The AIM listed Kibo Mining Plc (Ireland) (LSE: KIBO) describes itself as a Tanzania focused mineral exploration and development company.
I’m picking on Kibo today because of it’s 54% price rise as a result of today’s RNS announcing the signing of a Joint Development Agreement in respect of ‘the Rukwa Coal to Power Project.’
A Chinese company called SEPCO III is to ‘contribute up to US$3million towards completing remaining Definitive Feasibility Study work by October 2015’.
Louis Coetzee CEO, comments:
This agreement aligns the Kibo team with the technical capability of Sepco III, ensuring the finalisation of feasibility work and the ultimate design, construction and delivery of the RCPP will be undertaken in accordance with world class standards
It is expected that the Definitive Feasibility Study across both Mining and Power Generation compents will be completed by October 2015.
What we have here is a 54% price hike on the assumption that the feasibility study will prove to be economically viable because ‘SEPCO III of QingDao, China, is one of the world’s largest and technically most experienced EPC (Engineering, Procurement and Construction) organisations’.
Boy this company like to announce placings.
The last set of results released 25 September 2014 revealed a decrease in basic and dilutive loss per ordinary share of 13% compared to previous interim results.
Digging into the numbers deeper to the six months ended 30 June 104 Kibo reported an operating loss of £1,055,472 and a loss per share of 0.68 pence.
Just look at the balance sheet:
This is why Graham and Dodd can save investors from looking to buy the stock into such companies.
The intangibles make up the vast majority of assets and frankly they are not worth the paper they are written on: what good is an asset if it leads to operational losses. technically that makes it a liability.
That just leaves total current assets of £128,377 and total liabilities of £264,261 which places Kibo into basket case territory.
No matter because Kibo has issued vast amounts of shares since 25 September so I’m sure cash and securities will now look a lot better. It’s just a pity that Kibo has to shaft it’s own shareholders to get cash.
Today would have been a very nice opportunity to just get out.