Final Results

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. 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 or contact:

Louis Coetzee	[e-mail]	Katoro Gold plc	Executive Director
James Biddle Roland Cornish	[phone]	Beaumont Cornish Ltd	Nominated Advisor
Nick Emmerson Sam Lomanto	[phone]	SI Capital Ltd	Broker

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) 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), 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.

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

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 2023	31 December 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 premium	Deferred shares	Merger reserve	Capital contribution	Warrant and share based payment reserve	Foreign currency translation reserve	Retained deficit	Non-controlling interest	Total equity
	£	£		£	£	£	£	£		£
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 2023	31 December 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 share		615,980,994	460,412,593
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.

 

END