder solutions (Ireland), 2 Grand Canal Square, Dublin 2 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, Terbium Financial
Services, 31 Beacon Road, Florida North 1709, Johannesburg (PO Box 61272 Marshalltown 2107,
Johannesburg) or via e-mail at kibo@terbium.global 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.
f.
The Company, pursuant to Section 1095 of the Companies Act, 2014 and regulation 14 of the
Companies Act, 1990 (Uncertificated Securities) Regulations 1996 (as amended) specifies that only
those shareholders registered in the Register of Members of the Company (the “Register”) at the close
of business on the day which is two days before the date of the meeting, (or in the case of an
adjournment at the close of business on the day which is two days prior to the adjourned meeting),
shall be entitled to attend and vote at the meeting or any adjournment thereof in respect only of the
number of shares registered in their name at that time. Changes to entries in the Register after that
time will be disregarded in determining the rights of any person to attend and/or vote at the meeting.
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
KIBO MINING PUBLIC LIMITED COMPANY
(the “Company”)
FORM OF PROXY
Annual General Meeting
I/We (See Note A below) ______________________________________of ____________________________
being a shareholder of the Company, hereby appoint (See Note B below):
(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 Friday 30
June 2017 at 10 a.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 from voting at his/her discretion.
Ordinary Business of the Meeting
For
Against
Vote
Withheld
1
To receive, consider and adopt the financial statements for the year
ended 31 December 2016 together with the Directors and Auditors
Reports thereon.
To authorise the Directors to fix the remuneration of the auditors.
To re-elect Mr Louis Coetzee as a Director.
To re-elect Mr Andreas Lianos as a Director.
2
3
4
Special Business of the Meeting
For
Against
Vote
Withheld
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 empowered pursuant to Section
1023(3) of the Companies Act, 2014 to allot equity securities.
Dated this _______ day of _________ 2017
Signature or other execution by the shareholder (See Note C, turn over):
___________________________
59 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
Notes:
(A)
(B)
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.
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)
(ii)
in the case of an individual shareholder be signed by the shareholder or his or her
attorney; and
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)
(E)
(E)
(F)
(G)
(H)
(I)
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.
To be valid, the form of proxy and, if relevant, the power of attorney under which it is signed, or a
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’s share registrar, Capita Asset
certified copy of that power of attorney, must be received by the Company’s share registrar, Capita
Services, Shareholder Solutions (Ireland), 2 Grand Canal Square, Dublin 2 at not less than 48 hours prior
Registrars (Ireland) Ltd, Shareholder Solutions (Ireland), 2 Grand Canal Square, Dublin 2 at not less
to the time appointed for the meeting.
than 48 hours prior to the time appointed for the meeting.
All South African shareholders must send their proxies to the transfer secretaries, Terbium Financial
Services, 31 Beacon Road, Florida North 1709, Johannesburg (PO Box 61272 Marshalltown 2107,
Johannesburg) or via e-mail to kibo@terbium.global not less than 48 hours prior to the time appointed
for the meeting.
A proxy need not be a shareholder of the Company but must attend the Meeting in person to
represent his/her appointer.
The return of a proxy form will not preclude any shareholder from attending and voting at the
Meeting.
The “Vote Withheld” option is provided to enable you to abstain on any particular resolution. It should
be noted that a “Vote Withheld” is not a vote in law and will not be counted in the calculation of the
proportion of the votes ‘For’ and ‘Against’ a resolution.
Pursuant to Section 1095 of the Companies Act, 2014 and regulation 14 of the Companies Act, 1990
(Uncertificated Securities) Regulations 1996 entitlement to attend and vote at the meeting and the
number of votes which may be cast thereat will be determined by reference to the Register of
Members of the Company at close of business on the day which is two days before the date of the
meeting (or in the case of an adjournment as at close of business on the day which is two days before
the date of the adjourned meeting).Changes to entries on the Register of Members after that time
shall be disregarded in determining the rights of any person to attend and vote 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
1.
1. 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
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
Meeting”, but any such deletion must be initialled by the KIBO shareholder concerned. The person whose
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.
name appears first on the form of proxy and who is present at the Annual General Meeting will be entitled
follow.
to
exclusion
names
whose
proxy
those
the
act
as
to
of
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 60
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
2. 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.
3. The date must be filled in on this proxy form when it is signed.
4. The completion and lodging of this form of proxy will not preclude the relevant KIBO 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.
5. Documentary evidence establishing the 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.
6. Any alterations or corrections made to this form of proxy must be initialled by the signatory/ies.
7. 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.
8. Forms of proxy must be received by the transfer secretaries, Terbium Financial Services, 31 Beacon Road,
Florida North 1709, Johannesburg (PO Box 61272 Marshalltown 2107, Johannesburg) or via e-mail to
kibo@terbium.global by not later than 10 a.m. on the 28th June 2017.
9. 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.
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
To be completed and mailed to:
Terbium Financial Services
PO Box 61272
Marshalltown 2107
Johannesburg
OR
To be completed and hand delivered to:
Terbium Financial Services
31 Beacon Road, Florida North 1709
Johannesburg
OR
E-mail: kibo@terbium.global
61 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
KIBO MINING PLC
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016
EXPLANATION OF RESOLUTIONS TO BE PROPOSED AT THE ANNUAL GENERAL MEETING
Resolution 1: Financial statements
The Directors will present the financial statements of the Company for the year ended 31 December
2016. A full copy of the Annual Report is available on www.kibomining.com.
Resolution 2: Auditors’ remuneration
The Directors are seeking to renew their authority to fix the remuneration of the Auditors for the year
ending 31 December 2017.
Resolutions 3 and 4: Re-election of Directors
Kibo Mining plc is led by a strong and effective Board of Directors. The performance of the Board is
reviewed annually, and each of the Directors has made a substantial contribution to the leadership
and governance of the Company during the year and continues to contribute effectively and to
demonstrate commitment to their respective roles.
Mr Louis Coetzee and Mr Andreas Lianos are retiring as directors of the Company in accordance with
Regulation 84 of the Articles of Association of the Company and being eligible, have offered
themselves for re-election.
Resolution 5: Allotment of shares
At the Annual General Meeting of the Company held in 2016, shareholders gave the Directors a
general authority under Section 1021 of the Companies Act, 2014 to allot shares. That authority will
expire at the conclusion of the forthcoming Annual General Meeting. Shareholders are therefore being
asked to renew the Directors’ authority to allot shares in the Company.
By Resolution 5, the Directors will, at the forthcoming Annual General Meeting, seek authority to issue
shares up to a nominal value equal to the authorised but unissued ordinary share capital of the
Company from time to time. The authority will, if renewed, expire at the conclusion of the annual
general meeting to be held in 2018. The Directors will exercise this authority only if they consider this
to be in the best interests of shareholders generally at that time.
Resolution 6: Dis-application of pre-emption rights
The power given to the Directors at the 2016 Annual General Meeting to allot shares for cash
otherwise than in accordance with statutory pre-emption rights also expires at the conclusion of the
forthcoming Annual General Meeting.
Shareholders are therefore also being asked to renew, until the Annual General Meeting to be held in
2018, the Directors’ authority to allot shares for cash otherwise than in accordance with statutory pre-
emption provisions in the event of a rights issue or in respect of any other issue of equity securities for
cash 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 Directors will exercise this
authority only if they consider this to be in the best interests of shareholders generally at that time.
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 62
NOTES:
EXPLANATION OF RESOLUTIONS TO BE PROPOSED AT THE ANNUAL GENERAL MEETING
Resolution 1: Financial statements
The Directors will present the financial statements of the Company for the year ended 31 December
2016. A full copy of the Annual Report is available on www.kibomining.com.
Resolution 2: Auditors’ remuneration
The Directors are seeking to renew their authority to fix the remuneration of the Auditors for the year
ending 31 December 2017.
Resolutions 3 and 4: Re-election of Directors
Kibo Mining plc is led by a strong and effective Board of Directors. The performance of the Board is
reviewed annually, and each of the Directors has made a substantial contribution to the leadership
and governance of the Company during the year and continues to contribute effectively and to
demonstrate commitment to their respective roles.
Mr Louis Coetzee and Mr Andreas Lianos are retiring as directors of the Company in accordance with
Regulation 84 of the Articles of Association of the Company and being eligible, have offered
themselves for re-election.
Resolution 5: Allotment of shares
At the Annual General Meeting of the Company held in 2016, shareholders gave the Directors a
general authority under Section 1021 of the Companies Act, 2014 to allot shares. That authority will
expire at the conclusion of the forthcoming Annual General Meeting. Shareholders are therefore being
asked to renew the Directors’ authority to allot shares in the Company.
By Resolution 5, the Directors will, at the forthcoming Annual General Meeting, seek authority to issue
shares up to a nominal value equal to the authorised but unissued ordinary share capital of the
Company from time to time. The authority will, if renewed, expire at the conclusion of the annual
general meeting to be held in 2018. The Directors will exercise this authority only if they consider this
to be in the best interests of shareholders generally at that time.
Resolution 6: Dis-application of pre-emption rights
The power given to the Directors at the 2016 Annual General Meeting to allot shares for cash
otherwise than in accordance with statutory pre-emption rights also expires at the conclusion of the
forthcoming Annual General Meeting.
Shareholders are therefore also being asked to renew, until the Annual General Meeting to be held in
2018, the Directors’ authority to allot shares for cash otherwise than in accordance with statutory pre-
emption provisions in the event of a rights issue or in respect of any other issue of equity securities for
cash 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 Directors will exercise this
authority only if they consider this to be in the best interests of shareholders generally at that time.
63 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016
NOTES:
KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2016 64
HigHligHTs 2016
Mbeya Coal to Power (Coal)
• Re-statement of Coal Resource
• Completion of Definitive Power Feasibility Study
• Completion of Definitive Mining Feasibility Study
• Mining Right Application submitted to Tanzanian Ministry of Energy
& Minerals
• Collaboration Agreement signed with GE International Inc. (GE) for supply
of equipment, technology and services to the Mbeya power plant
• Appointment of ABSA/Barclays Bank as new Financial Advisor to MCPP
• Engineering-Procurement-Construction (EPC) & Other Equipment
Manufacturer (OEM) contracts awarded to SEPCO III & GE respectively
• Completion of Environmental & Social Impact Study
• Completion of Integrated Bankable Feasibility Study (announced
January 2017)
IMweru & lubando ProjeCt (Gold)
• Options investigated for spin-off of Kibo’s gold projects (Imweru &
Lubando) in Lake Victoria Region into separate gold mining company
• Heads of Agreement signed with Opera Investments PLC for the sale of
Imweru & Lubando in reverse takeover transaction (“Opera Transaction”)
• Opera Transaction completed (May 2017) with admission of Opera
to AIM, re-named Katoro Gold PLC and placing implemented which
raised £1.5m to advance Imweru towards gold production
• Re-statement of gold Mineral Resources at Imweru & Lubando
HanetI ProjeCt (nI-Cu-PGM)
• Haneti maintained in good standing pending availability of resource
to drill established drill targets
Kibo AnnuAl REpoRt 2016
TARgeT PRogRAmme
foR 2017/2018
MCPP
• Environmental Impact Assessment (Complete, awaiting certification)
• Negotiation of PPA with TANESCO (Target: Q2 2017 subject to
finalization of Tanzania Energy Policy Procurement Review
currently underway)
• Financial Close (2017 – dependent on finalizing PPA)
HanetI
• Implement drill programme at Haneti on priority targets at Mihanza
and Mwaka Hills contingent on resources being available
Katoro Gold PlC
IMweru
• Implement drill programme with objective of expanding and
upgrading existing Mineral Resource in order to complete mining
Pre-Feasibility Study (PFS)
• Contingent on favourable results from PFS, proceed to completion
of definitive bankable feasibility study which will incorporate:
• Geotechnical & Engineering studies
• Completion of Environmental and Social Impact Study
• Mining Licence Application
• Financial Modelling
• Bring the project to Financial Close
• Commence mine construction
• Implement follow-up exploration programmes on regional targets
with the objective of discovering and defining additional gold
resources
2016
Annual Report
and Accounts
9
3
7
1
2
7
7
6
5
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