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")

Dated: 2 October 2019

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

Fundraise

Katoro Gold PLC (AIM: KAT), the Tanzanian focused exploration and development company, is pleased to announce that is has raised £100,000 (gross), through a placing and subscription of new ordinary shares at 1.0p per share (the 'Fundraise').

Louis Coetzee, Executive Chairman of Katoro Gold plc commented: "I am pleased to announce the Fundraise, which provides funds to allow us to continue to advance the Company's Haneti project in Tanzania and for general working capital requirements.

"Katoro is pursuing a major chonolith type nickel sulphide discovery at Haneti, however Haneti is not just nickel focused and recent work has identified significant potential for Platinum Group Metals (notably Palladium), gold, copper, lithium and rare earth elements.

"Haneti is a large-scale polymetallic licence area and we are now also assimilating the historic information in respect of other metals and minerals and developing low cost work programmes to investigate the highest impact opportunities efficiently.

"We look forward to providing further updates to the market in respect of the highly prospective Haneti licence." 

Highlights

·; Katoro has raised £100,000 (gross) through a placing and subscription of 10,000,000 new ordinary shares of 1.0p each in the capital of the Company ('Ordinary Shares') ('Financing Shares') at 1.0p per share with new and existing shareholders;

·; Each Financing Share has an attaching warrant to subscribe for a further new Ordinary Share at a price of 1.5p, with a life to expiry of 2 years from the Financing Shares admission to trading on AIM ('Admission'), creating 10,000,000 new warrants ('Financing Warrants');

·; Kibo Energy PLC ('Kibo'), the Company's majority shareholder, has participated in the Fundraise for £18,000 and will be issued with 1,800,000 Financing Shares and will receive 1,800,000 Financing Warrants;

·; The Fundraise will enable the Company to continue to progress the Haneti project ('Haneti' or the 'Project') and provides general working capital;

·; At Haneti, the Company is targeting a chonolith nickel sulphide deposit and the maiden drill programme will be targeting sulphide mineralisation, which if confirmed will be a highly positive outcome;

·; Haneti is currently 75% owned by Katoro, with 25% held by Power Metal Resources plc (LON:POW) ('POW') and POW has the right by 15 May 2020 to increase its holding in Haneti to 35% by a payment of £25,000 cash to Katoro;

·; The Company currently has 20m warrants outstanding, including 10m held by POW exercisable at 1.25p and 10m held by participants in the Fundraise exercisable at 1.50p; and

- Should all warrants be exercised, the Company would receive an additional £275,000 in cash inflow which would provide a significant cash runway for the Company.

Background to the Haneti Nickel Project

Katoro has a 75% interest in Haneti, a highly prospective, high-grade nickel sulphide asset in Tanzania. Development of Haneti is being advanced in tandem with its joint venture partner, POW, which has the remaining 25% interest in Haneti and a right to acquire a further 10% interest from Katoro to increase its interest to 35%, through a cash payment of £25,000 to Katoro, until 15 May 2020.

The Company and POW have been undertaking a review and analysis of all historic work completed on the 5,000 sq. km polymetallic Project and believe that it could host a chonolith type nickel sulphide deposit. Previous work undertaken, totalling approximately US$1.5 million, has identified grades of up to 13.59% nickel with additional gold, cobalt, platinum values and some significant lithium anomalies. Additionally, independent work, undertaken by Western Geophysics Pty, underlined the potential of Haneti to host a substantial nickel sulphide deposit.

In 2012/13, the Geological Survey of Tanzania ('GST') conducted a high resolution airborne geophysical survey covering an area of approximately 12,000 sq. km. The GST survey outlined mafic-ultramafic zones with strike lengths of 10-20 km (northwest zone), 30 km (southwest zone) and 80 km (central zone), extending the footprint of the known nickel sulphide prospective Haneti-Itiso Ultramafic Complex ('HIUC').

Haneti lies within the ground area covered by the HIUC and, following the findings above, was subject to an independent geochemical interpretation, which identified the Mihanza Hill area as a prime drill target for nickel, copper and PGM mineralisation. The findings from the geochemical interpretation report and the in-house review thereon was sent to Perth based geophysical consultants, Spinifex Geophysics, for detailed processing and interpretation to better understand the geology of Haneti and to generate new target areas particularly for nickel, copper and platinum group metals (PGM) style mineralisation.

A follow up extensive soil sampling programme was then undertaken, the results of which were announced by Katoro on 20 May 2019. This extended the strike length of previously identified high priority areas and the findings have been utilised to inform planning for a proposed drill programme. Furthermore, it also identified a new, previously unidentified exploration target.

At the primary target, Mihanza Hill, a high magnetic anomaly was modelled using a 3D inversion modelling technique to better understand how the magnetic signature varied with depth. The results indicate that there is a considerable 'root' to the Mihanza Hill ultramafic outcrop, which points to a large volume of rock that could have positive implications for the differentiation of nickel sulphide rich magmas and provides a large volume of nickel prospective target rock at this location.

Related Party Transaction

Kibo, the Company's majority shareholder is also a substantial shareholder as defined by the AIM Rules for Companies, and accordingly Kibo's participation in the Fundraise represents a related party transaction under Rule 13 of the AIM Rules. The independent directors of the Company, being Paul Dudley and Myles Campion, consider, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms upon which Kibo are participating in the Fundraise are fair and reasonable insofar as the Company's shareholders are concerned.

Admission and Total Voting Rights

Application will be made for the Admission of the Financing Shares, with such Admission expected to become effective on or around 16 October 2019. Following Admission, the share capital of the Company will comprise 179,555,462 Ordinary Shares.

Each Ordinary Share has one voting right. No Ordinary Shares are held in treasury. Accordingly, the total number of voting rights will be 179,555,462 and this figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, Katoro under the FCA's Disclosure Guidance and Transparency Rules.

Following the issue of the Financing Shares and Admission, Kibo will be interested in, in aggregate, 94,338,739 Ordinary Shares representing approximately 52.5% of the Company's then issued share capital and will be interested in 1,800,000 Financing Warrants.

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: