REG - Katoro Gold PLC - Final Results
31/05/2024 07:00
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RNS Number : 5437Q Katoro Gold PLC 31 May 2024
Katoro Gold Plc
(Incorporated in England and Wales)
(Registration Number: 9306219)
Share code on the AIM: KAT
ISIN: GB00BSNBL022
('Katoro' or 'the Company')
Condensed Consolidated Annual Financial Results for the year ended 31 December
2023
Dated: 31 May 2024
Katoro Gold PLC ("Katoro" or the "Company") (AIM: KAT), the strategic and
precious minerals exploration and development company is pleased to release
its audited results for the year ended 31 December 2023. A condensed set of
financial statements accompanies this announcement below, while the Company's
full Annual Report and Financial results can be found on the Company's website
www.katorogold.com (http://www.katorogold.com) . The Company's Annual Report,
is in the process of being prepared for dispatch to shareholders. Details of
the date and venue for this year's AGM, will be announced on posting of the
Annual Financial results.
Overview
· Early in 2023 the Company successfully raised £150,000 (gross)
at 0.1 pence per share which was utilized for ongoing working capital and to
conclude the project assessment process.
· Mindful of funding constraints, the Company prioritised its
resource development of the Haneti Project in Tanzania. After the successful
diamond drill program and analysis of deep-seated rock data at the Haneti
Project in 2022, consolidation of all data and the geological model for future
exploration was done.
· This past year has further been marked by a continued, focused
effort to solidify the Company's position through a process of identification
and selection of strategic opportunities in the realm of precious and critical
mineral exploration.
· Post year end:
o A comprehensive strategic revitalisation plan was implemented which
involves a refreshed board of directors, strategic advisory support and a
revised funding plan.
o The Company successfully secured a total of £825 000 in financing during
February 2024. The influx of funds provides a solid foundation for
implementing the revitalisation plan and propelling the Company forward to a
sustainable future.
This announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) no. 596/2014.
For further information please visit www.katorogold.com
(http://www.katorogold.com) or contact:
Louis Coetzee louisc@katorogold.com (mailto:louisc@katorogold.com) Katoro Gold plc Executive Director
James Biddle +44 207 628 3396 Beaumont Cornish Ltd Nominated Advisor
Roland Cornish
Nick Emmerson +44 (0) 1483 413 500 SI Capital Ltd Broker
Sam Lomanto
Chairman's Report
Introduction
I am pleased to present my maiden Katoro Gold Plc (hereinafter referred to as
'Katoro Gold' or 'Katoro') Annual Report and Financial Statements for the
financial year ending 31 December 2023 as new incumbent non-executive
chairman. This past year has been marked by a continued, focused effort at
Katoro Gold to solidify the Company's position through a process of
identification and selection of strategic opportunities in the realm of
precious mineral exploration, whilst methodically continuing with the Haneti
Project. Concurrently, we have maintained a dynamic, perceptive approach,
continuously adapting our strategies to navigate the evolving demands of the
industry and its associated markets.
Katoro Gold's commitment to portfolio diversification remained a cornerstone
of its strategic vision in 2023. This involved the continuous evaluation of
new opportunities aimed at the mitigation of country-specific risks and
enhance the company's existing holdings. By actively seeking strategic
acquisitions aligned with its vision of becoming a prominent African-focused
player in the precious mineral exploration and development space, Katoro
continuously seeks opportunities to strengthen its overall market position and
resilience. This diversification strategy not only buffers against potential
disruptions in specific geographic locations but also offered the potential to
unlock new avenues for growth and value creation. As Katoro navigates the
dynamic landscape of the African minerals industry, its focus on strategic
portfolio diversification aims to position it for long-term success and a
robust presence within the precious mineral sector.
Exploration and Development
In 2023, Katoro Gold, mindful of funding constraints, prioritised its resource
development of the Haneti Project in Tanzania. After the successful diamond
drill program and analysis of deep-seated rock data at the Haneti Project in
2022, consolidation of all data and the geological model for future
exploration was done, in following of the Final Exploration Report's
recommendations.
On the commercial front, discussions with potential partners regarding Haneti
will resume in 2024, though funding uncertainties impaired the process during
2023. While the Joint Venture Agreement (JVA) with Lake Victoria Gold (LVG)
established a framework for the Imweru Gold Project, with LVG holding an 80%
stake in the project and Katoro Gold retaining the remaining 20%, it is
important to note that LVG remains in default of their agreed capital
contribution, which was due on or before December 31, 2023. Katoro is
currently evaluating its options without prejudice.
Corporate and Post Year-End Developments
Katoro has entered 2024 with a comprehensive strategy aimed at resetting the
Company's trajectory. This renewed approach involves a refreshed board of
directors, strategic advisory support, and a revised funding plan. We believe
these combined efforts hold significant potential to unlock substantial value
for our shareholders. The recent successfully completed restructure and
financing of the Company will position Katoro on the lower end of the UK
junior resource market capitalisation spectrum, providing a solid foundation
for our revitalised business strategy. This refreshed approach prioritises
delivering value to shareholders, which remains our paramount objective.
Future Outlook
In a significant step forward for Katoro's comprehensive strategic
revitalisation plan, the Company successfully secured a total of £825,000 in
financing during February 2024. This capital injection commenced with an
initial £750,000 announced on February 12th, followed by an additional
£75,000 secured through a subsequent order from a single institution. This
demonstrates strong market confidence in Katoro's renewed strategy and its
potential to deliver long-term shareholder value. This influx of funds will
provide a solid foundation for implementing the revitalisation plan and
propelling Katoro towards a more robust and sustainable future.
This report was approved on 30 May 2024 by:
Sean Wade
Non-Executive Chairman
Strategic Report
The Board of Directors present their strategic report together with the
audited annual financial statements for the year ended 31 December 2023 of
Katoro Gold PLC (the "Company") and its subsidiaries (collectively the
"Group").
Principal activities
The principal activity of the Group is gold and nickel focussed exploration
activities in Tanzania and South Africa.
Review of business in the year
The Group is in its early stage of development and details of the operational
activities of the Group are included in the Chairman's report.
Financial activities
Description 31 December 2023 31 December 2022
£ £
Administrative expenses (450,540) (664,682)
Foreign exchange (losses)/gains (311) (407)
Impairments (7,053) (224,966)
Loss on disposal of subsidiary - (75,922)
Share in loss in associate 7,480 (4,408)
Exploration expenditure (163,448) (285,374)
Finance income 12 5,260
Taxation - (61)
Loss for the period (613,860) (1,250,560)
The decrease in the loss year-on-year, as disclosed in the table above and in
the statement of comprehensive income, is mainly owing to the following
causes:
• Decrease in administrative expenses due to decrease in operational
activities during the current period.
• Decrease in explorational expenditure due to funding that is to be
obtained before exploration projects can continue.
• There was a large impairment of the Haneti assets during 2022
which related to more than one year's expenses. The impairment in 2023 only
relates to one year's expenditure and is considerably lower in value.
Shares were sub-divided during 2023 whereby the par value of each ordinary
share changed from £0,01 to £0,001. The subdivision did not have an effect
on the number of shares issued and therefore does not influence the loss per
share. Share issues took place in April 2023 which reduced the loss per share
compared to the prior year.
Key performance indicators
Management does not consider there to be any key financial KPI's at this
stage, other than the loss per share for the period, which is included in the
statement of comprehensive income. As and when operational activities increase
management will reconsider the key financial KPI's and update the necessary
disclosures accordingly. Non-financial KPI's comprise the measure of
advancement with respect to the various key exploration projects over the
medium to long term.
Principal Risks and Uncertainties
The realisation of exploration and evaluation assets is dependent on the
discovery and successful development of economic mineral reserves and is
subject to a number of significant potential risks summarised as follows, and
described further below:
• financial instrument & foreign exchange risk;
• strategic risk;
• funding risk;
• commercial risk;
• operational risk;
• speculative nature of mineral exploration and development;
• political stability;
• Uninsurable Risks and
• foreign investment risks including increases in taxes, royalties
and renegotiation of contracts.
Financial instrument and foreign exchange risk
The Company and Group are exposed to risks arising from financial instruments
held and foreign exchange transactions entered into throughout the period.
These are discussed in Note 18 to the Annual Financial Statements.
Strategic risk
Significant and increasing competition exists for mineral acquisition
opportunities throughout the world. As a result of this competition, the Group
may be unable to acquire rights to exploit additional attractive mining
properties on terms it considers acceptable. Accordingly, there can be no
assurance that the Group will acquire any interest in additional operations
that would yield reserves or result in commercial mining operations. The
Company expects to undertake sufficient due diligence where warranted to help
ensure opportunities are subjected to proper evaluation.
Funding risk
In the past the Group has raised funds via equity contributions from new and
existing shareholders, thereby ensuring the Group remains a going concern
until such time that revenues are earned through the sale or development and
mining of a mineral deposit. There can be no assurance that such funds will
continue to be available on reasonable terms, or at all in future. The
Directors regularly review cash flow requirements to ensure the Group can meet
financial obligations as and when they fall due.
For further related disclosure refer to the going concern evaluation in the
Directors' report. It includes the evaluation of the going concern assumption
due to the funding risk. The section discloses the information that has been
taken into account, how the risks were evaluated and mitigated.
Commercial risk
The mining industry is competitive and there is no assurance that, even if
commercial quantities of minerals are discovered, a profitable market will
exist for the sale of such minerals. There can be no assurance that the
quality of the minerals will be such that the Group properties can be mined at
a profit. Factors beyond the control of the Group may affect the marketability
of any minerals discovered. Mineral prices are subject to volatile price
changes from a variety of factors including international economic and
political trends, expectations of inflation, global and regional demand,
currency exchange fluctuations, interest rates and global or regional
consumption patterns, speculative activities and increased production due to
improved mining and production methods. Ultimately, the Group expects that
prior to a development decision, a project would be the subject of a
feasibility analysis to ensure there exists an appropriate level of confidence
in its economic viability.
Operational risk
Mining operations are subject to hazards normally encountered in exploration,
development and production. These include unexpected geological formations,
rock falls, flooding, dam wall failure and other incidents or conditions which
could result in damage to plant or equipment or the environment and which
could impact any future production throughout. Although it is intended to take
adequate precautions to minimise risk, there is a possibility of a material
adverse impact on the Group's operations and its financial results. The
Company will develop and maintain policies appropriate to the stage of
development of its various projects.
Staffing and Key Personnel Risks
Recruiting and retaining qualified personnel is critical to the Group's
success. The number of persons skilled in the acquisition, exploration and
development of mining properties is limited and competition for such persons
is intense. While the Company has good relations with its employees, these
relations may be impacted by changes in the scheme of labour relations which
may be introduced by the relevant governmental authorities. Adverse changes in
such legislation may have a material adverse effect on the Group's business,
results of operations and financial condition. Staff are encouraged to discuss
with management matters of interest to the employees and subjects affecting
day-to-day operations of the Group.
Speculative Nature of Mineral Exploration and Development
In addition to the above there can be no assurance that the current
exploration programmes will result in profitable mining operations.
The recoverability of the carrying value of exploration and evaluation assets
is dependent on the successful discovery of economically recoverable reserves,
the achievement of profitable operations, and the ability of the Group to
raise additional financing, if necessary, or alternatively upon the Company's
ability to dispose of its interests on an advantageous basis. Changes in
market conditions could require material write downs of the carrying value of
the Group's assets.
Development of the Group's mineral exploration properties is, amongst others,
contingent upon obtaining satisfactory exploration results and securing
additional adequate funding. Mineral exploration and development involves
substantial expenses and a high degree of risk, which even a combination of
experience, knowledge and careful evaluation may not be able to adequately
mitigate. The degree of risk reduces substantially when a Group's properties
move from the exploration phase to the development phase.
The discovery of mineral deposits is dependent upon a number of factors
including the technical skill of the exploration personnel involved. The
commercial viability of a mineral deposit, once discovered, is also dependent
upon a number of factors, including the size, grade and proximity to
infrastructure, metal prices and government regulations, including regulations
relating to royalties, allowable production, importing and exporting of
minerals, and environmental protection. In addition, several years can elapse
from the initial phase of drilling until commercial operations are commenced.
Political Stability
The Company is conducting its activities in Tanzania and South Africa. The
Directors believe that the Governments of Tanzania and South Africa support
the development of natural resources by foreign investors and the Directors
actively monitor the situation on an ongoing basis. However, there is no
assurance that future political and economic conditions in Tanzania and South
Africa will not result in the respective governments adopting different
policies regarding foreign development and ownership of mineral resources. Any
changes in policy affecting ownership of assets, taxation, rates of exchange,
environmental protection, labour relations, repatriation of income and return
of capital, may affect the Company's ability to develop the projects.
Uninsurable Risks
The Group may become subject to liability for accidents, pollution and other
hazards against which it cannot insure or against which it may elect not to
insure because of prohibitive premium costs or for other reasons, such as
amounts which exceed policy limits.
Foreign investment risks including increases in taxes, royalties and
renegotiation of contracts
The Group is subject to risk arising from the ever-changing economic
environment in which its subsidiaries operate, mainly driven by the changing
regulatory environment governing corporate taxation, transfer pricing and
other investment related operational activities. The Group continues to
re-assess its investment decisions in order to limit exposure to the
ever-changing regulatory environment in which it operates.
Section 172 Report
Section 172(1)(a) to (f) of the Companies Act 2006 requires each director to
act in the way he or she considers would be most likely to promote the success
of the Company for the benefit of its members as a whole, with regard to the
following matters:
a. The likely consequences of any decision in the long-term
Katoro is a mining exploration and development Company. By their natures
mining exploration and development projects are complex, capital intensive,
last many years and involve a varied group of stakeholders. As such it is
extremely important that the board considers all decisions made by the Company
in the context of their long-term impact on the Company. Consequences of such
decisions include (but are not limited to) the impact on all stakeholders
(with particular care towards local communities), impact on environmental
issues in and around project areas and the financial impact on the Company and
its ability to function effectively. Katoro Gold is meticulous in its
planning, as is required for permitting processes in the mining exploration
and development sector. As such, the Company prepares detailed planning
documents before initiating any major work programme. Such planning
documents assess a variety of factors from community and environmental issues
to technical geological and project funding matters. Where appropriate the
Company provides copies of these reports on its website (www.katorogold.com
(http://www.katorogold.com) ) or releases excerpts via the London Stock
Exchange's Regulatory News Service.
b. The interests of the company's employees
The health and safety of Katoro Gold's employees is of paramount concern to
the board. It is imperative that Katoro Gold provides a safe and secure
working environment for all staff. The Company conducts regular Health &
Safety reviews and ensures that any operational plans are subject to rigorous
scrutiny in their creation and constant monitoring during their
implementation.
The Company is a responsible employer in respect to the approach it takes
towards employee and contractor pay, benefits and other terms of engagement as
it develops. These are constantly reviewed.
While the Board is all male at the date of this report, it is committed to
fair and equal gender opportunity and fostering diversity, subject to ensuring
appointees are appropriately qualified and experienced for their roles. The
Group acknowledges that as it expands its operations, it will be to its
benefit to align the composition of its Boards and profile of its management
and staff to reflect balance in the ethnicity and gender of its personnel.
Analyses of gender of Group personnel during reporting period:
Male Female Other
Board 4 0 0
Management 1 4 0
Employees No direct employees No direct employees No direct employees
c. The need to foster the company's business relationships with
suppliers, customers and others
Mining exploration and development projects involve a diverse and varied group
of stakeholders. These include (but is not limited to) the Company's
employees, government officials, local communities, financial backers,
shareholders and other suppliers. The Company adopts a transparent and open
stance in its dealings with all stakeholders to help build trust. Mining
exploration and development projects can only succeed with the full support of
all involved.
The board has oversight of the procurement and contract management processes
in place and receives regular updates on any matters of significance, as well
as approving the awarding of large contracts. The board ensures the Company
fully adheres to the Bribery Act 2010 2010 by means of Anti-Corruption &
Bribery and Whistle-Blowing policies that is implemented.
d. The impact of the company's operations on the community and
environment
Mining exploration and development projects can have a significant impact on
local communities and the environment. The board constantly reviews the impact
of its operations on local communities and the environments. Where required,
the Company completes detailed surveying work (such as Environmental Impact
Assessments) and, where necessary, applies for relevant permits. Such
processes require diligence and concentrated effort.
The board ensures it maintains positive relations with local communities, by
engaging in local programmes and providing secure employment opportunities.
e. The desirability of the company maintaining a reputation for high
standards of business conduct
As a listed company, Katoro Gold's reputation for the high standards of its
business conduct is paramount. The board makes every effort to ensure it
maintains these.
The Company is subject to the disclosure requirements of the AIM Rules for
Companies and Financial Conduct Authority's Disclosure Transparency Rules.
These comprehensive set of rules enforce a strict discipline upon the Company
in terms of the manner, timeliness, subjectivity and content of its public
disclosures.
Katoro Gold is also required to complete an annual audit. This is a rigorous
analysis of the Company's operations and review of the Company's policies. The
results of this are published each year in the Company's Annual Report.
Katoro Gold also publishes on its website an "AIM 26 Disclosure"
(https://katorogold.com/investors/aim-rule-26
(https://katorogold.com/?page_id=19) ), which details much of the manner in
which the Company is run.
Katoro Gold is committed to corporate governance and adheres to the QCA
Corporate Governance Code. The Company's corporate governance statement can be
found here https://katorogold.com/wp-content/uploads/2018/10/QCA-Statement.pdf
(https://katorogold.com/wp-content/uploads/2018/10/QCA-Statement.pdf) .
f. The need to act fairly as between members of the company
As a listed Company, Katoro Gold is committed to treating its shareholders
fairly and delivering shareholder value.
Katoro Gold is registered in England and Wales and is subject to the Companies
Act 2006. The Company is also subject to the UK City Code on Takeovers and
Mergers. The Company's articles of association, which help define some of the
actions between the Company and its shareholders, can be found here
https://katorogold.com/investors/corporate-documents
(https://katorogold.com/?page_id=17)
This report was approved by the Board on 30 May 2024 and signed on its behalf
by:
Louis Coetzee
Executive Director
Condensed Consolidated Financial Results for the year ended 31 December 2023
Condensed Consolidated Statement of Comprehensive Income
31 December 2023 31 December 2022
Audited Audited
Note £ £
Administrative expenses (450,540) (664,682)
Foreign exchange (losses) / gains (311) (407)
Impairments 5 & 7 (7,053) (224,966)
Share of loss in associate 7 7,480 (4,408)
Loss on disposal of subsidiary - (75,922)
Exploration expenditure (163,448) (285,374)
Operating loss (613,872) (1,255,759)
Finance income 12 5,260
Loss on ordinary activities before tax (613,860) (1,250,499)
Taxation - (61)
Loss for the period (613,860) (1,250,560)
Other comprehensive income:
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign operations 6,495 97,226
Other comprehensive loss for the period net of tax 6,495 97,226
Total comprehensive loss for the period (607,365) (1,153,334)
Loss for the period (613,860) (1,250,560)
Attributable to the owners of the parent (576,141) (1,054,079)
Attributable to non-controlling interest (37,719) (196,481)
Total comprehensive loss for the period (607,365) (1,153,334)
Attributable to the owners of the parent (608,062) (994,101)
Attributable to non-controlling interest 697 (159,233)
Loss per Share
Basic loss per share (pence) 4 (0.09) (0.23)
Diluted loss per share (pence) 4 (0.09) (0.23)
Condensed Consolidated Statement of Financial Position
31 December 31 December
2023 2022
Audited Audited
£ £
Assets
Non-Current Assets
Exploration and evaluation assets 5 - -
Total Non-Current Assets - -
Current Assets
Other receivables 15,916 16,340
Cash and cash equivalents 414 49,596
Total Current Assets 16,330 65,936
Total Assets 16,330 65,936
Equity and Liabilities
Equity
Called up share capital 8 669,497 4,604,125
Share premium account 8 2,962,582 2,962,582
Deferred shares 8 4,143,713 -
Merger Reserve 1,271,715 1,271,715
Capital Contribution 10,528 10,528
Warrant and share based payment reserve 451,556 828,223
Translation Reserve (328,858) (296,937)
Retained earnings reserve (9,527,078) (9,318,504)
Equity attributable to owners of the parent (346,345) 61,732
Non-controlling interest (291,943) (292,640)
Total Equity (638,288) (230,908)
Liabilities
Current Liabilities
Trade and other payables 460,578 106,615
Other financial liabilities 194,040 190,229
Total Current Liabilities 654,618 296,844
Total Equity and Liabilities 16,330 65,936
Condensed Consolidated Statement of Changes in Equity
Share capital Share Deferred shares Merger Capital contribution Warrant and share based payment reserve Foreign currency translation reserve Retained deficit Non-controlling interest Total equity
premium reserve
£ £ £ £ £ £ £ £
Balance as at 1 January 2023 4,604,125 2,962,582 - 1,271,715 10,528 828,223 (296,937) (9,318,504) (292,640) (230,908)
Loss for the year - - - - - - - (576,141) (37,719) (613,860)
Other comprehensive loss - - - - - - (31,921) - 38,416 6,495
Restructuring of shares (4,143,713) - 4,143,713 - - - - - - -
Shares issued 209,085 - - - - - - - - 209,085
Share issue costs - - - - - - - (9,100) (9,100)
Warrants expired - - - - - (376,667) - 376,667 - -
Balance as at 31 December 2023 669,497 2,962,582 4,143,713 1,271,715 10,528 451,556 (328,858) (9,527,078) (291,943) (638,288)
Balance as at 1 January 2022 4,604,125 2,926,582 - 1,271,715 10,528 946,153 (356,915) (8,382,355) (133,407) 922,426
Loss for the year - - - - - - - (1,054,079) (196,481) (1,250,560)
Other comprehensive loss - - - - - - 59,978 - 37,248 97,226
Expiry of share warrants and options - - - - - (117,930) - 117,930 - -
Balance as at 31 December 2022 4,604,125 2,962,582 - 1,271,715 10,528 828,223 (296,937) (9,318,504) (292,640) (230,908)
Condensed Consolidated Statement of Cash Flow
31 December 31 December
2023 2022
Audited Audited
Notes £ £
Cash flows from operating activities
Loss for the period before taxation (613,860) (1,250,499)
Adjustments for:
Foreign exchange loss / (gain) 311 407
Share of (profit)/loss in associate 7 (7,480) 4,408
Impairments of intangible assets 5 - 209,500
Impairment of associates 7 7,053 15,466
Loss on disposal of subsidiary - 75,922
Other non-cash items 116 961
Trade payables settled in shares 59,085 -
Decrease/(Increase) in other receivables 424 32,362
(Decrease)/Increase in trade and other payables 353,963 18,163
Net cash flows from operating activities (200,388) (893,310)
Cash flows from financing activities
Issue of shares (net of share issue cost) 140,900 -
Proceeds from other financial liabilities 3,811 114,950
Net cash proceeds from financing activities 144,711 114,950
Net (decrease) / increase in cash (55,677) (778,360)
Movement in foreign currency reserves 6,495 -
Cash and cash equivalents at the start of the financial period 49,596 827,956
Cash and cash equivalents at the end of the financial period 414 49,596
Condensed Consolidated financial results for the year ended 31 December 2023
Note 1 General Information
Katoro Gold PLC ("Katoro" or the "Company") is a Company incorporated in
England & Wales as a public limited Company. The Group financial
statements consolidate those of the Company and its subsidiaries (together
referred to as the "Group"). The Company's registered office is located at 60
Gracechurch Street, London EC3V 0HR.
The principal activities of the Group are related to the evaluation and
exploration studies within a licenced portfolio area with a view to generating
commercially viable mineral resources.
The individual financial statements of the Company ("Company financial
statements") have been prepared in accordance with the Companies Act 2006
which permits a Company that publishes its Company and Group financial
statements together, to take advantage of the exemption in Section 408 of the
Companies Act 2006, from presenting to its members its Company Income
Statement and related notes that form part of the approved Company financial
statements.
Note 2 Going Concern
In the past the Group has raised funds via equity contributions from new and
existing shareholders, thereby ensuring the Group remains a going concern
until such time that revenues are earned through the sale or development and
mining of a mineral deposit. There can be no assurance that such funds will
continue to be available on reasonable terms, or at all in future. The
directors have not made any adjustments which could arise in the event that
the Group is not a going concern.
The Directors regularly review cash flow requirements to ensure the Group can
meet financial obligations as and when they fall due. Due to funding
constraints during the year, expenditure was managed and monitored with due
care. The firm actions taken to address the current liability position that
increased during the year under review are set out below. Actions include the
fundraise that took place after year-end. The Directors have evaluated the
Group's liquidity risk and liquidity requirements to confirm whether the Group
has adequate cash resources and working capital to continue as a going concern
for the foreseeable future. The directors assessed available information about
the future, possible outcomes of planned events, and the responses to such
events and conditions that would be available to the Board.
There is a material uncertainty related to the events or conditions described
below that may cast significant doubt on the entity's ability to continue as a
going concern, and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The Group currently generates no revenue and had a net liability position of
£638,288 as at 31 December 2023 (31 December 2022: net liabilities of
£230,908). As at year end, the Group had liquid assets in the form of cash
and cash equivalents of £414 and no other financial asset balances receivable
(2022: £49,596 and £nil).
Considering the net current liability position of £638,288, the Directors
have reviewed the cash flow forecasts, based on the existing budget, and
evaluated to prior year actuals. The forecast includes estimates and
assumptions regarding future costs and the timing of these. The financial
forecast does not include non-committed cash inflows or expenditure.
The Group has limited funds available post financial year end following from
the continued exploration activities undertaken throughout the Group. In
response to the above an external advisor, Value Generation Ltd was engaged to
assist the Company with a business recovery plan and support the Company in
the areas of funding, strategy, operational planning, communications and
business administration. As a result, the Katoro Board finalised and announced
a Business Recovery Plan, along with a capital placing fundraise on 12
February 2024. The proceeds from the fundraise was £825 000 which provided
for settlement of creditors as well as a solid foundation for the business
recovery plan. The aim of Katoro now is to focus on a limited number of high
impact exploration and development projects, rather than a diverse
wide-ranging portfolio, enabling the allocation of working capital into a set
of focused business interests. The cash flow forecast after the fundraise in
February 2024 indicates a cash shortfall arising from January 2025. The
fundraise provides a solid foundation for implementing the revitalisation plan
and propelling the Company forward to a sustainable future. Based on the
current forecast the Group still does not have sufficient cash to meet its
liabilities and finance day to day operations for the next 12 months after the
issue of this report.
The directors continue to review the Group's options to secure additional
funding for its general working capital requirements. The Group and Company
will also require additional finance in order to progress work on its current
assets and bring them to commercial development and cash generation. Such
development is dependent on successful exploration activity and technical
reports, and then on securing further funding. Additional capital raising
will be required to finance potential acquisition targets and corporate
development needs, as well as meeting its financial obligations as they become
due.
The evaluation of the going concern considers that Katoro has a strong proven
track record of being able to source funding on an ongoing basis, even in
difficult market conditions, and it expects to be able to continue doing so.
Various other sources of funding are being considered, most notably:
· Capital placing
· Credit loan notes
· Exercise of outstanding warrants
Katoro also enjoys strong support, with specific reference to funding, from
its corporate broker, SI Capital Ltd, which also has a proven track record of
being able to facilitate ongoing funding.
The Directors continue to monitor and manage the Company's cash and overheads
carefully in the best interests of its shareholders. Whilst the Directors
continue to consider it appropriate to prepare the financial statements on a
going concern basis, the above constitutes a material uncertainty that the
shareholders should be aware of.
Note 3 Audited results
These condensed consolidated financial results have been extracted from the
audited financial statements but are not in itself audited.
Note 4 Basic and dilutive loss per share
The basic loss and weighted average number of ordinary shares used for
calculation purposes comprise the following:
Basic Loss per share 31 December 2023 (£) 31 December 2022 (£)
Loss for the period attributable to equity holders of the parent (576,141) (1,054,079)
Weighted average number of ordinary shares for the purposes of basic loss per 615,980,994 460,412,593
share
Basic loss per ordinary share (pence) (0.09) (0.23)
The Company had warrants in issue as at 31 December 2023 and 2022 though the
inclusion of such warrants in the weighted average number of shares as
possible dilutive instruments in issue during 2023 and 2022 would be
anti-dilutive and therefore they have not been included for the purpose of
calculating the loss per share.
During the year 209,085,100 shares were issued.
The Company performed a share capital subdivision subsequent to year end,
whereby each existing ordinary share was split into one ordinary share of
£0.001 and one deferred share of £0.009. The issued ordinary shares did not
change as a result of this transaction and there was no effect on the weighted
average number of ordinary shares.
Note 5 Exploration and evaluation assets
Exploration and evaluation assets consist solely of separately identifiable
prospecting assets held by Kibo Nickel and its subsidiaries.
The following reconciliation serves to summarise the composition of intangible
prospecting assets as at period end:
Reconciliation of exploration and evaluation assets
Haneti
(£)
Carrying value as at 1 January 2022 209,500
Acquisition of prospecting licences -
Impairment of licences (209,500)
Carrying value as at 1 January 2023 -
Carrying value as at 31 December 2023 -
Exploration and evaluation assets are not amortised, due to the indefinite
useful life, which is attached to the underlying prospecting rights, until
such time that active mining operations commence, which will result in the
exploration and evaluation asset being amortised over the useful life of the
relevant mining licences.
Exploration and evaluation assets with an indefinite useful life are assessed
for impairment when facts and circumstances suggest that the carrying amount
of an exploration and evaluation asset may exceed its recoverable amount. When
facts and circumstances suggest that the carrying amount exceeds the
recoverable amount, the Group measures, presents and discloses any resulting
impairment loss in accordance with IAS 36.
One or more of the following facts and circumstances indicate that the Group
must test exploration and evaluation assets for impairment (the list is not
exhaustive):
a) the period for which the entity has the right to explore in the
specific area has expired during the period or will expire in the near future
and is not expected to be renewed.
b) substantive expenditure on further exploration for and evaluation
of mineral resources in the specific area is neither budgeted nor planned.
c) exploration for and evaluation of mineral resources in the specific
area have not led to the discovery of commercially viable quantities of
mineral resources and the entity has decided to discontinue such activities in
the specific area.
d) sufficient data exist to indicate that, although a development in
the specific area is likely to proceed, the carrying amount of the exploration
and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
Management have considered indicators of impairment in relation to the
exploration and evaluation assets and have identified potential indicators as
at period end. The following factors were considered by management:
· The period for which the entity has the right to explore in the
specific area;
· Substantive expenditure required on further exploration for and
evaluation of mineral resources in the specific area which is neither budgeted
nor planned;
· Whether the exploration for and evaluation of mineral resources
in the specific area have not led to the discovery of commercially viable
quantities of mineral resources and the entity has decided to discontinue such
activities in the specific area; and
· Sufficient data exists to indicate that, although a development
in the specific area is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered in full from
successful development or by sale.
Management has performed an assessment of the projects and has maintained its
view that the carrying value is £Nil (2022: £Nil) as there has been
insignificant changes to the status of the projects since the prior year.
Subsequent to year end, management has implemented a full review of all
projects as part of a restructuring process it is currently undertaking.
Refer to the accounting policy relating to the use of estimates and judgements
for exploration and evaluation assets for further detail relating to the
determination of the key estimates and judgements.
Note 6 Other financial assets
Group (£)
2023 2022
Other financial assets comprise:
Lake Victoria Gold receivable 656,283 656,283
Blyvoor Joint Venture receivable 1,136,661 1,287,686
1,792,944 1,943,969
Impairment of other financial assets receivable
Lake Victoria Gold receivable (656,283) (656,283)
Blyvoor Joint Venture receivable (1,136,661) (1,287,686)
(1,792,944) (1,943,969)
Movements in other financial assets comprise of:
Opening balance as at 1 January 1,943,969 1,880,556
Additions - 7,560
Cancellation of Reef Miner Disposal - (656,283)
Disposal of Kibo Gold - 656,283
Foreign currency translation (151,025) 55,853
Closing balance as at 31 December 1,792,944 1,943,969
Movements in impairments of other financial assets receivable consist of:
Opening balance as at 1 January (1,943,969) (1,880,556)
Impairments - (7,560)
Cancellation of Reef Miner disposal - 656,283
Disposal of Kibo Gold - (656,283)
Foreign currency translation 151,025 (55,853)
Closing balance as at 31 December (1,792,944) (1,943,969)
Lake Victoria Gold Receivable
Following various administrative difficulties in transferring ownership of
Reef Miners Limited from Kibo Gold Limited to Lake Victoria Gold Limited, both
parties concluded on 07 March 2022 to cancel the previous Sale of Share
Agreement by mutual consent.
As per the cancellation agreement, the Reef Transaction was cancelled by
mutual agreement between the parties, with neither party having any claim
against another party following specifically from the cancellation agreement.
On the same day Katoro Gold plc and Lake Victoria Gold Limited entered into a
"Joint Venture Agreement". Under the terms and conditions of the "Joint
Venture Agreement", Lake Victoria Gold Limited became the 80% shareholder of
Kibo Gold Limited, Cypriot subsidiary of Katoro Gold plc, on the date of the
Agreement with Katoro Gold plc owning the remaining 20%.
Prior to the implementation of the above "Joint Venture Agreement", Katoro
Gold plc held 200 ordinary shares in the equity of Kibo Gold Limited,
constituting 100% of the issued share capital in the company.
On the effective date, Lake Victoria Gold Limited subscribed for 800 new
shares in Kibo Gold Limited, equal to 80% of the total issued share capital of
the company on conclusion of the "Joint Venture Agreement", for the
subscription amount of €88,000.
Katoro Gold plc indemnifies Lake Victoria Gold Limited against any claims
resulting from the cancellation of the Sale of Share Agreement. The position
of ownership of Reef Mining Limited was completely returned to Katoro Gold
plc, and no contingent amounts are due and payable by Lake Victoria Gold
Limited in this regard.
As per the "Joint Venture Agreement", the Conditions Precedent for the
conclusion of the Share Issue have been met on the 7th of March 2022 and that
the "effective date" of transfer of ownership of 80% of the shareholding is on
the 7th of March 2022, as the issued shares to Lake Victoria Gold Limited rank
Pari-Passu with the issued shares.
The "Joint Venture Agreement" furthermore details the following requirements:
• Lake Victoria Gold Limited will contribute capital to Kibo Gold plc
in the form of a shareholder's loan amounting to €792,000;
• Lake Victoria Gold Limited will be obliged to declare a preference
dividend to Katoro Gold Plc in the amount of €792,000 which is payable in
any number of instalments by the earlier of 31 December 2023 and the date it
ceases to be a shareholder in the company; and
• In the event that the preference dividend has not been declared and
paid by Kibo Gold Limited to Katoro Gold plc by 31 December 2023, the
outstanding balance owing will be paid by Lake Victoria Gold Limited to Katoro
Gold plc directly.
The investment in Kibo Gold plc was as of 7 March 2022 recognised as an
associate to reflect the terms of the "Joint Venture Agreement".
The receivable in Lake Victoria Gold has been fully impaired at 31 December
2022 due to the credit risk of LVG, which is as a result of previous payments
not being received as they became due.
Blyvoor Joint Operations
On 30 January 2020, the Group entered into a Joint Venture Agreement with
Blyvoor Gold Mines (Pty) Ltd, whereby Katoro Gold plc and Blyvoor Gold Mines
(Pty) Ltd would become 50/50 participants in an unincorporated Joint Venture.
In accordance with the requirements of the Joint Venture Agreement, the Katoro
Group was to provide a ZAR15.0 million loan (approximately £790,000) to the
JV ('the Katoro Loan Facility'), which will fund ongoing development work on
the Project.
As at year end, the Group has advanced funding in the amount of £1,136,661
(2022: £1,287,686) of which 100% relate to expenditure allocated to the Joint
Venture operations, carried by the Katoro Gold plc Group. The funding advanced
during the year amounted to £Nil (2022: £7,560) and the remainder of the
balance of £151,025 relates to change in translation rate during the year.
The Katoro Loan Facility would have formed part of the development capital
project financing that Katoro was required to procure in accordance with its
obligations contained in the Acquisition Agreement, provided that:
· the balance of the Katoro Loan Facility then outstanding shall be
subordinated to third party creditors participating in the development capital
project financing.
· the Katoro Loan Facility will bear interest at the 12-month
London Inter Bank Offered Rate, or its successor; and
· the Katoro Loan Facility will be repayable within 12 months
after:
- the last third-party creditor participating in the project
financing shall have been paid;
- or any earlier date on which the Parties may agree.
As at reporting period end, the counterparty to the Acquisition Agreement had
failed to deliver all the required documentation to satisfy the last condition
precedent, therefore the Group is considering its position and options in this
matter.
Note 7 Investments in associates
Investment in associates consists of equity investments where the Group has an
equity interest between 20% and 50% and does not exercise control over the
investee.
The following reconciliation serves to summarise the composition of
investments in associates as at year end.
Kibo Gold
Limited
(£)
At 1 January 2022 -
Remaining equity interest following loss of control over investee 180,301
Additional contributions to the investee 19,783
Share of losses for the year (4,408)
Share in other comprehensive loss for the year (91)
Impairment loss recognised as part of remaining equity interest (180,301)
Impairment loss attributable to associate (15,466)
At 31 December 2022 -
Share of profits for the year 7,480
Return of contributions to the investee (427)
Impairment loss attributable to associate (7,053)
At 31 December 2023 -
Note 8 Share Capital and other equity reserves
The called-up and fully paid share capital of the Company is as follows:
2023 2022
(£) (£)
Allotted, issued and fully paid shares
669,497,693 Ordinary shares of £0.001 each 669,497 -
460,412,593 Ordinary shares £0.01 each - 4,604,125
669,497 4,604,125
All ordinary shares issued have the right to vote, right to receive dividends,
a copy of the annual report, and the right to transfer ownership of their
shares.
The following share transactions took place during the period 1 January 2023
to 31 December 2023:
· On 16 March 2023 Katoro underwent a capital reorganisation
whereby each ordinary share of £0.01 was subdivided into an ordinary share of
£0.001 and a deferred share of £0.009.
· On 3 April 2023 130,000,000 shares in Katoro were issued at par
value of £0.001 as part of a cash placement.
· On 3 April 2023 20,000,000 shares in Katoro were issued at par
value of £0.001 as part of directors' subscriptions.
· On 3 April 2023 48,000,000 shares in Katoro were issued at par
value of £0.001 in lieu of payment for Director's fees due.
· On 11 April 2023 11,085,100 shares in Katoro were issued at par
value of £0.001 in lieu of payment for Director's fees due.
A reconciliation of share capital is set out below:
Number of Shares Ordinary Share Capital Share Premium Deferred shares
(£)
(£)
(£)
Balance at 31 December 2021 460,412,593 4,604,125 2,962,582 -
Balance at 31 December 2022 460,412,593 4,604,125 2,962,582 -
Issue of deferred shares - (4,143,713) - 4,143,713
Directors' fees settlement 11,085,100 11,085 - -
Cash placing shares 130,000,000 130,000 - -
Directors' subscriptions 20,000,000 20,000 - -
Directors fees settlement 48,000,000 48,000 - -
Balance at 31 December 2023 669,497,693 669,497 2,962,582 4,143,713
All ordinary shares issued have the right to vote, right to receive dividends,
a copy of the annual report, and the right to transfer ownership of their
shares. There have been no shares issued during the year.
Note 9 Board of Directors
There were no changes to the board of directors during the period, or any
other committee's composition. There were changes to the board of directors
after year-end refer to Note 11.
Note 10 Subsequent events
The Company raised £825 000 through the issue of shares in February
2024.
Since 12 February 2024, the Company has appointed Sean Wade as
Non-executive Chairman, and Louis Coetzee has moved from the role of
Executive Chairman into the role of Executive Director to continue the
management of business operations.
The appointment of a new Chief Executive Officer is expected in the near term
and, as notified, on their appointment Mr Coetzee will step down from the
Board of the Company into the role of business consultant until 31 July
2024 to again assist with transitional business operations.
As at the end of January 2024 the creditors of the Company included an amount
of £91,000 in respect of outstanding Board fees from current Directors for
the period April 2023 to January 2024, inclusive. This amount has been
reduced with the agreement of the Board of directors to £63,617.88, which
was settled through the issue of 63,617,880 Ordinary Shares as the issue price
of 0.1p per share . Shares are subject to a "hard" lock-in.
The Company has settled invoices amounting to £38,305.00 due to Kibo Energy
plc through the issue of 38,305,000 Ordinary Shares ("Service Shares") at the
same issue price as the Financing Shares of 0.1p per share. Shares are subject
to a "hard" lock-in.
Value Generation Limited has been appointed as an advisor to the Company to
assist with business recovery and support the Company in the areas of
strategy, operational planning, communications and business administration.
Note 11 Commitments and contingencies
The Group does not have identifiable material contingencies or commitments as
at the reporting date.
Note 12 Segment report
IFRS 8 requires an entity to report financial and descriptive information
about its reportable segments, which are operating segments or aggregations of
operating segments that meet specific criteria. Operating segments are
components of an entity about which separate financial information is
available that is evaluated regularly by the Chief Operating decision maker.
The Chief Executive Officer is the Chief Operating decision maker of the
Group.
Management currently identifies two divisions as operating segments - Mining
(Sub-holding Company and operating entities) and Corporate (Ultimate Holding
Company). These operating segments are monitored, and strategic decisions are
made based upon them together with other non-financial data collated from
exploration activities. Principal activities for these operating segments are
as follows:
2023 Group Mining and Exploration Corporate 31 December 2023
(£) (£)
(£)
Group Group Group
Administrative cost (219,532) (231,008) (450,540)
Exploration expenditure (163,448) - (163,448)
Foreign exchange loss (311) - (311)
Finance income 12 - 12
Impairment (7,053) - (7,053)
Share in profit/loss in associates 7,480 - 7,480
Loss before tax (382,852) (231,008) (613,860)
2022 Group Mining and Exploration Corporate 31 December 2022
(£) (£)
(£)
Group Group Group
Administrative cost (261,794) (627,854) (889,648)
Exploration expenditure (285,374) - (285,374)
Foreign exchange loss (407) - (407)
Finance income 5,260 - 5,260
Loss on disposal of subsidiary - (75,922) (75,922)
Share in loss in associates (4,408) - (4,408)
Loss before tax (546,723) (703,776) (1,250,499)
2023 Group Mining and Exploration Corporate 31 December 2023
(£) (£)
(£)
Group Group Group
Assets
Segment assets 553 15,777 16,330
Liabilities
Segment liabilities (350,554) (304,064) (654,618)
2022 Group Mining and Exploration Corporate 31 December 2022
(£) (£)
(£)
Group Group Group
Assets
Segment assets 6,103 59,833 65,936
Liabilities
Segment liabilities (219,192) (77,652) (296,844)
Geographical segments
The Group operates in four principal geographical areas - United Kingdom,
Cyprus, South Africa and Tanzania.
Tanzania Cyprus United Kingdom Total
31 December
2023
(£) (£) (£) (£)
2023
Major Operational indicators
Carrying value of segmented assets 483 71 15,766 16,330
Loss before tax (45,332) (224,962) (343,566) (613,860)
Tanzania Cyprus United Kingdom Total
31 December
2022
(£) (£) (£) (£)
2022
Major Operational indicators
Carrying value of segmented assets 4,732 3,420 57,784 65,936
Loss after tax (300,438) (220,366) (729,695) (1,250,499)
Directors, officers and professional advisers
Board of
Directors
Louis Coetzee (Executive Director)
Louis Scheepers (Non-Executive Director)
Lukas Maree (Non-Executive Director)
Sean Wade (Non-Executive Chairman)
Company
Secretary: Ben
Harber
Shakespeare Martineau LLP
6(th) Floor
60 Gracechurch Street
London
EC3V OHR
Auditors:
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Broker:
SI Capital Limited
46 Bridge Street
Godalming
GU7 1HL
Nominated
adviser:
Beaumont Cornish Limited
Ninth Floor, Landmark
St Peter's Square
1 Oxford Street
Manchester
M1 4PB
Nominated Adviser
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
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