Kibo Mining is a Tanzania focused mineral exploration and development company.
The acquisition constitutes a reverse takeover of Opera Investments for the purposes of the listing rules, and subject to Opera Investments shareholder approval of the necessary resolutions.
On 23 May 2017 admission to trading on AIM will occur under the new company name of Katoro Gold and new ticker symbol KAT.
The consideration for the acquisition will be satisfied by the allotment and issue of 61 million new ordinary shares in Opera Investments to Kibo Mining at a price of 6 pence per consideration share.
Opera has also conditionally raised gross proceeds of £1.5 million, through the issue of 25 million new ordinary shares at 6 pence per placing share. Kibo Mining is to subscribe for 833 333 placing shares at a cost of £50 000, to be funded from existing cash reserves.
Kibo Gold reported an operating loss of £62 420 for the year ended 31 December 2016, it has a carrying value of £1.7 million in the Kibo Mining accounts, and as required by IFRS, it will not be unconsolidated from the accounts of Kibo Mining.
There will be no change to either the board or capital of Kibo Mining as a result of the transaction, and Kibo Mining remains focused on developing its Mbeya coal to power project.
Kibo Gold holds, through its wholly-owned subsidiaries, interests in two gold mineral resource projects, as well as a large acreage of earlier stage gold exploration prospects within the licence portfolios and, potentially, the option portfolios within the greater Lake Victoria Goldfields in northern Tanzania.
The gold projects principally comprise the Imweru and Lubando projects, which both have mineral resources established in accordance with the JORC (2012) Code with an accompanying code compliant competent person’s report.
The total mineral resources stated for Imweru consist of 11.607 Mt at grade of 1.38 g/t for a mineral resource of 515.110 oz at a resource pay limit of 0.4 g/t for the open pittable material and 1.3 g/t for the underground material, while the Lubando mineral resources equate to 6.78 Mt at grade of 1.10 g/t for 239 870 oz at a pay limit of 0.4 g/t to a depth of 200 m and 1.3 g/t below the 200 m depth cut-off.
The respective projects also include the earlier stage Sheba, Pamba and Busolwa projects. Katoro Gold’s primary focus will be on advancing and developing Imweru through a work programme which will include, inter alia, a feasibility study and a drilling programme, with the aim to commence production with an initial target of 50 000 ozpa gold within 18 to 24 months, subject to further funding, following admission.
In addition to Imweru and Lubando, Opera Investments will also acquire a number of other prospecting licences within the wider Imweru and Lubando licence portfolios.
Kibo Mining will retain initial responsibility, at its cost, for each of the applications comprising the Imweru option portfolio and the Lubando option portfolio and will use its reasonable endeavours to ensure that an offer is made in respect thereof.
Kibo Mining will notify Katoro Gold of an offer made in respect of any application, and Katoro Gold may elect to confirm acceptance of such offer.
Where Katoro Gold has elected to accept an offer and the resulting prospecting licence would be issued to a member of the Kibo Mining, Kibo Mining will procure the transfer of the prospecting license, when issued, to Katoro Gold at the cost of Katoro Gold.
Similarly, Kibo Mining will retain responsibility, at its cost, for the retained licence and will use its reasonable endeavours to resolve the administrative issues with the licensing authorities.
Should the retained licence be confirmed in good standing, all future costs associated with this prospecting licence would be for the account of Katoro Gold. Additionally, Kibo Mining has agreed to procure the transfer to Katoro Gold of the protocol licences at the cost of Katoro Gold.
The directors of Katoro Gold and Kibo Mining will be subject to a one-year lock up and a further one-year orderly market agreement in respect of the ordinary shares that each holds or is interested in pursuant to the lock-up agreements that each have entered into with the company, Strand Hanson and Beaufort Securities.
Accordingly Kibo Mining’s intentions are to hold its interest in Katoro Gold for a minimum of one year and regularly review its position with respect to its interest in Katoro Gold thereafter.
Kibo Mining notes that Louis Coetzee and Lukas Marthinus Maree, both directors of Kibo Mining, are proposed directors of Katoro Gold and as such are subject to the lock-up agreement and orderly market agreement.
With the exception of Coetzee and Maree, who through their position as both a director of Kibo Mining and a proposed director of Katoro, are involved in the proposed transaction as a related party, Kibo Mining’s directors consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.