Kibo Energy Regulatory News (KIBO)

Kibo Energy PLC (Incorporated in Ireland) (Registration Number: 451931)(External registration number: 2011/007371/10) Share code on the JSE Limited: KBOShare code on the AIM: KIBOISIN: IE00B97C0C31("Kibo" or "the Company")

Dated: 11 June 2021

Kibo Energy PLC ('Kibo' or the 'Company')

Results for the Year Ended 31 December 2020

Kibo Energy PLC ("Kibo" or the "Company"), the multi-asset, Africa focused energy company, is pleased to release its consolidated annual financial results for the year ended 31 December 2020. 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 is also available from the Company's website at www.kibo.energy at the following link  http://kibo.energy/wp-content/uploads/Kibo-Annual-Report-2020-Final.pdf. The financial statements are set out below and should be read in conjunction with the 2020 Annual Report.

Details of the date and venue for this year's AGM will be announced in due course.

Overview

Financial (including the consolidated results of MAST Energy Developments Plc and Katoro Gold Plc)

· Loss after tax £6,417,237 (2019: £3,903,116 loss)

o £2,448,710 of total loss for the period stems from consolidated results of Katoro Gold Plc, which is separately funded

· Administrative expenditure year to year remains fairly consistent at £3,393,687 (2019: £2,922,927)

· Listing and capital raising fees increased from £729,072 to £1,027,658 due to the MED listing;

· Additional exploration expenditure of £1,122,676 incurred in 2020 by Kibo's subsidiary, Katoro, on the Blyvoor JV Project in South Africa;

· Cash outflow from consolidated operating activities consistent year to year £2,374,684 (2019: £2,392,495 cash outflow), including the consolidated cash outflows of MAST Energy Developments Plc and Katoro Gold Plc respectively, both which are separately funded;

· Cash outflow from company operating activities have declined year to year £396,994 (2019: £490,210 cash outflow);

· Total net debt (cash less debt) £2,046,772 (2019: £1,456,217 net debt);

· Basic and diluted EPS £0.003 loss (2019: basic and diluted £0.004 loss).

Operational highlights in the 2020 year

· Continued advancement of the development of our key projects:

- the Benga Power Plant Project in Mozambique ("Benga Project");

- the Mabesekwa Coal Independent Power Project in Botswana ("MCIPP Project");

- the Mbeya Coal to Power Project in Tanzania ("Mbeya Project");

- the UK's Reserve Power Market Projects (Bordesley Energy Project") held by Kibo's subsidiary MAST Energy Developments Plc; and

- the Blyvoor Gold Tailings Project ("the Project") and the Haneti Nickel Project held by Kibo's subsidiary Katoro Gold Plc.

· The Benga Project, located in the Tete province of Mozambique, is the Company's highest development priority; it holds a 65% interest in the project with the remaining 35% held by a local company, Termoeléctrica de Benga. The project was developed for a c. 150 MW PPA with local state electric utility Electricidade de Moçambique ('EDM'). An updated Memorandum of Understanding was signed with EDM during 2020, which provides for its continued support and commitment to negotiate a PPA for power off-take for the national grid. The project is now in the process of being upgraded to accommodate a c. 20O MW additional private commercial off taker in the form of the Tete Steel and Vanadium Project with Baobab Resources Ltd ('Baobab'). To date, the Defined Feasibility Study was updated and optimised to satisfy EDM and Baobab's power off-take requirements with the incorporation of a grid impact assessment and integration studies as well as an updated technical and financial review of the project during the second half of 2020.

· The MCIPP Project in Botswana sees Kibo assume a 35% equity interest in the total 761 Mt Mabesekwa Coal Resource while maintaining its 85% interests in the existing MCIPP project for the development of a 300 MW coal to power plant and participate as a 35%-40% partner with Shumba for the development of a second 300 MW power with electricity output directed solely to a petrochemical plant being developed by Shumba and other parties. The project is aligned with Shumba's progress and therefore assumes a low development priority in the Kibo portfolio.

· The Mbeya Project, with its 120 Mt Coal Resource, developed to a 1,5 million tonnes per annum mine, holds seven mining rights over the coal resource that will provide fuel to the 300 MW MCPP thermal power plant. The MCPP Environmental Impact Assessment certification for both mine and power station remain valid. The Company continues to work closely with the Tanzanian Government, partners, and other stakeholders to identify and investigate alternative commercial opportunities both within Tanzania and regionally.

· The Bordesley Energy Project progressed the Bordesley 5 MW base case with upward optimization capability of 19.12 MW, amongst other development work such as EPC Scope of Works, entering into a 20-year tenancy agreement with two 5-year extension periods with the landlord. This term is synchronous with gas reciprocating engine life expectancy and optimizes commercial and technical outcomes. Bordesley now has numerous optimization options to develop as a Reserve Power generation hub by virtue of shared infrastructure with Target 2, power generation off-take by proxy sales and economy of scale due to two close-by Reserve Power sites totalling 14.12 Mw of generating capacity which culminates in EPC and Balance of Plant ("BOP") economy of scale project costs and timelines.

· Katoro, entered into a binding conditional agreement to form a 50/50 unincorporated joint venture in South Africa, focused on the reprocessing of an existing 1.34 million ounce of gold JORC compliant tailings resource, completed technical work related to the upgrade and restatement of the Blyvoor Gold Tailings Project resource statement and completed additional technical and financial work that was conducted in response to the recommendations and findings of the Blyvoor Scoping Study. Katoro is currently in the processes of finalizing a comprehensive funding package in accordance with the Blyvoor Joint Venture ("the JV") that will allow the construction, commissioning and operation of a mining and processing facility capable of processing 500,000 tonnes of tailings material per month, at an average Life of Mine ("LoM") gold grade of 0.29 g/t and confirmed recovery of 51%, before incorporating recovery gains from the latest metallurgical optimization tests. The optimization results indicated that overall recoveries of up to 60% can be achieved by milling the coarser fraction (+75µm) of the feedstock which comprises around 30% of the total Run of Mine ("RoM").

· Katoro, concluded the disposal of its Imweru and Lubando Gold Projects in Tanzania for a total staged cash consideration of up to US$1.0 million and a 1.5% Net Smelter Royalty.

· Funding of £1.45 million through placing completed in late 2020 which has enabled the Company to continue with our project development plans and ongoing working capital requirements during 2021.

· The Directors continue to consider it appropriate to prepare the financial statements on a going concern basis, as the Group has sufficient funds for its present working capital requirements for the foreseeable future due to the c. £698k funds secured from warrants exercised in Kibo Energy Plc in 2021 to date and Katoro Gold Plc in excess of £500k, and funds raised in excess of £5m from the recent listing of Mast Energy Developments Plc. This is further expanded on in the annual financial statements.

Post period highlights and Outlook

· On the 14 April 2021, Mast Energy Developments Plc completed a successful IPO on the Official List of the London Stock Exchange by way of a Standard Listing raising £5.4m with a market capitalisation on admission of £23m. Kibo remains a majority shareholder at 55.4%. listed on the London Stock Exchange.

· MAST Energy Developments Plc, has progressed the acquisition transaction announced in the RNS of 7 September 2020, to the point where it is now finalizing a definitive Share Purchase Agreement ("SPA") to acquire 100% of the 9MW flexible gas power project (the 'Acquisition'). 

· Kibo and its local JV partners in the Benga Power Project recently attended a workshop with EDM in Maputo to discuss and agree the next steps towards the ultimate finalization of a PPA. During the meeting the final optimised definitive feasibility study, inclusive of the updated grid integration study, and a summary of an updated draft financial model was presented and discussed as the fundamentals that will guide and focus the further course of the PPA process. This will ensure that a final result is obtained at the earliest opportunity possible.

· Kibo takes major step forward in execution of the Company's renewable energy strategy, by way of commencing an extensive due diligence process in relation to the potential acquisition of all or part of a prospective portfolio of UK renewable energy projects. The opportunity consists of several attractive standalone renewable energy projects in the UK, focusing on the generation and/or storage of electric power from renewable generation sources. The portfolio consists of several waste-to-energy projects in which the Company has negotiated exclusivity and a first right to acquire, subject to successful due diligence results and an agreement on commercial terms and conditions. Any successful acquisition(s) from the project portfolio will enhance Kibo's strategy, which is focused on transforming and integrating conventional energy generation into sustainable renewable energy, and in the process support the UK's Renewable Energy Strategy.

· Kibo entered into an agreement with South Africa-based Industrial Green Solutions (Pty) Ltd ('IGES') to jointly develop a portfolio of Waste to Energy projects in South Africa ('the Agreement') with an initial target of generating more than 50 megawatts of electricity for sale to industrial users. The Agreement, which is subject to the satisfaction of certain conditions, is in line with Kibo's strategy to integrate renewable energy into its project pipeline, which includes three utility-scale power generation and mining projects.

· We are very excited about our new renewable energy initiatives which is focussed on addressing the non-recyclable plastics crisis to reduce the amount ending up in landfill by addressing this problem through a process of Pyrolysis which converts plastic waste into syngas which in turn generates electricity. Our renewable generated electricity will be sold to offtake partners, and our substantial combined project pipeline of waste to energy projects in the UK and ZA with two near term targets which we aim to take into production, will greatly assist in the realisation of our strategy and value to shareholders.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

For further information please visit www.kibo.energy or contact:

I am pleased to provide a review of our activities during the period and to present our full-year audited accounts for 2020.

Kibo's strategy remains to develop utility-level and standalone, sustainable, affordable energy solutions through the design, build, construction and operation of clean energy solutions, integrated with renewable and intelligent storage solutions. A cornerstone of this strategy is the integration of suitable, sustainable renewable technologies with proven clean low-cost coal base load technology in all our project development plans, with the assumption that base load energy plays a very important role in addressing the increasing demand for affordable, reliable and sustainable electricity in our geographic focus areas.

As we support the global strategic concept of sustainability, we continue to seek best of breed environmentally friendly technological solutions, working with our strategic development partners through existing collaboration agreements.

In this regard, during the year, we advanced the development of our key projects: the Benga Power Plant Project ("BPPP" or "Benga Project") in Mozambique; the Mabesekwa Coal Independent Power Project ("MCIPP" or "Mabesekwa Project") in Botswana; and the Mbeya Coal to Power Project ("MCPP") in Tanzania.

A key focus area, the entry into the UK's Reserve Power Market, has taken shape with the recent listing of MAST Energy Developments Plc ("MED") on the 14 April 2021. We have now sent MED off on its own path, as we did with Katoro Gold some years ago.

As we look back on 2020, while we set a solid platform for continued work in FY 2021, we were undoubtedly impacted by the ongoing impact of Covid-19. While the MCPP and MCIPP projects were most materially impacted, they remain in good standing and we continue to explore how we can extract best value from them.

In Mozambique, we made great strides developing the Benga Project, increasing our future off take potential by more than 100% through the inclusion of the Baobab development in the Benga portfolio.

We were also pleased with the progress of MED, and with its IPO and admission now completed, and Kibo's retention of the majority shareholding it continues to provide, now more than ever the prospect of short term revenue and real opportunities to participate in the development of alternative energy solutions.

On the corporate side, keeping the Company funded presented on-going challenges due to the low share price and the general uncertainty created by the Covid-19 pandemic. We have however steadied the ship and can see clearer waters ahead in 2021. In this regard, a £1 million convertible loan note facility with a first drawdown tranche of £300,000 in August was replaced with a broker sponsored placing with ETX Capital Limited in September for total proceeds of £1,450,000, meeting our working capital requirement to allow us to reach key development milestones, particularly for the Benga and MED projects, during the second half of 2020.

Being able to secure funding during this difficult period is testament to the belief in our company by investors and other stakeholders.

The result for the reporting period amounted to a loss of £6,417,237 for the year ended 31 December 2020 (31 December 2019: £3,903,116) 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.

In addition to our interest of c. 55.4% in MED, I would also like to mention our investment in Katoro Gold PLC (AIM: KAT/www.katorogold.com), which currently stands at 25.37%. Katoro is making excellent advances pursuing robust development opportunities in battery base metals and gold projects.

Both of these companies have a short term view to production and revenue and we look forward to their accelerated project plans for FY 2021.

We are optimistic and positive about the Kibo Group of companies. We have used 2020 to consolidate and refine planning and look forward to a year of success in FY 2021.

In closing, I would like to acknowledge the support of our shareholders, especially those who have helped the Company directly through the past year. Also, I would like to thank our Board and management under the strong leadership of our CEO, Louis Coetzee, for their hard work in guiding the Company through this challenging period.

They continue to show the skill and leadership to realise our strategy of becoming a successful global developer of sustainable energy projects in an industry in this transitional phase from fossil fuels to renewable energy generation.

_____________________________

Christian Schaffalitzky

Chairman

10 June 2021

Introduction

Kibo aims to be a significant regional broad based energy developer of sustainable power solutions, integrating clean-burning fossil fuel, renewable generation and energy storage technology. Its operational objectives for the period focused on project development and delivery as well as accelerating the integration of solutions that enable the Company to ultimately transition from using clean fossil fuel technology to renewable energy technology solutions and the implementation of a sustainable funding model to enable these objectives.

During FY 2020, Kibo continued to advance its African and UK energy projects, albeit at a slower pace than originally scheduled due to the impact of the Covid-19 pandemic on field operations. The Company has continued to maintain its business relationships and operational capability during this difficult period and is well positioned to quickly accelerate its development schedules in a post pandemic world.

Operations

Tanzania - Mbeya Project ("MCPP" or "Mbeya Project")

The MCPP remains a key project, being fully developed, funding ready and still acknowledged by the Tanzanian Government. The project suffered a minor setback from what we believe to be clumsy tendering procedure and efforts are on the way to get the project back on track in Tanzania. The untimely passing of the Tanzanian President unfortunately put a stop to all statutory proceedings.

The project, with its 120 Mt Coal Resource*, developed to a 1,5 million tonnes per annum mine, holds seven mining rights over the coal resource that will provide fuel to the 300 MW MCPP thermal power plant. The MCPP Environmental Impact Assessment certification for both mine and power station remain valid.

The Company continues to work closely with the Tanzanian Government, partners and other stakeholders to identify and investigate alternative commercial opportunities both within Tanzania and regionally.

*Kibo confirms that there has been no material change to the Mbeya Coal Resource since the Coal Resource estimate was first published as part of the RNS dated 11 April 2016 which is available on its website www.kibo.energy.

Mozambique - Benga Power Plant Project ("BPPP" or "Benga Project")

The Benga project, located in the Tete province of Mozambique, is the Company's highest development priority; it holds a 65% interest in the project with the remaining 35% held by a local company, Termoeléctrica de Benga.

The project was developed for a c. 150 MW PPA with local state electric utility Electricidade de Moçambique ('EDM'). An updated Memorandum of Understanding was signed with EDM during 2020, which provides for its continued support and commitment to negotiate a PPA for power off-take for the national grid.

The project is now in the process of being upgraded to accommodate a c. 20O MW additional private commercial off taker in the form of the Tete Steel and Vanadium Project with Baobab Resources Ltd ('Baobab'). To date, the DFS was updated and optimised to satisfy EDM and Baobab's power off-take requirements with the incorporation of a grid impact assessment and integration studies as well as an updated technical and financial review of the project during the second half 2020.  The proposed power plant footprint was also increased with the acquisition of additional land increasing the project site by 345 hectares principally to provide for the incorporation of renewable energy technologies on-site. Discussions are also ongoing with regards to providing auxiliary power requirements for the first phase of a 250,000 tpa steel rolling mill of the Baobab Tete Steel Project, on a build, own and operate basis.

The Benga project is a key enabler of Tete Steel and Vanadium project, which in turn is a key enabler of the Mozambique Revuboe Industrial Free Zone ('RIFZ'), intended to bolster the economy in the resources rich Tete Province.

United Kingdom - Mast Energy Developments Plc ("MED")

MED, intending to participate in the UK Reserve Market, is an exciting addition to the Kibo stable.

The recent listing of the Company's now 55.42% subsidiary MED Plc on the London Stock Exchange on 14 April 2021 where it raised c. £5m as part of an IPO, will enable it to accelerate development and commissioning of its existing flexible power sites and allow acquisition of additional sites. MED's target is to assemble a portfolio of well-located flexible power sites in the UK, commencing with c. 50 MW in year one and building up to a portfolio of up to 300 MW of flexible power generating capacity over the next few years.

Botswana- Mabesekwa Project ("MCIPP" or "Mabesekwa Project")

Kibo negotiated a major re-structuring and expansion of its Botswana energy asset holdings in September 2019 in collaboration with Shumba Energy Limited. The binding Heads of Agreement saw Kibo assume a 35% interest in the total 761 Mt Mabesekwa Coal Resource* while maintaining its 85% interests in the existing MCIPP project for the development of a 300 MW coal to power plant and participate as a 35%-40% partner with Shumba for the development of a second 300 MW power with electricity output directed solely to a petrochemical plant being developed by Shumba and other parties. The project is aligned with Shumba's progress and therefore assumes a low development priority in the Kibo portfolio.

\* The Company confirms that there has been no material change to the Mabesekwa Coal Resource since the Coal Resource estimate was first published as part of the announcement dated 21 June 2018 which is available on its website www.kibo.energy

Corporate

During 2020, the Company undertook various funding initiatives to ensure the ongoing development of its projects. As part of this process, it embarked on aggressive austerity measures to preserve cash whilst being able to continue with core activities and raised c. GBP 1.4 million.

In preparation for, and to facilitate the listing of the MED Plc on the London Stock Exchange, recently completed, the Company undertook corporate restructuring within and between the Kibo and MED group companies during 2020. The latter part of 2020 was spent in preparation of the intended MED IPO, which was completed within budget and time. A regrettable delay in FCA approval pushed the time line out by more than three months.

_______________________________

Louis Coetzee

Chief Executive Officer

10 June 2021

All activities derive from continuing operations.

The Group has no recognised gains or losses other than those dealt with in the Statement of Profit or Loss and Other Comprehensive Income.

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

______________________________ ________________________

Christian Schaffalitzky NoelO'Keeffe 

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

______________________________ ________________________

Christian Schaffalitzky Noel O'Keeffe

Equity includes a profit for the year of the parent company of £689,870 (2019: loss of £1,832,539). 

The accompanying notes on pages 50-80 form integral part of these financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

______________________________ ________________________

Christian Schaffalitzky Noel O'Keeffe

The notes on pages 50-80 form part of the financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

Christian Schaffalitzky Noel O'Keeffe

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 10 June 2021 and signed on its behalf by:

On behalf of the Board

______________________________ ________________________

Christian Schaffalitzky Noel O'Keeffe

The accompanying notes on pages 50-80 form an integral part of these financial statements.

The accompanying notes on pages 50-80 form an integral part of these 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:

Geographical segments

The Group operates in six principal geographical areas - Corporate (Ireland, Cyprus, South Africa & United Kingdom) and Mining (Tanzania, and Botswana).

2. Other Income

3. Loss on ordinary activities before taxation

4. Staff costs (including Directors)

The average monthly number of employees (including executive Directors) during the period was as follows:

5. Directors' emoluments

The emoluments of the Chairman were £27,837 (2019: £43,588).

The emoluments of the highest paid director were £170,190 (2019: £245,291).

Following from the terms and conditions related to further funding advances from financiers, with effect from June 2020, the Directors agreed to reduce their salaries by 40%.

Directors received shares in the value of £Nil during the year (2019: £151,003) in lieu of settlement of salaries not settled in cash.

Share warrants to the value of £Nil (2019: £74,179) were issued to directors 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.

The following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period:

Director salaries and fees accrued as at 31 December 2020 amount to £474,267 (2019: £224,672).

6. Taxation

Current tax

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:

The effective tax rate used for the December 2020 and December 2019 reconciliations above is the corporate rate of 14.9% and 12.5% payable by corporate entities on taxable profits under tax law in that jurisdiction respectively.

No provision has been made for the 2020 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 £35,320,553 (2019: £28,903,316) available for potential offset against future profits which equates to an estimated potential deferred tax asset of £4,569,667 (2019: £3,612,915). 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.

7. Profit/(Loss) of parent Company

As permitted by Section 293 of the Companies Act 2014, the Statement of Profit or Loss of the parent Company has not been separately disclosed in these financial statements. The parent Company's profit for the financial period was £689,870 (2019: Loss of £1,832,539).

8. Loss per share

Basic loss per share

The basic loss and weighted average number of ordinary shares used for calculation purposes comprise the following:

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.

9.  Property, plant and equipment

 .

10. Intangible assets

Intangible assets consist of separately identifiable prospecting and exploration assets or intellectual property (Bordersley Power) acquired either through business combinations or through separate asset acquisitions. These intangible assets are recognised at the respective fair values of the underlying asset acquired, or where the fair value of the underlying asset acquired is not readily available, the fair value of the consideration.

The following reconciliation serves to summarise the composition of intangible assets as at period end:

Intangible assets are not amortised, due to the indefinite useful life which is attached to the underlying prospecting rights and/ or intellectual property acquired, until such time that active mining operations/ power generation commence, which will result in the intangible asset being amortised over the useful life of the relevant project.

Intangible assets with an indefinite useful life are assessed for impairment on an annual basis, against the prospective fair value of the intangible asset. The valuation of intangible assets with an indefinite useful life is reassessed on an annual basis through valuation techniques applicable to the nature of the intangible assets.

One or more of the following facts or circumstances indicate that an entity should test an intangible asset for impairment:

· the period for which the entity has the right to explore or 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;

· exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and

· sufficient data exist 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 abovementioned intangible assets comprise a combination of fair market values, discounted cash flow projections and historic transaction prices.

The following key assumptions influence the measurement of the intangible assets' recoverable amounts, through utilising the value in use calculation performed:

· currency fluctuations and exchange movements applicable to model;

· commodity prices related to ore reserve and forward looking statements;

· expected growth rates in respect of production capacity;

· cost of capital related to funding requirements;

· applicable discounts rates, inflation and taxation implications;

· future operating expenditure for extraction and mining of measured mineral resources; and

· co-operation of key project partners going forward.

Through review of the project specific financial, operational, market and economic indicators applicable to the above intangible assets, as well as consideration of the various elements which contribute toward the indication of impairment of exploration and evaluation assets, it was concluded no impairment was necessary in the 2020 financial period. A summary of the 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.

A Definitive Feasibility Study has been conducted on the project which underpinned its value and confirmed an initial rate of return of 69.2%. 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.

An Integrated Bankable Feasibility Study report for the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an initial 25-year mine life, post-tax equity IRR between 21-22%, debt pay-back period of 11-12 years and a construction period of 36 months.

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 inviting the Group it 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.

As at year end, taking into account the various aspects listed above, the Group concluded that none of the impairment indicators had been met in relation to the Mbeya Coal assets.

Lake Victoria Project

The Group entered into an agreement during August 2019 with Lake Victoria Gold Limited ("LVG") covering the proposed disposal of 100% of the equity interest held by Katoro in its wholly owned subsidiary, Reef Miners Limited ("Reef"), which owns the Imweru gold project and the Lubando gold project in northern Tanzania.

As at year end, the conditions precedent relating to the disposal had been met, and the disposal has thus been completed. (refer to Note 17).

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. This acquisition was in line with the Group's strategy of positioning itself as a strategic regional electricity supplier in Southern Africa and creates many synergies with the MCPP in Tanzania.

As a result of the acquisition, 153,710,030 ordinary shares in Kibo were issued to Sechaba Natural Resources Limited ("Sechaba"). Sechaba retained a 15% interest in the Mabesekwa Coal Independent Power Project. 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 £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 a 300Mt subset of the current insitu 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. A variety of shareholders' and joint development agreements govern the management of the various entities, including minority interest protections, with details of Kibo's final interests in these entities and the MCIPP resource to be advised upon completion of the reorganisation.

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 transaction became effective on 5 December 2019 when Kibo concluded a shareholders agreement with KEB and Shumba whereby Kibo, through its wholly owned subsidiaries, Kibo Mining Cyprus Limited and Kibo Energy Botswana Limited would decrease their equity interest in KEB from 85% to 35%, effectively halving their interest in the MCIPP project.

As a result of the reorganisation, Kibo lost control of KEB and therefore derecognised the intangible asset previously recorded and simultaneously recognised an investment in associate equal to the fair value of the remaining interest retained in KEB (refer Note 11).

Bordersley Power Ltd

Kibo 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 £175,000 settled through the issue of shares.

Thereafter, Kibo 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 Kibo to St' Anderton at an issue price of £0.0525 per share and payable in five tranches ('Consideration Shares') such that the full consideration is only payable in the event that Bordersley is progressively derisked.

The issue price of the Consideration Shares and the associated number to be issued to St' Anderton was determined by using the methodology set out in the original MED vendor agreement as guidance, and was calculated as c. £2,420,000 comprising:

· 100% of the net present value of the Project Royalties (being the royalty equal to 5% of the gross revenue less gas and trading costs) amounting to c. £370,000; and

· 40% of the net present value of the Project Revenue (being net profit before tax) flowing to St' Anderton from Bordersley through MED amounting to c. £2,050,000.

11. Investment in associate

Mabesekwa Coal Independent Power Plant

The Group retained a 35% equity interest in Kibo Energy Botswana (Pty) Ltd as a result the reorganisation of its interests in the Mabesekwa Coal Independent Power Plant as disclosed in Note 10.

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.

Summarised financial information of the associate is set out below:

Kibo Energy Botswana (Pty) Ltd's principal place of business is Plot 2780, Extension 9, Gaborone, Botswana.

12. Other financial assets