When I last covered Kibo Mining (LSE: KIBO) in April, one of the issues raised was the massive amount of intangibles:
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.
Yesterday’s annual results for the period up to 31 December 2014 from Kibo just compounds the issue:
Intangibles have increased significantly to £14,413,865 up from £9,718,509 whilst tangible assets (current assets) have reduced.
Here’s what Kibo’s auditors have to say about the intangible assets (note 6 from the accounts, emphasis mine):
The realisation of intangible assets of GBP14,413,865 (2013: GBP9,718,509), amounts due from Group undertakings of GBP26,047,465 (2013: GBP25,286,099) and investments in Group undertakings of GBP1,700,000 (2013: GBP1,700,000) included in the Company Statement of Financial Position is dependent on the discovery of economic reserves including the ability of the Group to raise sufficient finance to develop the projects.
So we are waiting for Kibo to actually find the gold, nickel, coal and/or uranium in economically viable amounts plus raise the necessary finance to mine it for the intangible assets to realise their full value as stated on the balance sheet.
With regard to discovering economically viable projects all one needs to do is look at past earnings to see that Kibo has a very tough time actually making money from the projects it already operates:
Basic EPS: 2014 1.00p, 2013 -14.00p, 2012 -9.56p, 2011 -11.10p, 2010 -3.45p
But it gets worse.
That positive EPS number for 2014 (today’s results) is based on a pre tax profit of £2,125,004 as a result of a reversal of an impairment charge:
This type of accounting gimmickry is just plain silly and makes the quality of Kibo’s earnings very poor indeed.
Just for completeness here is a screenshot from note 12 to the accounts:
Bottom line: Kibo Mining Plc is still a bargepole stock.
For more coverage of Kibo Mining Plc, check out these posts:
- Kibo Mining: Where Are The Cash Flows From The Rukwa Coal to Power Project
- Why Kibo Mining Earnings Are A Pipe Dream
- Kibo Mining…They Didn’t. Yes They Did! A Placing To Shaft Shareholders. Again.
- Kibo Mining: Shafting Shareholders Badly
- Kibo Mining – More AIM Balance Sheet BS