SHAREHOLDER AND TRADING UPDATE, CHANGE OF YEAR END

RNS Number : 3412T

Kibo Mining Plc

12 December 2012

 



Kibo Mining Plc

(Incorporated in Ireland)

(Registration Number: 451931)

(External registration number: 2011/007371/10)

Share code on the JSE Limited: KBO

Share code on the AIM: KIBO

ISIN: IE00B61XQX41

("Kibo" or "the Company")

Dated: 12 December 2012

SHAREHOLDER AND TRADING UPDATE, CHANGE OF YEAR END

·      Completion of the 100% acquisition of Mzuri Gold Limited and Mayborn Resources Limited which re-position Kibo as a major multi-commodity mineral explorer and developer in Tanzania;

·      Negotiation of JV Agreement with Asian Conglomerate progressing well based on a re-negotiated MOU which will see Kibo assume full operational control for the Rukwa coal development;

·      Promising exploration results from completion of Stage 1 exploration projects at Lake Victoria, Haneti and Morogoro have defined a number of drill targets for near term testing in 2013;

·      Proposed JV agreement with Votorantim on the Haneti project nears finalisation with mutually agreed work programme to the value of $0.8M (£0.5M) to commence early in 2013. Work programme includes budget for drilling on initial targets based on work carried out by Kibo to date.

Kibo Mining plc ("Kibo" or the "Company" (AIM: KIBO; AltX: KBO), the mineral exploration and development company focused on gold nickel, coal and uranium projects in Tanzania is pleased to provide shareholders with the following Shareholder and Trading Update on the position of the Company as at the end of September 2012. The Company also wishes to announce that it has changed its financial year-end to December 31 (from 30 September) in order to align the Company's year-end with the year-ends of its newly acquired subsidiaries (together, the "Group").

Louis Coetzee, CEO of the Company, commented today:

The acquisitions of Mzuri Energy Limited and Mayborn Investments (Pty) Limited, which were formally completed on 1 October 2012, have added significant coal and uranium assets to Kibo's Tanzanian commodity portfolio and re-position the Company as a major operator in the Tanzanian mineral exploration and development space. We look forward to unlocking the value in our enviable ground position in Tanzania which I believe has already begun with the promising results emerging from our exploration programmes implemented during the period. This release provides an update on the activities of the expanded Kibo Group.

General

Activities during the first six months of the period under review were reported in the Company's previous Interim Half Year Results covering the period to 31 March 2012. The most significant item was the announcement of an agreement to acquire a minimum of 51% interest in a Canadian company, Mzuri Energy Ltd ("MEL") and 100% interest in a South African company, Mayborn Resource Investments (Pty) Ltd ("Mayborn"). We are pleased to report that on the 1^st October 2012, these acquisitions were formally completed to the extent that Kibo acquired 100% of both companies. These acquisitions have brought with them substantial Tanzanian coal and uranium assets which, together with the company's existing large gold and base metal portfolio, re-position Kibo as a major multi-commodity mineral explorer and developer in Tanzania.

We would like to welcome our new Shareholders to Kibo following the MEL and Mayborn acquisitions together with our new Board members, Cecil Bond and Bernard Poznanski who were appointed during the reporting period. Both gentlemen bring a wealth of global experience in the mineral exploration and mining sector to the Company would also like to thank William Payne who resigned from the Board during the period for his invaluable contribution to the development of Kibo to date.

Exploration

In conjunction with our busy schedule on the corporate activity front during the period, we also completed our Stage 1 exploration programme on our Lake Victoria, Morogoro and Haneti projects. The results of this work were reported in our Operational Update dated 21 June 2012 (released at the same time as our last Interim Report) and more recently in an Exploration Update dated 14 November 2012. The exploration results demonstrate the significant progress that we have made to date in fulfilling our exploration objectives of defining a number of drill ready targets for testing across all projects during Stage 2 exploration, which will now commence in 2013. We are particularly pleased at the results emerging from our work at Haneti (nickel, gold and PGMs) and Morogoro South (Gold) where we have defined robust drill targets in these non-traditional but increasingly attractive prospective regions of Tanzania.

At Haneti, our exploration team has been working closely with Votorantim during the period on planning the next phase of exploration. As previously reported, Kibo has an MOU in place with Votorantim, a major Brazilian industrial group with significant experience in nickel exploration and mining. A full JV Agreement ("JVA") is in the late stage of finalisation, which requires Votorantim to expend £2.7M over a three-year earn-in phase to earn a 50% interest in the project. A schedule of exploration activities, which includes drilling of initial targets, has been agreed and an initial $0.8m (£0.5m) exploration programme will commence in early 2013 following signing of the JVA, which we anticipate will be complete before the end of 2012.

Corporate

On the 11^th May 2012, Kibo suspended trading in its shares on AIM and the JSE in order to facilitate the acquisitions of MEL and Mayborn. These transactions were deemed to constitute a reverse takeover of the company under AIM and JSE regulations. On the 15^th August 2012, with the publication of a Re-Admission Document and Notice of EGM, trading in Kibo shares recommenced on AIM and the JSE. On the 6 September 2012, at an EGM, Kibo Shareholders approved the 100% acquisitions of MEL and Mayborn and trading in the enlarged share capital of the company commenced on the 7^th September 2012. The acquisitions were formally completed on the 1^st October 2012.  Kibo is now integrating these companies and their significant asset portfolios in to the Group which we believe, together with our existing gold and base metal assets puts us in an excellent position to generate value for shareholders over the next few years. Kibo has already attracted interest from a major Asian Conglomerate ("AC") in our flagship 109 million tonne (JORC-compliant Inferred Mineral Resource), Rukwa coal deposit and an MOU is in place for the development of a coal mine and associated mouth-of-mine coal fired power plant. Negotiations to finalise a comprehensive JV Agreement with the AC are proceeding well and are now based on a re-negotiated MOU, which will see Kibo assume full operational control to advance the Rukwa coal project.

Global markets have been volatile during the period under review and this trend has continued on towards the end of 2012. A general theme has been a flight from higher risk investments and like many of our peers in the junior exploration sector we have not been immune from this trend. It is worth noting that only one new AIM IPO came to the market during the 2^nd and 3^rd quarters of 2012 and equity funds raised on AIM during these quarters of £96m and £84m respectively were the lowest quarterly amounts since Q3 2004 (Ernst & Young, Mining Eye reports for Q2 & Q3 2012). In this environment our share price has performed poorly and we believe its current level does not reflect the inherent value in the company given the quality of our mineral assets, our multi-commodity focus and our operational capacity in Tanzania. Weak market conditions have also impacted on our ability to raise funds and the support of the Mzuri Group Ltd ("Mzuri"), our largest shareholder is much appreciated during the period. Mzuri fully subscribed to a £750,000 Placing in February 2012 and this has allowed us to make significant progress on our early stage exploration programmes in Tanzania (refer Exploration section below). As we near the end of 2012, securing further funding to advance our exploration and development programmes is proving challenging. However, we are confident that we can succeed based on our recent achievement in securing attractive mineral assets, joint venture partners and demonstrating exploration progress on our licences.

In view of the challenging funding environment and in order to expand our funding options, we took the opportunity during the period to put in place a standby equity distribution agreement ("SEDA") with YA Global Masters (SPV) Ltd. I am confident that this facility will be a useful addition to our funding options as we progress, particularly within the context of an improving market and increased trading in the Company's shares.

Change of Year End and Summary Financial Information to 30 September 2012

In order to align the year ends of the various companies within the expanded Kibo Group following the MEL and Mayborn acquisitions, Kibo has decided to change its financial year-end from 30 September to 31 December.  As such, the next audited accounts for the Company will be prepared for the fifteen months to 31 December 2012. These accounts will include the full consolidation of the acquisitions of MEL and Mayborn as fully described in the re-admission document dated 15 August 2012 and the Reverse Take-Over approved by shareholders on 6 September 2012.

As an interim update, a summary of key financial information on the Company and the Group to 30 September 2012 is provided in this release. This financial information has been extracted for information purposes only from Kibo's management accounts for twelve months ended

30 September 2012 and includes pro forma consolidated information on MEL and Mayborn, whose acquisitions were not formally completed until 1 October 2012. The financial information does not constitute interim financial statements as defined under International Financial Reporting Standards, however it should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 30 September 2011, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") as well as the Re-admission document dated 15 August 2012.

On a pro forma consolidated basis including MEL and Mayborn, the unaudited cash balance of the Group as at 30 September was approximately GBP400 000. This includes cash and cash equivalents of Kibo on 30 September, was GBP169,169 with balance coming from MEL and Mayborn.

The Group had no income for the period and expenditure by Kibo totalled GBP 555 691 of expenditure which equates to a loss per share of

0.14 pence per share calculated on the weighted number of ordinary shares of 409,699,183 before the acquisitions of MEL and Mayborn (the "Acquisitions") as discussed above. In addition, MEL and Mayborn had expenditure of approximately USD500 000 during the period from

31 December 2011 (the date of its last accounts) to 30 September 2012, including exploration expenditure of approximately USD250 000.

The intangible assets of Kibo before taking into account the Acquisitions discussed above and more fully disclosed in the Re-admission document, was GBP 5,522,066.

The current assets of Kibo were GBP 1.9 million which includes capitalised prepayments related to the Acquisitions totalling GBP1.7 million, these costs will be expensed on consolidation of the Acquisitions on 1 October 2012, the effective date of the Acquisitions.

Group current liabilities were GBP2.5 million, which include approximately GBP1.6million of costs relating to the Acquisitions.  These costs represent substantially all of the costs associated with the Acquisitions and they will be brought into the Consolidated Statement of Comprehensive Income in the financial statements to 31 December 2012 from the effective date of acquisition, being 1 October 2012. The Group has no long term liabilities.

Kibo's authorised share capital is 3,000,000,000 ordinary shares of 0.01 euro each. The issued number of shares at September 30, 2012 (before the Acquisitions) was 415,129,511. The Acquisitions of MEL and Mayborn, which were approved by shareholders in September and formally completed on 1 October 2012, were financed through the issue of 706,964,400 ordinary shares of €0.01 at a value of 2.5 pence each. This expanded the issued share capital of Kibo to 1,122,093,911 ordinary shares.

Enquiries

Louis Coetzee	[phone]	Kibo Mining plc	Chief Executive Officer
Stuart Laing	[phone]	RFC Ambrian Limited	Nominated Adviser
Andreas Lianos	[phone]	River Group	Corporate Adviser and Designated Adviser  (AltX)
Matthew Johnson	[phone]	Northland Capital	Broker (Assistant Director, Corporate Finance)
Nick Bealer	[phone]	Cornhill Capital Ltd	Broker (Corporate Broking)
Matt Beale	[phone]	Fortbridge	Public Relations

General Background & Strategy

Kibo is a public company registered in Ireland (company number 451931). Its registered office is Kibo Mining plc, Suite 3,

One Earlsfort Centre, Lower Hatch Street, Dublin 2, Ireland. Kibo was established in early 2008 to explore and develop

mineral deposits in Tanzania, East Africa and was admitted to AIM on 27 April 2010 and AltX in South Africa on 30 May 2011.

The Company suspended itself from AIM during the period 11 May to 14 August 2012 to facilitate two corporate acquisitions

that significantly increased its mineral assets in Tanzania. It was re-admitted to AIM and the JSE on 15 August 2012 and

shareholder approval for the acquisitions was obtained the 6th September 2012 at an EGM. The acquisitions were formally

completed on the 1st October 2012.

The Board of Kibo is composed of professionals whose experience include mineral exploration, mine development, mining

finance, tax, law, mergers and acquisitions, and financial control of public companies. It is supported by a competent and

motivated Tanzanian staff that operates from Kibo's operations office in Dar es Salaam.

The mineral assets of the Company now comprise five projects in Tanzania - Haneti (Nickel, PGE and Gold), Morogoro (Gold),

Lake Victoria (Gold), Rukwa (Coal) and Pinewood (Coal & Uranium) which give Kibo access to 38,000 km2 of early stage

exploration licences in Tanzania's premier gold mining region, the Lake Victoria Goldfield, within the emerging gold

exploration regions in eastern Tanzania and uranium & coal regions in south-western Tanzania.

The acquisitions of Mzuri Energy and Mayborn have added the advanced Rukwa thermal coal project and the Pinewood

uranium exploration project to Kibo's portfolio of mineral projects in Tanzania.

The Rukwa and Pinewood projects will provide Kibo shareholders with exposure to an attractive portfolio of strategic

energy assets in Tanzania. Importantly, they are situated within and close to the Mtwara Corridor, an area where the

Tanzanian Government has committed to significant infrastructure development and which has seen recent multi-million dollar

investment in coal and coal-fired power stations and uranium exploration.

The Rukwa project is substantially more advanced than Kibo's existing exploration projects, with a significant Mineral Resource

of thermal coal already defined. This provides nearer term development and commercialisation potential, complementing the

earlier stage existing projects held by Kibo. This is further supported by the memorandum of understanding that has already

been entered into with a major Asian conglomerate for the development of a coal mine and mine-mouth coal-fired power plant

based on the Rukwa project.

In addition, the Pinewood project encompasses a significant ground holding of prospective Karoo sequence sedimentary rocks.

These sediments are attracting considerable interest from international companies exploring for uranium and coal mineralisation

following some notable discoveries in recent years.

Kibo's objective is to build shareholder value in a sustainable manner. This objective will be pursued primarily through active

exploration of its own projects and by using the Company's experience in Tanzania to acquire attractive exploration and

development assets on competitive terms that can be moved swiftly up the value curve by using the company's own skills base

whilst also seeking to benefit from strategic collaborative relationships with industry leaders who have special skills and

competencies within their chosen fields of focus. Kibo will undertake continual risk assessment of its projects and take

whatever actions it believes are necessary to ensure that these risks are mitigated.

QUALIFIED PERSON STATEMENT

CERTIFICATES OF QUALIFICATIONS

To accompany the report dated 19th April 2012 and entitled "Independent Technical Report for the Rukwa Coal Project, Mbeya Region, United Republic of Tanzania".

1.     I am responsible for preparing the aforementioned independent technical report (or"ITR");

2.     I am a Director and Principal Geologist with the firm GEMECS (Pty) Limited ("GEMECS") with an office at Visiomed Office park, 269 Beyers Naude Drive Randburg Johannesburg, South Africa;

3.     I am a graduate of the University of the Free State (former University of The Orange Free State) Bloemfontein, , Pietermaritzburg with a BSc Degree in Geology (1972). I graduated with a Master of Science (MSc) at the University of the Free State (1976). I have practised my profession continuously since 1975;

4.     I am registered as a Professional Natural Scientist (Geological Science) with the South African Council for Natural Scientific Professions (SACNASP), Registration No 400066/98.;

5.     I am a Fellow Member of the Geological Society of South Africa (FGGSA);

6.     I have not received, nor do I expect to receive, any interest, directly or indirectly, in the Rukwa Coal Project.

7.     As of the date of this certificate, to the best of my knowledge, information and belief,this updated ITR contains all scientific and technical information that is required to be disclosed such as to make this ITR complete and not be misleading in any way;

8.     I have read National Instrument NI 43-101 and Form NI 43-101F1 and by reason of my education and past relevant work experience, I fulfil the requirements to be a "Qualified Person" for the purposes of National Instrument 43-101. This ITR has been prepared in compliance with National Instrument 43-101 and Form 43- 101F1;

9.     I as a Qualified Person, am independent of Mzuri Energy Limited and Rukwa Coal Limited as defined in 1.4 of National Instrument 43-101

10.  I have personally inspected the Rukwa prospecting areas located in Mbeya District,Tanzania during a site visit conducted in June 2010. I visited the property for a period of 2 days.

11.  Until my site visit during June 2010 I had no previous involvment in the Rukwa Coal Project.

12.  GEMECS was retained by Rukwa Coal to prepare an updated independent technical

13.  report for this project in accordance with National Instrument 43-101. The preceding report is based on our review of project files and information provided by Rukwa and discussions with personnel of Rukwa;

Dated the 19th day of April 2012

CD van Niekerk Pr.Sci.Nat.

Director and Principal Geologist

12 December 2012

Johannesburg

Corporate and Designated Adviser

River Group

 

END

 

 

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