Katoro Gold : Final Results 31 December 2021

KATORO GOLD PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2021

KATORO GOLD PLC	ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CONTENTS
CORPORATE DIRECTORY		1
CHAIRMAN'S REPORT		3
STRATEGIC REPORT		5
CORPORATE GOVERNANCE REPORT	10
DIRECTORS' REPORT		13
STATEMENT OF DIRECTORS RESPONSIBILITIES	20
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS	21
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	26
COMPANY STATEMENT OF COMPREHENSIVE INCOME	27
COMPANY STATEMENT OF FINANCIAL POSITION	28
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	29
COMPANY STATEMENT OF CHANGES IN EQUITY	30
CONSOLIDATED STATEMENT OF CASH FLOWS	31
COMPANY STATEMENT OF CASH FLOWS	32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	33
NOTES TO THE ANNUAL FINANCIAL STATEMENTS	40

KATORO GOLD PLC	ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE DIRECTORY
BOARD OF DIRECTORS:		Louis Coetzee	Chairman (Executive)
		Louis Scheepers	Non-executive director
		Myles Campion	Non-executive director
		Paul Dudley		Non-executive director
COMPANY SECRETARY:		Lukas Maree		Non-executive director
	Ben Harber	Martineau LLP
		Shakespeareth
		6 Floor
		60 Gracechurch Street
		London
REGISTERED OFFICE:		EC3V OHR
	6th Floor
		60 Gracechurch Street
		London
BUSINESS ADDRESS - UK:		EC4V OHR
	6th Floor
		60 Gracechurch Street
		London
BUSINESS ADDRESS - CYPRUS:	EC4V OHR
Kolonakiou 57
		Ag. Athanasios
		4103, Limassol
BUSINESS ADDRESS - TANZANIA:	Cyprus
Peugeot House,
		Plot No. 36,
		Bibi Titi Mohamed Road,
AUDITORS:		Dar es Salaam, Tanzania
	Crowe U.K. LLP
		55 Ludgate Hill
		London
STOCK EXCHANGE LISTING:	EC4M 7JW
London Stock Exchange: AIM (Share code: KAT)
SHARE REGISTRARS:		Link Group
		10 Floor
		Central Square
		29 Wellington Street
		Leeds
PRINCIPAL BANKERS:		LS1 4DL
	Barclays Bank Plc
		Priory Place
		Level 3 New London Road
		Chelmsford
		Essex
BROKER:		CM2 0PP
	SI Capital Ltd
		46 Bridge Street

Godalming

GU71HL

1

KATORO GOLD PLC	ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE DIRECTORY
SOLICITORS:	Druces LLP
	Salisbury House
	London Wall
	London
NOMINATED ADVISER:	EC2M 5PS
RFC Ambrian Limited
	Octagon Point
	5 Cheapside
	London
WEBSITE:	EC2V 6AA
www.katorogold.com
DATE OF INCORPORATION:	11 November 2014
COMPANY NUMBER:	09306219

2

KATORO GOLD PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

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-stage2020-2021 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.

3