TIDMKIBO
RNS Number : 2987E
Kibo Energy PLC
29 June 2023
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931
(External registration number: 2011/007371/10)
LEI code: 635400WTCRIZB6TVGZ23
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 29 June 2023
Kibo Energy PLC ('Kibo' or the 'Company')
Results for the Year Ended 31 December 2022
Kibo Energy PLC ("Kibo" or the "Company"), the renewable
energy-focused development company, is pleased to release its
consolidated annual financial results for the year ended 31
December 2022. The Company's Annual Report, which contains the full
financial statements is in the process of being prepared for
dispatch to shareholders. A copy of this Annual Report will also be
available on the Company's website at
https://kibo.energy/wp-content/uploads/Kibo-Annual-Report-2022-Final.pdf
.
Details of the date and venue for this year's AGM will be
announced in due course.
Overview
Financial results (includes the consolidated results of MAST
Energy Developments Plc)
-- Total revenues GBP1,036,743 (2021: GBP3,245);
-- Operating loss GBP10,570,952 (2021: GBP 24,071,363 loss);
-- Loss after tax for the year ended December 2022 GBP10,908,524
(2021: GBP23,148,155 loss) includes:
-- GBP181,684 (2021: GBP891,375) from the equity accounted
results of Katoro Gold Plc ("Katoro"), which is separately
funded;
-- GBP2,732,982 (2021: GBP1,079,083) from the consolidated
results of Mast Energy Developments Plc ("MED"), which is
separately funded.
-- GBP7,038,930 (2021: GBP20,705,209) impairment loss mainly on
Mast Energy Developments plc (Bordersley), Mbeya Coal to Power and
Mabesekwa Coal to Power projects as a result of the continuing
global shift to move toward renewable energy and disregard fossil
fuel assets, coupled with the Group's execution of its renewable
energy strategy during the 2022 financial period;
-- Administrative expenditure increased to GBP2,579,028 in the year ended December 2022 (2021: GBP2,325,750)
-- Listing and capital raising fees increased from GBP321,365 to GBP 363,368 ;
-- Additional renewable energy and exploration project
expenditure of GBP847,567 (2021: GBP687,963) incurred in 2022 by
Kibo's subsidiaries being mainly MAST Energy Developments plc on
Bordersley, Pyebridge and Rochdale and on Sustineri Energy (Pty)
Ltd on renewable energy in South Africa;
-- Cash outflows from company operating activities have
increased to GBP759,985 (2021: GBP491,229 cash outflow);
-- Group net debt position (cash less debt) is (GBP5,032,945) (2021: (GBP404,576) net debt);
-- Company net debt position (cash less debt) is (GBP2,659,817) (2021: GBP6,608 net cash);
-- Basic and diluted loss per share of GBP0.003 for December
2022 (2021: basic and diluted GBP0.009);
-- Headline loss per share of GBP0.0009 for December 2022 (2021:
headline loss per share of GBP0.0007).
Operational highlights in the 2022 year to date
-- Solidified our position in sectors like Waste to Energy,
Biofuel, Reserve Power, and Renewable Energy Generation Long
Duration Battery Storage, focusing on Southern Africa and the
UK.
-- Proceeded with the joint venture agreement to jointly develop
a portfolio of Waste to Energy projects in South Africa with
Industrial Green Energy Solutions (Pty) Ltd , which will initially
develop a phased c. 8MW project for an industrial client, to be
followed by six other projects at different sites, to a total
generation of up to 50MW. A 20-year conditional Power Purchase
Agreement secured for initial 2.7 MW phase.
-- Ongoing intention to divest from coal assets while retaining
energy projects through innovative biofuel technology. Recent
testing showed the superior potential of biomass (bio coal)
compared to conventional coal in industrial boilers.
-- Initiated a technical study to assess the feasibility of
replacing fossil fuels with renewable biofuel. In this regard, Kibo
has appointed an experienced international biomass and biofuel
consultant to evaluate the economic and operational feasibility of
implementing bio coal as a fuel replacement for utility-scale power
projects.
-- In discussions with the Tanzanian government for the Mbeya
Power Project, aligning with the Tanzanian Power System Master
Plan. A renewed MOU with TANESCO outlines the framework for
finalizing power purchase and implementation agreements.
-- Partnership with Enerox GmbH secures qualified exclusive
rights to deploy VRFB Energy Storage Systems, advancing our
commitment to sustainable energy.
-- Entered into a share purchase agreement to acquire Shankley
Biogas Limited, securing the rights to the Southport project-a 12
MW Waste to Energy initiative near Liverpool, UK. The project aims
to generate bio-methane, power a 10 MW CHP plant, and a 2 MW
battery storage facility.
Post period highlights and Outlook
-- Kibo appointed Beaumont Cornish to the Company as its
Nominated Advisor (Nomad) on 11 January 2023 following the
resignation of RFC Ambrian as Company Nomad on 9 December 2022.
-- Kibo appointed Ajay Saldanha to the Board as a director of the Company on 11 January 2023.
-- Kibo appointed Peter Oldacre as Kibo Group Business Development Executive on 10 March 2023.
-- Kibo announced a potential new revenue stream on 17 January
2023 for its initial project within the IGES waste to energy joint
venture, targeting the production of synthetic oil from
non-recyclable plastic waste (in addition to the previously
reported production of electricity from syngas), which promises
significant added benefits.
-- Kibo settled outstanding creditors by way of issuing
14,025,314 ordinary shares at 0.14 pence per share, of par value
EUR0.001 each (the "Settlement Shares") to a service provider in
payment of an outstanding invoice for value of GBP19,635.44.
-- The Kibo 7% Convertible Loan Note Instrument was redeemed
with the agreement of Noteholders for outstanding balances
amounting to GBP714,517 (principal and interest) as of 28 February
2023 on 11 April 2023 for Kibo shares to satisfy one of the
conditions precedents to the re-profiling of the Kibo Facility
Agreement signed on 10 April 2023 (refer below).
-- Kibo announced a reprofiling of the Bridge Loan Facility
Agreement signed with an Institutional Investor on 16 February 2022
and for which the maturity date was subsequently extended from its
original date of 16 June 2022 to 28 April 2023. The Reprofiling
Agreement saw GBP1,113,980 of the outstanding balance on the
existing bridge loan facility converted into a new 24-month term
loan (the Reprofiling Agreement) following the completion of the
conditions precedent under the Reprofiling Agreement which were
satisfied on 25 April 2023 and announced on 26 April 2023. Kibo has
also awarded 1,262,300,283 warrants to the Institutional under the
agreed reprofiling terms of the Facility.
-- Kibo repriced all unexercised and outstanding warrants in the
Company to the amount of 1,128,024,625 such that they are
exercisable at GBP0.001 (0.1p). Pursuant to the warrant repricing,
Kibo received warrant notices to exercise 284,524,625 Kibo warrants
for which 284,524,625 ordinary Kibo shares of EUR0.001 at a price
of GBP0.001 (0.1p) will be issued.
-- Kibo announced on 2 May 2023 that recent verification testing
on selected biomass types demonstrate that the selected biomass
types not only match but significantly outperforms conventional
coal in many specification categories used in industrial boilers.
These verification results have shown more favourable outcomes in
terms of specifications compared to previous tests.
-- Kibo announced on 18 May 2023 that the potential to fuel its
legacy coal power plant projects with biofuel is being advanced
alongside renewed negotiations on a power purchase agreement with
the Tanzanian Government in relation to the Mbeya Power Project.
Furthermore, Kibo announced the establishment of a Joint Technical
Committee with TANESCO to ensure the key milestones, as set out in
the MOU, are met.
-- Kibo's subsidiary, MAST Energy Developments plc (MED)
announced on 18 May 2023 that it has recently concluded a Heads of
Terms ('HoT') with regard to a new Joint Venture ('JV') agreement
between MED and a new institutional investor-led consortium (the
'Institutional Investor'). Under the HoT, it is envisaged that the
Institutional Investor will inject all required investment capital
into the JV with an expected total investment value of c. GBP33.6m,
with no funding contribution required from MED.
-- The Group continues to focus on its revised renewable energy
strategy in order to align with global requirements.
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR"). F or
further information please visit www.kibo.energy or contact:
Louis Coetzee info@kibo .energy Kibo Energy PLC Chief Executive Officer
Andreas Lianos +357 99 53 1107 River Group JSE Corporate and Designated
Adviser
----------------------------- ------------------- ----------------------------
Claire Noyce +44 (0) 20 3764 2341 Hybridan LLP Joint Broker
----------------------------- ------------------- ----------------------------
Damon Heath +44 207 186 9952 Shard Capital Joint Broker
Partners LLP
----------------------------- ------------------- ----------------------------
James Biddle +44 207 628 3396 Beaumont Cornish Nominated Adviser
Roland Cornish Limited
----------------------------- ------------------- ----------------------------
Zainab Slemang zainab@lifacommunications.com Lifa Communications Investor and Media
van Rijmenant Relations
Consultant
----------------------------- ------------------- ----------------------------
CHAIRMAN'S REPORT
I am pleased to provide a review of Kibo Energy PLC ("Kibo" or
the "Company") and its subsidiaries' (together with Kibo, the
"Group") activities for the 2022 FY reporting period and to present
our full-year audited accounts for 2022.
Kibo, still a relatively newcomer to the sustainable clean and
renewable energy sector, has made significant progress in
waste-to-energy, biofuel, reserve power, and battery storage
projects. Despite significant market challenges, Kibo remains
resilient, focused and committed to its goals. The Company has
successfully transitioned into a clean / renewable energy company
and has acquired a strong project portfolio in the UK and Southern
Africa.
To provide context, I will offer a concise summary of the year's
activities outlined in more detail elsewhere in this annual
report:
-- Joint venture with IGES converts un-recyclable plastic into
syngas, secures power purchase agreement for waste-to-energy
facility;
-- Kibo acquires Shankley Biogas Limited and invests in Mast
Energy Developments PLC for waste-to-energy and reserve energy
projects;
-- Initiates work program to establish the viability of
substituting coal with biofuel in thermal power plants and renews
MoU with Tanzanian Government for the Mbeya Power Project;
-- Entered Long Duration Energy Storage sector through strategic
agreement with Enerox GmbH and establishes joint venture with
National Broadband Solution (Pty) Ltd; and
-- New appointments made to the board, retirements of long-serving directors.
Kibo is pioneering the energy landscape in its approach to the
Company's strategic shift towards sustainable and renewable assets.
Through groundbreaking ventures and partnerships, we are driving
advancements in waste-to-energy, biofuel, reserve power, and
long-duration battery storage. With a forward - looking focus on
innovation to address the challenges in maintaining stable base
load generation while transitioning to sustainable renewable energy
generation solutions, Kibo is contributing to a productive, greener
and brighter future.
In terms of International Financial Reporting Standards (IFRS),
intangible assets with an indefinite life must be tested for
impairment on an annual basis. The change in the Group's strategy
during 2021 to move toward renewable energies coupled with global
divestments in fossil fuel assets, resulted therein that the Group
recognised impairment of GBP5,504,216 (2021: GBP20,088,240) related
to its coal assets. The result for the reporting period amounted to
a loss of GBP10,908,524 for the year ended 31 December 2022 (31
December 2021: GBP23,148,155) as detailed further in the Statement
of Profit or Loss and Other Comprehensive Income, and further
details on financial activities are detailed elsewhere in the
Annual Report. The loss is primarily due to the impairment of
non-current assets, referred to above.
In closing, I would like to acknowledge the support of our
shareholders and all stakeholders as we continue with advancing our
new project portfolio. I would like to thank our Board, as well as
management and staff, for their continued support and commitment in
advancing Kibo.
REVIEW OF ACTIVITIES
Introduction
During 2022, the Group demonstrated its firm commitment to
transition the Group into a sustainable renewable energy company,
despite challenging conditions. We solidified our position in
sectors like Waste to Energy, Biofuel, Reserve Power, and Renewable
Energy Generation Long Duration Battery Storage. Focusing on
Southern Africa and the UK, our achievements have been
significant.
Operations
Sustineri Energy Joint Venture - Waste-to-Energy Project (South
Africa)
Kibo and Industrial Green Energy Solutions (IGES) have formed
Sustineri Energy (Pty) Ltd, aiming to generate over 50 MW of
electricity in South Africa through waste-to-energy projects.
Pyrolysis technology will convert non-recyclable plastics into
syngas.
-- Kibo provides GBP560,000 financial support, including an equity loan.
-- First phase: phased construction of c. 8 MW Waste to Energy facility in Gauteng.
-- 20-year conditional Power Purchase Agreement secured for initial 2.7 MW phase.
-- JV explores synthetic oil production for additional revenue
and profitability from the original project design. Viability
assessments are being conducted; a feasibility optimisation study
is underway for oil integration into original design.
-- Kibo identifies additional waste-to-energy opportunities in pursuit of c. 50 MW capacity.
-- Lesedi Nuclear Services selected as strategic partner for EPC and O&M.
Southport - Waste-to-Energy Project (UK)
Kibo has entered into a share purchase agreement to acquire
Shankley Biogas Limited, securing the rights to the Southport
project-a 12 MW Waste to Energy initiative near Liverpool, UK. The
project aims to generate bio-methane, power a 10 MW CHP plant, and
a 2 MW battery storage facility. Shankley Biogas Limited has
secured a favourable conditional Power Purchase Agreement (PPA) and
Gas Purchase Agreement (GPA) with a reputable buyer. The project
has received full planning permission and has established grid and
gas connection points. Financial estimates demonstrate promising
returns and value for the project.
With reference to the qualified audit opinion on the Company's
investment in Shankley Biogas Limited, Kibo was unable to provide
the auditor with sufficient appropriate audit evidence about the
carrying values of the investment in Shankley and its associated
assets and liabilities, as included in the Group and Company
Balance Sheet as at 31 December 2022. This is because of a dispute
with the vendor due to the vendor's inability to provide sufficient
and reliable financial information for Shankley Biogas Limited,
despite numerous requests in this regard, and the Company being
unable to agree an option to lease agreement in respect of the site
with the vendor. The Company is currently engaged in constructive
negotiations to reach an amicable resolve for the ongoing dispute
and is confident that this will be settled soon.
Legacy Coal Projects - Tanzania, Botswana and Mozambique and
Biofuel Initiative
Kibo is actively pursuing sustainable fuel sources for its
energy projects in Tanzania, Botswana, and Mozambique.
-- Kibo aims to divest from coal assets while retaining energy
projects through innovative biofuel technology. Recent testing
showed the superior potential of biomass (bio coal) compared to
conventional coal in industrial boilers.
-- The company has initiated a technical study to assess the
feasibility of replacing fossil fuels with renewable biofuel. In
this regard, Kibo has appointed an experienced international
biomass and biofuel consultant to evaluate the economic and
operational feasibility of implementing bio coal as a fuel
replacement for utility-scale power projects.
-- Kibo is in discussions with the Tanzanian government for the
Mbeya Power Project, aligning with the Tanzanian Power System
Master Plan. A renewed MOU with TANESCO outlines the framework for
finalizing power purchase and implementation agreements.
Long Duration Energy Storage
Kibo's CellCube Vanadium Redox Flow Battery Energy Storage
Systems (VRFB BESS) strengthens the Company's Southern Africa
project development with durable, long-duration energy storage for
renewables, addressing key aspects such as load shedding and grid
stability.
-- The partnership with Enerox GmbH secures qualified exclusive
rights to deploy VRFB Energy Storage Systems, advancing our
commitment to sustainable energy.
-- Kibo's role as a project developer includes the prospective
manufacturing specific CellCube BESS, driving our clean energy
solutions.
Investments
Mast Energy Developments PLC ("MED")
Since its IPO in April 2021, MAST Energy Developers (MED), in
which Kibo holds a 57.86% investment has been steadily advancing
towards its goal of establishing a portfolio of flexible power
sites in the UK, aiming for a capacity of up to 300 MW. MED's
recent addition of the Hindlip Lane and Stather Road projects,
alongside existing gas peaker plants, brings them closer to this
target. The company's announcement of a heads of terms for a Joint
Venture Agreement, with a significant investor providing an
investment of c. GBP33.6 million, positions MED to accelerate
project acquisition and achieve their capacity goal within the next
two years.
Further information on these projects and the latest MED updates
can be found on its website at www.med.energy .
Katoro Gold PLC - Mineral Exploration
During 2022, Kibo's 20.88% investment in Katoro Gold PLC yielded
progressive results in their projects in Tanzania and South Africa.
While the planned listing and IPO for the Blyvoor gold tailings
joint venture was delayed, Katoro is actively seeking funding
options for its development. In Tanzania, Katoro made progress with
drilling phases in the Haneti Nickel-PGM Project and reestablished
a joint venture interest in the Imweru Gold Project, restructuring
the transaction with Lake Victoria Gold for the asset's
development.
Further information on the Katoro projects and the latest
updates can be found on its website at www.katorogold.com .
Corporate
In 2022, Kibo underwent financial and organizational changes,
issuing shares to settle invoices, fees, and debts.
-- Share Issuance: Kibo issued 108,540,021 new ordinary shares
at various prices to settle invoices, implementation fees, and
outstanding debts.
-- Director and Management Changes: In a series of key
transitions, Christian Schaffalitzky and Chris Schutte retired, and
Andreas Lianos resigned from their director positions. Ajay
Saldanha joined the Board in early 2023, while Pieter Krügel took
on the role of CEO at Mast Energy Developments PLC. Cobus van der
Merwe assumed the position of Kibo Group CFO, and Peter Oldacre was
appointed as the Group Business Development Executive. Shard
Capital Partners LLP became a joint broker alongside Hybridan LLP,
and Beaumont Cornish took over as the new Nomad. These changes
aimed to fortify internal management capacity and support strategic
growth.
Despite Kibo's proven ability to secure ongoing funding,
unexpected and uncontrollable obstacles during Q4 2022 disrupted
its annual funding plans, causing a loss of time and moreover,
business continuity.
-- The Company faced an initial setback with the unexpected
resignation of the previous NOMAD, resulting in a mandatory
suspension from AIM and a pause in closing planned funding
initiatives.
-- Additionally, major shareholders faced voting challenges
arising from a technical problem within the Euroclear system
preventing them from voting from outside the EU jurisdiction during
critically important extraordinary general meetings.
-- Despite the correction of, and recovery after the NOMAD and
Euroclear issues and the subsequent resumption of funding plans,
this created severe delays in securing funding, resulting in
extensive operational disruption and progressive execution.
Nevertheless, the situation was contained, and the company is back
on track.
Kibo remains confident in its ability to adequately address its
short and medium terms funding requirements through various
strategic partnerships and creative funding solutions. Recent
success in this regard is demonstrated by the various initiatives
set out below:
-- Convertible Loan Note Redeemable Instrument (CLN): In January
2022, a CLN was issued to settle debts. The maturity date was
extended multiple times, with a final date set for April 28, 2023.
Noteholders converted GBP714,517 worth of Notes into 510,369,286
Kibo shares.
-- Bridge Loan Facility: In February 2022, Kibo secured a bridge
loan facility of GBP1 million with an institutional investor. The
loan carried a fixed coupon interest rate of 3.5% and was
originally due for repayment in June 2022. To settle a facility
implementation fee of GBP70,000, shares were issued. The repayment
date was extended to April 2023, and the investor gained the right
to trade Mast Energy Developments PLC shares worth up to
GBP250,000, offsetting the outstanding amount.
-- Reprofiling Agreement: Kibo implemented a Reprofiling
Agreement on April 11, 2023, converting GBP1,113,980 of the bridge
loan facility into a 24-month term loan. Additionally, Convertible
Loan Notes were converted to shares, warrants were repriced and
exercised, and new warrants were awarded. The agreement took effect
on April 25, 2023, with the issuance of new warrants and
shares.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
-------------------------------------------------------------------------------------
All figures are stated in Sterling 31 December 31 December
2022 2021
------------- -------------
Audited Audited
------
Notes GBP GBP
------
Revenue 2 1,036,743 3,245
Cost of sales (778,802) (34,321)
------------- -------------
Gross profit/(loss) 257,941 (31,076)
Administrative expenses (2,579,028) (2,325,750)
11, 12
Impairment of non-current assets & 14 (7,038,930) (20,705,209)
Listing and capital raising fees (363,368) (321,365)
Project and exploration expenditure (847,567) (687,963)
------------- -------------
Operating loss (10,570,952) (24,071,363)
Investment and other income 3 93,866 1,017,937
Share of loss from associate (181,684) (48,357)
Finance costs 4 (249,754) (46,372)
Loss before tax 5 (10,908,524) (23,148,155)
Taxation 8 - -
------------- -------------
Loss for the period (10,908,524) (23,148,155)
Other comprehensive loss:
Items that may be classified subsequently
to profit or loss:
Exchange differences on translation of foreign
operations 372,191 (212,919)
Exchange differences reclassified on disposal
of foreign operation - 345,217
Other Comprehensive loss for the period net
of tax 372,191 132,298
Total comprehensive loss for the period (10,536,333) (23,015,857)
------------- -------------
Loss for the period (10,908,524) (23,148,155)
------------- -------------
Attributable to the owners of the parent (9,776,917) (21,996,968)
Attributable to the non-controlling interest (1,131,607) (1,151,187)
Total comprehensive loss for the period (10,536,333) (23,015,857)
------------- -------------
Attributable to the owners of the parent (9,404,726) (21,864,515)
Attributable to the non-controlling interest (1,131,607) (1,151,342)
Loss Per Share
Basic loss per share 9 (0.003) (0.009)
Diluted loss per share 9 (0.003) (0.009)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
----------------------------------------------------------------------------------
All figures are stated in Sterling 31 December 31 December
2022 2021
------------- -------------
Audited Audited
----- ------------- -------------
Notes GBP GBP
----- ------------- -------------
Assets
Non--current assets
Property, plant and equipment 10 3,493,998 2,899,759
Intangible assets 11 2,691,893 4,964,550
Investments in associates 12 100,945 4,092,403
Total non-current assets 6,286,836 11,956,712
------------- -------------
Current assets
Other receivables 15 227,223 255,747
Cash and cash equivalents 16 163,884 2,082,906
Total current assets 391,107 2,338,653
------------- -------------
Total assets 6,677,943 14,295,365
============= =============
Equity and liabilities
Equity
Called up share capital 17 21,140,481 21,042,444
Share premium account 17 45,516,081 45,429,328
Share based payments reserve 19 73,469 466,868
Translation reserves 20 (93,993) (466,184)
Retained deficit (66,319,142) (56,627,389)
------------- -------------
Attributable to equity holders of the parent 316,896 9,845,067
------------- -------------
Non-controlling interest 21 1,164,218 1,962,816
------------- -------------
Total equity 1,481,114 11,807,883
------------- -------------
Liabilities
Non-current liabilities
Lease liability 10 346,674 289,045
Other financial liabilities 23 243,056 -
------------- -------------
Total non-current liabilities 589,730 289,045
------------- -------------
Current liabilities
Lease liability 10 3,980 2,473
Trade and other payables 22 2,395,090 1,116,273
Borrowings 23 1,195,239 1,079,691
Other financial liabilities 23 1,012,790 -
Total current liabilities 4,607,099 2,198,437
------------- -------------
Total liabilities 5,196,829 2,487,482
------------- -------------
Total equity and liabilities 6,677,943 14,295,365
============= =============
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are stated in Sterling 31 December 31 December
2022 2021
------------ ------------
Audited Audited
-----
Notes GBP GBP
-----
Revenue - -
Administrative expenses (804,820) (315,666)
Listing and capital raising fees (230,920) (39,583)
Impairment of subsidiary investments (12,333,224) (29,379,842)
Fair value adjustment (427,819) (1,635,881)
------------ ------------
Operating loss (13,796,783) (31,370,972)
Other income 3 16,266 135,709
Finance costs 4 (151,375) -
Loss before tax 5 (13,931,892) (31,235,263)
Taxation - -
------------ ------------
Loss for the period (13,931,892) (31,235,263)
------------ ------------
All activities derive from continuing operations.
The Company has no recognised gains or losses other than those
dealt with in the Statement of Profit or Loss and Other
Comprehensive Income.
COMPANY STATEMENT OF FINANCIAL POSITION
All figures are stated in Sterling 31 December 31 December
2022 2021
------------ ------------
Audited Audited
------------ ------------
Notes GBP GBP
------------ ------------
Non--current Assets
Investments 24 5,688,607 16,762,761
Property, plant and equipment 10 1,265
Total non-current assets 5,689,872 16,762,761
------------ ------------
Current assets
Other receivables 15 90,720 73,734
Cash and cash equivalents 16 19,442 239,674
Total current assets 110,162 313,408
------------ ------------
Total assets 5,800,034 17,076,169
============ ============
Equity and liabilities
Equity
Called up share capital 17 21,140,481 21,042,444
Share premium account 17 45,516,081 45,429,328
Share based payment reserve 19 73,469 466,868
Retained deficit (63,609,256) (50,095,537)
------------ ------------
Total equity 3,120,775 16,843,103
------------ ------------
Liabilities
Current liabilities
Trade and other payables 22 826,035 114,062
Borrowings 23 1,195,239 119,004
Other financial liabilities 23 657,985 -
Total current liabilities 2,679,259 233,066
============ ============
Total liabilities 2,679,259 233,066
============ ============
Total equity and liabilities 5,800,034 17,076,169
============ ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
-----------------------------------------------------------------------------------------------------------------------
Share Share Warrants Control Foreign Retained Non-controlling Total
Capital premium and share reserve currency deficit interest equity
based translation
payment reserve
reserve
---------------- ---------- ---------- --------- -------- ----------- ------------ --------------- ------------
All figures are GBP GBP GBP GBP GBP GBP GBP GBP
stated in
Sterling
---------------- ---------- ---------- --------- -------- ----------- ------------ --------------- ------------
Balance as at 1
January 2021 20,411,493 44,312,371 1,728,487 (18,329) (598,637) (39,019,856) (256,841) 26,558,688
========== ========== ========= ======== =========== ============ =============== ============
Loss for the
year - - - - - (21,996,968) (1,151,187) (23,148,155)
Other
comprehensive
income -
exchange
differences - - - - (212,764) - (155) (212,919)
Shares issued 630,951 1,116,957 - - - - - 1,747,908
Disposal of
subsidiary - - - - - 3,259,232 3,201,014 6,460,246
Acquisition of
non-controlling
interest - - - - - (308,030) 308,030 -
Vesting of share
options -
Katoro Gold
PLC - - 146,249 - - - - 146,249
Warrants issued
by Kibo Energy
PLC - - 48,695 - - - - 48,695
Warrants issued
by Kibo Energy
plc which
expired during
the year - - (559,400) - - 559,400 - -
Change in
shareholding
without loss of
control - - (897,163) 18,329 345,217 878,833 (138,045) 207,171
Balance as at 31
December 2021 21,042,444 45,429,328 466,868 - (466,184) (56,627,389) 1,962,816 11,807,883
---------- ---------- --------- -------- ----------- ------------ --------------- ------------
Loss for the
year - - - - - (9,776,917) (1,131,607) (10,908,524)
Other
comprehensive
income -
exchange
differences - - - - 372,191 - - 372,191
Change in
shareholding
without loss of
control (333,009) 333,009 -
Shares issued 98,037 86,753 - - - - 184,790
Warrants issued
by Kibo Energy
PLC during
the year - - 24,774 - - - - 24,774
Warrants issued
by Kibo Energy
PLC which
expired during
the year - - (418,173) - - 418,173 - -
Balance as at 31
December 2022 21,140,481 45,516,081 73,469 - (93,993) (66,319,142) 1,164,218 1,481,114
========== ========== ========= ======== =========== ============ =============== ============
Notes 17 17 19 18 20 21
COMPANY STATEMENT OF FINANCIAL POSITION
----------------------------------------------------------------------------------------------------------------------
Share capital Share premium Share based payment reserve Retained deficit Total equity
--------------------------- ------------- ------------- --------------------------- ---------------- ------------
All figures are stated in GBP GBP GBP GBP GBP
Sterling
--------------------------- ------------- ------------- --------------------------- ---------------- ------------
Balance as at 1 January
2021 20,411,493 44,312,371 977,575 (19,419,674) 46,281,765
Profit the year - - - (31,235,263) (31,235,263)
Shares issued 630,951 1,116,957 - - 1,747,908
Shares issued to pay
deferred vendor liability - - 48,693 - 48,693
- - (559,400) 559,400 -
Balance as at 31 December
2021 21,042,444 45,429,328 466,868 (50,095,537) 16,843,103
============= ============= =========================== ================ ============
Loss for the year - - - (13,931,892) (13,931,892)
Shares issued 98,037 86,753 - - 184,790
Warrants issued by Kibo
Energy PLC during the year - - 24,774 - 24,774
Warrants issued by Kibo
Energy PLC which expired
during the year - - (418,173) 418,173 -
Balance as at 31 December
2022 21,140,481 45,516,081 73,469 (63,609,256) 3,120,775
============= ============= =========================== ================ ============
Notes 17 17 19
CONSOLIDATED STATEMENT OF CASH FLOWS
---------------------------------------------------------------------------------------
All figures are stated in Sterling 31 December 31 December
2022 2021
------------ ------------
Audited Audited
-----
Notes GBP GBP
-----
Cash flows from operating activities
Loss for the period before taxation (10,908,524) (23,148,155)
Adjustments for:
(Profit)/Loss from the disposal of subsidiary - (529,415)
Interest accrued 248,202 46,357
Debt forgiven 3 - (355,659)
Warrants and options issued 24,774 194,945
Impairment of goodwill 14 - 300,000
Impairment of intangible assets 11 3,229,155 13,955,528
Impairment of associates 12 3,809,775 6,449,681
Loss from equity accounted associate 181,684 48,357
Exploration and development expenditure on
a Joint Operation - 91,179
Impairment of financial asset receivable - 43,722
Depreciation on property, plant and equipment 10 66,582 10,635
Profit on sale of property, plant and equipment (7,264) -
Gains on revaluations of derivatives (86,558) -
Costs settled through the issue of shares 95,001 -
Directors' fees settled with credit loan notes 44,591 -
Other non-cashflow items 133 -
(3,302,449) (2,892,825)
------------ ------------
Movement in working capital
Decrease / (Increase) in debtors 15 28,524 (145,525)
Increase / (Decrease) in creditors 22 678,817 (240,958)
------------ ------------
707,341 (386,483)
------------ ------------
Net cash outflows from operating activities (2,595,108) (3,279,308)
------------ ------------
Cash flows from financing activities
Proceeds of issue of share capital - 1,527,576
Proceeds from disposal of shares to non-controlling
interest - 6,099,500
Repayment of lease liabilities (27,000) (27,000)
Repayment of borrowings (44,917) (195,282)
Proceeds from borrowings 2,322,824 38,975
Net cash proceeds from financing activities 2,250,907 7,443,769
------------ ------------
Cash flows from investing activities
Cash received from /(advanced) to Joint Venture 20,955 (91,179)
Property, plant and equipment acquired (excluding
right of use assets) (1,020,747) (1,654,239)
Intangible assets acquired (342,038) (150,273)
Cash forfeited on disposal of subsidiary - (272,075)
Deferred payment settlement (555,535) -
Net cash flows from investing activities (1,897,365) (2,167,766)
------------ ------------
Net (decrease) / increase in cash (2,241,566) 1,996,695
Cash at beginning of period 2,082,906 256,760
Exchange movement 322,544 (170,549)
------------ ------------
Cash at end of the period 16 163,884 2,082,906
------------ ------------
COMPANY STATEMENT OF CASH FLOWS
----------------------------------------------------------------------------------
All figures are stated in Sterling 31 December 31 December
2022 2021
------------ ------------
Audited Audited
----- ------------ ------------
Notes GBP GBP
----- ------------ ------------
Cash flows from operating activities
(Loss) for the period before taxation
Adjusted for: (13,931,892) (31,235,263)
Inter-company sales capitalised - (61,000)
Fair value adjustment 406,863 1,635,881
Warrants and options issued 24,774 48,693
Interest accrued 151,377 -
Non-cash recoveries of expenses - (114,253)
Impairment of investment in subsidiaries 12,354,180 29,379,842
Expenses settled in shares 95,001 -
Directors' fees settled with credit loan notes 44,591 -
Other non-cash items 134 -
(854,972) (346,100)
------------ ------------
Movement in working capital
(Increase) / Decrease in debtors 15 (16,986) (40,314)
Increase / (Decrease) in creditors 22 111,973 (104,815)
94,987 (145,129)
------------ ------------
Net cash outflows from operating activities (759,985) (491,229)
------------ ------------
Cash flows from financing activities
Proceeds of issue of share capital 17 - 1,497,176
Proceeds from borrowings 23 1,672,824 -
Repayment of borrowings (44,917) (50,007)
------------ ------------
Net cash proceeds from financing activities 1,627,907 1,447,169
------------ ------------
Cash flows from investing activities
Cash advances to Group Companies (1,086,889) (858,054)
Purchase of Property, Plant and Equipment 10 (1,265) -
------------ ------------
Net cash used in investing activities (1,088,154) (858,054)
------------ ------------
Net (decrease)/increase in cash (220,232) 97,886
Cash at beginning of period 239,674 141,788
Cash at end of the period 16 19,442 239,674
============ ============
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 individual projects as operating
segments. These operating segments are monitored, and strategic
decisions are made based upon their individual nature, together
with other non-financial data collated from exploration activities.
Principal activities for these operating segments are as
follows:
2022 Group Mabasekwa 31 December
Bordersley Coal to Mbeya Pyebridge Rochdale Sustineri 2022 (GBP)
Power Power Coal Power Power Energy Corporate Group
------------ ------------ ------------- ---------- ---------- ---------- ------------ -------------
Revenue - - - 1,036,743 - - - 1,036,743
Cost of sales - - - (778,802) - - - (778,802)
Administrative
and other cost (46,064) (7,065) (7,186) (52,809) (10,763) (1,766) (2,453,375) (2,579,028)
Impairments and
fair value
adjustments (1,288,578) (3,563,639) (1,940,577) - - - (246,136) (7,038,930)
Listing and
Capital
raising fees - - - - - - (363,368) (363,368)
Project and
exploration
expenditure (222,296) - - (255,601) (104,090) (108,912) (156,668) (847,567)
Share in loss
of associate - - - - - - (181,684) (181,684)
Investment and
other income - - - - - 10 93,856 93,866
Finance costs (24,537) - - - - - (225,217) (249,754)
------------
Loss before
tax (1,581,475) (3,570,704) (1,947,763) (50,469) (114,853) (110,668) (3,532,592) (10,908,524)
------------ ------------ ------------- ---------- ---------- ---------- ------------ -------------
2021 Group Benga Blyvoor Lake Mabesekwa Mbeya 31 December
Power Joint Bordersley Victoria Coal to Coal to Pyebridge Rochdale Sustineri 2021 (GBP)
J. V Venture Power Haneti Gold Power Power Power Power Energy Corporate Group
---------- ---------- ----------- ---------- ------------ ------------ ------------- ---------- ---------- ---------- ------------ ---------------
Revenue - - - - - - - 3,245 - - - 3,245
Cost of sales - - - - - - - (34,321) - - - (34,321)
Administrative
and other cost (26,682) (16,799) (332,550) (82,504) (141,098) (13,944) (43,967) (13,448) (4,641) (1,097) (1,649,020) (2,325,750)
Impairments and
fair value
adjustments - - (300,000) - - (6,132,711) (13,955,528) - - - (316,970) (20,705,209)
Listing and
Capital
raising fees - - - - - - - - - - (321,365) (321,365)
Project and
exploration
expenditure (74,337) (126,173) (24,878) (119,101) - - (100,165) (44,004) (11,265) (94,207) (93,833) (687,963)
Investment and
other income 787 5,134 355,659 - 16,505 - 48,298 - - - 591,554 1,017,937
Loss before
tax (100,232) (137,838) (301,769) (201,605) (124,593) (6,146,655) (14,051,362) (88,528) (15,906) (95,304) (1,884,363) (23,148,155)
---------- ---------- ----------- ---------- ------------ ------------ ------------- ---------- ---------- ---------- ------------ ---------------
2022 Group 31
Mabasekwa December
Bordersley Coal to MbeyaCoal Pyebridge Rochdale Sustineri 2022 (GBP)
Power Power to Power Power Power Energy Corporate Group
----------- ---------- ---------- ---------- --------- ---------- ----------
Assets
Segment assets 1,733,554 235 - 2,082,352 262,043 293,160 2,306,599 6,677,943
Liabilities
Segment
liabilities 296,984 7,270 2,320 133,650 6,897 48,491 4,701,217 5,196,829
2021 Group 31
Benga Mabesekwa Mbeya December
Power Bordersley Coal to Coal to Pyebridge Rochdale Sustineri 2021 (GBP)
J. V Power Power Power Power Power Energy Corporate Group
-------
Assets
Segment assets 14,219 3,085,261 3,405,354 1,944,925 2,491,666 261,454 278,985 2,813,501 14,295,365
Liabilities
Segment
liabilities 10,065 394,588 5,577 52,379 70,847 5,570 18,976 1,929,480 2,487,482
Geographical segments
The Group operates in six principal geographical areas being
Tanzania (Exploration), Botswana (Exploration), Cyprus (Corporate),
South Africa (Renewable Energy), United Kingdom (Renewable Energy)
and Ireland (Corporate).
South United 31 December
Tanzania Botswana Cyprus Africa Kingdom Ireland 2022 (GBP)
Carrying value of
segmented
assets - - 218,735 293,160 5,564,783 601,265 6,677,943
Revenue - - - - 1,036,743 - 1,036,743
Loss before tax (1,947,763) (3,563,639) (1,517,557) (110,843) (2,732,982) (1,035,740) (10,908,524)
------------ ------------ ------------ ---------- ------------ ------------ -------------
South United 31 December
Tanzania Botswana Cyprus Africa Kingdom Ireland 2021 (GBP)
Carrying value of
segmented
assets 1,944,925 3,405,354 188,879 283,831 7,630,489 841,887 14,295,365
Revenue - - - - 3,245 - 3,245
Profit/ Loss after tax (14,211,842) (6,143,283) (1,008,539) (218,316) (1,827,534) 261,359 (23,148,155)
------------- ------------ ------------ ---------- ------------ -------- -------------
All revenue generated was from the United Kingdom geographical
area with the only customer being Statkraft Markets GMBH.
2. Revenue
31 December 31 December
2022 (GBP) 2021 (GBP)
Group Group
Electricity sales 1,036,743 3,245
------------------------ -----------------------
1,036,743 3,245
------------------------ -----------------------
Revenue comprised ancillary electricity sales from operational
testing of the renewable energy operations of MAST Energy
Developments PLC in the United Kingdom.
3. Investment and other Income
31 December 31 December 31 December 31 December
2022 2021 2022 2021
(GBP) (GBP) (GBP) (GBP)
Group Group Company Company
Debt forgiven - 355,659 - -
Interest received 44 - 34 -
Gain on revaluation of
derivative liabilities 86,558 - - -
Profit on the loss of
control over subsidiary - 529,415 - -
Profit on sale of plant
and equipment 7,264 - - -
Recoveries - - 16,232 61,000
Other income - 132,863 - 74,709
93,866 1,017,937 16,266 135,709
------------- ------------- ------------- -------------
During the financial year the Group recorded other income
resulting from the revaluation of derivative liabilities. These
liabilities were recognised as part of convertible loan notes
entered into during the financial year. The derivative liability
was fair valued at year end and resulted in a gain for the
financial year.
4. Finance costs
31 December 31 December 31 December 31 December
2022 2021 2022 2021
(GBP) (GBP) (GBP) (GBP)
Group Group Company Company
Interest paid to finance
houses 223,623 21,647 151,375 -
Interest from leases
(refer note 10) 26,131 24,725 - -
249,754 46,372 151,375 -
------------- ------------- ------------- -------------
5. Loss on ordinary activities before taxation
Operating loss is 31 December 31 December 31 December 31 December
stated after the 2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
following key transactions: Group Group Company Company
Depreciation of property,
plant and equipment 66,582 10,635 - -
Impairment of other
financial assets
- receivable from
Lake Victoria Gold - 16,240 - -
Group auditors' remuneration
for audit of financial
statements 58,425 45,000 58,425 -
Subsidiaries auditors'
remuneration for
audit of the financial
statements 172,767 155,094 - -
Impairment of goodwill - 300,000 - -
Impairment of intangible
assets 3,229,155 13,955,528 - -
Impairment of associates 3,809,774 6,449,682 - -
Impairment of subsidiary
investments - - 12,354,180 29,379,842
Fair value adjustments - - 406,863 1,635,881
Gains on revaluations
of derivatives (86,558) - - -
Profit on sale of
assets (7,264) - - -
6. Staff costs (including Directors)
Group Group Company Company
31 December 31 December 31 December 31 December
2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
Wages and salaries 949,355 898,145 28,297 27,415
Share based remuneration - 146,250 -
949,355 1,044,395 28,297 27,415
------------- ------------- ------------- -------------
The average monthly number of employees (including executive
Directors) during the period was as follows:
Group Group Company Company
31 December 31 December 31 December 31 December
2022 2021 2022 2021
Exploration and development
activities 10 10 1 1
Administration 7 7 1 1
------------- ------------- ------------- -------------
17 17 2 2
------------- ------------- ------------- -------------
7. Directors' emoluments
Group Group Company Company
31 December 31 December 31 December 31 December
2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
Basic salary and fees accrued 374,308 397,262 24,366 27,415
Share based payments - - - -
------------- ------------- ------------- -------------
374,308 397,262 24,366 27,415
------------- ------------- ------------- -------------
The emoluments of the Chairman were GBP 55,950 (2021: GBP 47,578
). The emoluments of the highest paid director were GBP164,726
(2021: GBP 129,347) .
Directors received shares in the value of GBPNil during the year
(2021: GBPNil) and warrants to the value of GBPNil (2021: GBPNil)
during the year.
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.
T he following table summarises the remuneration applicable to
each of the individuals who held office as a director during the
reporting period:
31 December 2022 Salary
Salary and fees
and fees settled Warrants
accrued in shares issued Total
GBP GBP GBP GBP
Christian Schaffalitzky 16,990 - - 16,990
Louis Coetzee 164,726 - - 164,726
Noel O'Keeffe 38,135 - - 38,135
Andreas Lianos 31,274 - - 31,274
Christiaan Schutte 123,183 - - 123,183
Total 374,308 - - 374,308
---------- ----------- -------------- ----------
31 December 2021 Salary
Salary and fees
and fees settled Warrants
accrued in shares issued Total
GBP GBP GBP GBP
Christian Schaffalitzky 20,578 - - 20,578
Louis Coetzee 165,347 - - 165,347
Noel O'Keeffe 38,319 - - 38,319
Lukas Maree 7,349 - - 7,349
Wenzel Kerremans 7,349 - - 7,349
Andreas Lianos 36,050 - - 36,050
Christiaan Schutte 122,270 - - 122,270
Total 397,262 - - 397,262
---------- ----------- --------- --------
As at 31 December 2022, an amount of GBP174,482 (2021:
GBP443,336) was due and payable to Directors for services rendered
not yet settled.
8. Taxation
Current tax
31 December 31 December
2022 (GBP) 2021 (GBP)
Charge for the period in respect of corporate - -
taxation
------------ ------------
Total tax charge - -
------------ ------------
The difference between the total current tax shown above and the
amount calculated by applying the standard rate
of corporation tax for various jurisdictions to the loss before
tax is as follows:
2022 (GBP) 2021 (GBP)
------------- -------------
Loss on ordinary activities before tax (10,908,524) (23,148,155)
------------- -------------
Income tax expense calculated at blended rate
of 13.18% (2021: 18.86%) (1,437,917) (4,365,742)
------------- -------------
Income which is not taxable (4,615) (100,589)
Expenses which are not deductible 913,814 3,959,520
Losses available for carry forward 528,718 506,811
Income tax expense recognised in the Statement - -
of Profit or Loss
------------- -------------
The effective tax rate used for the December 2022 and December
2021 reconciliations above is the corporate rate of 14.15% and
18.86% payable by corporate entities on taxable profits under tax
law in that jurisdiction respectively. The tax jurisdictions in
which the Group operates are Cyprus, Ireland, South Africa,
Tanzania and the United Kingdom.
No provision has been made for the 2022 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 GBP41,896,825 (2021: GBP38,201,734) available for potential
offset against future profits which equates to an estimated
potential deferred tax asset of GBP5,779,065 (2021: GBP5,076,208).
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.
9. Loss per share
Basic loss per share
The basic loss and weighted average number of ordinary shares
used for calculation purposes comprise the following:
Basic Loss per share 31 December 31 December
2022(GBP) 2021 (GBP)
Loss for the period attributable to equity
holders of the parent (9,776,917) (21,996,968)
Weighted average number of ordinary shares
for the purposes of basic loss per share 3,010,992,501 2,480,279,189
Basic loss per ordinary share (GBP) (0.003) (0.009)
As there are no instruments in issue which have a dilutive
impact, the dilutive loss per share is equal to the basic loss per
share, and thus not disclosed separately.
10. Property, plant and equipment
GROUP Land Furniture Motor Office I.T Plant & Right of Total
and Vehicles Equipment Equipment Machinery use
Fittings assets
Cost (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
------- --------- -------- --------- --------- --------- -------- ---------
Opening Cost
as at 1
January 2021 - 2,436 16,131 4,970 4,989 8,601 - 37,127
------- --------- -------- --------- --------- --------- -------- ---------
Disposals - - - - - - - -
Additions 602,500 - - - 509 2,011,409 293,793 2,908,211
Exchange
movements - 29 192 (28) (108) 102 - 187
Closing Cost
as at 31
December 2021 602,500 2,465 16,323 4,942 5,390 2,020,112 293,793 2,945,525
------- --------- -------- --------- --------- --------- -------- ---------
Disposals - (2,465) - (3,383) (3,193) (5,642) - (14,683)
Additions - - - - 6,031 75,061 62,090 143,182
Assets under
development - - - - - 939,664 - 939,664
Derecognition
as a result
of waiver - - - - - (421,041) - (421,041)
Exchange
movement - - - - - 2,695 - 2,695
Closing Cost
as at 31
December 2022 602,500 - 16,323 1,559 8,228 2,610,849 355,883 3,595,342
------- --------- -------- --------- --------- --------- -------- ---------
Land Furniture Motor Office I.T Plant & Right of Total
and Vehicles Equipment Equipment Machinery use
Fittings assets
Accumulated (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
Depreciation
("Acc Depr")
------- --------- -------- --------- --------- --------- -------- ---------
Acc Depr as at
1 January
2021 - (2,436) (15,285) (4,398) (4,289) (8,601) - (35,009)
------- --------- -------- --------- --------- --------- -------- ---------
Disposals - - - - - - - -
Depreciation - - (842) - - - (9,793) (10,635)
Exchange
movements - (29) (196) (9) 215 (103) - (122)
Acc Depr as at
31 December
2021 - (2,465) (16,323) (4,407) (4,074) (8,704) (9,793) (45,766)
------- --------- -------- --------- --------- --------- -------- ---------
Disposals - 2,465 - 3,383 3,193 1,974 - 11,015
Depreciation - (1,385) (52,632) (12,565) (66,582)
Exchange
movements - - - - - (11) - (11)
Acc Depr as at
31 December
2022 - - (16,323) (1,024) (2,266) (59,373) (22,358) (101,344)
------- --------- -------- --------- --------- --------- -------- ---------
Furniture Motor Office I.T Plant & Right of Total
Land and Vehicles Equipment Equipment Machinery use
Fittings assets
Carrying Value (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
------- --------- -------- --------- --------- --------- ---------
Carrying value
as at 31
December 2021 602,500 - - 535 1,316 2,011,408 284,000 2,899,759
------- --------- -------- --------- --------- --------- -------- ---------
Carrying value
as at 31
December 2022 602,500 - - 535 5,962 2,551,476 333,525 3,493,998
------- --------- -------- --------- --------- --------- -------- ---------
COMPANY Land Furniture Motor Office I.T Plant & Right Total
and Vehicles Equipment Equipment Machinery of use
Fittings assets
Cost (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
----- --------- -------- --------- --------- --------- ------ -----
Opening Cost - - - - - - - -
as at 1
January 2021
----- --------- -------- --------- --------- --------- ------ -----
Closing Cost - - - - - - - -
as at 31
December 2021
----- --------- -------- --------- --------- --------- ------ -----
Additions - - - - 1,265 - - 1,265
Closing Cost
as at 31
December
2022 - - - - 1,265 - - 1,265
----- --------- -------- --------- --------- --------- ------ -----
Land Furniture Motor Office I.T Plant & Right Total
and Vehicles Equipment Equipment Machinery of use
Fittings assets
Accumulated (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
Depreciation
("Acc Depr")
----- --------- -------- --------- --------- --------- ------ -----
Acc Depr as - - - - - - - -
at 1 January
2021
----- --------- -------- --------- --------- --------- ------ -----
Acc Depr as - - - - - - - -
at 31
December 2021
----- --------- -------- --------- --------- --------- ------ -----
Acc Depr as - - - - - - - -
at 31
December 2022
----- --------- -------- --------- --------- --------- ------ -----
Furniture Motor Office I.T Plant & Right Total
Land and Vehicles Equipment Equipment Machinery of use
Fittings assets
Carrying (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
Value
----- --------- -------- --------- --------- --------- -----
Carrying - - - - - - - -
value as at
31 December
2021
----- --------- -------- --------- --------- --------- ------ -----
Carrying
value as at
31 December
2022 - - - - 1,265 - - 1,265
----- --------- -------- --------- --------- --------- ------ -----
Right of use asset
The Group has one lease contract for land it shall utilise to
construct a 5MW gas-fuelled power generation plant. The land is
located at Bordesley, Liverpool St. Birmingham.
The land has a lease term of 20 years, with an option to extend
for 10 years which the Group has opted to include due to the highly
likely nature of extension as at the time of the original
assessment.
The Group's obligations under its leases are secured by the
lessor's title to the leased assets. The Group's incremental
borrowing rate ranges between 8.44% and 10.38%.
The Group has valued its property, plant and equipment in line
with its directors' estimation of the Value in Use for those
assets. Kindly refer to note 11 for the key variables used in the
estimation of the value thereof.
Right of use asset 31 December 31 December
2022 2021
(GBP) (GBP)
Group Group
Set out below are the carrying amounts of
right-of-use assets recognised and the movements
during the period:
Opening balance 284,000 -
Additions 62,090 293,793
Depreciation (12,565) ( 9,793 )
Closing balance 333,525 284,000
------------- -------------
Lease liability
Set out below are the carrying amounts of
lease liabilities and the movements during
the period:
Opening balance 291,518 -
Additions 60,005 293,793
Interest 26,131 24,725
Repayment (27,000) (27,000)
------------- -------------
Closing balance 350,654 291,518
------------- -------------
Spilt of lease liability between current
and non-current portions:
Non-current 346,674 289,045
Current 3,980 2,473
Total 350,654 291,518
------------- -------------
Future minimum lease payments fall due as
follows
- within 1 year 33,960 27,000
- later than 1 year but within 5 years 135,840 108,000
- later than 5 years 756,720 648,000
------------- -------------
Subtotal 926,520 783,000
------------- -------------
- Unearned future finance charges (575,866) (491,482)
Closing balance 350,654 291,518
------------- -------------
A 100bp change in the Incremental Borrowing Rate ("IBR"), would
result in a GBP29,603 change in the Right of Use Asset, and
corresponding Lease Liability on inception date.
11. Intangible assets
Intangible assets consist of separately identifiable
prospecting, exploration and renewable energy assets in the form of
licences, intellectual property or rights acquired either through
business combinations or through separate asset acquisitions.
The following reconciliation serves to summarise the composition
of intangible assets as at period end:
ADV001 ARL018 Bordersley Mbeya Rochdale Shankley Sustineri Total
Hindlip Stather Power (GBP) Coal to Power Biogas Energy ( GBP)
Lane (GBP) Road (GBP) Power ( GBP) (GBP) ( GBP)
Project
( GBP)
----------- ------------ ------------ ------------- --------- --------- ---------- -------------
Carrying
value at 1
January
2021 - - 2,595,000 15,896,105 - - - 18,491,105
Impairments - - - (13,955,528) - - - (13,955,528)
Acquisition
of Rochdale
Power - - - - 150,273 - - 150,273
Acquisition
of
Sustineri
Energy - - - - - - 278,700 278,700
----------- ------------ ------------ ------------- --------- --------- ---------- -------------
Carrying
value at 1
January
2022 - - 2,595,000 1,940,577 150,273 - 278,700 4,964,550
Impairments - - (1,288,578) (1,940,577) - - - (3,229,155)
Acquisition
of ARL018
Stather
Road - 91,482 - - - - - 91,482
Acquisition
of ADV001
Hindlip
Lane 247,506 - - - - - - 247,506
Acquisition
of Shankley
Biogas Ltd - - - - - 603,050 - 603,050
Exchange
movements - - - - - - 14,460 14,460
----------- ------------ ------------ ------------- --------- --------- ---------- -------------
Carrying
value at 31
December
2022 247,506 91,482 1,306,422 - 150,273 603,050 293,160 2,691,893
----------- ------------ ------------ ------------- --------- --------- ---------- -------------
Intangible assets attributable to prospecting or exploration
activities with an indefinite useful life are not amortised until
such time that active mining operations commence, which will result
in the intangible asset being amortised over the useful life of the
relevant project.
Intangible assets attributable to renewable energy activities
are amortised once commercial production commences, over the
remaining useful life of the project, which is estimated to be
between 20 to 30 years, depending on the unique characteristics of
each project.
Until such time as the underlying operations commence
production, intangible assets with an indefinite useful life are
assessed for impairment on an annual basis, against the recoverable
value of the intangible asset, or earlier if an indication of
impairment exists.
One or more of the following facts or circumstances indicate
that the Group should test an intangible asset for impairment:
-- the period for which the Group has the right to develop the
asset has expired during the period or will expire in the
foreseeable future;
-- substantial expenditure on the asset in future is neither planned nor budgeted;
-- sufficient data exists to indicate that, although a
development in the specific area is likely to proceed, the carrying
amount of the development asset is unlikely to be recovered in full
from successful development or by sale.
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
above mentioned 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 calculation performed:
-- measurement of the available resources and reserves;
-- currency fluctuations and exchange movements applicable to the valuation model;
-- commodity prices related to resources and reserve and forward-looking statements;
-- expected growth rates in respect of production capacity;
-- cost of capital related to funding requirements;
-- determination of the commercial viability period;
-- applicable discounts rates, inflation and taxation implications;
-- future operating expenditure related to the realisation of the respective project assets; and
-- co-operation of key project partners going forward.
The following key assumptions influence the measurement of the
intangible assets' recoverable amounts, through utilising the fair
value calculation performed:
-- Determination of consideration receivable based on recently
completed transactions, considering the nature, location, size and
desirability of recently completed transactions, for similar
assets.
A summary of each project and the impairment assessment
performed for each of the intangible assets are detailed below.
Mbeya Coal to Power Project
The Mbeya Coal to Power Project situated in the Mbeya region of
Tanzania, which comprises the Mbeya Coal Mine, a potential 1.5Mt
p/a mining operation, and the Mbeya Power Plant, a planned 300MW
mine-mouth thermal power station. The Mbeya Coal Mine has a defined
120.8 Mt NI 43-101 thermal coal resource. The 300MW mouth-of-mine
thermal power station has long term scalability with the potential
to become a 1000MW plant. The completed full Power Feasibility
Study highlighted an annual power output target of 1.8GW based on
annual average coal consumption of 1.5Mt.
Subsequent to the completion of a compulsory tender process
through TANESCO on the development of the Mbeya Coal to Power
Project, the Group was informed that its bid to secure a
Power-Purchase Agreement was unsuccessful in February 2019. Further
engagement with TANESCO has subsequently culminated in the receipt
of a formal notice from TANESCO during 2020 and inviting the Group
to develop the Mbeya Coal to Power Project for the export market
and thereby enabling the Company to engage with the African Power
Pools regarding potential off-take agreements.
Result of impairment review undertaken during the period
Status of the Term Sheet
The initial Term Sheet signed with interested parties for the
Mbeya Coal Ltd Mining Licenses is no longer valid. After conducting
due diligence, the interested parties discovered several factors
that contribute to the reduced commercial attractiveness and
feasibility of the project. These factors include the low quality
of the coal and the significant challenges posed by its grade and
associated market related price, as well as the remote location of
the mining site (1000 km from Dar es Salaam or 600 km from Mtwara).
The absence of bulk coal handling facilities at nearby ports and
the high indicative transportation costs further undermines the
project's viability. Without a nearby off-taker, it is no longer
feasible to design, construct, and operate a mid-sized coal mine on
the indicative Mbeya mining site.
The project's original intention was to exclusively supply coal
to the mine-mouth power station. However, Mbeya Power Ltd, the
sister company of MCPP (Mbeya Coal Power Project), has made the
decision to align with its parent company, Kibo Energy PLC, and not
pursue coal-fired steam power. As a result, there is no longer a
need to supply coal exclusively to the power station.
In conclusion, the abandonment of coal-fired steam power by
Mbeya Power Ltd, along with the low-quality coal, remote location,
lack of infrastructure, high transportation costs, and unattractive
coal price, has rendered the Mbeya Coal Ltd Mining Licenses
commercially unviable and infeasible.
Status of the Mining Licenses (Mining Licences Numbers ML 655-ML
661)
Mbeya Coal Ltd is a Tanzanian registered mining and exploration
company that was actively involved in the development of a 300MW
integrated coal-to-power project, aligned with the Tanzania Power
System Master Plan. As part of the Mbeya Coal to Power Project
(MCPP), Mbeya Coal Ltd holds a portfolio of Coal Prospecting
Licences that led to the application and granting of the seven
above mentioned Mining Licenses. The coal mine intended for this
project serves as the sole fuel source for the 300MW power plant.
Kibo Energy PLC, in collaboration with TANESCO, has made a USD 20
million investment in the development of the MCPP project.
Throughout the exploration and mining license application
process, the Mining Commission was duly informed that this project
was an integrated coal-to-power initiative, and that the
commencement of mine development was contingent upon signing
relevant power agreements with TANESCO and the Government of
Tanzania. This understanding was officially acknowledged on
multiple occasions.
The Mining Commission granted the aforementioned mining licenses
on March 2, 2022, subject to the payment of annual rent fees.
However, the investor expressed reluctance to pay the annual rent
until a new Memorandum of Understanding (MoU) with TANESCO was
signed to avoid incurring unnecessary expenses amounting to
approximately USD 210,000 annually. The Mining Commission was
notified of this situation, and they agreed to extend the payment
deadlines pending discussions and the eventual signing of a
definitive MoU with TANESCO.
On September 20, Mbeya Coal reported positive progress in
discussions with TANESCO and indicated that the signing of the MoU
was imminent. They requested another extension for the payment
deadline until the MoU was either signed or denied. On December 12,
Mbeya Coal Ltd informed the Mining Commission that the MoU with
TANESCO had been signed on November 15, 2022. However, no responses
were received in relation to these official requests.
Subsequently, Mbeya Coal discovered that the status of the
Mining License in question had been changed online and replaced
with a foreign Prospecting License. Concerned about this
development, Mbeya Coal made an urgent inquiry, leading to the
receipt of a letter from the Mining Commission dated December 28,
2022, stating that the Mining Licenses had been cancelled due to
Mbeya Coal's alleged failure to respond to a Default Notice issued
on August 3, 2022.
Mbeya Coal promptly disputed the unilateral and unfair
cancellation, asserting that the Mining Commission had disregarded
their various requests for extensions and highlighting
irregularities and potential illegality in the commission's
procedures. The matter was pursued vigorously with the Minerals
Department and Mining Commission and eventually escalated to the
office of the Prime Minister of Tanzania. (The latter was
acknowledged by the PM's office)
As of now, the unjust cancellation of the mining licenses by
Mbeya Coal Ltd remains in dispute and unresolved, and Mbeya Coal
Ltd is still awaiting a response from the Principal Secretary for
Energy's office.
An independent consultant was appointed who is actively engaging
the Mining Commission in following up this matter.
Resultingly, we estimated the recoverable amount of Kibo's Coal
Assets to be GBPNil, due to there being no viable offer at present
for the acquisition of the mining licences coupled with the fact
that the licences have been revoked and currently under
dispute.
During the year, the intangible asset was by impaired by
GBP1,940,577 to GBPNil.
Bordersley - 2019
MAST Energy PLC initially acquired an indirect 100% equity
interest in shovel-ready reserve power generation project,
Bordersley, which will comprise a 5MW gas-fuelled power generation
plant for the consideration of GBP175,000 settled through the issue
of shares.
Thereafter, MAST acquired all of St Anderton's direct and
indirect interests (Royalty Agreements) in the Bordersley power
project described above giving it a 100% economic and 100% equity
interest in Bordersley (the 'Acquisition'). Consideration for the
Acquisition consists of the allotment and issue of 46,067,206
ordinary shares in the capital of MAST to St Anderton at an issue
price of GBP0.0525 per share and payable in five tranches
('Consideration Shares') such that the full consideration is only
payable in the event that Bordersley is progressively
de-risked.
As there were no separately identifiable assets and/or
liabilities acquired, the purchase price was allocated toward the
Intellectual Property acquired, in the amount of GBP2,595,000.
During the year, the intangible asset was measured at its value
in use value and found to be impaired in the amount of
GBP1,288,578. The discount rate applicable to the value in use
assessment was 13.54%.
Pyebridge Power Ltd - 2021
Sloane Developments (Sloane) acquired a 100% equity interest in
Pyebridge Power Limited ("Pyebridge") for GBP2,500,000 in cash
which is settled as follows:
-- An initial GBP1,485,500 to be paid in cash at completion date on the 10th of August 2021;
-- Repayment of the loan outstanding of GBP14,500 by Sloane to Pyebridge;
-- Deferred consideration of GBP1,000,000 to be paid in two
tranches 8 months and 12 months respectively from the date of
completion. During the 2022 financial year GBP421,041 of the
deferred consideration was waived and the cost price of the assets
reduced by the same amount.
The acquisition of Pyebridge comprised of the following:
-- An installed and commissioned synchronous gas-powered standby generation facility; and
-- The land on which the gas-powered facility stands.
The acquisition of land and gas-powered generation facility has
been accounted for as assets purchased at consolidated level, and
not as a business combination in accordance with IFRS 3. Therefore,
the purchase price has been allocated between land and the PPE
based on their respective fair values as at the date of acquisition
, as disclosed in Note 10.
Rochdale Power Ltd - 2021
Sloane Developments (Sloane) acquired a 100% interest in
Rochdale Power Limited ("Rochdale"), from Balance Power Projects
Limited, for the installation of a 4.4 MW flexible gas power
project in Dig Gate Lane, Rochdale, OL 16 4NR.
The acquisition purchase price totals GBP239,523 of which the
freehold site amounts to GBP90,750 excluding VAT and the property
rights amount to GBP150,273. The acquisition purchase price is to
be paid in cash. The freehold site purchased is the property at Dig
Gate Lane, Kingsway Business Park, Rochdale, OL16 4NR.
The acquisition of land and gas-powered generation facility will
be accounted for as assets purchased at consolidated level, and not
as a business combination in accordance with IFRS 3. Therefore, the
purchase price has been allocated to the property, plant and
equipment and intangible assets, as disclosed in Note 10 and Note
11 respectively.
ADV 001 Ltd - 2022
Sloane Developments (Sloane) acquired a 100% interest in ADV 001
Limited ("Hindlip Lane"), from DKE Flexible Energy Limited, for the
installation of a 7.5 MW gas-peaker plant in Buildings Farm,
Hindlip Lane, Hindlip, Worcester, WR3 8SB.
The acquisition purchase price totals GBP262,500 of which
GBP88,817 is utilised to settle a shareholder's loan of the same
amount and the remainder of GBP173,683 is allocated towards
purchasing all issued shares of the business. The acquisition
purchase price was paid from a credit loan obtained from the
institutional investor. A further GBP10,694 was paid in cash by
Mast Energy Developments PLC ("MED") of which GBP8,020 is allocated
to the purchase price of Hindlip Lane.
The acquisition of land and gas-powered generation facility was
accounted for as an asset acquisition at consolidated level, and
not as a business combination in accordance with IFRS 3. Therefore,
the purchase price has been allocated to assets and liabilities
acquired based on their respective fair values as at the date of
acquisition.
ARL 018 Ltd - 2022
Sloane Developments (Sloane) acquired a 100% interest in ARL 015
Limited ("Stather Road"), from DKE Flexible Energy Limited, for the
installation of a 2.4 MW gas-peaker plant on Land lying on the
south side of Stather Road, Flixborough.
The acquisition purchase price totals GBP87,500 of which
GBP54,882 is utilised to settle a shareholder's loan of the same
amount and the remainder of GBP32,618 is allocated towards
purchasing all issued shares of the business. The acquisition
purchase price is to be paid from a credit loan obtained from the
institutional investor. A further GBP10,694 was paid in cash by
Mast Energy Developments PLC ("MED") of which GBP2,673 is allocated
to the purchase price of Stather Road.
The acquisition of land and gas-powered generation facility was
accounted for as an asset acquisition at consolidated level, and
not as a business combination in accordance with IFRS 3. Therefore,
the purchase price has been allocated to assets and liabilities
acquired based on their respective fair values as at the date of
acquisition.
Sustineri Energy - 2021
The Group, through its subsidiary Kibo Energy (Cyprus) Limited
(KE), entered into an agreement with Industrial Green Energy
Solutions (Pty) Ltd (IGES) whereby KE would acquire 65% equity
stake in Sustineri Energy (Pty) Ltd (Sustineri), with IGES, the
technology (IP) and process owner, acquiring a 35% stake. IGES
would contribute IP in the amount of approximately GBP278,000
through an equity loan to Sustineri Energy (Pty) Ltd as
contribution to the incorporation of the entity, and KE would
thereafter contribute resources in the amount of GBP532,000 as part
of its contribution. Thereafter Sustineri would source debt and
equity to develop its underlying projects.
IGES, on behalf of Sustineri Energy (Pty) Ltd, completed and
filed the necessary environmental approvals and was awarded a waste
management license by the DEFF on 4 March 2021 for the waste fired
combined heat and power plant to be installed at the Limeroc
Business Park in Centurion, South Africa.
Shankley Biogas Ltd - 2022
The Group, entered into an agreement on 30 September 2022 with
Richard Watts whereby KE would acquire 100% equity stake in
Shankley Biogas Limited (Shankley) for a purchase consideration of
GBP600,000 which was still due as at 31 December 2022.
The purchase consideration is to be settled partially in cash to
the amount of GBP250,000 and the remainder in shares with a value
of GBP350,000. Based on the agreement 198,637,911 ordinary shares
will be issued at an exercise price of GBP0.001762 per share. The
date of settlement is undetermined at this stage but is expected to
be settled within 12 months after the financial year end.
The purchase of Shankley does not constitute a business in terms
of IFRS 3: Business Combinations and is treated as a purchase of
assets and liabilities at fair value at year end. Kibo invested in
the project based on the project location and technological rights
attributable to specific project planning and recognises an
intangible asset of GBP603,050 therefore.
The intangible asset will remain at cost until such time as the
project is ready for use and output is generated.
Highlights of the project purchase is summarised as:
-- Shankley Biogas Ltd has negotiated a Power Purchase Agreement
('PPA') and a Gas Purchase Agreement ('GPA') term sheet on
favourable terms with a blue-chip buyer.
-- The Project has full planning permission as well as grid and
gas connection points already in place.
-- Based on independent financial estimates, prepared by
reputable and appropriately accredited consulting firm, the
projected valuation metrics for the Project are summarised as
follows:
o - Internal rate of return ('IRR') of c. 22.78%
o - Net Present Value (6%) ('NPV') of c. GBP47 million
o - Net Asset Value ('NAV') of c. GBP22 million
o - Projected average annual revenue of c. GBP24 million over a
25-year term.
o - Estimated Operating margin c. 38%
o - Capital estimated of c. GBP.35m
The major classes of assets acquired, and liabilities assumed
are as follows:
Shankley
Biogas Limited
(GBP)
---------------------------
Property, plant and equipment 939,664
Cash and cash equivalents 7,412
Accounts receivable 200
Accrued liabilities (950,326)
---------------------------
Net equity acquired (3,050)
A summary of the assessment performed for each of the renewable
energy intangible assets are detailed below.
Key estimation variables Rochdale Bordersley
Life of project 20 years 20 years
----------------- ---------------
Weighted average cost of capital
("WACC") 13.54% 13.54%
----------------- ---------------
Output 4.4MW 5.0MW
----------------- ---------------
Average GBP/MW output GBP481,118 per GBP423,384 per
MW output MW output
----------------- ---------------
Debt/Equity ratio 58/42 58/42
----------------- ---------------
Sensitivity analysis
----------------- ---------------
Project delayed by 6 months GBP102,664 GBP89,079
----------------- ---------------
250bps Increase/Decrease in WACC GBP800,806 GBP881,030
----------------- ---------------
250bps Increase/Decrease in GBP/MW GBP29,290 GBP40,868
output
----------------- ---------------
Key estimation variables ADV001 ARL018
----------------- ---------------
Life of project 20 years 20 years
----------------- ---------------
Weighted average cost of capital
("WACC") 13.54% 13.54%
----------------- ---------------
Output 7.5MW 2.4MW
----------------- ---------------
Average GBP/MW output GBP436,463 per GBP437,865 per
MW output MW output
----------------- ---------------
Debt/Equity ratio 58/42 58/42
----------------- ---------------
Sensitivity analysis
----------------- ---------------
Projects delayed by 6 months GBP40,173 GBP10,601
----------------- ---------------
250bps Increase/Decrease in WACC GBP946,375 GBP317,017
----------------- ---------------
250bps Increase/Decrease in GBP/MW GBP36,248 GBP12,399
output
----------------- ---------------
Key estimation variables Sustineri Energy
Life of project 10 years
-----------------
Weighted average cost of capital
("WACC") 13.37%
-----------------
Output 2.7MW
-----------------
Average GBP/MW output GBP15 to GBP20
per MW output
-----------------
Debt/Equity ratio 75/25
-----------------
Sensitivity analysis
-----------------
Projects delayed by 6 months GBP258,665
-----------------
250bps Increase/Decrease in WACC GBP82,784
-----------------
250bps Increase/Decrease in GBP/MW GBP166,726
output
-----------------
The Group is exposed to significant market volatility in its
estimate of the weighted average cost of capital. The risk-free
rate for the market in which the Group operates was negatively
affected during the financial year as a direct result of the war
between Russia and Ukraine.
The market interest rates have increased significantly year on
year and the weighted average cost of capital rose from +-6.2% in
the previous year to 13.5% for the current financial year. This has
resulted in impairments being required for the investments and
related property, plant and equipment.
Market indicators are predominantly showing an expected decrease
in the interest rates during the second half of the 2023 financial
year. When these indicators are compared to the sensitivity
analysis the Group expects that a high likelihood exists of
impairment reversal in future when the market interest rates start
lowering.
The assessment of the value in use of the intangible assets
resulted in an impairment of GBP1,288,478 being recognised. The
most significant contributor to the impairment required was the
increase of the weighted average cost of capital due to increase in
market interest rates.
The directors have performed further sensitivity analysis on the
value in use assessments for the four projects based in the UK and
Sustinery based in South Africa with the following variables being
assessed:
Key estimation Reason for assessment Average change
variables in value in
use
Projects delayed Projects are dependent on external GBP501,182
by 6 months funding and delay in funding may
result in delay in net cash inflows
from the projects
---------------------------------------- ---------------
250bps Increase/Decrease The market interest rates have been GBP3,028,012
in WACC volatile during the financial year
and due to the above average interest
rate increases an assessment of 250bps
increase or decrease was performed.
---------------------------------------- ---------------
250bps Increase/Decrease The energy market has experienced GBP285,531
in GBP/MW output above average increases during the
financial year and an assessment
of 250bps increase or decrease was
performed.
---------------------------------------- ---------------
12. Investment in associates
Investment in associates consist of equity investments where the
Group has an equity interest between 20% and 50% and does not
exercise control over the investee.
The following reconciliation serves to summarise the composition
of investments in associates as at period end:
Katoro Mabesekwa Total
Gold PLC Coal Independent ( GBP)
(GBP) Power Project
(GBP)
Carrying value at 1 January 2021 - 9,696,351 9,696,351
---------- ------------------ ------------
Share of losses for the year (48,357) - (48,357)
Remaining equity interest following loss
of control over investee 894,090 - 894,090
Impairment loss (316,969) (6,132,712) (6,449,681)
Carrying value at 1 January 2022 528,764 3,563,639 4,092,403
---------- ------------------ ------------
Share of losses for the year (181,684) - (181,684)
Impairment loss (246,135) (3,563,639) (3,809,774)
Carrying value at 31 December 2022 100,945 - 100,945
---------- ------------------ ------------
Mabesekwa Coal Independent Power Project
On 3 April 2018, the Group completed the acquisition of an 85%
interest in the Mabesekwa Coal Independent Power
Project, located in Botswana. The intangible asset was
recognised at the fair value of the consideration paid, which
emanates from the fair value of the equity instruments issued as at
transaction date, being GBP 9,376,312.
The Mabesekwa Coal Independent Power Project ("MCIPP") is
located approximately 40km east of the village of Tonata and
approximately 50km southeast of Francistown, Botswana's second
largest city. Certain aspects of the Project have been advanced
previously by Sechaba Natural Resources Limited ("Sechaba"),
including water and land use permits and environmental
certification. Mabesekwa consists of an in situ 777Mt Coal
Resource. A pre-feasibility study on a coal mine and a scoping
study on a coal fired thermal power plant has been completed. Kibo
is in possession of a Competent Persons Report on the project,
which includes a SAMREC-compliant Maiden Resource Statement on the
excised 300 Mt portion of the Mabesekwa coal deposit.
In September 2019, Kibo and Shumba Energy Limited ("Shumba")
signed a binding Heads of Agreement to reorganise the arrangements
for the MCIPP and its associated coal asset in Botswana. Under the
reorganisation the MCIPP retained assets will be consolidated back
into KEB and Kibo's interest in KEB will be reduced to 35% to
maintain Kibo's look-through interest in the MCIPP resource and
make sundry adjustments to recognise Kibo's project expenditure. In
exchange for the increase in the equity interest held by Shumba,
Shumba would forego the previous claim it had against a portion of
the MCIPP coal resources, thereby increasing the value of the
interest held by KEB.
The value of the remaining equity interest in Kibo Energy
Botswana (Pty) Ltd on initial recognition, was determined based on
the fair value of the proportionate equity interest retained in the
in the enlarged resource following the restructuring during
2019.
Result of impairment review undertaken during the period
The Group has decided to divest itself from these assets in line
with the Group direction change to renewable energy. As the Term
Sheet upon which the Mabasekwa Coal assets were based has expired,
the project value was impaired to GBPNil during the year.
Summarised financial information of the associate is set out
below:
Group (GBP) Group (GBP)
2022 2021
------------ ------------
Non-Current assets - 7,824,447
Current assets - 866
Loss for the year (3,865,168) -
Kibo Energy Botswana (Pty) Ltd recognised no revenue during the
year (2021: Nil). No dividends were received during the year (2021:
Nil). Kibo Energy Botswana (Pty) Ltd's principal place of business
is Plot 2780, Extension 9, Gaborone, Botswana.
Katoro Gold PLC
On 30 September 2021, the Group lost the ability to exercise
control over the operations of Katoro Gold PLC and its subsidiaries
(hereinafter referred to as the "Katoro Group") following from the
resignation of certain Kibo directors.
Following the loss of control, in accordance with IFRS 10, the
assets, liabilities, non-controlling interest and foreign currency
translation reserves attributable to the operations of the Katoro
Group were derecognised, with the remaining equity interest
retained in the associate being recognised at fair value, resulting
in a loss on deemed disposal recognised through profit or loss, as
detailed below.
The value of the remaining equity interest in Katoro Gold PLC on
initial recognition as an associate, was determined based on the
fair value of the listed equities.
Summarised financial information of the associate is set out
below:
Group (GBP) Group (GBP)
31 December 31 December
2022 2021
------------- -------------
Non-current assets - 209,500
Current assets 65,936 876,658
Current liabilities (296,844) (163,732)
Loss for the year ended (1,066,616) (1,142,479)
Cash flow from operating activities (893,310) (915,880)
Cash flow from investing activities - (125,866)
Cash flows from financing activities 114,950 (1,771,925)
Katoro Gold PLC recognised no revenue during the year (2021:
GBPNil). No dividends were received during the year (2021: GBPNil).
Kibo owns 96,138,738 of Katoro's 460,412,593 issued shares or
20.88% of the issued shares at year end.
Katoro Gold PLC's principal place of business is the 6(th)
Floor, 60 Gracechurch Street, London, EC4V OHR. Project specific
information about Katoro Gold PLC can be obtained from their
website at katorogold.com.
13. Other financial assets
Group (GBP)
2022 2021
-------------- -------------
Other financial assets comprise of:
Lake Victoria Gold receivable - 657,061
Blyvoor Joint Venture receivable - 1,223,495
- 1,880,556
-------------- -------------
Impairment allowance for other financial assets
receivable
Lake Victoria Gold receivable - (657,061)
Blyvoor Joint Venture receivable - (1,223,495)
-------------- -------------
- (1880,556)
-------------- -------------
Group (GBP)
Reconciliation of movement in other financial Blyvoor Lake Victoria
assets Joint Venture Gold
-------------- -------------
Foreign exchange movement - 16,240
Further advance on the Blyvoor Joint Venture 63,158 -
Credit loss allowance recognised (63,158) (16,240)
-------------- -------------
Carrying value as at 31 December 2021 - -
-------------- -------------
Carrying value as at 31 December 2022 - -
-------------- -------------
14. Goodwill
MAST Energy Projects Limited - 2020
In the previous financial period, the Group acquired a 60%
equity interest in MAST Energy Project Limited, previously known as
MAST Energy Development Limited, for GBP300,000, settled through
the issue of 5,714,286 ordinary shares in Kibo effective on 19
October 2018. The acquisition of MAST Energy Projects Limited falls
within the ambit of IFRS 3: Business Combinations.
The net assets acquired were valued at Nil, with the resultant
purchase price being allocated to Goodwill on date of acquisition.
Goodwill is assessed for impairment on an annual basis, against the
recoverable amount of underlying Cash Generating Unit ("CGU"). The
recoverable amount of the CGU is the higher of its fair value less
cost to sell and its value in use.
Because the underlying projects previously held by Mast Energy
Projects Limited have now been restructured into separate SPV's,
controlled directly by the intermediary holding company Sloane
Developments Limited, there was no prospective benefit from
continued operations of Mast Energy Projects Limited therefore the
goodwill was impaired. The Company will cease operations in the
foreseeable future.
The goodwill carried forward from this transaction is GBPNil
after an impairment of GBP300,000 in the previous financial
year.
15. Other receivables
Group 2022 Group Company Company
(GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
Amounts falling due within
one year:
Other debtors 227,223 255,747 90,720 73,734
227,223 255,747 90,720 73,734
----------- ------------ ------------ ------------
The carrying value of current receivables approximates their
fair value.
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.
16. Cash and cash equivalents
Group (GBP) Company (GBP)
Cash consists of: 2022 2021 2022 2021
------- --------- ------ -------
Short term convertible cash reserves 163,884 2,082,906 19,442 239,674
163,884 2,082,906 19,442 239,674
======= ========= ====== =======
Cash has not been ceded or placed as encumbrance toward any
liabilities as at year end.
17. Share capital - Group and Company
2022 2021
Authorised equity
5,000,000,000 Ordinary shares of EUR0.001
each EUR5,000,000 EUR5,000,000
1,000,000,000 deferred shares of EUR0.014
each EUR14,000,000 EUR14,000,000
3,000,000,000 deferred shares of EUR0.009
each EUR27,000,000 EUR27,000,000
EUR46,000,000 EUR46,000,000
Allotted, issued and fully paid shares
2022: 3,039,197,458 Ordinary shares GBP1,934,599 -
of EUR0.001 each
2021: 2,930,657,437 Ordinary shares - GBP1,836,562
of EUR0.001 each
1,291,394,535 Deferred shares of EUR0.009 GBP9,257,075 GBP9,257,075
each
805,053,798 Deferred shares of EUR0.014 GBP9,948,807 GBP9,948,807
each
------------------------- -----------------------
GBP21,140,481 GBP21,042,444
Ordinary Deferred
Number of Share Capital Share Capital Share premium
Shares (GBP) (GBP) (GBP)
Balance at 31 December
2020 2,221,640,835 1,205,611 19,205,882 44,312,371
-------------- ----------------- ----------------- --------------
Shares issued during
the period 709,016,602 630,951 - 1,116,957
Balance at 31 December
2021 2,930,657,437 1,836,562 19,205,882 45,429,328
-------------- ----------------- ----------------- --------------
Shares issued during
the period 108,540,021 98,036 - 86,753
Balance at 31 December
2022 3,039,197,458 1,934,598 19,205,882 45,516,081
-------------- ----------------- ----------------- --------------
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.
The company issued the following ordinary shares during the
period, with regard to key transactions:
-- 39,264,079 new Kibo Shares were issued on 16 February 2022 of
EUR0.001 each at a deemed issue price of GBP0.0017828 per share to
an Institutional Investor ("Investor") in settlement of GBP70,000
of facility implementation fee pursuant to the Funding Facility
Agreement signed between the Investor and the Company in February
2022;
-- 13,157,895 new Kibo Shares were issued on 16 February 2022 of
EUR0.001 each at a deemed issue price of GBP0.0019 per share to
certain providers of financial and technical services in settlement
of GBP25,000 of outstanding invoices;
-- 56,118,047 new Kibo Shares were issued on 20 May 2022 of
EUR0.001 each at a deemed issue price of GBP0.0016 per share to
Sanderson Capital Partners Limited in full and final settlement of
GBP89,788.88 of the total remaining outstanding amount owing
pursuant to the Forward Payment Facility
18. Control reserve
The transaction with Opera Investments PLC in 2017 represented a
disposal without loss of control. Under IFRS this constitutes a
transaction with equity holders and as such is recognised through
equity as opposed to recognising goodwill. The control reserve
represents the difference between the purchase consideration and
the book value of the net assets and liabilities acquired in the
transaction with Opera Investments. The control reserve balance as
at the year-end is Nil, following the loss of control over of
Katoro Gold PLC effective from 30 September 2021.
19. Share based payments reserve
The following reconciliation serves to summarise the composition
of the share-based payment reserves as at period end, which
incorporates both warrants and share options in issue for the
Group:
Group (GBP) Company (GBP)
---------------------- ----------------------
2022 2021 2022 2021
---------- ---------- ---------- ----------
Opening balance of share-based
payment reserve 466,868 1,728,487 466,868 977,575
Issue of share options and
warrants 24,774 194,944 24,774 48,693
Expired warrants during the
period (418,173) (559,400) (418,173) (559,400)
Loss of control over subsidiary - (897,163) - -
---------- ----------
73,469 466,868 73,469 466,868
---------- ---------- ---------- ----------
Share Options and Warrants detail
Share Options
Kibo and MAST Energy Developments PLC had no share options in
issue throughout the year
The following reconciliation serves to summarise the value
attributable to the share option reserve as at period end:
Group (GBP)
-----------------
2022 2021
----- ----------
Opening balance of share-based payment reserve - 256,315
Issue of share options - 146,249
Loss of control over subsidiary - (402,564)
- -
----- ----------
The following reconciliation serves to summarise the quantity of
share options in issue as at period end:
Group
2022 2021
Opening balance - 32,244,781
Share options issued - -
Loss of control of subsidiary - (32,244,781)
- -
Warrants
The following reconciliation serves to summarise the value
attributable to the share-based payment reserve as at period end
for the Company:
Company (GBP)
2022 2021
Opening balance of warrant
reserve 466,868 977,575
Issue of warrants 24,774 48,693
Expired warrants (418,173) (559,400)
73,469 466,868
The following reconciliation serves to summarise the quantity of
warrants in issue as at period end:
Group Company
2022 2021 2022 2021
Opening balance 1,180,861,140 1,341,308,419 1,180,861,140 1,275,833,420
New warrants issued 168,274,625 430,000,000 168,274,625 430,000,000
Warrants exercised - (189,431,556) - (188,431,556)
Warrants expired (221,111,140) (340,740,724) (221,111,140) (336,540,724)
Decrease in warrants
following loss of control
over subsidiary - (60,274,999) - -
1,128,024,625 1,180,861,140 1,128,024,625 1,180,861,140
At 31 December 2022 the Group had no share options and
1,128,024,625 warrants outstanding:
Warrants
Date of Grant Issue date Expiry date Exercise Number granted Exercisable
price as at 31
December
2022
17 Sept 2020 17 Sept 2020 17 Sept 2023 0.4p 240,000,000 216,000,000
17 Sept 2020 17 Sept 2020 17 Sept 2023 0.25p 362,500,000 313,750,000
3 November 3 November 2 November
2021 2021 2023 0.4p 430,000,000 430,000,000
16 February 16 February 15 February
2022 2022 2025 0.023p 168,274,625 168,274,625
1,200,774,625 1,128,024,625
Total Contingently Issuable shares 1,200,774,625 1,128,024,625
Expenses settled through the issue of shares
The Group recognised the following expense related to equity
settled share-based payment transactions:
2022 (GBP) 2021 (GBP)
Geological expenditure settled 25,000 -
Listing and capital raising fees 159,790 -
Shares and warrants issued to directors and
staff - 146,250
184,790 146,250
20. 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, taking into
account the financing provided to subsidiary operations is seen as
part of the Group's net investment in subsidiaries.
Group
2022 2021
(GBP) (GBP)
Opening balance (466,184) (598,637)
Movement during the period 372,191 (212,764)
Disposal of subsidiary - 345,217
Closing balance (93,993) (466,184)
21. Non -controlling interest
The non-controlling interest brought forward relates to the
minority equity attributable to Sustineri Energy and Mast Energy
Developments Plc. As at 31 December 2022, the Group's
non-controlling interest comprises 42.14% equity held in MAST
Energy Development PLC (2021: 45%).
Group
2022 (GBP) 2021 (GBP)
Opening balance 1,962,816 (256,841)
Change of interest in subsidiary without loss
of control 333,009 3,201,014
Acquisition of non-controlling interest - 308,030
Change in shareholding resulting in a loss
of control - (138,045)
Comprehensive loss for the year allocated to
non-controlling interest (1,131,607) (1,151,342)
Closing balance of non-controlling interest 1,164,218 1,962,816
The summarised financial information for significant
subsidiaries in which the non-controlling interest has an
influence, namely MAST Energy Developments PLC as at ended 31
December 2022, is presented below:
MAST Energy
Development
PLC
2022 (GBP)
Statement of Financial position
Total assets 4,617,505
Total liabilities 2,500,761
Statement of Profit and Loss
Revenue for the period 1,036,743
Loss for the period (2,733,000)
Statement of Cash Flow
Cash flows from operating activities (1,284,427)
Cash flows from investing activities (974,350)
Cash flows from financing activities 585,500
22. Trade and other payables
Group Group Company Company
2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
Amounts falling due within one
year:
Trade payables 680,722 1,116,273 159,009 114,062
Derivative liabilities (refer below) 20,386 - - -
Other payables 884,015 - - -
Accrued liabilities 809,967 - 667,026 -
2,395,090 1,116,273 826,035 114,062
Movements in derivative liabilities
included in Trade and Other Payables:
Recognition of derivative liability
derived from the convertible loan
notes 106,944 - - -
Gain on fair value adjustment of
derivative liability (86,558) - - -
20,386 - - -
The carrying value of current trade and other payables equals
their fair value due mainly to the short-term nature of these
receivables.
Derivatives
The derivative liability is derived from the convertible credit
note loans. The convertible feature within the credit notes enables
the noteholders to convert into a fixed number of shares at the
Fixed Premium Payment Price (FPPP). This price does have
variability, although the FPPP is set at the Reference price, in
the event that a share placing occurs 93,910 at below the Reference
price, the FPPP will be the share placing price ("round down"
feature). The conversion includes and embedded derivative, as its
value moves in relation the share price (through a placing price)
and it is not related to the underlying host instrument, the debt.
The effect is that the embedded derivative is accounted for
separately at fair value.
23. Borrowings and other financial liabilities
Group Group Company Company
2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
Amounts falling due within one
year:
Short term loans 1,195,239 1,079,691 1,195,239 119,004
Other financial liabilities - Convertible
loan notes 1,012,790 - 657,985 -
Amounts falling due between one
year and five years:
Other financial liabilities - Convertible
loan notes 243,056 - - -
2,451,085 1,079,691 1,853,224 119,004
Group Group Company Company
2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
Reconciliation of borrowings and
other financial liabilities:
Opening balance 1,079,691 858,546 119,004 344,391
Proceeds from convertible loans
in MED 650,000 - - -
Proceeds from borrowings in Kibo 1,672,824 - 1,672,824 -
Recognition of derivative liability
derived from the convertible loan
notes (106,944) - - -
Raised during the year - 978,038 - -
Repayment of deferred payment
liability (555,535) (175,705) - (55,669)
Repayment of borrowings (44,917) - (44,917) -
Waiver of deferred payment liability (421,041) - - -
Debt forgiven - (355,659) - -
Loss of control over subsidiary - (77,434) - -
Interest raised 192,087 21,623 121,393 -
Costs incurred on borrowings 74,709 - 74,709 -
Settled through the issue of shares (89,789) (169,718) (89,789) (169,718)
Closing balance 2,451,085 1,079,691 1,853,224 119,004
Breakdown of borrowings and other
financial liabilities:
Non-current 243,056 - - -
Current 2,208,029 1,079,691 1,853,224 119,004
Total 2,451,085 1,079,691 1,853,224 119,004
Deferred vendor liability
The deferred vendor liability was settled during the year by
mutual agreement between the seller of Pyebridge and MED PLC. The
settlement took place following agreed costs incurred by MED on
behalf of the seller and the eventual waiver of the remaining
amounts due in the amount of GBP421,041.
The settlement was reached as a result of the seller not
reaching certain contractual milestones originally agreed to in the
purchase agreement of Pyebridge. The deferred payment liability for
the purchase was linked to the seller reaching these
milestones.
The resulting waiver is treated as price adjustment to the
underlying assets for the Company and Group respectively as the
fair value of the consideration paid for the assets were reduced by
the waiver.
Convertible loan notes
Short term loans relate to two unsecured loan facilities from
the institutional investor which are repayable either through the
issue of ordinary shares or payment of cash by the Company.
These facilities have repayment periods of 18 and 24 months
respectively for each drawdown from the facility. The facilities
may be converted at the option of the note holders once certain
milestones have been met. At the financial year end 31 December
2022, none of these milestones have been met and no conversion may
take place. The earliest conversion may occur during October
2023.
Institutional Investor
The Institutional Investor borrowing is a bridge loan facility
agreement for up to GBP3m with a term of up to 36 months. Funds
advanced under the Facility will attract a fixed coupon interest
rate of 3.5% and will be repayable with accrued interest on 23 July
2023
24. Investment in subsidiaries and associates
Breakdown of investments as at 31 December 2022
Associate Subsidiary
undertakings undertakings
(GBP) (GBP)
Kibo Mining (Cyprus) Limited - 4,987,662
Katoro Gold PLC 100,945 -
Shankley Biogas Limited - 600,000
Total cost of investments 100,945 5,587,662
Breakdown of investments as at 31 December 2021
Associate Subsidiary
undertakings undertakings
(GBP) (GBP)
Kibo Mining (Cyprus) Limited - 16,233,997
Katoro Gold PLC 528,764 -
Total cost of investments 528,764 16,233,997
Investments at Cost
At 1 January 2021 - 46,664,160
Additions in Kibo Mining Cyprus Limited - 1,114,324
Impairment of the subsidiaries - (29,379,842)
Derecognition of subsidiary and recognition
of associate 2,164,645 (2,164,645)
Fair value adjustment of Katoro Gold PLC (1,635,881) -
At 31 December 2021 (GBP) 528,764 16,233,997
Additions in Kibo Mining Cyprus Limited - 1,086,889
Purchase of Shankley Biogas Limited (refer note
11) - 600,000
Impairment of subsidiaries - (12,333,224)
Fair value adjustment of Katoro Gold PLC (427,819) -
At 31 December 2022 (GBP) 100,945 5,587,662
The impairment in Katoro Gold PLC is due to the significant
decline in the share price, which results in the recoverable amount
of the investment in Katoro Gold PLC decreasing considerably in
2022.
At 31 December 2022 the Company had the following
undertakings:
Subsidiary, Interest Interest
Description associate, Activity Incorporated held held
Joint Ops in (2022) (2021)
Directly held investments
Kibo Mining (Cyprus)
Limited Subsidiary Treasury Function Cyprus 100% 100%
Katoro Gold PLC Associate Mineral Exploration United Kingdom 20.88% 20.88%
Indirectly held
investments
MAST Energy Development
PLC Subsidiary Power Generation United Kingdom 57.86% 55%
Sloane Developments
Limited Subsidiary Holding Company United Kingdom 57.86% 55%
MAST Energy Projects
Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Bordersley Power Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Rochdale Power Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Pyebridge Power Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Kibo Gold Limited Associate Holding Company Cyprus 20.88% 20.88%
Savannah Mining Limited Associate Mineral Exploration Tanzania 20.88% 20.88%
Kibo Nickel Limited Associate Holding Company Cyprus 20.88% 20.88%
Eagle Exploration
Limited Associate Mineral Exploration Tanzania 20.88% 20.88%
Katoro (Cyprus) Limited Associate Mineral Exploration Cyprus 20.88% 20.88%
Katoro South Africa
Limited Associate Mineral Exploration South Africa 20.88% 20.88%
Mbeya Holdings Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Development
Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Mining Company
Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Coal Limited Subsidiary Mineral Exploration Tanzania 100% 100%
Rukwa Holding Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Power Tanzania
Limited Subsidiary Power Generation Tanzania 100% 100%
Kibo Mining South
Africa (Pty) Ltd Subsidiary Treasury Function South Africa 100% 100%
Sustineri Energy (Pty)
Ltd Subsidiary Renewable Energy South Africa 65% 65%
Kibo Exploration Limited Subsidiary Treasury Function Tanzania 100% 100%
Kibo MXS Limited Subsidiary Holding Company Cyprus 100% 100%
Mzuri Exploration
Services Limited Investment Exploration Services Tanzania 4.78% 4.78%
Protocol Mining Limited Investment Exploration Services Tanzania 4.78% 4.78%
Jubilee Resources
Limited Subsidiary Mineral Exploration Tanzania 100% 100%
Kibo Energy Botswana
Limited Subsidiary Holding Company Cyprus 100% 100%
Kibo Energy Botswana
(Pty) Ltd Associate Mineral Exploration Botswana 35% 35%
Kibo Energy Mozambique
Limited Subsidiary Holding Company Cyprus 100% 100%
Pinewood Resources
Limited Subsidiary Mineral Exploration Tanzania 100% 100%
BENGA Power Plant
Limited Joint Venture Power Generation Tanzania 65% 65%
Makambako Resources
Limited Subsidiary Mineral Exploration Tanzania 100% 100%
Shankley Biogas Limited Subsidiary Power Generation United Kingdom 100% -
The Group has applied the approach whereby loans to Group
undertakings and trade receivables from Group undertakings were
capitalised to the cost of the underlying investments. The
capitalisation results in a decrease in the exchange fluctuations
between Group companies operating from various locations.
25. Related parties
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:)
A. Lianos River Group, Boudica Group and Namaqua Management
Limited
Other entities over which directors/key management or their
close family have control or significant 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.
St Anderton on Vaal Limited
St Anderton on Vaal Limited provides consulting
services to the Group. The directors of
St Anderton on Vaal Limited are also directors
of Mast Energy Developments PLC.
Kibo Mining PLC is a shareholder of the following companies and
as such are considered related parties:
Directly held investments: Kibo Mining (Cyprus) Limited
Katoro Gold PLC
Indirectly held investments: Kibo Gold Limited
Kibo Mining South Africa Proprietary Limited
Savannah Mining Limited
Kibo Nickel Limited
Katoro (Cyprus) Limited
Katoro South Africa Limited
Kibo Energy Botswana Limited
Kibo Energy Mozambique Limited
Eagle Exploration Mining Limited
Rukwa Holdings Limited
Mbeya Holdings Limited
Mbeya Development Company Limited
Mbeya Mining Company Limited
Mbeya Coal Limited
Mbeya Power Limited
Kibo Exploration Limited
Mbeya Power Tanzania Limited
Kibo MXS Limited
Kibo Energy Mozambique Limited
Pinewood Resources Limited
Makambako Resources Limited
Jubilee Resources Limited
Kibo Energy Botswana Limited
MAST Energy Developments PLC
MAST Energy Projects Limited
Sloane Developments Limited
Bordersley Power Limited
Rochdale Power Limited
Pyebridge Power Limited
Shankley Biogas Limited
During the year GBP23,176 was paid to Boudica Group for
secretarial services.
26. Financial Instruments and Financial Risk Management
The Group and Company's principal financial instruments
comprises trade payables and borrowings. 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 2022 and 2021 financial
period, the Group and Company's policy not to undertake trading in
derivatives. Any derivative liabilities due are a result of
agreements with the Group and Company's suppliers or financiers
under its primary business goals, i.e., financing and development
of renewable energy projects.
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.
2022 (GBP) 2021 (GBP)
Financial instruments of Loans and Financial Loans and Financial
the Group are: receivables liabilities receivables liabilities
-------------
Financial assets at amortised
cost
Other receivables 227,223 - 255,747 -
Cash and cash equivalents 163,884 - 2,082,906 -
Financial liabilities at
amortised cost
Trade and other payables - 2,374,704 - 1,116,273
Other financial liabilities 1,255,846 - -
Borrowings - 1,195,239 - 1,079,691
Financial liabilities at
fair value
Trade payables - derivative
liabilities - 20,386 - -
391,107 4,846,175 2,338,653 2,195,964
2022 (GBP) 2021 (GBP)
Financial instruments of Loans and Financial Loans and Financial
the Company are: receivables liabilities receivables liabilities
-------------
Financial assets at amortised
cost
Other receivables 90,720 - 73,734 -
Cash and cash equivalents 19,442 - 239,674 -
Financial liabilities at
amortised cost
Trade and other payables - 826,035 - 114,062
Other financial liabilties - 657,985 - -
Borrowings - 1,195,239 - 119,004
110,162 2,679,259 313,408 233,066
Foreign currency risk
The Group undertakes certain transactions denominated in foreign
currencies and exposures to exchange rate fluctuations therefore
may arise. Exchange rate exposures are managed by continuously
reviewing exchange rate movements in the relevant foreign
currencies. The exposure to exchange rate fluctuations for the
Group/Company is limited to foreign currency translation of
subsidiaries.
At the period ended 31 December 2022, the Group had no
outstanding forward exchange contracts.
Exchange rates used for conversion of foreign subsidiaries
undertakings were:
2022 2021
EURO to GBP (Average) 0.8115 0.8595
EURO to GBP (Spot) 0.8866 0.8394
USD to GBP (Average) 0.8528 0.7281
USD to GBP (Spot) 0.8266 0.7412
ZAR to GBP (Average) 0.0496 0.0492
ZAR to GBP (Spot) 0.0486 0.0465
------ ------
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
As the Group/Company has no material monetary assets denominated
in foreign currencies, the impact associated with a change in the
foreign exchange rates is not expected to be material to the
Group/Company.
Credit risk
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 significant 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. Expected credit
losses were not measured on a collective basis. The various
financial assets owed from group undertakings were evaluated
against the underlying asset value of the investee, taking into
account the value of the various projects undertaken during the
period, thus validating, as required the credit loss recognised in
relation to amounts owed by group undertakings.
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 (GBP) Company (GBP)
2022 2021 2022 2021
Trade & other receivables 227,223 255,747 90,720 73,734
Cash 163,884 2,082,906 19,442 239,674
Liquidity risk management
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 Group and Company's financial liabilities as at 31 December
2022 were all payable on demand.
Less than Greater Greater
1 year than 1 year than 5 years
but within
Group (GBP) 5 years
At 31 December 2022
Trade and other payables 2,395,090 - -
Borrowings 1,195,239 - -
Lease liabilities 27,000 108,000 621,000
Other financial liabilities 1,012,790 243,056 -
At 31 December 2021
Trade and other payables 1,116,273 - -
Borrowings 1,079,691 - -
Lease liabilities 27,000 108,000 648,000
Company (GBP)
At 31 December 2022
Trade and other payables 826,035 --
Borrowings 1,195,239 --
Other financial liabilities 657,985
At 31 December 2021
Trade and other payables 114,062 --
Borrowings 119,004 --
Interest rate risk
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:
Currently no significant impact exists due to possible interest
rate changes on the Company's interest-bearing instruments.
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and
equity balance.
The Group manages its capital structure and makes adjustments to
it, in light of changes in economic conditions. To maintain or
adjust its capital structure, the Group may adjust or issue new
shares or raise debt. No changes were made in the objectives,
policies or processes during the period ended 31 December 2022.
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
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
As at 31 December 2022, the Group had no outstanding contracts
designated as hedges.
27. Post Statement of Financial Position events
During January 2023, the Group appointed Beaumont Cornish
Limited as Nominated Advisor (NOMAD) following the resignation of
RFC Ambrian Ltd. On the same day, Ajay Dominic Saldanha was
appointed to the board of directors as a non-executive
director.
On 25 January 2023 Kibo settled outstanding creditors by way of
issuing 14,025,314 ordinary shares at 0.14 pence per share, of par
value EUR0.001 each (the "Settlement Shares") to a service provider
in payment of an outstanding invoice for value of GBP19,635.44.
The Group made a decision to potentially introduce an additional
revenue stream to its 2.7 MW plastic-to-syngas power plant (the
'Project'), which sits within the 65%-owned Sustineri Energy (Pty)
Ltd, following the Company's previous announcement dated 14
February 2022. This potential new revenue stream involves the
production of synthetic oil from non-recyclable plastic waste in
addition to the production of electricity from syngas, which
promises significant added benefits to the Project.
A subsidiary of Kibo, MED, applied for and was successful in
pre-qualification to bid for two new CM contracts, being a T-1 and
a T-4 CM contract. Following the preparation of a robust CM Auction
bid strategy, MED is pleased to announce that pursuant to the
recent Capacity Market Auctions and subsequent results, its T-1 bid
cleared at GBP60/kW/pa and, its T-4 bid cleared at an unprecedented
historic record price of GBP63/kW/pa.
Mr. Peter Oldacre was appointed as the new Group Business
Development Executive for the Kibo Group of companies ('KEGC' or
the 'Group').
On 11 April 2023 received warrant exercise notices and loan
conversion notices for which new Kibo shares will be issued as
follows:
Kibo Warrant Exercise
The Company has received warrant notices to exercise 284,524,625
Kibo warrants for which 284,524,625 ordinary Kibo shares of
EUR0.001 at a price of GBP0.001 (0.1p) will be issued (the "Warrant
Shares"). The Warrant Shares include 168,274,625 shares to be
issued to the Institutional Investor. Accordingly, the
Institutional Investor being RiverFort Global Opportunities PCC Ltd
will have a holding of 168,274,625 shares representing a 4.37%
interest in the Company. From the total Warrant proceeds of
GBP284,524.63, GBP68,274.63 is being retained by the Institutional
Investor from its warrant exercise as a reduction against the
Outstanding Amount on the term loan facility (the "Facility") under
the terms of the agreed reprofiling terms of the Facility.
Issue of the Warrant Shares satisfies conditions precedent 2 and
3 for the reprofiling of the Facility under the reprofiling
agreement.
Kibo Convertible Loan Note Conversion
Accordingly, and further to the announcement of 11 April,
Conversion notices have now been received by the noteholders on
Kibo's 7% Convertible Loan Note Instrument dated 7 January 2022
(the 'Loan Notes'), to convert all principal amounts and accrued
interest to ordinary Kibo shares of EUR0.001 par value. The total
amount outstanding, including accrued interest on the Loan Notes,
is GBP714,517 which has been converted at a deemed price of 0.14p,
resulting in the issue of 510,369,286 new Kibo shares to the
noteholders (the "Conversion Shares"). The noteholders include
certain directors and senior management of the Company as further
detailed below.
Issue of the Conversion Shares satisfied condition precedent 1
for the reprofiling of the Facility under the reprofiling
agreement.
The total amount of new Kibo shares (Warrant Shares and
Conversion Shares) issued is 794,893,911 (the "New Shares").
Kibo New Warrant Issue
The Company has also awarded 1,262,300,283 warrants to the
Institutional Investor (Institutional Investor Warrants) under the
agreed reprofiling terms of the Facility. This is calculated as
being 100% of the Reprofiled Amount as defined in the 11 April
announcement divided by the Reference Price of EUR0.001 and these
warrants are exercisable half at a price of EUR0.001 per Share and
half at a price of EUR0.002 per Share. Following the Kibo Warrant
Exercise and the Kibo New Warrant Issue there will be 2,105,800,283
warrants outstanding in the Company (issued and unexpired).
Reprofiling of Facility becomes Effective.
As conditions precedent 1 to 3 for the reprofiling of the
Facility under the reprofiling agreement have now been met, the
debt reprofiling is now effective.
On 4 May 2023 the Group Company has requested that 116,250,000
of the shares it has applied for to be admitted for trading on AIM
and the JSE, in its 26 April 2023 announcement, be deferred from
being issued and admitted for trading, until full payment for the
corresponding warrants, for which prior irrevocable exercise
notices have been submitted, has been received. Accordingly, the
Company has issued 168,274,625 Ordinary Shares to RiverFort Global
Opportunities PCC Ltd in respect of the warrant exercise announced
on 26 April 2023 for which trading on AIM and the JSE is expected
on 5 May 2023 and for which full payment has been received by the
Company from RiverFort Global Opportunities PCC Ltd
("Admission").
On 26 May 2023 the Group announced that 48,000,000 shares of the
116,250,00 it had deferred from being issued and admitted to AIM
have now been allotted following receipt of warrant exercise funds
in respect of a warrant exercise notice already received. The
warrant exercise notice relates to exercise of 48,000,000 Kibo
warrants for which 48,000,000 ordinary Kibo shares of EUR0.001 at a
price of GBP0.001 (0.1p) will now be issued (the "Warrant Shares").
Total warrant exercise funds in respect of this warrant exercise
received by the Company are GBP48,000.
Total Voting Rights
Application will be made for the Warrant Shares to be admitted
to trading on AIM and the JSE AltX markets. Trading in the Warrant
Shares is expected to commence on AIM and the JSE on or around 2
June 2023 ('Admission'). Following Admission, the Company will have
3,779,866,683 shares in issue and the foregoing gure may be used by
shareholders as the denominator for the calculations to determine
if they are required to notify their interest in, or a change to
their interest in, the Company under the FCA's Disclosure Guidance
and Transparency Rules.
28. Commitments and Contingencies
Benga Power Project
Kibo entered into a Joint Venture Agreement (the 'Benga Power
Joint Venture' or 'JV') with Mozambique energy company
Termoeléctrica de Benga S.A. to participate in the further
assessment and potential development of the Benga Independent Power
Project ('BIPP').
In order to maintain its initial participation interest Kibo is
required to ensure funding of a maximum amount of GBP1 million
towards the completion of a Definitive Feasibility Study, however
this expenditure is still discretionary.
Other than the commitments and contingencies noted above, the
Group does not have identifiable material commitments and
contingencies as at the reporting date. Any contingent rental is
expensed in the period in which it incurred.
Annexure 1: Headline Earning Per Share
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
1/2022 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: 31 December 31 December
2022 (GBP) 2021 (GBP)
---------------
Loss for the period attributable to normal
shareholders (9,776,917) (21,996,968)
Adjustments:
Profit on loss of control over of subsidiaries (529,415)
Profit on disposal of PPE (7,264) -
Impairment of goodwill 300,000
Impairment of intangible assets 3,229,155 13,955,528
Impairment of associates 3,809,774 6,449,681
---------------
Headline loss for the period attributable
to normal shareholders (2,745,252) (1,821,174)
Headline loss per ordinary share (0.0009) (0.0007)
Weighted average number of shares in issue: 3,010,992,501 2,480,279,189
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.
GENERAL INFORMATION
The financial information prepared using accounting policies consistent
with International Financial Reporting Standards ("IFRS") as adopted
by the European Union included in this preliminary statement does
not constitute the statutory financial statements for the purposes
of Chapter 4 of part 6 of the Companies Act 2014. Full statutory
statements for the year ended 31 December 2022 prepared in accordance
with IFRS, upon which the auditors have given a qualified report,
have not yet been filed with the Registrar of Companies. Full financial
statements for the year ended 31 December 2021 prepared in accordance
with IFRS and containing an unqualified report, have been filed
with the Registrar of Companies.
Extracts of the Independent Auditor's Report are as follows:
'Qualified Opinion
We have audited the consolidated financial statements of Kibo Energy
Plc ("the Company") and its subsidiaries (the "Group") for the
year ended 31 December 2022, which comprise the Consolidated Statement
of Profit or Loss and Other Comprehensive Income, the Consolidated
Statement of Financial Position, the Company Statement of Profit
or Loss and Other Comprehensive Income, the Company Statement of
Financial Position, the Consolidated Statement of Changes in Equity,
the Company Statement of Changes in Equity, the Consolidated Statement
of Cash Flows, the Company Statement of Cash Flows, the Summary
of Significant Accounting Policies and the related notes to the
consolidated financial statements. The financial reporting framework
that has been applied in their preparation is Irish Law and International
Financial Reporting Standards ("IFRSs"), as adopted by the EU.
In our opinion, except for the possible effects of the matter described
in the Basis of Qualified Opinion section of our report, the accompanying
consolidated financial statements:
* give a true and fair view of the consolidated
financial position of the Group as at 31 December
2022 and of the profit or loss and cash flows of the
Group for the year then ended;
* give a true and fair view of the financial position
of the Company as at 31 December 2022 and of the
Company profit or loss and cash flows for the year
then ended;
* have been properly prepared in accordance with
International Financial Reporting Standards ("IFRSs"),
as adopted by the EU; and
* have been properly prepared in accordance with the
requirements of the Companies Act 2014.
Basis for Qualified Opinion
The Group's investment in Shankley Biogas Limited, a company acquired
under a Share Purchase Agreement effective on 30 September 2022,
is carried in the Company Balance Sheet at cost at GBP600,000 and
the Group Balance Sheet includes an amount capitalised in Intangible
Assets for Project Development Rights of GBP603,050, development
costs of GBP939,664 and associated current liabilities of GBP950,326.
The acquisition is also subject to ongoing disputes between the
seller and the Company. We were unable to obtain sufficient appropriate
audit evidence about the carrying value of the Company investment,
the Group Intangibles, the Group Development costs and associated
liabilities as at 31 December 2022 because management were unable
to provide access to sufficient and reliable financial information
for Shankley Biogas Limited. Consequently, we were unable to determine
whether any adjustments to these amounts were necessary.
We conducted our audit in accordance with International Standards
on Auditing (Ireland) ("ISAs (Ireland)"). Our responsibilities
under those standards are further described in the Auditor's Responsibilities
for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Group in accordance with
the International Ethics Standards Board for Accountants' Code
of Ethics for Professional Accountants (IESBA Code), and we have
fulfilled our other ethical responsibilities in accordance with
the IESBA Code.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our qualified opinion.
Material uncertainty relating to going concern
We draw attention to the Section headed Going Concern on page 25
of the financial statements, which details the factors the Company
has considered when assessing the going concern position. As detailed
in the relevant note on pages 45 to 46, the uncertainty surrounding
the availability of funds to finance ongoing working capital requirements
and the financing of commercial projects of the Group through to
the stage of cash generation indicates the existence of a material
uncertainty that may cast significant doubt on the Group's ability
to continue as a going concern. Our opinion is not modified in
respect of this matter.
Our responsibilities with respect to Going Concern are described
further the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of this report while the directors'
responsibilities are described further in the Responsibilities
of Management and Those Charged with Governance for the Consolidated
Financial Statements section.'
The Notes to the Accounts inter alia include the following:
Going Concern
The financial statements have been prepared on the going concern
basis which contemplates the continuity of normal business activities
and the realisation of assets and the settlement of liabilities
in the normal course of business. In performing the going concern
assessment, the Board considered various factors, including the
availability of cash and cash equivalents; data relating to working
capital requirements for the foreseeable future; cash-flows from
operational commencement, available information about the future,
the possible outcomes of planned events, changes
in future conditions, the current global economic situation due
to the ongoing Ukraine conflict and the responses to such events
and conditions that would be available to the Board.
The Board has, inter alia, considered the following specific factors
in determining whether the Group is a going concern:
* The significant financial loss for the year amounting
to GBP10,908,524 (2021: GBP23,148,155);
* Cash and cash equivalents readily available to the
Group in the amount of GBP163,884 in order to pay its
creditors and maturing liabilities in the amount of
GBP4,192,170 as and when they fall due and meet its
operating costs for the ensuing twelve months (2021:
GBP2,082,906 and GBP2,198,437 respectively); and
* Whether the Group has available cash resources, or
equivalent short term funding opportunities in the
foreseeable future, to deploy in developing and
growing existing operations or invest in new
opportunities.
Following from the losses incurred in the current financial period,
coupled with the net current liability position the Group finds
itself in as at December 2022, these conditions, together with
those mentioned above are considered to indicate that a material
uncertainty exists which may cast significant doubt on the Group's
ability to continue as a going concern.
This is largely attributable to the short-term liquidity position
the Group finds itself in as a result of the significant capital
required to develop projects that exceeds cash contributed to the
group by the capital contributors as well as insufficient revenue
generated to cover overhead costs. The Directors have evaluated
the Groups liquidity requirements to confirm whether the Group
has adequate cash resources to continue as a going concern for
the foreseeable future, taking into account the net current liability
position, and consequently prepared a cash flow forecast covering
a period of 12 months from the date of these financial statements,
concluding that the Group would be able to continue its operations
as a going concern.
In response to the net current liability position, to address future
cash flow requirements, detailed liquidity improvement initiatives
have been identified and are being pursued, with their implementation
regularly monitored in order to ensure the Group is able to alleviate
the liquidity constraints in the foreseeable future. Therefore,
the ability of the Group to continue as a going concern is dependent
on the successful implementation or conclusion of the below noted
matters in order to address the liquidity risk the Group faces
on an ongoing basis:
* Successful conclusion of funding initiatives of the
Group in order to continue development of the
underlying projects of the Group; and
* Successful completion of a joint venture agreement
between MED and an institutional investor to a value
of. GBP33.6m for which a Heads of Terms has already
been agreed.
As the Board is confident it would be able to successfully implement
the above matters, it has adopted the going concern basis of accounting
in preparing the consolidated financial statements.
**S**
Johannesburg
29 June 2023
Corporate and Designated Adviser
River Group
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