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Shumba Energy niggling with increasing losses

Shumba Energy’s dream of taking over as the answer to SADC chronic power shortages could be under threat as the company still needs to light up its finance books which are currently showing a trend of repeating and increasing losses.

Shuma Energy, a coal mining and energy development company listed on Botswana Stock Exchange listed companies, this week released consolidated statement of comprehensive income for the 6 months ended 31 December 2019. The company’s latest financial report, shows that the company’s operating loss grew more than double from P4.3 million in 31 December 2018 to P9. 5 million in December 2019. The operating expenses also grew heftily from P6. 1 million to P8.4 million, contributing to the company’s increasing loss from P7. 8 million in 2018 to P12 million in 2019.

Shumba Energy’s basic earnings per share (in thebe) increased to (0.005435) from (0.00283) in December 2018. The company’s number of shares increased to 291,819,493 from 275,452,343. In the consolidated statement of comprehensive income for the 12 months ended 30 June 2019 released last year, the loss for the period was P25.4 million in June 2018 to P22.7 million. The profit for the year was P54 million increasing to P22. 7 million

According to last year’s financial statement the operating loss for Shumba could be associated with the company’s announced “to pursue opportunities in Coal to Liquids (CTL).” Shumba Energy last year sourced out P20 million for the CTL plant. Shumba exclusively revealed that they want to be the first CTL processor in Botswana to produce energy fuels and other ‘green’ hydro-carbon derivatives or Aromatics for Liquid Organic Hydrogen production and as input for manufacture of transportable and scalable energy storage units.

Last year Shumba Energy’s total expenditure on projects and asset development during the year was P23 34 160. According to the statement, the Group’s net assets at the end of the year were P46 108 030, a decline year on year of 55 percent reflecting the losses incurred as a result of the fall of the Kibo Energy PLC shares, which the Group acquired in the prior year from the Mabesekwa transaction. Shumba Energy management’s ongoing commitment and competence in the disciplined maintenance of a low-cost structure within the Group shown clearly in the Group’s continued advancement and maintenance of cash position relative to its peers.

According to Shumba Energy, the company has over 4 billion tons of coal of which an excess of 1 billion tons has been drilled to indicated and measured levels. These are the highest confidence levels of exploration Sechaba Project coal can be used for generating power and international export coal, according to Shumba Energy. The company has also entered into a strategic partnership with Lurco Group South Africa for the development of the multiple Thermal coal products from Morupule South Project which may be sold into both Power Generation and Industrial markets both locally and internationally according to demand. The group also entered into an agreement with Kibo Energy to consolidate the Mabesekwa resource, according to Shumba Energy. Previously Kibo acquired 85 percent of one third of the resource with the group holding, says the company.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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