Condensed Consolidated Statement of Cash Flow

During the financial year the group recognised an investment in an associate Kibo Gold Limited at its retained equity value upon dilution of its interest from 100% to the remaining 20% pursuant an agreement with Lake Victoria Gold following the cancellation of the Reef Miner Limited disposal in a previous reporting period. The investment was impaired to £Nil on the same day to reflect the value of the Kibo Gold investment previously held. The retained interest and impairment value was £180,301. Refer note 7 and 8.

The shares in LVG originally received as part payment for the Reef Miner disposal were cancelled at its fair value previously held of £Nil. Refer note 6.

Condensed Consolidated financial results for the year ended 31 December 2022

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 regularly review cash flow requirements to ensure the Group can meet financial obligations as and when they fall due.

In performing the going concern assessment, the Board considered various factors, including the availability of cash and cash equivalents, data relating to working capital requirements for the foreseeable future, 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.

The Group currently generates no revenue and had a net liability position of £230,908 as at 31 December 2022 (31 December 2021: net assets of £922,426). As at year end, the Group had liquid assets in the form of cash and cash equivalent and other financial asset balances receivable of £49,596 (2021: £827,956 and £48,702).

The Directors have evaluated the Group's liquidity risk and liquidity requirements to confirm whether the Group has adequate cash resources to continue as a going concern for the foreseeable future. Considering the net current liability position, 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 expenditure.

The cash flow forecast indicates a cash shortfall will arise on the short term. The Group has limited funds available post year end following from the continued exploration activities undertaken throughout the Group, 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. 

Various sources of funding will be considered, most notably:

·    Capital Placings

·    Credit Loan Notes

·    Exercise of outstanding Warrants

·    A letter of support can be obtained from Kibo Energy Plc

Furthermore, Katoro has a strong proven track record of being able to source funding on an ongoing basis, even in very difficult market conditions, and it expects to be able to continue doing so. Katoro is in the process of finalising a significant transaction with regards to a new acquisition and have an advanced terms sheet that is being finalised for execution.

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.

As noted in earlier in the post balance sheet events section, a general meeting was held on 15 March 2023 where the nominal value of shares was reduced from 0.01 to 0.001 which effectively reduced the value of the issued share capital (based on the 460 412 593 issued shares).

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:

The Company had warrants in issue as at 31 December 2022 and 2021 though the inclusion of such warrants in the weighted average number of shares as possible dilutive instruments in issue during 2022 and 2021 would be anti-dilutive and therefore they have not been included for the purpose of calculating the loss per share.

A transaction took place after year-end, effective 11 April 2023 whereby 19,000,000 ordinary shares were issued, which results in an increase in the number of issued shares to 658,412,593. In addition, 209,085,100 warrants were issued on the same date.

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. Refer note 11.

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:

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.

Historical geophysical and geochemical sampling programmes completed prior to the 2022 drilling campaign were successful in identifying at least three high-priority drilling targets at Haneti. As no fresh rock samples had ever been obtained from the Project, the decision was made to drill these targets. The main programme goal was to extract fresh rocks to obtain a better understanding of the subsurface geology as well as to intersect Ni-Cu sulphide mineralisation.

The 2022 diamond core drilling programme was completed successfully with a total of 900m drilled. This included three drill holes which were targeting previously outlined mafic-ultramafic Ni- Cu-PGE sulphide targets at the Mihanza and Mwaka Hill prospects (on PL no. 11797/2022). The three holes completed are outlined and summarised below:

• Mwaka Hill Prospect: Hole MWDD01 was drilled to 245.8m down hole depth at an inclination of -63° and MWDD02 to 224.0m at a -64° inclination. The two holes intersected significant thicknesses of altered ultramafic rocks (serpentinite) and mafic rocks (gabbro). Hole MWDD01 gave the highest Ni intersection of 2.00 m @ 0.45% Ni from 81.5m downhole. In MWDD02 two wider intersections were encountered with 4.0m @ 0.38% Ni from 151.4m and 4.0m @ 0.35% Ni from 159.4m. All elevated Ni results were found exclusively within serpentinite.

• Mihanza Hill Prospect: Hole MHDD01 at the was drilled to 430.2m at a -64° inclination. The hole intersected similar rock types as at the Mwaka Hill prospect but contained no significant Ni intersections but did contain anomalous PGE, Au and Cu results including:  2.0m of 0.08g/t platinum (Pt) + palladium (Pd) from 241.3m; 2.0m of 0.21g/t Au from 392.4m; and 2.0m @ 0.11 % Cu from 236.2m.

The drilling field work phase was followed by laboratory analyses, performed at SGS's laboratory located in Mwanza, Tanzania with samples also then transferred to SGS South Africa to mitigate certain operational difficulties at SGS Tanzania. This re-routing of samples and the additional work required in respect of the lithium prospectivity added some additional time to the return of completed findings to the operational team.

As at the time publishing this report, the Company had successfully completed the diamond drilling programme. The results were analysed and will allow for a refined approach during the next phase of the project, with focus on specified areas. This plan has not yet been developed in sufficient detail, and accordingly further funding has not yet been obtained. Due to this uncertainty as at 31 December 2022, management has applied a provision for impairment against the carrying value of the intangible asset to the value of £209,500.

Note 6            Investments

The investment represents 700,000 ordinary shares in Lake Victoria Gold Limited, incorporated in Australia. The shares were issued on 15 October 2019 to Katoro Gold PLC in recognition of the Company granting the extension to receipt of the first tranche of monies due under the term sheet. The investment in Lake Victoria Gold has been fully impaired due to the early-stage exploration nature of the underlying investee entity.

During the year the investment in Lake Victoria Gold Limited was cancelled as a result of the cancellation of the Reef Miners Limited disposal. Refer to note 8.

Note 7            Other financial assets

Lake Victoria Gold Receivable

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.

The resulting loss on disposal was recognised during the period ended 31 December 2022:

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 £1,287,686 (2021: £1,223,495) 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 £7,560 and the remainder of the balance of £56,631 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 8            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.

During the financial year the Group entered into an agreement with Lake Victoria Gold Limited whereby LVG purchased Kibo Gold Limited for a total consideration of £729,203 of which £656,283 is due by LVG to Katoro Gold Plc. This was pursuant the restructuring of an agreement with LVG relating to the previous reported disposal of Reef Miners Limited.

The original disposal agreement of Reef Miners was cancelled and LVG purchased an 80% equity interest in Reef Miners' parent Kibo Gold by way of a share issue of Kibo Gold. The share issue resulted in a dilution of interest for Katoro Gold Plc in Kibo Gold and the subsequent loss of control.

On the date that control in Kibo Gold was lost, Katoro Gold raised a residual interest in Kibo Gold to the value of £180,301 which was impaired on the same day to reflect the position of the investment in Kibo Gold previously held. Refer note 7.

Note 9            Share Capital and other equity reserves

The called-up and fully paid share capital of the Company is as follows:

A reconciliation of share capital is set out below:

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.

During the year, 28,408,333 warrants with a reserve value of £117,930 expired was reclassified to retained earnings. There were no changes to the options issued and its related reserve during the year. No changes occurred in the Merger and Capital Contributions reserves.

Note 10         Board of Directors

There were no changes to the board of directors during the period, or any other committee's composition.

Note 11         Subsequent events

At the general meeting held on 15 March 2023 a resolution was passed whereby the share capital was subdivided. Before the subdivision the Company had 460,412,593 ordinary shares of £0.01 each after the subdivision the Company had 460,412,593 New Ordinary Shares of £0.001 each. The Board believes that the proposed subdivision of share capital will provide the Company with more flexibility regarding its future funding options and improve trading liquidity in a very challenging market.

In April 2023 the Company has raised £150,000 (gross) at 0.1 pence per share, through a placing by SI Capital of £130,000 and Directors' subscription of £20,000, both of which will be used to fund the Company's ongoing working capital requirements (the 'Fundraise').

The Company has also issued £59 085 of new ordinary shares at 0.1 pence per share in settlement of accrued director fees outstanding.  Each Financing Share has an attaching warrant to subscribe for a further new Ordinary Share at an exercise price of 0.2 pence per warrant, with a life to expiry of 3 years from the Financing Shares admission.

Note 12         Commitments and contingencies

The Group does not have identifiable material contingencies or commitments as at the reporting date.

Note 13         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:

Geographical segments

The Group operates in four principal geographical areas - United Kingdom, Cyprus, South Africa and Tanzania.

Directors, officers and professional advisers

Board of Directors                                          Louis Coetzee (Executive Chairman)

                                                                               Louis Scheepers (Non-Executive Director)

                                                                               Myles Campion (Non-Executive Director)

                                                                               Paul Dudley (Non-Executive Director)

                                                                               Lukas Maree (Non-Executive Director)

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

                                                                               3 Hardman Street

                                                                               Manchester

                                                                               M3 3HF