Aim-listed Katoro Gold, which holds mining assets in Africa, has secured new financing and is implementing business and development changes, along with board changes, to reinvigorate the company.
Financing was by way of a broker-led placing and subscription with new and existing shareholders to support business development, raising £750 000 through the issue of 750-million shares.
The financing is conditional only on admission to trading on Aim, which is expected to become effective on February 16.
Each financing share will have an attaching warrant to subscribe for a further new ordinary share. In total, should all the financing warrants be exercised, this would raise an additional £1.5-million for the company.
Alongside the financing, the company has settled invoices amounting to £38 305 due to shareholder Kibo Energy through the issue of 38.3-million ordinary shares.
The services related to administrative support provided to Katoro by Kibo Energy.
Kibo Energy holds 96.1-millon Katoro shares on which Kibo has committed to a hard lock-in of its current shareholding in the company for a minimum period of 12 months.
Further, to support the retention of key non-board team members the company has created a pool of 25-million options to acquire new ordinary shares on the same terms as the financing warrants. These options will be allocated to members of the team following the appointment of a new board of directors.
Louis Coetzee, current executive chairperson, will step down from the board and from employment with the company, with effect from the appointment of two new directors, following appropriate market due diligence.
He will, however, continue to consult for the company after his resignation to assist with transitional administration, including project management, financial accounting and audit matters, until July 31.
It is expected that the two new directors will assume the roles of nonexecutive chairperson and CEO, with further information on this expected to follow.
Louis Scheepers and Lukas Marthinus (Tinus) Maree have agreed to continue to serve as nonexecutive directors with the company for a minimum of six months from February 12.
The board changes are aimed at finding ways to maximise value from existing interests and to secure new cost-effective opportunities globally, with a focus on critical minerals, including uranium.
To date, the creditors of the company include an amount of £91 000 in respect of outstanding board fees from current directors for the period April 2023 to January 2024, inclusive.
This amount has been reduced with the agreement of the board directors to £63 617.88, of which £42 411.92 will be settled in full through the issue of 42.4-million ordinary shares.
All current directors of the company have committed to a hard lock-in of their current (pre-financing) shareholding in the company, while serving as directors or for a minimum period of 12 months, whichever is the shorter.
Value Generation has been appointed as an adviser to Katoro to assist with business recovery and support the company in the areas of strategy, operational planning, communications and business administration.
Paul Johnson, former CEO of Metal Tiger and Power Metal Resources, will be the chief consultant for this advisory work.
In accordance with the advisory agreement, Vale Generation has received 25-million warrants to subscribe for new shares.
Katoro will undertake a review of existing project interests to determine the optimal strategy for each interest.
While it will remain and operate as a junior resource exploration and development company, going forward, it will seek additional opportunities to broaden its portfolio of interests in Africa, North America and Australia.
To reflect this, the company plans to change its business name to Katoro Global Resources.
The company says it now has access to a deep resource of technical advisory support and potential new project pipeline including ground available through staking, joint venture opportunities and acquisition opportunities.
Target projects are available and may be secured in a range of commodities; however, a particular focus will be on critical mineral opportunities
“We have, for some time, been working to find a pathway to reinvigorate the company. I believe the proposals announced today, with the refreshed board, advisory support and new approach, have the potential to deliver considerable value for shareholders,” says Coetzee.
Following the financing, Katoro will have a market capitalisation on the very low end of UK-listed junior resource companies.
“This is a low foundation from which we believe a refreshed and energetic business strategy can be built, delivering value to shareholders, which is critically important.
“The board are incentivised through shareholdings and options to deliver for investors and to ensure the focus is on delivery through share price appreciation,” Coetzee points out.
Katoro says the junior resource sector has experienced a prolonged downturn, with junior resource companies facing considerable challenges.
In this environment, new opportunities remain available, albeit that availability is expected to reduce as the sector recovers.
For this reason, it is important that the company acts in an efficient and expeditious manner in its forward activities, it points out.
Katoro’s current project portfolio comprises the Blyvoor Gold joint venture (JV), in South Africa; the Imweru gold project, in Tanzania; a majority interest in the Haneti nickel/platinum group metals/copper/gold/lithium/rare earth element project, in Tanzania; and a 50% interest in the Trans Namibian Mining & Minerals iron-ore JV, in Namibia.