(MENAFN- ProactiveInvestors) Before the Mining Indaba conference in Cape Town wound up on Thursday Proactive Investors caught up with Louis Coetzee chief executive of ().
Proactive Investors: Kibo saw its share price rise significantly in December but there has been some pullback in January. Does this pullback cause you any concern
Louis Coetzee: It depends how you define concern As shareholders of ourselves the board and management like to see the share price increasing and we take great pleasure to see that happen for ourselves and for our shareholders many of whom have been with us for quite a few years.
But we have to accept the pattern of the market especially for positive growth stories such as Kibo is to move in waves and we have recently experienced a downward movement in that pattern. If it could move upwards in a straight line it would be far more appealing but sadly market life is not that simple.
That all aside we have considerable confidence in our business model and our plans in the short medium and long term. We are starting to feel investors sharing that confidence too which is very positive. So we believe that as more news is released and confidence builds so should our share price.
PI: You mention confidence of the company and increasingly of investors. Why do you think that confidence is growing
LC: Within the company we have always been confident in the Kibo business model. That confidence comes from all levels and all situations and so internally we have been determined to push on with our work even in the recently poor market conditions for our sector as a whole.
We have spent time in discussions with many different parties across our entire project base from governmental officials through to independent natural resource project investors and various large corporations. Much of this is not published in news announcements to preserve company confidential information but we have a tremendous amount of interest in the work of Kibo and the company's assets. That level of positive interest does keep you going when the stock market is quite hostile.
Last summer we decided that the market and third parties needed to have more information on our key projects so they could also see the progress we had made to date so we commenced the formal studies on Rukwa Coal Mining and Power Generation; and also on our Imweru Gold project.
We have been able to release a considerable amount of data in relation to these projects and that has helped the market understand and have confidence in the underlying value of the company. Obviously we have to be careful with the release of sensitive information pertaining to matters that could impact commercial negotiations but we feel a good amount of information is already out there and there is more information to follow.
PI: When you mention market understanding of the value we note your broker released a report recently with a share price target many times the current share price. How did you feel about that report
LC: Well pleased of course especially as the report only really focuses on the Rukwa coal-to-power project and even then gives a price target of 27p or so. On top of that we have all the other business assets against which there is value of course.
If I am honest the valuation side doesn’t surprise me as we have long believed that the Rukwa project held substantial value. That has been validated by the study report financial valuations we published in December 2014 and by the surge in interest the study data has inspired from a number of rather large companies.
PI: What does that increasing interest in Rukwa mean in practical terms for shareholders in
LC: For the company directors and senior management it meant an acceleration in our travel and workload.
More seriously it means that we have been engaging with a number of large power generation and other companies who have expressed an interest in investing in Rukwa.
We have interest from Asia and Europe and are working under protective non-disclosure arrangements with around ten organisations who we have pre-qualified as acceptable partners for this project.
Of course there are parties at various stages but around half are significantly more advanced and more than one are at the very late stage of what you could term project due diligence.
For shareholders we recognise the company transformational opportunity to bring in a partner with scale finance and technical ability to transform the forward dynamic on Rukwa. That is our absolute focus at the moment.
PI: How far are you away from actually getting a development partner deal on the table
LC: That is a question I receive quite regularly and the answer is quite simple; we are already there and are in a position to transact. Kibo are the reason why a transaction has not been concluded as yet because we are absolutely focused on a final transaction that reflects and values the work we have done to date fully. This of course is a major project and we also want to retain a significant stake in the project all the way through to power generation (coal mining and power elements).
But as we have advised via RNS a deal could be completed at any time but we certainly won’t hamper final closing negotiations by releasing too much information until the time is right.
PI: Your business is quite diverse can you briefly summarise what else is in the Kibo stable
LC: There is plenty of breadth in our offer to the market. In Lake Victoria we have gold licences with over 550000 JORC-compliant gold ounces at Imweru where we see early production as our principal strategy. We have recently released information on the PEA [preliminary economic assessment] work for this project albeit we have to be careful with the data we release with various commercial discussions underway. Lake Victoria also includes numerous additional gold licences and at Lubando we have another 170k ounces of NI 43-101 compliant gold. The overall prospectivity development opportunities and commercial value in that portion of our business is tremendous.
At Haneti we are fast closing in on a potential Nickel Sulphide target which could also be immense. We are drill-ready with a well-refined target basis and getting this project firing is a real key target for us as soon as possible.
At our gold project in Morogoro and our Uranium project at Pinewood we are partnering with to take these projects forward whilst not impacting the medium term cash flow of Kibo as Metal Tiger will fund these operations.
Overall we now have five projects all under current or near term active development and that is quite an achievement given the sector environment. To say we are excited as a team is an understatement and should be tempered by a reminder that we have plenty of work still to do to make sure the value of our projects is properly reflected in our market capitalisation.
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