Katoro Gold Regulatory News (KAT)

Katoro Gold plc (Incorporated in England and Wales)

(Registration Number: 9306219)

Share code on AIM: KAT

ISIN: GB00BSNBL022

("Katoro" or "the Company")

12 June 2020

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

Completion of Disposal - Imweru Gold Project

Katoro Gold plc (AIM:KAT), the gold and nickel exploration and development company, is pleased to announce the completion of the disposal of the Imweru gold project ('Imweru' or 'the Project') to Lake Victoria Gold Limited ('LVG').

Highlights:

· Further to the Company's announcement of 8 April 2020, the disposal of Imweru is now complete for a total staged consideration of US$1.0 million and a 1.5% Net Smelter Royalty ('NSR') on all future gold production (the 'Transaction')

· The Transaction has been approved by the Mining Commission in Tanzania with a "Consent Certificate" issued by the Executive Secretary of the Mining Commission

· Final Condition Precedent now met and the Transaction between LVG and Katoro has been completed

Louis Coetzee, Executive Chairman of Katoro Gold, said: "The completion of this disposal enables the management team at Katoro to focus financial and managerial resources on the highly significant Blyvoor gold tailings production project. The focus on Blyvoor is important, particularly recognising the progress being made and the extensive interest from project level financing partners.

"The disposal also adds to the Company's working capital, including up to US$1 million in cash payments and a 1.5% net smelter royalty, which is a valuable asset recognising the near-term operational plans and anticipated scale of production.

"I wish the team at LVG well as it develops the business and executes a smooth and accelerated pathway into gold production."

Further Transaction Information

Katoro has finalised the Transaction with LVG regarding its Imweru gold project held by its 100% Tanzanian registered subsidiary, Reef Miners Ltd.

LVG is an unlisted public company, incorporated in Australia, operating multiple exploration licenses including its key project, the Imwelo Gold Project, located adjacent to Imweru and which holds a mining licence.

The Transaction will see two strategic gold assets combined, which increases the project footprint and in-situ gold resource, and will, the Board of Katoro believes, allow a considerably faster route to gold production.

Imweru is located in the Lake Victoria Goldfields region of northern Tanzania, a proven mineral district that currently hosts both AngloGold Ashanti's Geita Gold Mine and Accia Bulyanhulu Gold Mine.

The current, JORC-compliant, mineral resource at Imweru consists of 11.6 Mt at a grade of 1.38 g/t for 515,110 oz Au. Exploration work to date has only covered 50% of the project area.

Under the terms of the Transaction, Katoro will receive US$1,000,000 from LVG payable pursuant to a convertible loan note instrument which shall provide for the issue of the Convertible Loan Notes, which will be due on the following dates:

a) US$100,000 upon the satisfaction of the conditions precedent;

b) US$100,000 upon registration of the Sale Shares in the name of LVG;

c) US$100,000 on the date 4 months from the date of the Agreement;

d) US$200,000 on the date 9 months from the date of the Agreement; and

e) US$500,000 upon the earlier of the commissioning of the first producing mine of LVG in the United Republic of Tanzania or the date 24 months from the date of the Agreement.

The Convertible Loan Notes issued and constituted by the Convertible Loan Note Instrument shall be repaid in cash or converted at the sole discretion of Katoro within 30 days of the dates set out in the Transaction agreement.

If Katoro elects to convert any of the Convertible Loan Notes, the price at which the conversion takes place and the Ordinary Shares are issued shall be A$0.10 and LVG warrants and undertakes that it will have the appropriate share authorities in place at Completion to issue any such Ordinary Shares.

The Transaction agreement provides anti-dilution provisions enabling Katoro to at least maintain its proportionate holding in LVG, created by any conversion of the Convertible Loan Notes.

In addition to the Convertible Loan Notes, LVG shall pay to Katoro a net smelter royalty of 1.5% on all gold produced from the Mineral Rights calculated in accordance with the terms the Transaction.

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

**ENDS**

For further information please visit www.katorogold.com or contact: