BLYVOOR GOLD TAILINGS PROJECT: CPR RESULTS

Katoro Gold plc (Incorporated in England and Wales)

(Registration Number: 9306219)

Share code on AIM: KAT

ISIN: GB00BSNBL022

("Katoro" or "the Company")

04 May 2021

Katoro Gold plc ('Katoro' or the 'Company')

BLYVOOR GOLD TAILINGS PROJECT: CPR RESULTS

Katoro Gold plc (AIM: KAT), the AIM listed gold and nickel exploration and development company, is pleased to announce the results of a comprehensive Competent Person's Report ("CPR"), that reports on the results and findings of additional technical and financial work that was conducted on the Blyvoor Gold Tailings Project ("the Project") in response to the recommendations and findings of the Blyvoor Scoping Study announced in RNS dated: 07 May 2020 and 4 March 2021. Katoro is currently in the processes of finalizing a comprehensive funding package in accordance with the Blyvoor Joint Venture ("the JV") that will allow the construction, commissioning and operation of a mining and processing facility capable of processing 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 51%, before incorporating recovery gains from the latest metallurgical optimization tests. The optimization results indicated that overall recoveries of up to 60% can be achieved by milling the coarser fraction (+75µm) of the feedstock which comprises around 30% of the total Run of Mine ("RoM").

The findings of the CPR were subject to the results of the confirmatory and optimization metallurgical test work. Following receipt of all the outstanding metallurgical test results, the Company is now able to validate the findings of the CPR and further engage with prospective funders towards conclusion of funding arrangements as set out above.

The CPR comprises an advanced Pre-Feasibility level study, a SAMREC compliant reserve and resource statement, and a South African Mineral Asset Valuation ("SAMVAL") report for Blyvoor TSF 1, 6 and 7 and Doornfontein TSF 1, 2 and 3 gold tailings storage facilities.

Note: Previous technical work on the Project was reported in RNS's dated 15 December 2020 (Resource Results) as well as 30 September, 16 November, and 30 November 2020, (General Updates) respectively.

Highlights CPR

·    Total project resource size of 1,410,000 oz gold consisting 500,000 oz gold in the measured category (35.5%), 368,000 oz gold in the indicated category (26.1%), and 542,000 oz gold in the inferred category (38.4%) (Table 1)

·    TSF 6 and 7 was upgraded to Probable Reserve status containing 424,000 oz gold and 392,000 oz gold, respectively (Table 2).

·    The mine plan includes 1,325,822 oz gold after applying a 2% dilution factor, a 95% Mine Call Factor, and accounting for 1% ore losses.

·    The CPR demonstrates (before incorporation of the results of the recent metallurgical optimization work):

§ An unlevered Project Net Present Value ('[email protected]%') of US$ 114 million, a 33% Internal Rate of Return ('IRR') and a Return on Investment ('ROI') of 64%;

§ LOM of 25 years building to a production capacity of 500,000 tons per month with an overall production of 675, 842 ounces of gold over LOM;

§ Low-cost operation:

·    With an estimated All-in Sustaining Cost ('AISC') of US$861 per ounce of gold;

·    All-in Cost ('AIC') of US$1,067 per ounce of gold;

·    Total Project capital costs of US$152m across the life of the Project, and

·    Peak funding requirement of US$69m.

·    The study utilised an average gold price of US$1,610 per ounce compared to the current price of c. US$1,800 per ounce;

·    Additional metallurgical test work confirmed the current grade vs. recovery model from previous technical studies and no further metallurgical test work is required;

·    Optimization studies revealed that by milling a portion of the feedstock (with coarser size fraction (+75 um)), overall recovery can be increased up to c. 60% from the current confirmed 51% average recovery over LoM and 53.5% for the reserve (TSF 6 and 7); and

·    Following rigorous independent review, evaluation, and assessment, the Project demonstrates robust technical and economic viability.

Louis Coetzee, Executive Chairman of Katoro, said: "We are extremely satisfied and pleased with the results of the projects thus far. Completion of technical work was delayed substantially by repeated COVID - 19 restrictions in South Africa, but at the same time allowed for better and more detailed review and optimization work to be done.

The completion of the technical work and especially the independent SAMVAL valuation of the project once again confirms that the project is very robust in all aspects and puts the Company in a very strong position to finalize funding discussions as set out above. We are now in the process of determining to what extent the higher recovery rates may improve the already robust project economics and will be updating the market in this regard in due course".

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014.

CPR key outcomes and discussion

Table 1: Mineral resource statement for Blyvoor Gold Mine TSFs effective 22 January 2021.

The operator for the Project is the Katoro Joint Venture.

Table 2: Blyvoor TSF No.6 and TSF No.7 Mineral Reserve estimation effective 22 January 2021.

The operator for the Project is the Katoro Joint Venture.

Review by Qualified Persons

Information in this announcement that relates to the Blyvoor Mineral Resource is taken from the report titled " P20-006a_Katoro_BlyvoorTSF_CPR_Final" date 22 January 2021 (the "Report"). The Report contains a SAMREC-compliant Mineral Resource estimate, PFS and SAMVAL and was prepared for the Katoro TSF Gold Project (Blyvoor Joint Venture) in which Katoro Gold plc holds a 50% attributable interest.  The Competent Person responsible for the submission of this document is Mr Daniel (Daan) van Heerden (Director, Minxcon): B Eng (Min.), MCom (Bus. Admin.), MMC, Pr.Eng. (Reg. No. 20050318), FSAIMM (Reg. No. 37309), AMMSA. Mr van Heerden has worked in the mining industry for over 30 years. He has extensive experience in managing underground and open cast mining operations in South Africa and abroad for world-class mining majors and junior mining companies. He was responsible for new business development for two major mining companies and has experience in mining mergers and acquisitions. He is currently heading the Mining Engineering division of Minxcon, where he is integrally involved in activities such as valuation, due diligence, finance structuring, change management required post the event, feasibility studies, life of mine plans, technical reviews and writing of technical reports for various commodities.

Information contained in this announcement has also been reviewed by Mr. Noel O'Keeffe, geologist, BSC.  P.Geo, who is a Member of the Institute of Geologists of Ireland. Mr. O'Keeffe has several years' experience in the evaluation of gold projects.

**ENDS**

For further information please visit www.katorogold.com