Consolidated Annual Financial Results_31 Dec 2021
26/05/2022 12:39
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RNS Number : 9537M Katoro Gold PLC 26 May 2022
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
2021
Dated 26 May 2022
Katoro Gold plc ("Katoro" or the "Company") (AIM: KAT), the Tanzanian focused
exploration and development company is pleased to release its condensed
consolidated annual financial results for the year ended 31 December 2021. The
Company's Annual Report, which contains the full financial statements
accompanying this announcement, is in the process of being prepared for
dispatch to shareholders. A copy of this Annual Report will also be available
from the Company's website at www.katorogold.com (http://www.katorogold.com) .
Details of the date and venue for this year's AGM, will be announced on
posting of the Annual Financial results.
Key Highlights
· Maiden drill programme at the Haneti project commenced on
December 29, 2020, and in spite of severe COVID-19 restrictions and related
implications, completed 1965 metres of RAB drilling over 50 holes at Mihanza
Hill and Mwaka Hill under extreme rainy conditions. 1965 samples were
collected from which 776 three-metre composites were prepared for analyses at
the SGS laboratory at Mwanza. Information gleaned from the RAB drilling
results and the discovery of new gossanous nickel-copper-magnetite veining at
Mihanza Hill, confirmed the results from previous exploration work done at
Haneti, which was the primary objective of the RAB drill programme.
· The Blyvoor project made enormous gains during the reporting
period, of which the most important were the achievement of two major
milestones, notably, the completion of all technical work, publication of a
Competent Person's Report, and the subsequent decision to commence the process
related to potentially listing the Blyvoor Joint Venture on the Standard List
of the London Stock Exchange. The counterparty on the Blyvoor project however,
failed to deliver all the required documentation to satisfy the last condition
precedent, and as such the acquisition agreement did not become unconditional
in December 2021. The Company is at the moment considering its position and
options in this matter.
· The Company strengthened its balance sheet with financing of
£815,000 during the period, most notably a capital placing raise during
November 2021 and based on current estimates have sufficient funding until
January 2023.
· Post period end:
o The diamond drilling programme at Haneti, executed by an excellent drill
contractor in a blistering 17 days, eventually completed 900.04 metres across
three drill holes as planned and with depths of 430.24m, 245.78m and 224.02m
respectively, by the first week in February 2022. Currently, all of the 428
samples prepared from drill core, is under laboratory analyses at SGS, South
Africa; and
o The Company entered into a Joint Venture Agreement with Lake Victoria Gold
('LVG') for the development of the Company's Imweru Gold Project ('Project').
Under the Agreement, LVG will earn up to 80% in the Project, with the balance
of 20% being held by Katoro as a carried interest, with the JV reimbursing
Katoro for previous expenditures in the amount of €792,000 on or before 31
December 2023.
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 Chairman
Bhavesh Patel +44 20 3440 6800 RFC Ambrian Limited NOMAD on AIM
Andrew Thomson
Nick Emmerson +44 (0) 1483 413 500 SI Capital Ltd Broker
Sam Lomanto
Chairman's Report
2021 was an intense and tumultuous year dominated by lingering COVID-19
restrictions and related issues, especially so for the business world, and
marred by unexpected and violent political unrest in South Africa. Despite
these challenges, Katoro looks back on a year of major achievements on all
fronts.
Reflecting on this year, I would like to take a moment to thank the Company's
Directors, business partners and shareholders for their dedication and
support. As Katoro is a small Company with restricted resources, each
individual and contractor had to stand up and be counted with resounding
results.
Review of 2021
During this year, Katoro continued to roll out its strategy by concluding
project development of the very promising South African Blyvoor project, as
well as building up to the strategically important next step of Diamond
Drilling at Haneti in Tanzania.
The Company strengthened its balance sheet with financing of £815,000 during
the period, most notably a capital placing raise during November 2021.
Haneti Nickel PGM Project
The Haneti project , the early-stage exploration Joint Venture between Katoro
Gold PLC (65%) and Power Metal Resources PLC (35%) has made great strides
during this year.
Extensive historic work on the Haneti Program to date, as well as the recent
surface exploration work in 2020- 2021, completed the Anomaly Identification
phase which was aimed at identification of nickel sulphide or other
mineralization to justify advancing the program to the Anomaly Confirmation
Stage.
Based on this work and following a number of key geological conclusions on the
mineral potential of Haneti, two potential targets areas were identified for
drilling: an area with one target at Mihanza and another area with two targets
at Mwaka, representing good locations for diamond drilling to recover
un‐weathered rocks from depth to assist with geological interpretation, and
to test for fresh sulphide mineralisation at trace or more concentrated levels
at depth.
The main objective of the planned drilling campaign was, through extraction of
fresh rock material from depth, to confirm the anomaly identified through
earlier work and to take an informed strategic decision to undertake an
intensive resource drilling programme.
In order to minimise risk, the decision was taken to proceed with a two-stage
maiden drilling programme, notably, Stage 1, a Rotary Air Blast ("RAB")
programme aimed at providing better detail on the subsurface shape and
orientation of the ultramafic body, thereby allowing for better planning and
placing of diamond drill holes, and Stage 2, diamond drilling programme,
to obtain fresh rock samples from depth. These samples, as they become
available, will be sent for geochemical and petrological analysis to
obtain further geological knowledge on the nature of the ultramafic body with
the express aim of better understanding its potential to host a nickel
sulphide deposit and to confirm the existence of sulphide mineralisation.
The above conclusions and planning defined execution of the two-stage
2020-2021 drilling program. Regrettably, the second stage diamond drilling
programme was slightly delayed and only completed during Q1, 2022.
RAB Drilling Programme
This maiden drill programme that commenced on December 29, 2020, and in spite
of severe COVID-19 restrictions and related implications, completed 1965
metres of RAB drilling over 50 holes at Mihanza Hill and Mwaka Hill under
extreme rainy conditions. 1965 samples were collected from which 776
three-metre composites were prepared for analyses at the SGS laboratory at
Mwanza.
Information gleaned from the RAB drilling results and the discovery of new
gossanous nickel-copper-magnetite veining at Mihanza Hill, confirmed the
results from previous exploration work done at Haneti, which was the primary
objective of the RAB drill programme. This provided the required confirmation
to take the next step in the Haneti exploration strategy, which was to
proceed with the stage 2, deep diamond drilling to assess the potential for
possible economic nickel sulphide mineralisation at Haneti.
Diamond Drilling Programme
Stage 2 of the Anomaly Confirmation Stage, a diamond drilling programme, was
planned to commence during late Q4, 2021, but was delayed by a mandatory
license renewal process as a necessary pre-curser to continued field work.
Although this delay was administrative by nature, the consequence was a
renewed seven year life of the tenement programme, but a regrettably delayed
drilling commencement date of mid-January 2022.
Blyvoor Tailings Project
The South African Blyvoor Tailings Project, subject of a 50/50 unincorporated
Joint Venture between Katoro Gold PLC and Blyvoor Gold Operations, the legal
owner of the project, is aimed at the exploitation of potentially viable
deposits of gold and any other minerals from six gold tailings dams containing
a SAMREC compliant resource of c. 1.4Moz gold at an average grade of c.
0.30g/t Au. The project, subject to funding, targets operations to process
500,000 tonnes of tailings material per month, at an average Life of Mine
("LoM") gold grade of 0.29 g/t and confirmed recovery of up to 60%.
Led by veteran gold miner and former CEO of Harmony Gold, Graham Briggs, the
Blyvoor project made enormous gains during the reporting period, of which the
most important were the achievement of two major milestones, notably, the
completion of all technical work, publication of a Competent Person's
Report, and the subsequent decision to commence the process related to the
potential listing the Blyvoor Joint Venture on the Standard List of the London
Stock Exchange. The counterparty on the Blyvoor project however, failed to
deliver all the required documentation to satisfy the last condition
precedent, and as such the acquisition agreement did not become unconditional
in December 2021. The Company is at the moment considering its position and
options in this matter.
Competent Persons Report
On 4 May 2021, the Company announced its Competent Person's Report ("CPR"),
reporting on the results and findings of additional technical and financial
work conducted on the Blyvoor Gold Tailings Project in response to the
recommendations and findings of the Blyvoor Scoping Study, previously
completed. The CPR, a comprehensive and detailed study on the Blyvoor TSF 1,
6 and 7 and Doornfontein TSF 1, 2 and 3 gold tailings storage facilities,
comprised an advanced Pre-Feasibility level study, a SAMREC compliant reserve
and resource statement, and a South African Mineral Asset Valuation ("SAMVAL")
report on these gold tailings storage facilities.
The CPR reported a 1,410,000 oz gold resource with 35.5% in the measured,
26.1% in the indicated and 38.4% in the inferred categories respectively
with TSF 6 and 7 upgraded to probably reserve status containing 424,000 oz
gold and 392,000 oz gold respectively. The mine plan was reported at 1,352,822
oz gold and with a projected 51% recovery rate, aims at production of 675 842
oz gold over a 25-year Life of Mine.
The project financials reported by the CPR comprised of an unlevered NPV
(7.9%) of USD 114 million, 33% IRR and ROI of 64%, underpinned by a USD 1610
gold price, all - in cost of USD 1067 per oz, project capital cost totalling
USD 152million and peak funding requirement of USD 69 million.
Completion of the technical work and especially the independent SAMVAL
valuation of the project reconfirmed the robustness of the project.
Post Year-End Statement
Post reporting period, the Company has continued to make significant progress
on all aspects of the business.
The diamond drilling programme at Haneti, executed by an excellent drill
contractor in a blistering 17 days, eventually completed 900.04 metres
across three drill holes as planned and with depths of 430.24m, 245.78m and
224.02m respectively, by the first week in February 2022. Currently, all
of the 428 samples prepared from drill core, is under laboratory analyses at
SGS, South Africa.
The Company entered into a Joint Venture Agreement with Lake Victoria Gold
('LVG') for the development of the Company's Imweru Gold Project ('Project').
Under the Agreement, LVG will earn up to 80% in the Project, with the balance
of 20% being held by Katoro as a carried interest, with the JV reimbursing
Katoro for previous expenditures in the amount of €792,000 on or before 31
December 2023.
Conclusion
In conclusion it remains to be said that 2021 was an extremely challenging
year but was rewarded with excellent project development results. This was
made possible by tremendously competent and dedicated project management and
technical teams and partners who grinded out results despite many
difficulties. The progress of 2021 prepared the Company with an optimistic
outlook for 2022 and beyond.
This report was approved on 26 May 2022 by:
Louis Coetzee
Executive Chairman
This announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) no. 596/2014.
Strategic Report
The Board of Directors present their strategic report together with the
audited annual financial statements for the year ended 31 December 2021 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 2021 31 December 2020
Administrative expenses (689,396) (894,870)
Share based payment transactions (195,241) (225,778)
Foreign exchange gains/(losses) 15,471 (76,889)
Exploration expenditure (284,463) (1,394,715)
Other income 1,029 43,873
Finance income 10,121 9,570
Finance cost - (22,303)
Loss for the period (1,142,479) (2,561,114)
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; and
• Decrease in exploration expenditure due to the completion of the
CPR Report on the Blyvoor Joint Venture exploration early in the financial
period, following which further exploration was stagnant.
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; 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 19 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.
The Group currently generates no revenue and had net assets of £922,426 as at
31 December 2021 (31 December 2020: £121,876). As at year end, the Group had
liquid assets in the form of cash and cash equivalent and other financial
asset balances receivable of £827,956 and £48,702 respectively.
The Directors have reviewed budgets, projected cash flows and other relevant
information, and on the basis of this review and the below, they are confident
that the Company and the Group will have adequate financial resources to
continue in operational until January 2023, whereafter further funding will be
required.
The Group has limited funds available post year end following from the
continued exploration activities undertaken throughout the Group, which based
on current estimation would be sufficient to continue operations until January
2023, therefore further capital raising will be required to advance the
underlying projects of the Group beyond the foreseeable future, and continue
operations.
The Directors though continue to review the Group's options to secure
additional funding for its general working capital requirements, alongside its
ongoing review of potential acquisition targets and corporate development
needs.
The Group and Company will 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 explorations and
technical reports and then on securing further funding. The Directors are
confident in this light that such funding will be available, although there is
no guarantee as to the terms of such funding or that such funding will be
available. As a result, 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 shareholders should be aware of.
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 pay and benefits. These are constantly reviewed.
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.
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 Plc, 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/?page_id=19 (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/?page_id=31 (https://katorogold.com/?page_id=31)
This report was approved by the Board on 26 May 2022 and signed on its behalf
by:
Louis Coetzee
Executive Chairman
Condensed Consolidated Financial Results for the year ended 31 December 2021
Condensed Consolidated Statement of Comprehensive Income
31 December 2021 31 December 2020
Audited Audited
£ £
Revenue - -
Administrative (689,396) (894,872)
expenses
Share based payment transactions (195,241) (225,778)
Foreign exchange gains/(losses) 15,471 (76,889)
Exploration expenditure (284,463) (1,394,715)
Operating (1,153,629) (2,592,254)
loss
Other 1,029 43,873
income
Finance income 10,121 9,570
Finance costs - (22,303)
Loss on ordinary activities before (1,142,479) (2,561,114)
tax
Taxation - -
Loss for the (1,142,479) (2,561,114)
period
Other comprehensive loss:
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign (2,162) (9,266)
operations
Gain reclassified to profit or loss on disposal of foreign operation - 121,670
Other comprehensive loss for the period net of tax (2,162) 112,404
Total comprehensive loss for the (1,144,641) (2,448,710)
period
Loss for the period (1,142,479) (2,561,114)
Attributable to the owners of the parent (1,062,598) (2,437,234)
Attributable to non-controlling interest (79,881) (123,880)
Total comprehensive loss for the period (1,144,641) (2,448,710)
Attributable to the owners of the parent (1,080,669) (2,324,830)
Attributable to non-controlling interest (63,972) (123,880)
Loss Per Share
Basic loss per share (pence) (0.27) (0.91)
Diluted loss per share (pence) (0.27) (0.91)
Condensed Consolidated Statement of Financial Position
31 December 31 December
2021 2020
Audited Audited
£ £
Assets
Non-Current
Assets
Exploration and evaluation assets 209,500 209,500
Total Non-Current Assets 209,500 209,500
Current
Assets
Other receivables 48,702 46,405
Cash and cash 827,956 97,777
equivalents
Total Current 876,658 144,182
Assets
Total 1,086,158 353,682
Assets
Equity and
Liabilities
Equity
Called up share 4,604,125 3,286,982
capital
Share premium account 2,962,582 2,472,725
Merger Reserve 1,271,715 1,271,715
Capital Contribution 10,528 10,528
Warrant and share based payment reserve 946,153 750,912
Translation Reserve (356,915) (338,844)
Retained earnings reserve (8,382,355) (7,262,707)
Equity attributable to owners of the parent 1,055,833 191,311
Non-controlling interest (133,407) (69,435)
Total Equity 922,426 121,876
Liabilities `
Current Liabilities
Trade and other payables 88,452 173,651
Other financial liabilities 75,280 58,155
Total Current 163,732 231,806
Liabilities
Total Equity and Liabilities 1,086,158 353,682
Condensed Consolidated Statement of Changes in Equity
Share capital Share 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 2021 3,286,982 2,472,725 1,271,715 10,528 750,912 (338,844) (7,262,707) (69,435) 121,876
Loss for the year - - - - - - (1,062,598) (79,881) (1,142,479)
Other comprehensive loss - - - - - (18,071) - 15,909 (2,162)
Issue of share capital 1,317,143 489,857 - - - - - - 1,807,000
Costs relating to share issue - - - - - - (57,050) - (57,050)
Issue of share warrants and options - - - - 195,241 - - - 195,241
Balance as at 31 December 2021 4,604,125 2,962,582 1,271,715 10,528 946,153 (356,915) (8,382,355) (133,407) 922,426
Balance as at 1 January 2020 1,795,555 2,216,729 1,271,715 10,528 105,467 (451,250) (4,804,302) 33,272 177,714
Loss for the year - - - - - - (2,437,232) (123,880) (2,561,112)
Other comprehensive loss - - - - - (9,264) - - (9,264)
Issue of share capital 1,491,427 255,996 - - - - - 1,747,423
Share warrants and options - - - - 645,445 - - - 645,445
Disposal of interest in subsidiary without losing control - - - - - - (21,173) 21,173 -
Disposal of interest in subsidiary - - - - - 121,670 - - 121,670
Balance as at 31 December 2020 3,286,982 2,472,725 1,271,715 10,528 750,912 (338,844) (7,262,707) (69,435) 121,876
Condensed Consolidated Statement of Cash Flow
31 December 31 December
2021 2020
Audited Audited
£ £
Cash flows from operating activities
Loss for the period before taxation (1,142,479) (2,561,112)
Adjustments for:
Foreign exchange (gain)/loss (23,253) 99,826
Share based payment transactions 195,241 225,778
Director's shares issued as part of capital placing - 50,090
Liabilities settled through the issue of equity - (4,200)
Profit on sale of subsidiary - (43,873)
Impairments of other financial assets 142,106 1,160,337
(Increase) in other receivables (2,297) (33,387)
(Decrease)/Increase in trade and other payables (85,198) 67,506
(915,880) (1,039,035)
Cash flows from investing activities
Advances of other financial assets (125,866) (1,122,676)
Proceed received from disposal of subsidiary - 76,717
Proceeds from sale of subsidiary without loss of control - 25,000
Cash and cash equivalents disposed of due to sale of Subsidiary - (6,966)
Net cash proceeds from investing activities (125,866) (1,027,925)
Cash flows from financing activities
Issue of shares (net of share issue 1,732,950 1,337,000
cost)
Proceeds from other financial liabilities 38,975 792,800
Net cash proceeds from financing activities 1,771,925 2,129,800
Net increase/(decrease) in cash 730,179 62,839
Cash and cash equivalents at the start of the financial period 97,777 34,938
Cash and cash equivalents at the end of the financial period 827,956 97,777
Condensed Consolidated financial results for the year ended 31 December 2021
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.
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 regularly review cash flow requirements to ensure the Group can meet
financial obligations as and when they fall due.
The Group currently generates no revenue and had net assets of £922,426 as at
31 December 2021 (31 December 2020: £121,876). As at year end, the Group had
liquid assets in the form of cash and cash equivalent and other financial
asset balances receivable of £827,956 and £48,702 respectively.
The Directors have reviewed budgets, projected cash flows and other relevant
information, and on the basis of this review and the below, they are confident
that the Company and the Group will have adequate financial resources to
continue in operational until January 2023, whereafter further funding will be
required.
The Group has limited funds available post year end following from the
continued exploration activities undertaken throughout the Group, which based
on current estimation would be sufficient to continue operations until January
2023, therefore further capital raising will be required to advance the
underlying projects of the Group beyond the foreseeable future, and continue
operations.
The Directors though continue to review the Group's options to secure
additional funding for its general working capital requirements, alongside its
ongoing review of potential acquisition targets and corporate development
needs.
The Group and Company will 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 explorations and
technical reports and then on securing further funding. The Directors are
confident in this light that such funding will be available, although there is
no guarantee as to the terms of such funding or that such funding will be
available. As a result, 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 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 2021 (£) 31 December 2020 (£)
Loss for the period attributable to equity holders of the parent (1,062,598) (2,437,234)
Weighted average number of ordinary shares for the purposes of basic loss per 388,524,723 268,475,455
share
Basic loss per ordinary share (pence) (0.27) (0.91)
The Company had warrants in issue as at 31 December 2021 and 2020, though the
inclusion of such warrants in the weighted average number of shares as
possible dilutive instruments in issue during 2021 and 2020 would be
anti-dilutive and therefore they have not been included for the purpose of
calculating the loss per share.
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 2019 209,500
Acquisition of prospecting licences -
Impairment of licences -
Carrying value as at 1 January 2020 209,500
Acquisition of prospecting licences -
Impairment of licences -
Carrying value as at 31 December 2021 209,500
Haneti comprises tenements (prospecting licences, offers and applications)
prospective for nickel, platinum-Group-elements and gold. It covers an area of
approximately 5,000 sq. km in central Tanzania and forms a near contiguous
project block. The project area straddles the Dodoma, Kondoa and Manyoni
districts all within the Dodoma (Administrative) Region. The main prospective
belt of rocks within the project, the Haneti-Itiso Ultramafic Complex (HIUC),
is centred on the small town of Haneti, located 88 kilometres north of
Tanzania's capital city Dodoma . The HIUC sporadically crops out over a strike
length of 80 kilometres with most outcrop exposure occurring 15 kilometres
east of Haneti village where artisanal mining of the semi-precious mineral
chrysoprase (nickel-stained chalcedonic quartz) is being carried out at a few
localities.
Following completion of RAB Drilling programme conducted during the first half
of 2021, surface mapping has identified small scale nickel-copper-magnetite
gossanous veins at a new outcrop at Mihanza Hill. The geological team consider
this discovery as substantiation of the potential for primary nickel rich
sulphide mineralisation within the underlying ultramafic body, underpinning
the requirement to progress to a deep drilling programme.
As at the time publishing this report, the diamond drilling programme had
mobilised with the prospect of furthering the resource certainty through
additional sampling and assay of the prospective area.
Note 6 Other financial assets
Group (£)
2021 2020
Other financial comprise:
Lake Victoria Gold receivable 657,061 640,821
Blyvoor Joint Venture receivable 1,223,495 1,160,337
1,880,556 1,801,158
Impairment of other financial assets receivable
Lake Victoria Gold receivable (657,061) (640,821)
Blyvoor Joint Venture receivable (1,223,495) (1,160,337)
- -
Lake Victoria Gold Receivable
On 30 June 2020, the last condition precedent related to the disposal of Reef
Miners Limited ("Reef") as per the SPA, comprising the Imweru gold project and
the Lubando gold project in northern Tanzania, was met resulting in the
effective disposal of the subsidiary to Lake Victoria Gold Limited ("LVG").
The following profit on disposal of the subsidiary was recognised in the 2020
financial statements:
Group (£)
Cash and cash equivalents (336)
Trade and other payables 9,136
Net liability value disposed off 8,800
Foreign currency translation reserve reclassified through profit or loss (121,670)
Proceeds from disposal 797,564
Profit on disposal for Group 684,694
Impairment (640,821)
Net profit on disposal for Group 43,873
The amount receivable from Lake Victoria Gold will be due and payable on the
following dates:
1. US$100,000 upon the satisfaction of the Condition Precedent;
2. US$100,000 upon registration of Reef in the name of LVG;
3. US$100,000 four months from the date of the SPA;
4. US$200,000 nine months from the date of the SPA; and
5. US$500,000 upon the earlier of the commissioning of the first
producing mine of LVG in the Tanzania or the date 24 months from the date of
the SPA.
As at 31 December 2020, funds of $100,000 have been received from Lake
Victoria Gold in respect of the sale of Reef Miners Limited ("Reef"). The
receivable in Lake Victoria Gold has been fully impaired due to the
significant increase in credit risk, which is as a result of payments 1,3 and
4 not being received as they become due and is still outstanding after year.
Subsequent to year end the Group entered into a Joint Venture Agreement with
Lake Victoria Gold, as further disclosed in Note 20.
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 a 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 £1,223,495 of
which 100% relate to expenditure allocated to the Joint Venture operations,
carried by the Katoro Gold plc Group.
Note 7 Share Capital
The called-up and fully paid share capital of the Company is as follows:
2021 2020
Allotted, issued and fully paid shares
460,412,593 (2020: 328,698,305) Ordinary shares of £0.01 each £4,604,125 £3,286,982
£4,604,125 £3,286,982
A reconciliation of share capital is set out below:
Number of Shares Ordinary Share Capital Share Premium
(£)
(£)
Balance at 31 December 2019 179,555,465 1,795,555 2,216,729
Shares issued during the period 149,142,843 1,491,427 255,996
Balance at 31 December 2020 328,698,305 3,286,982 2,472,725
Shares issued during the period 131,714,285 1,317,143 489,857
Balance at 31 December 2021 460,412,593 4,604,125 2,962,582
A summary of the shares issued is as follows, gross of directly attributable
costs:
Number of shares Share capital (£) Share premium (£) Total (£)
Cash placing shares 48,000,000 480,000 480,000 960,000
Shares issued for settlement of debt 1,214,285 12,143 4,857 17,000
Warrants exercised 1,000,000 10,000 5,000 15,000
Cash placing shares 81,500,000 815,000 - 815,000
131,714,285 1,317,143 489,857 1,807,000
Note 8 Board of Directors
There were no changes to the board of directors during the period, or any
other committee's composition.
Note 9 Subsequent events
Joint Venture Agreement with Lake Victoria Gold Limited
Following the default in settlement of the outstanding purchase consideration
receivable from Lake Victoria Gold Limited related to the sale of the Imweru
Gold Project, the Group entered into a Joint Venture Agreement ('Agreement')
with Lake Victoria Gold ('LVG') for the development of the Company's Imweru
Gold Project ('Project'). Under the Agreement, LVG will earn up to 80% in the
Project, with the balance of 20% being held by Katoro as a carried interest.
The administrative process to finalise registration of the sale transaction,
and therefore trigger ongoing milestone payments due to Katoro, was
subsequently indefinitely delayed due to unforeseen statutory barriers related
to the transfer of ownership at project level. This created a situation where
no definitive schedule date could be established for transfer of ownership and
issue of the relevant milestone convertible loan notes. In light of this
unsustainable situation the Company and LVG agreed to cancel the sale
transaction and to enter into a Joint Venture instead.
Note 10 Commitments and contingencies
The Group does not have identifiable material contingencies or commitments as
at the reporting date. Any contingent rental is expensed in the period in
which it is incurred.
Note 11 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:
2021 Group Mining and Exploration Corporate 31 December 2021 (£)
Group Group Group
Administrative cost (272,733) (611,904) (884,637)
Exploration expenditure (284,463) - (284,463)
Foreign exchange loss 15,471 - 15,471
Other income 1,029 - 1,029
Finance income 10,121 - 10,121
Loss after tax (530,575) (611,904) (1,142,479)
2020 Group Mining and Exploration Corporate 31 December 2020 (£)
Group Group Group
Administrative cost (181,027) (961,926) (1,142,953)
Exploration expenditure (1,394,715) - (1,394,715)
Foreign exchange loss (77,045) 156 (76,889)
Other income - 43,873 43,873
Finance income 9,570 - 9,570
Loss after tax (1,643,217) (917,896) (2,561,114)
2021 Group Mining and Exploration Corporate 31 December 2021 (£)
Group Group Group
Assets
Segment assets 297,194 788,964 1,086,158
Liabilities
Segment liabilities 99,983 63,749 163,732
2020 Group Mining and Exploration Corporate 31 December 2020 (£)
Group Group Group
Assets
Segment assets 245,457 108,225 353,682
Liabilities
Segment liabilities 94,071 137,735 231,806
Geographical segments
The Group operates in four principal geographical areas - United Kingdom,
Cyprus, South Africa and Tanzania.
Tanzania Cyprus United Kingdom South Africa Total
31 December
(£) (£) (£) (£) (£)
2021
Major Operational indicators
Carrying value of segmented assets 234,899 528 788,964 61,767 1,086,158
Loss after tax (136,879) (125,757) (726,061) (153,782) (1,142,479)
Tanzania Cyprus United Kingdom South Africa Total
31 December
(£) (£) (£) (£) (£)
2020
Major Operational indicators
Carrying value of segmented assets 225,449 2,667 108,225 17,341 353,682
Loss after tax (95,834) (351,941) (917,897) (1,195,442) (2,561,114)
By order of the board:
Louis Coetzee
Chairman (Executive)
Louis Scheepers
Non-Executive Director
Myles Campion
Non-Executive Director
Paul Dudley
Non-Executive Director
Lukas Maree
Non-Executive Director
Company
Secretary:
Ben Harber
Auditors:
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Broker:
SI Capital Limited
46 Bridge Street
Godalming
GU7 1HL
Nominated adviser:
RFC Ambrian Limited
Octagon Point
5 Cheapside
London EC2V 6AA
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