Annual Report • Apr 28, 2025
Annual Report
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Company registration number: 10796849 (England and Wales)
| Company Information 3 | |
|---|---|
| Forward Looking Statements 4 | |
| Chairman's Statement 5 | |
| Operations Report 7 | |
| Board of Directors and Senior Management 16 | |
| Strategic Report 17 | |
| Directors' Report 24 | |
| Corporate Governance Report 26 | |
| Directors' Remuneration Report 35 | |
| Statement of Directors' responsibilities 39 | |
| Independent auditor's report to the members of Kavango Resources plc 40 | |
| Consolidated statement of total comprehensive income 46 | |
| Consolidated statement of financial position 47 | |
| Company statement of financial position 48 | |
| Consolidated statement of changes in equity 49 | |
| Company statement of changes in equity 51 | |
| Consolidated statement of cash flows 53 | |
| Company statement of cash flows 54 | |
| Notes to the financial statements 55 |
David Smith, Non-Executive Chairman Peter Wynter Bee, Non-Executive Director Matthew Benjamin Turney, Chief Executive Officer Brett Grist, Chief Operating Officer (Resigned 29 May 2024) Hillary Nyakunengwa Gumbo, Founder & Executive Director Jeremy S. Brett, Executive Director (Resigned 27 May 2024) Donald McAlister (Appointed 6 June 2024) Alexandra Gorman (Appointed 6 June 2024)
Brett Grist (Resigned 30 September 2024) Lorraine Whitehorn (Appointed 30 September 2024)
Salisbury House, Suite 425 London Wall London EC2M 5PS United Kingdom
Registered Number 10796849 (England and Wales)
Share Registrars Limited 3 The Millennium Centre Crosby Way Farnham Surrey GU9 7XX United Kingdom
First Equity Limited Salisbury House London Wall London EC2M 5QQ United Kingdom
PKF Littlejohn LLP 15 Westferry Circus Canary Wharf London E14 4HD United Kingdom
Druces LLP Salisbury House London Wall London EC2M 5PS United Kingdom
Lloyds 198-200 The Marlowes Hemel Hempstead Hertfordshire HP1 1BH United Kingdom
Barclays PLC Level 15 1 Churchill Place Canary Wharf London E14 5HP United Kingdom
This Annual Report and Accounts 2024 contains certain forward-looking statements with respect to the financial condition, sustainability related matters, results of operations and business of the group, including the strategic priorities; financial, investment and capital targets; and Kavango Resources PLC's ('Kavango') ability to contribute to Kavango's environmental, social and governance ('ESG') ambitions, targets and commitments described herein.
Statements that are not historical facts, including statements about the group's beliefs and expectations, are forward-looking statements. Words such as 'expects', 'anticipates', 'intends', 'plans', 'believes', 'seeks', 'estimates', 'potential' and 'reasonably possible', variations of these words and similar expressions are intended to identify forward looking statements. These statements are based on current plans, estimates and projections, and therefore no undue reliance should be placed on them. Forward-looking statements apply only as of the date they are made. Kavango makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statement.
Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors, including ESG related factors, could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement.
I am pleased to present the financial results for Kavango Resources PLC ("Kavango" or the "Company"), the group focussed on metals production and exploration in Botswana and Zimbabwe, for the year ended 31 December 2024.
In 2024 the Company raised £3.8 million via convertible loan notes ("CLN"), issued to our Deputy Chairman and our majority shareholder, providing sufficient capital to progress the first phase of the CapEx programme in Zimbabwe. A further £6.5 million was raised via subscription from a combination of new and existing shareholders post year end, placing Kavango in a strong position for a junior mining company going into 2025. The new shares were issued and the subscription funds released following the publication of the FCA approved prospectus in January 2025.
In Botswana, the Company started 2024 with the announcement of the completion of the Kalahari Copper Belt ("KCB") airborne geophysical survey and having undertaken a number of drilling campaigns had by the year end gathered valuable data to build a vectoring model and determine the geophysics for the next phase of drilling. The large Karakubis Copper Project, part of our KCB mineral rights package, appears increasingly prospective for largescale copper deposits.
During the year a technical report completed by a recognised mining advisor on the Ditau Project ("Ditau") concluded that Ditau is an attractive early-stage exploration project with the potential to host a variety of mineralisation styles.
A large amount of geological and geophysical work has now been completed across the area covered by the Kalahari Suture Zone ("KSZ") licences which has confirmed a number of important geological features. The expert Technical Report has been received and the results and recommendations of this will be used by the Company to advance the project.
In Zimbabwe, Kavango is a gold producer whilst also exploring for gold deposits on the greenstone belt, where the focus has been those claims highly prospective for gold with the potential to be brought into production quickly.
During 2024 the Company entered into agreements for the purchase of claims known as the Hillside & Leopard Gold Projects ("Hillside & Leopard"), where results continue to identify a growing number of opportunities for near-term gold production. Prospect 3 has the profile for an open pit operation and heap leaching, using modern innovative mechanised mining technology developed through the experience of Australian miners. We believe that Zimbabwe has the potential for hosting a multitude of bulk mineable gold deposits.
In March 2024 Kavango Mining was established to mine gold at Hillside & Leopard.
The Company is assessing the potential for large-scale underground bulk mining at the Nara Gold Project ("Nara"). The option for the acquisition of claims expires on 30 June 2025 and our work in 2024 leads us to believe that Nara could be developing into a significant opportunity for Kavango.
The announcement in 2024 of the intention to implement a secondary listing on the Victoria Falls Stock Exchange following the publication of the prospectus is a progression of our commitment to invest heavily in Zimbabwe's gold exploration and mining sectors and endorses our intention to promote local ownership in Kavango, in keeping with the Company's strategy and that of the Zimbabwe Government's stated "Vision 2030" to transform Zimbabwe into a knowledge driven and industrialising upper middle-income economy.
More detailed information about the Company's projects in Botswana and Zimbabwe is provided in the CEO report.
During 2024 the Group incurred a loss of US\$ 8,662,000 equivalent to a loss of US\$ 0.59 cents per share (2023: US\$ 3,293,000, equivalent to a loss of US\$ 0.45 cents per share).
In June 2024 the directors, having considered commercial needs, restructured the Board of Kavango (the "Board") and were delighted when Peter Wynter Bee agreed to assume the role of Deputy Chairman. Donald McAlister and Alex Gorman joined as Non-Executive Directors and have considerably strengthened the dynamic of the Board. As recently announced, Alex will join the Company full time during mid 2025 as Chief Operating Officer and move to Zimbabwe.
I should like to take this opportunity on behalf of the Board to thank our dedicated workforce, led by our CEO and highly experienced executive team, based in Botswana and Zimbabwe, supported by consultants of the highest quality, for their hard work throughout the year, and our shareholders for their continued support and for enthusiastically sharing our vision.
Kavango started and ended 2024 in a strong position and as 2025 progresses, the Company continues to build a robust operation with the immediate focus on near term free cashflow generation, with the potential to maximise shareholder value whilst also striving for excellence by adhering to the highest ethical principles, demonstrating unwavering integrity through its actions and committing to sustainable practices in all aspects of the business.
We look forward to updating the market in due course.
David Smith
25 April 2025
It is difficult for a company like Kavango to communicate to shareholders quite how much effort goes into proper metals exploration. Even relatively small areas of ground, such as the 900 hectares we are exploring in Zimbabwe, can pose complex challenges to solve. Exploration over thousands of square kilometres, as we are doing in Botswana, is even more demanding.
However, Kavango is a unique company on the London Stock Exchange, thanks to the exceptional support of our major shareholder Purebond Limited ("Purebond") and director Peter Wynter Bee. Through Purebond and Peter's strong financial backing, Kavango has been able to perform more like a private equity backed business rather than a listed start-up.
The speed at which our team has worked our ground in Zimbabwe has been extremely impressive. We have been able to pursue ambitious and aggressive exploration, to the point we could be on the cusp of moving into substantial cash flow generation.
2024 laid the foundation for what I hope will be our breakthrough year in 2025.
In Zimbabwe, Kavango made outstanding progress over the course of 2024. In this year's annual report, I will present a detailed, month by month account of how much work our team has done. I am incredibly proud of the effort everyone has put in. This was a year in which we embedded ourselves in this country's economy and forged strong partnerships with local and national stakeholders.
Coming into 2024, our objective was to make at least one significant gold discovery that we could advance towards production. As things stand, we believe we could have made up to three, possibly even four such discoveries. We now await drill results in eager anticipation, and I hope to be able to write in next year's report that we have received the confirmation of the results our team's hard work deserves.
During 2024, we learned a lot about operating in Zimbabwe and have gone a long way to prove that this country is "open for business". Our work in the field has demonstrated the clear potential in Zimbabwe's goldfields for modern exploration. The next stage for Kavango will be to prove that these goldfields can be developed quickly through modern mechanised mining.
Each month, our exploration team provides a written progress report. I share highlights from each report below:
("oz") of gold at an average grade of 10 g/t and N2 which is reported to have produced 18,165 oz of gold at an average grade of 8.9g/t between 1904 and 1964.
In March 2025 Kavango announced an increase in underground potential for both lateral and vertical continuity at Prospect 1 having intersected a reef, hosting quartz and sulphide bearing veins, in a previously inaccessible level of the historic Main Shaft during shaft restoration. Kavango plans to test the extent of these reefs through a combination of surface and underground drilling. If warranted, these results will inform subsequent drilling with the objective of defining a mineral resource at Prospect 1 for a larger, longer-term underground mine than previously anticipated. The Company's objective is to establish Prospect 1 as a third area of near-term gold production at Hillside alongside Prospects 3 and 4. In parallel, Kavango is proposing to increase the processing capacity at Prospect 1 to provide flexibility for greater production.
The drilling programme at Prospect 3 has provided Kavango with sufficient geological information and sample material to conduct assay, metallurgical and geotechnical test work. The company's focus is now on completing the test work to allow for an initial maiden resource and if warranted design of a trial open pit heap leach mining operation and if able to prove there is a mineable resource at Prospect 3, the aim to bring that into production in 2025.
In Botswana, Kavango focussed its attention primarily to exploration on its Kalahari Copper Belt ("KCB") project in 2024. Interest in the KCB is high and, as of writing this report, Kavango has the largest independent contiguous block of prospecting licences in Botswana. Over the last 18 months, China's MMG has bought Khoemacau Mining for US\$1.8billion and BHP Billiton (ASX:BHP) has confirmed an earn-in on Cobre Limited's prospecting licences on the northern and southern basin margins of the KCB. Kavango's Karakubis project covers the remaining southern basin margin.
We started the year in the KCB with an airborne geophysical survey of 2,374 line-km of Time Domain Electromagnetic (TDEM), magnetic and gravity data. This work was completed in Q1 and the Company released a preliminary interpretation of the airborne survey data to inform drill targeting.
Helicopter-borne gravity clearly defined a WSW-ENE trending ~9 milliGal gravity high underlying the Kara Anticline. The Kara gravity high is one of two linear features in the regional gravity (Kara & Tsootsha gravity highs) possibly linked to the Okwa Complex, that may indicate the presence of basement highs defining multiple edges between two deeper basins, one to the south (Ncojane Basin) the other to the northeast (Ghanzi Basin) with a subbasin to the north and west (Talismanis Basin).
Basin margins along the KCB are considered prospective sites for Cu-Ag mineralisation. Preliminary interpretation of magnetic data from this survey combined with re-processed regional magnetic data and satellite images, clearly define fold hinge targets in the D'Kar Formation (DKF) that correlate with preliminary AEM targets. Fold hinges are associated with mineralisation elsewhere on the KCB, such as at Sandfire Resources' (ASX:SFR) Motheo Mine.
In May Kavango announced placement of a drilling contract for the first phase of stratigraphic drilling on the KCB at its Karakubis Project. The appointed Contractor was Mitchell Drilling Botswana (Pty) Ltd ('Mitchell'), who have completed multiple successful diamond drilling programs in the KCB for other clients.
The Phase 1 stratigraphic diamond core drilling programme consisted of 5,000m on the Karakubis Project and comprises 10-15 holes to commence in June 2024. Drilling was designed to test stratigraphic position and structural features interpreted from heliborne electromagnetic (AEM) survey data. Drilling was designed to test targets previously identified by a combination of historic AEM, and Induced Polarisation (IP) surveys, and geological interpretation.
Kavango identified several high priority targets for its first phase of drilling. Drill holes were designed to check favourable trap sites modelled from geophysical data, to confirm stratigraphy, and to assess the potential to host large scale copper-silver mineralisation. Kavango's high priority targets were all located above interpreted, doublyplunging fold structures over gravity highs where associated faulting is thought to be favourable for trap site development.
In October, the Company released an update on the Phase 1 stratigraphic drill campaign at the Karakubis Project on Botswana's KCB.
Kavango's analysis of intersections from its first five holes identified the same stratigraphic sequences at Karakubis as those believed to be present around Sandfire Resources' (ASX:SFR) Motheo Mine and similar to MMG's (HKEX:1208) Zone 5 Deposit. Motheo and Zone 5 are two of the largest known copper deposits in the KCB.
Further, all five holes demonstrated evidence of both functioning structural "trap-sites" and substantial hydrothermal alteration. The confirmation of these two geological "engines" is an important indicator that the ground at Karakubis has been subjected to the correct processes for the accumulation of large-scale copper-silver deposits.
Finally, the Company, through pXRF analysis, confirmed the presence of copper, silver, lead and zinc mineralisation in all five holes it drilled. The combination of these four metals is highly encouraging for Kavango's continued exploration for a major commercial discovery.
In November, Kavango completed hole KCBDD007, and then initiated a new programme of ground geophysics using IP and Controlled Source Audio frequency Magnetotellurics ("CSAMT") with the intention of resuming the Phase 1 drilling programme after completion of the ground geophysics has been processed, modelled and interpreted.
These survey programmes have been conducted over carefully selected drill sections and were designed to test a number of parameters to help discriminate faults, folds and possible lithologies using differences in resistivity and chargeability to resolve the contact position between the D'Kar and Ngwako Pan Formations at depth, above which sits the drill targeted zone. The Company completed its first orientation survey of deep IP, calibrating the method to achieve quality data over significant depths down from 1,200m to 0m above sea level with a section of 1,200m depth extent. This data has been peer reviewed, modelled and inverted. Ground geophysics is ongoing in the KCB, as of writing this report.
Elsewhere in Botswana, Kavango focussed on review of its exploration data at its Ditau and Kalahari Suture Zone (KSZ) Projects. For the KSZ, the Company initiated a new NI43-101 report in H2. Work is ongoing on this, as of writing this report.
In March, the Company published the outcome of a report from Professor Hamid Mumin on work carried out for Kavango at Brandon University, Canada. Dr Mumin identified a possible high potential Banded Iron Formation (BIF) hosted Lode Gold model at the Ditau Project. Dr. Mumin's findings were based on logging of historic thirdparty drill core from a previous Kimberlite Project.
Kavango considers Target i10 could represent a large-scale, continuous system. This and other models including Iron oxide copper-gold ("IOCG") continue to offer potential at Ditau. Moving forward, the Company will continue to investigate this lead with a particular focus on seeking a JV partner.
In August, Kavango released a new NI43-101-standard Report for Ditau in Botswana. The report was completed by internationally recognised mining advisor, SLR and recommends next steps for Kavango's exploration at Ditau. SLR concluded that Ditau is an attractive early-stage exploration project with the potential to host a variety of mineralisation styles warranting a systematic exploration effort consisting of detailed geophysical surveying and a significant amount of drilling. Prospective mineralisation targets include Banded Iron Formation ("BIF")-hosted orogenic gold, IOCG, and Rare Earth Element ("REE")-bearing carbonatites.
Over the next 12 months, in Botswana, we will continue to focus on exploring Tier 1 copper assets. Our immediate plan is to complete the current round of geophysics, followed by drilling two holes, each approximately 1,000 meters deep. The results from this will guide our next steps in exploration. If feasible, we aim to secure a joint venture partner. In Zimbabwe, the business has two main components: exploration and mining. On the exploration side, we will continue to advance our work at Hillside and Nara, with the goal of defining mineable mineral resources. On the mining front, we will increase production at Hillside through modern mechanized mining techniques. At Nara, our focus will be on processing the dump, assuming we proceed with exercising the option to acquire the project.
On publishing this annual report, Kavango should be weeks away from receiving final drill results in Zimbabwe. If all goes to plan, I look forward to reporting to shareholders next year, our successful transition from being an exploration company to a modern mechanised miner.
Matthew Benjamin Turney Chief Executive Officer 25 April 2025
David is a solicitor who has worked in corporate finance and the equity capital markets for over 40 years with considerable practical experience of corporate governance, regulatory and compliance issues, and has advised junior mining companies extensively throughout his career. From January 2016 to March 2021, he was a partner in Druces LLP, the Company's solicitors.
Peter is an experienced lawyer who has focused on financing and managing mining companies. He has a strong experience in joint venture negotiations and raising project finance. Peter has raised capital for the development of projects since 1990. He was a founder of Reunion Mining plc which developed a gold mine in Zambia, a copper mine in Zimbabwe and the Skorpion zinc mine in Namibia prior to its takeover by Anglo-American. Peter served until recently as the founding director and chairman of Moxico Resources plc, the majority owner and operator of the producing Mimbula Copper Project in Zambia.
Ben is an experienced participant in London and North America's small cap financial markets. He joined Kavango's board in January 2021 and became CEO in June that year. Since then, he has played the lead role in overhauling the Company's business model. Ben has led all capital raises and managed shareholder relations. He has made key hires to the business, recruited strategic partnerships, and restructured all operations in Botswana, Zimbabwe and London. Ben has played a crucial role in upgrading the Company's exploration strategy and has worked with the board to deliver the Company's strategy.
Hillary was born in Matobo district of Zimbabwe in 1962. He graduated from the University of Zimbabwe (UZ) with a BSc in Geology and Physics (Honours) in 1984. In 1986, he graduated with an MSc Exploration Geophysics (UZ). He worked for Zimbabwe Mining Development Corporation from 1986 to 1990 when he joined Reunion Mining (Zimbabwe) Ltd until 1999. He has worked as a geophysical consultant for a number of companies in Africa and the Middle East such as Mawarid Mining and Rockover Resources. He was involved in the exploration and evaluation of Rockover's Dokwe Gold Project in Zimbabwe. He has been involved in a number of discoveries which include chrome at Anglo America's Inyala mine, Zimbabwe, Maligreen gold deposit and many kimberlites in Zimbabwe. In 2009 he setup 3D Earth Exploration in Botswana, a geophysical contracting and consulting company. In 2011, with Mike Moles he set up Kavango Minerals to explore for iron ore and base metals in Botswana. He is a Zimbabwean citizen, with Botswana residence status.
Donald has led numerous successful financings of mining ventures and has significant experience working in Zimbabwe and elsewhere in Africa. He was Finance Director of Reunion Mining PLC from 1994 until its takeover in 1999. He was Finance Director of Cluff Mining PLC(which became Ridge Mining PLC) from 2000 until 2009. He served as Finance Director of Mwana Africa PLC from 2009 until 2013 and served on the Board of Mwana's subsidiary companies in Zimbabwe, Feda Rebecca Gold Mine and Bindura Nickel Corporation. He was a founding director of Tertiary Minerals and remains on the company's Board. Donald has more than 30 years of experience in all financial aspects of the resources industry. His experience includes the economic evaluation of gold and base metal mines and the arrangement of project finance for feasibility studies and mine development.
Alex is a trained geologist currently working as a Mining Analyst at Peel Hunt, covering small and mid-cap mining companies listed in London. She originally trained as a geologist, working with Kavango's Consultant Geologist Dave Catterall on the Zone 5 copper discovery in the Kalahari Copper Belt, Botswana. Alex has previously worked in Bank of Montreal (BMO)'commodities and in various analytical and consulting roles at Wood Mackenzie.
The Directors present their strategic report on the group for the year ended 31 December 2024.
Kavango Resources Plc ("the Company") is a public limited company which is listed on the main market of the London Stock Exchange and incorporated and domiciled in the United Kingdom. Its registered address is Salisbury House, London Wall, Suite 425, London UK EC2M 5PS.
The Company is the parent company of Kavango Minerals (Pty) Ltd and Kanye Resources (Pty) Ltd, registered and domiciled in Botswana. The Company also owns 90% of Ashmead Holdings (Pty) Ltd, and Icon-Trading Company (Pty) Ltd and indirectly 90% of Shongwe Resources (Pty) Ltd, all registered and domiciled in Botswana. The Company owns 100% of Kavango Zimbabwe (Private) Limited and indirectly 100% of Kavango Mining (Private) Limited, both registered and domiciled in Zimbabwe.
The principal activity of the Company and its subsidiaries (the "Group") is mining and exploration for base and precious metals in Botswana and Zimbabwe.
Details of the Company's strategy, exploration activities, results and prospects are set out in the Chairman's Statement and in the Operations Report on pages 7 to 15.
The Directors were pleased to welcome an investment in the year of £3.8 million by Purebond Limited and Peter Wynter Bee, which allowed the Company to launch its Capital Investment & Financing Programme ("Cap Ex Programme") to develop the Company's mining projects in Zimbabwe. The Cap Ex Programme comprises of staged capital raises for investment into specific value-generating projects. A further £6.5 million was raised via subscription from a combination of new and existing shareholders post year end.
As a result of this the Company has been able to design a capital expenditure programme to enhance existing small scale gold production and undertake exploration drilling across its four highest ranked targets.
The Directors have identified the following principal risks in regard to the Group's future. The relative importance of risks faced by the Group can, and is likely to, change as the Group executes its strategy and as the external business environment evolves.
The Group's strategy may not deliver the results expected by shareholders. The Directors regularly monitor the appropriateness of the strategy, taking into account both internal and external factors, together with progress in implementing the strategy, and modify the strategy as may be required based on developments and exploration results. Key elements of this process are the Group's monthly reporting and regular Board meetings.
The Group has six core exploration assets being licences covering the Kalahari Copper Belt ("KCB"), Kalahari Suture Zone ("KSZ") Project, and Ditau in Botswana, covering an area totalling 14,227.06 km2 and options over claims covering the Hillside, Leopard, and Nara projects in Zimbabwe covering an area totalling 13.03 km2 . This totals a large area, together in excess of 14,240.09km2 , and also covers two countries, which the Board considers significantly mitigates against this risk. The Board understands the importance of regularly reviewing its strategy and regularly assessing other opportunities in the Botswana and Zimbabwe market and/or internationally.
Exploration at the KCB, KSZ, Ditau, Hillside, Leopard, and Nara Projects may not result in the discovery of economically viable mineral deposits.
Whilst the Directors endeavour to apply what they consider to be the latest technology to assess projects, the business of exploration for and identification of minerals and metals, is speculative and involves a high degree of risk. The mineral and metal potential of the Group's projects may not contain economically recoverable volumes of minerals, base metals, or precious metals of sufficient quality or quantity. To mitigate this risk, the Group continues to evaluate
additional opportunities, and where possible and appropriate, to acquire options over ground to enable some exploration to be conducted before completing an acquisition.
Even if there are economically recoverable deposits, delays in the construction and commissioning of mining projects or other technical difficulties may make the deposits difficult to exploit. The exploration and development of any project may be disrupted, damaged, or delayed by a variety of risks and hazards which are beyond the control of the Group. These include (without limitation) geological, geotechnical, and seismic factors, environmental hazards, technical failures, adverse weather conditions, acts of God and government regulations or delays.
Exploration is also subject to general industrial operating risks, such as equipment failure, explosions, fires and industrial accidents, which may result in potential delays or liabilities, loss of life, injury, environmental damage, damage to or destruction of property and regulatory investigations. The Group may also be liable for the mining activities of previous miners and previous exploration works. Although the Group intends, itself or through its operators, to maintain insurance in accordance with industry practice, no assurance can be given that the Group or the operator of an exploration project will be able to obtain insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any such claims. The Group may elect not to become insured because of high premium costs or may incur a liability to third parties (in excess of any insurance cover) arising from pollution or other damage or injury.
The company's technical team is experienced in mining vein-hosted gold in Zimbabwe, and continuously work to continuously assess risk to production, the ongoing economic viability of operations, and to the safety and wellbeing of those working on site. As the company continues to grow, we have implemented proactive risk management strategies, focusing on environmental, operational, and safety concerns. We engage in regular training programs for our workforce to ensure adherence to best practices and safety protocols. By fostering a culture of risk awareness and resilience, we remain committed to minimizing potential disruptions and enhancing the safety and efficiency of our mining activities.
In relation to the Group's existing projects the environmental impact to date is limited to activities associated with mining and exploration. The ultimate development of any project into a mining operation will inevitably impact considerably on the local landscape and communities. Some of these projects sit in an area of considerable natural beauty, or in areas where local communities are engaged in artisanal mining, and therefore there could be opposition to mining by some parties. This may impact on the cost and/or the Group's ability to sell or move these projects into production.
While the Group believes that its operations and future projects are currently, and will be, in substantial compliance with all relevant material environmental and health and safety laws and regulations, including relevant international standards, there can be no assurance that new laws and regulations, or amendments to, or stringent enforcement of, existing laws and regulations will not be introduced.
Nevertheless, the Group will continue to vigorously apply international standards to the design and execution of any and all of its activities, including engagement and consultation with local communities, and non-governmental and Governmental organisations to ensure any impacts of current and future activities are minimised and appropriately managed. The Group has established a comprehensive suite of health, safety, environmental and community policies which will continue to underpin all future activities.
The successful exploration or exploitation of natural resources on any project will require significant capital investment. The sources of financing currently available to the Group are through the issue of additional equity capital in the Company or through bringing in partners to fund exploration and development costs. The Group's ability to raise further funds will depend on the success of their investment strategy and conditions in financial and commodity markets. The Group may not be successful in procuring the requisite funds on terms which are acceptable to it (or at all) and, if such funding is unavailable, the Group may be required to reduce the scope of its investments or anticipated expansion.
The licences and operations of the Group are in jurisdictions outside the United Kingdom and accordingly there will be a number of risks which the Group will be unable to control. Whilst the Group will make every effort to ensure it has robust commercial agreements covering its activities, there is a risk that the Group's activities will be adversely affected by economic and political factors such as the imposition of additional taxes and charges, cancellation or suspension of licences and changes to the laws governing mineral exploration and operations. An increase in import duties could pose an inflation risk on supply of materials.
The Group's activities will be dependent upon the grant of appropriate licences, concessions, leases, permits, and regulatory consents that may be withdrawn or made subject to limitations. There can be no assurance that they will be granted or renewed or if so, on what terms. There is also the possibility that the terms of any licence may be changed other than as represented or expected.
The Group is dependent upon its executive management team and various technical consultants. While it has entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions.
Nevertheless, through programmes of incentivising staff, appropriate succession planning, and good management these risks can be largely mitigated.
The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that cannot be insured against or third-party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond its control, including geological, geotechnical, and seismic factors, environmental hazards, industrial accidents, occupation and health hazards and weather conditions or other acts of God.
In addition to the current principal risks identified above and those disclosed in note 26 to the financial statements, the Group's business is subject to risks relating to the financial markets and commodity markets. The buoyancy of both the aforementioned markets can affect the ability of the Group to raise funds for exploration. The Group has identified certain risks pertinent to its business including:
Human Resources and Management:
The Directors regularly monitor such risks, using information obtained or developed from external and internal sources, and will take actions as appropriate to mitigate these. Effective risk mitigation may be critical to the Group in achieving its strategic objectives and protecting its assets, personnel, and reputation. The Group assesses its risk on an ongoing basis to ensure it identifies key business risks and takes measures to mitigate these. Other steps include regular Board review of the business, monthly management reporting, financial operating procedures, and antibribery management systems. The Group reviews its business risks and management systems on a regular basis.
The ongoing performance of the Group is managed and monitored using the following key financial and nonfinancial indicators ("KPIs") on a monthly basis:
Where any KPI shows a variance early action is taken to identify the causes and to address the issue. The Directors are satisfied with the Group's performance for the year as the Group is either on track or ahead of its licence spending commitments and has been able to control costs despite inflationary pressures. The Company has continued to successfully raise finance to support its working capital requirements and exploration programme.
The Company's capital consists of ordinary shares which rank pari passu in all respects which are traded on the Main Market of the London Stock Exchange. There are no restrictions on the transfer of securities in the Company or restrictions on voting rights and none of the Company's shares are owned or controlled by employee share schemes. There are no arrangements in place between shareholders that are known to the Company that may restrict voting rights, restrict the transfer of securities, result in the appointment or replacement of Directors, amend the Company's articles of association or restrict the powers of the Company's Directors, including in relation to the issuing or buying back by the Company of its shares or any significant agreements to which the Company is a party that take effect after or terminate upon, a change of control of the Company following a takeover bid or arrangements between the Company and its Directors or employees providing for compensation for loss of office or employment (whether through resignation, purported redundancy or otherwise) that may occur because of a takeover bid.
The task force on climate-related financial disclosures ("TCFD") aim to provide investors, lenders, and other stakeholders with information necessary to assess climate-related risks and opportunities. The Group takes various actions throughout local operations to mitigate the potential impacts of the Group's activities. The Directors recognise the benefits of disclosing climate-related financial information.
Increasing global recognition of the need for urgent climate action is driving the demand for certain 'critical' minerals. The Group businesses can contribute to the clean energy transition, as explores and producers of minerals needed for renewable energy infrastructure, energy storage systems and electric vehicles production. As a part of this critical and transitions minerals supply chain, the Group are committed to the ethical, safe and responsible production of mineral products.
At Kavango, we recognise the extensive science revealing the scale of the climate challenge that we face as a global society. The Paris Agreement has been ratified by 194 nation states and the European Union, including all parties to the United Nations Framework Convention on Climate Change, and represents over 98% of global greenhouse gas emissions – showing the extent of global recognition of this threat. As a mineral exploration company and early stage producer, the Group has just started the process to inform our business on how best to support the objectives of the Paris Agreement through the lifetime of our assets.
Our Board, together with its standing committees, and specifically the ESG Committee, has oversight of our work on climate change and decarbonisation, as a material strategic and governance issue. The Board oversees the company's approach to managing climate change risk and delivering on related commitments, recognising:
• Reality – that as a minerals exploration company and early stage producer, the scope of our systems are necessarily simple and specific to the exploration and operating context to which our business is exposed.
Our Chief Executive Officer, together with our Executive Management, is accountable for executing our approach to climate change. Reflecting the early stage focus of our business, as a mineral exploration company and early stage producer, our team's performance is linked to successful identification of minerals, and economic mineral deposits. We are continuing to develop our performance recognition and reward systems and intend that climate-related key performance indicators will form part of short and long-term incentive plans. This will help to drive outcomes that protect and create long-term value.
In 2025 the Group undertook its first formal materiality assessment and in parallel have commenced an extensive upgrade of its enterprise risk management register, to inform on the double materiality elements of climate change:
The outcomes of these processes will inform objectives and key performance indicators specific to the business and any material aspects related to climate change.
As part of the materiality assessment, the Group have applied leading practices including inviting a cross section of key stakeholders including investors, employees, Board members, management and others, to formally participate. The process, lead by an independent external consultant, is a strategic exercise designed to identify material environmental, social and governance (sustainability) topics for disclosure and ongoing management by the business. The process draws on internal documentary sources and perspectives, as well as international sustainability reporting standards and corporate practice. Topics will be assessed against views of the significance of our economic, environmental, and social impacts – in line with good reporting practice - incorporating outputs from:
It is intended that the finalised materiality matrix will be validated by senior management, with routine reviews as part of corporate disclosure undertakings, being utilised to assess frequency of update of the materiality assessment.
Within the Group, our inaugural climate change action plan has been designed to advance activities to understand the processes and extent of the Group's activities as contributors to climate change, as well as the potential impacts of climate change on the Group activities. The plan will be updated every three years to ensure its continued evolution with our business and the environment.
Our approach to climate change, informing our climate change action plan, is driven by these key themes:
| Integrity and governance | Climate risks and opportunities | Management, monitoring and reporting |
|---|---|---|
| Business Governance | Identifying the Impacts | Business Integration |
| • Board Sustainability |
• High level climate |
• Energy and emissions |
| Committee mandate | scenario modelling and |
tracking |
| analysis |
| • Executive Management frameworks • Key performance indicators Strategic Risk Management Frameworks • Enhancement of enterprise risk management system • Inaugural materiality survey and related benchmarking |
• Transition risk assessment • Physical risk assessment Exploring Opportunities • Opportunities assessment • Energy supply security assessment • Energy supply contracts |
• Scope 1 and 2 energy use and emissions reporting • Opportunities advancement • Other TCFD related reporting Managing Impacts • Business continuity planning |
|---|---|---|
Within the Group, the enhancements that we are making will allow climate-related risks and opportunities to be identified, like all strategic risks, as an integral part of our Enterprise Risk Management and Materiality processes. These processes will be complemented by supporting processes to understand:
As part of our inaugural climate change action plan, we have undertaken to complete high level climate scenario modelling to obtain a view of climate-related risks for the Group businesses and key parts of our supply chain.
Exposure to physical hazards will be based on third-party verified and credible global climate data and climate model providers including sources utilised by the World Bank Climate Knowledge hub and the World Resources Institute Aqueduct. Physical risks will initially be assessed in a high-emissions climate scenario in line with the Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathway (RCP 8.5). This scenario provides a robust assessment of potential impacts, as it goes beyond the global base case assumption of at least 2°C of warming and assumes more severe physical impacts, allowing us to stress test exposure of our assets and resilience to physical climate change.
From this process, we expect to identify climate hazards of concern to our business that will inform further business actions, development of more detailed business continuity plans, and as applicable to the business, transition planning.
In line with the recommendations of the Task Force on Climate- Related Financial Disclosures (TCFD), the Group expects that as a result of the processes that we have commenced under our inaugural climate change action plan, that during the three-year plan period, we will be in a position to commence reporting on energy use and emissions. Key performance indicators that we expect to track and report on include:
Data this is compiled will be subject to analysis to as to inform strategic decisions and investments via our capital allocation framework, including those which support our climate change commitments. Investment decisions to drive decarbonisation within our business and sphere of influence, consider project returns and portfolio value, in the context of prevailing and future carbon pricing and the output of the Group's risk assessments.
Kavango is a production and exploration business focussed on gold and copper, operating in Zimbabwe and Botswana. Kavango's long term strategy is the exploration and development of low technical risk gold and copper projects and to bring them into production. Until there is a regular income stream the Company is dependent upon raising funds for its continued operation. The nature of the business is important to the understanding of the Company by its members, employees and suppliers.
The Board understands the importance of regularly reviewing its strategy and of regularly assessing other opportunities in the Botswana and Zimbabwe market and/or internationally. In August 2024, the Company announced that it had designed a capital expenditure programme, which comprises of a number of staged capital raises for investment into specific value-generating projects. The primary objective being to define mineable gold resources and acquire plant and equipment for larger-scale production. A number of exploration work streams have been running in parallel to maximise the speed of growth, and the move into resource drilling. As Kavango's business grows and the Company establishes a track record of success, the board anticipates accessing other pools of capital to fund growth.
The Company engages regularly with its shareholders to ensure that its strategy, operational results and financial performance are clearly understood. Kavango engages with shareholders via roadshows, attending investor conferences and through regular reporting on the London Stock Exchange ("LSE"). The Company regularly takes part in investor conferences, both in the UK and internationally. LSE announcements include details of the website, X (formerly Twitter) account and include phone numbers to contact the Company and its professional advisors. Kavango is committed to conducting business in an ethical and honest manner in all the jurisdictions in which it operates and to implementing and enforcing systems that ensure bribery is prevented. The Company has a strict policy regarding anti-bribery and corruption.
The full Corporate Governance policy can be found on the Company website. www.kavangoresources.com
The impact of the Company's activities on its stakeholders, employees and suppliers and the likely impact of operations on the environment and local communities are of foremost importance to the directors when making business decisions.
Engagement with local communities is dependent on jurisdiction and the stage of development but is typically by public forum or with local or regional leaders, including site visits and workshops. Wherever possible, local communities are engaged in safe geological operations and support functions required for field operations and the delivery of Kavango's strategy, for the wider economic benefit of the local communities in the areas in which the Kavango group has a presence, which it believes is vital to the success of the Company.
The Company is committed to continually improving community development and community investment programmes through monitoring, measuring, and managing its social and economic impacts, placing local people at the centre of development by helping to build their capacity to control their own development. Community initiatives have included assistance to a rural school and sponsorship of a local football team.
The Company seeks to maximise local employment; the Botswana based team are all Botswana nationals, and in excess of 90% of the Zimbabwe team are Zimbabwean nationals.
Kavango strives to develop strong relationships with local governments and forge government partnership for socioeconomic diversification and mine development in rural areas, whilst always conforming to its core values.
The welfare and safety of the Group's employees, workforce, contractors and suppliers is of paramount importance to the directors and executive team who oversee and strictly enforce the Company safety policy across the Group. Employee training focuses on operating safely and considerately.
Kavango is committed to acting professionally and fairly for the benefit of its members as a whole, in pursuit of the success of the company. Kavango is committed to acting with integrity in all its business dealings and relationships, whilst striving for excellence by adhering to the highest ethical principles, demonstrating unwavering integrity through its actions and committing to sustainable practices in all aspects of the business.
This Strategic Report was approved by the Board of Directors and is signed on its behalf by:
Matthew Benjamin Turney Director 25 April 2025
The Directors present their annual report on the affairs of the Group and Company, together with audited financial statements, for the year ended 31 December 2024.
A review of the current and future development of the Group's and Company's business is included in the Operational Report.
Details of subsequent events after the year end are disclosed in note 29 to the financial statements.
The Directors do not propose a dividend in respect of the year ended 31 December 2024 (2023: none).
The Directors of the Company who served during the year and up to the date of signing this report are as follows:
David Smith Matthew Benjamin (Ben) Turney Hillary Gumbo Brett Grist (resigned 29 May 2024) Peter Wynter Bee Jeremy S. Brett (Resigned 27 May 2024) Donald McAlister (appointed 6 June 2024) Alexandra Gorman (appointed 6 June 2024)
Directors' interests in the ordinary share capital of the Company at the date of this report are disclosed within the Directors' Remuneration Report.
The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were made during the year and remain in force at the date of this report
Details of the use of financial instruments and associated risk management by the Group are included in note 26 to the financial statements.
As of 10 April 2025 (being the closest relevant data for which data has been provided), the Company had been notified, in accordance with chapter 5 of the Disclosure Guidance and Transparency Rules or via disclosures under s.793 of the Companies Act, of the following voting rights of 3% or more in its issued share capital:
| Party name | Number of ordinary shares | % of share capital |
|---|---|---|
| Purebond Limited | 2,140,222,639 | 70.20% |
| Peter Wynter Bee* | 264,347,338 | 8.67% |
| Total | 2,404,569,977 | 78.87% |
*Includes shares held by Wynter Bee Resources Limited
Total shares in issue: 3,048,706,821
Details of the capital structure of the Company are included in the Strategic Report and note 22 to the financial statements.
Given the nature of its activities which can include airborne geophysics and the operation of drill rigs, the Group is conscious of greenhouse gas emissions. The Directors are mindful of their responsibilities in this regard and strive to seek opportunities where improvements may be made. Examples of actions on this include installation by the Company of solar power and battery storage for its office and exploration camp in Zimbabwe. The Company is exempt from the Streamlined Energy and Carbon Reporting (SECR) requirements since its energy consumption is less than 40,000 kWh per annum.
The consolidated and company financial statements have been prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have considered all relevant available information about the current and future position of the Group, including the Group's cash position and the budgeted level of spending on exploration and corporate activities. The Directors are satisfied that following the successful completion of fundraising in January 2025, which raised gross proceeds of US\$ 8,160,000, the Group has sufficient cash reserves to sustain the minimum level of exploration spending that is required as part of licence conditions and minimum corporate overheads activities for a period of not less than 12 months from the date of signing these financial statements. Therefore, the Directors continue to adopt the going concern basis of accounting in the preparation of the financial statements.
The Group made no political donations during the year (2023: none).
Each Director in office at the date of approval of this report has confirmed that:
The Group's auditors, PKF Littlejohn LLP, have indicated their willingness to continue in office and, on recommendation of the Audit and Risk Committee, a resolution that they should be re-appointed will be proposed at the annual general meeting of the Company.
The Corporate Governance Report forms part of this report.
This report sets out the information the company and the Group are required to disclose in the Directors' report in compliance with the Companies Act, the Financial Conduct Authority's Listing Rules (Listing Rules), the Disclosure Guidance and Transparency Rules (DTRs), and the Quoted Companies Alliance (QCA) Code. This report should be read in conjunction with the Strategic Report set out on pages 17 to 23 and the Corporate Governance Report set out on pages 26 to 34. Together, the Strategic Report, this Directors' Report, and other sections of the Corporate Governance report incorporated by reference, when taken as a whole, form the Management Report as required under Rule 4.1.5R of the DTRs.
This Directors' Report was approved by the Board of Directors on 25 April 2025 and is signed on its behalf by;
Matthew Benjamin Turney Director
This report forms part of the Strategic Report.
The Chairman of the Board of Directors of Kavango has a responsibility to ensure that Kavango has a sound corporate governance policy and an effective Board.
As a company listed on the Main Market, the Company is not required to comply with the provisions of the UK Corporate Governance Code. However, the Board is committed to maintaining high standards of corporate governance and, so far as appropriate given the Company's size and the constitution of the Board, looks to comply with the QCA Code.
In light of the Company's size and recent history, during the year, the Company has deviated from the QCA Code in the respects outlined below. The Board continues to review its governance arrangements, aided by the appointments of Donald McAlister and Alex Gorman as Non-Executive Directors in June 2024. In the year the Company continued its Board Evaluation process. Governance policies were also comprehensively reviewed.
The Board considers that the Company complies with the QCA code so far as is practicable having regard to the size, nature and current stage of development of the Company.
The Directors are responsible for internal control in the Company and for reviewing effectiveness. Due to the size of the Company, all key decisions are made by the Board. The Directors have reviewed the effectiveness of the Company's systems during the period under review and consider that there have been no material losses, contingencies or uncertainties due to weaknesses in the controls.
Details of the Company's business model and strategy are included in the Chairman's Statement, the Operations Report, and the Strategic Report.
The sections below set out how the Group applies the principles of the QCA Code and sets out areas of noncompliance.
The Company is involved with gold production in Zimbabwe and precious and base metal exploration in Botswana and Zimbabwe. Our goal is to deliver long term value for our shareholders. We aim to do this by identifying high calibre grassroots and early-stage exploration projects and advancing these. Consequently we:
Early-stage mineral exploration is by its nature speculative, and we aim to reduce the risks inherent in the industry by careful application of funds throughout individual projects. We do this by:
Key challenges include:
The Company is committed to engaging with its shareholders to ensure that its strategy, operational results, and financial performance are clearly understood. We engage with our shareholders via online presentations, roadshows, attending investor conferences and through our regular reporting on the London Stock Exchange. LSE announcements include details of the website, X (formerly known as Twitter) page and include phone numbers to contact the Company and its professional advisors.
The Annual General Meeting ("AGM") continues to be available as a forum for dialogue between retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. Subject to travel limitations all Directors endeavour to attend the AGM and to be available to answer questions raised by shareholders. The results of the AGM are announced via the London Stock Exchange. In addition, the Executive Directors regularly attend investor forums specific to the mining industry and engage with shareholders at those events.
Investors can contact us via our website (https://www.kavangoresources.com/) or by email at
[email protected]. Retail shareholders also regularly attend investor evenings held by our broker or other industry bodies and we publicise our attendance via LSE announcements and X (formerly known as Twitter). In addition, our corporate presentations are made available on our website.
The Directors actively seek to build a relationship with institutional shareholders. Shareholder relations are managed primarily by the Directors. The Directors make presentations to institutional shareholders and analysts throughout the year through events such as the 121 Group. We also have ad-hoc meetings with our shareholders via conference calls, online presentations, and email. The Board as a whole is kept informed of the views and concerns of major shareholders by the Chief Executive Officer. Any significant investment reports from analysts are also circulated to the Board. The Non-Executive Chairman is available to meet with major shareholders if required to discuss issues of importance to them and is considered to be independent from the executive management of the Company.
Aside from our shareholders, our most important stakeholder groups are our employees, local partners and those local communities that may be impacted by our exploration activities. The Board is regularly updated on stakeholder
issues and their potential impact on our business to enable the Board to understand and consider these issues in decision-making. The Board understands that maintaining the support of all its stakeholders is paramount for the long-term success of the Company. The operational team make contact with landowners and residents prior to commencing work in an area and aim to maintain open dialogue. Regular briefings and meetings are held with incountry government officials from the Ministry of Mineral Resources, Green Technology and Energy Security in Botswana, and the Ministry of Mines and Mining Development in Zimbabwe, as well as civic leaders.
We maintain only a small permanent staff in Botswana and Zimbabwe, and a very small team in the UK. Employee engagement with the Directors is frequent with regular calls held with the in-country management. The executive directors regularly visit the project sites and meet the employees, and two directors, including the CEO (as of 2024) reside in Zimbabwe. A third director will move to Zimbabwe in 2025. The Company has sponsored an employee to study internationally for a master's degree, funds professional memberships for appropriate team members, and has funded attendance at conferences.
We empower our employees to work in a mutually respectful and safe environment where they can make suggestions and contribute to the Company's success. Example interactions include health and safety and technical items. The Company is keen to support its workforce, providing training to expand capabilities, and favourable working terms that include support for healthcare. The Company is still at an early stage but has already developed a culture for our in-country operations where employees are mutually respectful, and where gender or ethnicity are no barrier to progression.
Our operations provide employment in remote areas of Botswana and Zimbabwe. Essential to our success is the establishment of close working relationships with local partners. We seek local partners who have a good understanding of the local exploration and mining industry and regulations within the country, and with the capacity and capability to assist with the management and maintenance of the project.
We are mindful of our obligations to the local environment and operate to high levels of health and safety in respect of both our local workers and the local community. Employee training focuses on operating safely and considerately in these communities. Engagement with local communities is dependent on jurisdiction and the stage of exploration but is typically by public forum or with local or regional leaders, including site visits and workshops. Social projects in the local communities are dependent on local needs and also the stage of exploration/level of project investment. Examples of our social projects have included support to local schools including hygiene needs, computer hardware, and prizes, as well as sponsorship of a local football team.
As projects move forward, we will seek to bring in partners who can credibly make the investments move towards the expansion of mine production. In doing so we have regard for their ability and desire to move projects forward, their industry reputation and their commitment to treating the local communities fairly and protecting the environment. We enter agreements that allow us to monitor their activities and have monthly updates on project progress.
The Company has a framework of internal financial controls, the effectiveness of which is regularly reviewed by the Directors and the Audit and Risk Committee, and which was updated in 2024. The key financial controls are:
The Board has ultimate responsibility for the Company's system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity, and risk profile of the Company. The principal elements of the Company's internal control system include:
The Company regularly reviews the effectiveness of its system of internal control, whilst also having regard to its size and the resources available, and extensive improvements to its internal controls have been implemented . As part of the Company's plans, we continue to review a number of non-financial controls covering areas such as regulatory compliance, business integrity, health and safety, and corporate social responsibility. A register of Conflicts of Interest is maintained. Standard Operating Procedures have been developed for any high safety risk activities, and Risk Assessments are carried out for new activities. Safety Performance is measured through key metrics. All employees are made aware on joining of their obligations under anti-bribery and corruption legislation, and this is also reflected in the Company's key contracts.
The Company's risk appetite and risk tolerance are outlined in the Strategic Report on pages 17 to 23.
Having considered commercial needs, Donald McAlister and Alexandra (Alex) Gorman were appointed to the Board as non-executive directors. These appointments became effective on 6 June 2024. Donald McAlister has extensive experience of operating in Zimbabwe and raising funds. Alexandra Gorman has worked as a mining analyst and originally trained as a geologist and worked previously in Botswana. Alex has agreed to take on the full time executive role of Chief Operating Officer, expected to take effect in June 2025.
Brett Grist stepped down from the Board on 29 May 2024 and continued in his role within the Company as Chief Operating Officer and Company Secretary until September 2024. Jeremy Brett stepped down from the Board on 27 May 2024 and continues to work in the capacity of consultant to the Company. In June 2024 Peter Wynter Bee assumed the role of Deputy Chairman.
Following these changes, the Board currently comprises a non-executive chairman, two executive directors and three additional independent non-executive directors. David Smith is the Non-Executive Chairman. During 2024 Deputy Chairman Peter Wynter Bee subscribed to a Convertible Loan Note in the Company as part of the Company's Cap-Ex Programme. In January 2025, following FCA approval of the prospectus, the loan notes were converted into 174,129,156 shares, resulting in a shareholding post the year end of 8.67%. The investment was carried out at arm's length and the Board considers that this does not affect Mr. Wynter Bee's independence as a Director.
The Directors seek to keep their skills up to date through continuing professional development and attending relevant courses. Directors from a technical discipline are encouraged to maintain professional accreditation.
The Board is working to improve balance between independence on the one hand, and knowledge of the Company and industry on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational, as they feel appropriate.
The Company Secretary provides support to the Board on further enhancing compliance with the QCA Code . Onboarding training is provided to newly appointed directors and there is a regular review of Company Policies and reporting.
Non-Executive Director Donald McAlister, has the role of Chair of the Audit and Risk Committee.
For the financial year 2024, the Board met bimonthly, with additional meetings for specific items as required. The agenda is set by the Company Secretary in consultation with the Chairman and Chief Executive Officer. The standard agenda points include:
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. A Register of Conflicts is maintained and is a standard agenda item at each Board meeting. The Directors have access to the Company's advisers, its broker, and its lawyers.
Board meetings are deemed quorate if two Board members are present, provided due notice of such meeting has been given to or waived by the non-attending Directors.
Directors and Officers Liability insurance is maintained for all Directors. Employer's Liability insurance is also in effect.
| The table below sets out Directors' eligible to attend at Board meetings held during 2024: |
|---|
| -------------------------------------------------------------------------------------------- |
| Director | Position | Attendance |
|---|---|---|
| David Smith | Non Executive Chairman (Independent) | 17/17 |
| Peter Wynter Bee | Non-Executive Deputy Chairman | 16/17 |
| Ben Turney | Chief Executive Officer | 13/17 |
| Hillary Gumbo | Executive Director | 12/17 |
| Brett Grist | Chief Operating Officer (resigned 29/5/24) | 5/5 |
| Jeremy S. Brett | Executive Director (resigned 27/5/24) | 0/5 |
| Donald McAlister | Non-Executive Director (appointed 6/5/24) | 9/11 |
| Alexandra Gorman | Non-Executive Director (appointed 6/5/24) | 5/11 |
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, particularly so in the area of precious and base metal exploration and development. All Directors receive regular and timely information on the Company's operational and financial performance, circulated to the Directors in advance of meetings.
The appointments to the Board of Donald McAlister and Alexandra (Alex) Gorman were announced in May 2024 and their appointments as Non-Executive Directors took effect on 6 June 2024. Donald McAlister has led numerous successful financings of mining ventures and has significant experience working in Zimbabwe. Alex Gorman originally trained as a geologist, working in the Kalahari Copper Belt, Botswana.
All Directors have disclosed any significant commitments to the Board and confirmed that they have sufficient time to discharge their duties. The CEO works in excess of 40 hours per week for the Company, and the other Executive Directors regularly work between 10 and 40 hours per week on the Company's business. The Non-Executive Directors regularly spend up to 10 hours per week on the Company's business, and more when needed.
All Directors retire by rotation at regular intervals in accordance with the Company's Articles of Association.
The Directors' biographies can be found on page 16 of this Report and on the Company's website (https://www.kavangoresources.com/about-us/directors-management).
In addition, the following Directors are also directors of the Company's subsidiaries: Hillary Gumbo is a director of Kavango Minerals (Pty) Limited, Shongwe Resources (Pty) Limited, Kavango Zimbabwe (Private) Limited, and Kavango Mining Private Limited; Ben Turney is a director of Kanye Resources (Pty) Limited, Kavango Zimbabwe (Private) Limited, Kavango Mining (Private) Limited, Ashmead Holdings (Private) Limited, and Icon Trading (Private) Limited.
Base salary levels will take into account market data for the relevant role, internal equity , the individual's experience, and their current base salary. Where an individual is recruited at below market norms, they may be realigned over time (e.g., two to three years), subject to performance in the role. Benefits are paid in accordance with the approved Remuneration Policy outlined in the Remuneration Report.
Payment for loss of office would be determined by the Board, taking into account contractual obligations.
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company's expense from lawyers, brokers, and other professional advisors that they deem relevant. In addition, the Directors have direct access to the advice and services of the Company Secretary.
During the financial year ended 31 December 2024 the Board announced a restructuring of the board to meet the future commercial needs of the Company and is achieving measurement of progress relative to objectives.
A detailed strategy defined for the Company is used as a benchmark to measure the performance of the Company and team moving forwards. Progress reviews are held periodically to assess progress against key metrics.
The Board aims to lead by example and do what is in the best interests of the Company, the shareholders and the communities in which it operates. We operate in remote and under-developed areas and ensure our employees understand their obligations towards the environment and in respect of anti-bribery and corruption.
Regular calls attended with senior employees serve to refresh and re-iterate the Company's ethical standards as they apply to the operational issues that are discussed on that call.
All employees are informed of responsibilities with regard to anti-bribery and corruption when they join the Company. Contracts with suppliers also reflect these requirements.
Employees are required to treat each other with respect and to not tolerate any form of discrimination. A formal grievance process is in place, ensuring that employees may voice concerns.
Further information on the corporate culture can be found under principle 3 above.
The Board meets every two months and holds additional ad hoc meetings as and when required. The Board sets direction for the Company through a formal schedule of matters reserved for its decision.
The Board and its Committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting and Board and Committee papers are distributed by the Company Secretary. Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting,which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant Committee and are tracked for action by the Company's management.
The Board is responsible for the long-term success of the Company and for the overall Company strategy. There is a formal schedule of matters reserved to the Board, including approval of exploration projects; approval of the annual and interim results; annual budgets; dividend policy; and Board structure. The Board also monitors the exposure to key business risks.
There is a clear division of responsibility at the head of the Company. The Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction. The Chief Executive Officer is responsible for proposing the strategic focus to the Board, implementing it once it has been approved and overseeing the management of the Company. Together with the Chief Operating Officer and other senior employees, he is
responsible for establishing and enforcing systems and controls, and liaison with external advisors. He has responsibility for communicating with shareholders, assisted by other senior employees.
All Directors receive regular and timely information on the Company's operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. The business reports monthly on its headline performance against its agreed budget, and the Board reviews the monthly update on performance and any significant variances are reviewed at each meeting. Senior executives below Board level are invited to attend Board meetings when deemed appropriate by the Chief Executive or Chairman, to present business updates.
The Audit and Risk Committee is chaired by Donald McAlister since his appointment in June 2024 and includes Peter Wynter Bee and David Smith. The Committee is responsible, amongst other things, for monitoring the Group's financial reporting, external and internal audits and controls, including reviewing and monitoring the integrity of the Group's annual and half-yearly financial statements, reviewing and monitoring the extent of non-audit work undertaken by external auditors, advising on the appointment of external auditors, overseeing the Group's relationship with its external auditors, reviewing the effectiveness of the external audit process and reviewing the effectiveness of the Group's internal control review function. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board. The Audit and Risk Committee gives due consideration to laws and regulations, the provisions of the Quoted Companies Alliance ("QCA") Code and the requirements of the Listing Rules.
Specific risks are set out in the Strategic Report on pages 17 to 23.
The Remuneration Committee is chaired by David Smith and includes Peter Wynter Bee.
Remuneration issues are presented for approval by the full Board, with any conflicted directors abstaining from decision-making as appropriate.
Key remuneration-related activities which occurred during the year included inflation-related increases for all directors, bonus payments for the CEO and COO and Company-wide pay proposals. At the last general meeting of the Company at which a resolution to approve the directors' remuneration report was passed in 2024, the percentage of votes cast was 99.04% for, 0.96% against and 0.001% withheld.
The Company has never declared or paid any dividends on the Ordinary Shares. The Company currently intends to pay dividends on future earnings, if any, when it is commercially appropriate to do so. Any decision to declare and pay dividends will be made at the discretion of the Board and will depend on, among other things, the Company's results of operations, financial condition and solvency and distributable reserves tests imposed by corporate law and such other factors that the Board may consider relevant. The Company's current intention is to retain any earnings for use in its business operations and the Company does not anticipate declaring any dividends in the foreseeable future.
The Company has adopted an Anti-Corruption and Bribery Policy. It applies to the Directors, all employees of the Group, contractors working for the Group and its suppliers. The Board believes that the Group, through its internal controls, has appropriate procedures in place to reduce the risk of bribery and that all employees, agents, consultants, and associated persons are made fully awareof the Group's policies and procedures with respect to ethical behaviour, business conduct and transparency.
The safety of the Group's employees and contractors is critical to its operations.
Kavango aims to prevent all incidents and accidents at its operations and in a reasonably practicable manner and strives to minimise hazards inherent in the working environment.
The Company is committed to providing a working environment that is conducive to good health and safety; managing risks in the workplace and surveillance of workplaces and employees; complying with applicable legal requirements; ensuring that appropriate resources, training and personal protective equipment are provided to improve occupational health and safety; ensuring that employees and contractors have the relevant skills to perform
work-related tasks in a safe manner and that they are aware of their individual health and safety obligations and rights.
Kavango undertakes its mining and exploration activities in a manner that strives to minimise or eliminate negative impacts and maximise positive impacts of an environmental or socio-economic nature. The Company is committed to responsible stewardship of natural resources and the ecological environment.
The Company aims to continually improve its environmental performance and the prevention of pollution, reduce or control the creation, emission or discharge of any type of pollutant or waste and to reduce adverse environmental impacts; the integration of environmental management into management practices throughout the Group, rehabilitate disturbed land as much as possible and protect environmental biodiversity; protect cultural heritage resources; comply with applicable legal requirements; and train and educate employees in environmental responsibilities.
During drilling operations, the Company aims to limit any areas cut or cleared, and to restore these afterwards. Biodegradable drilling fluids are used, and any spills are recorded. The Company is keen to reduce its use of fossil fuels and has installed solar power energy supplies for its exploration camp and offices in Zimbabwe.
Kavango aims to minimise potential negative social impacts while promoting opportunities and benefits for host communities.
The Company is committed to continually improving community development and community investment programmes through monitoring, measuring, and managing its social and economic impacts; placing local people at the centre of development by helping to build their capacity to control their own development. The Company seeks to maximise local employment; all our Botswana based team are Botswana nationals, and in excess of 90% of our Zimbabwe team are Zimbabwean nationals. Community initiatives have included assistance to a rural school, benefiting female education of a disadvantaged community, and provision of computer hardware to a school and sponsorship of a local football team.
Purpose: Kavango Resources is committed to fostering a diverse and inclusive workplace that reflects the communities we operate in and the global nature of our business. This policy outlines our approach to diversity and inclusion, ensuring compliance with the UK Listing Rules and promoting equitable representation at all levels of the company.
Scope This policy applies to all employees, contractors, board members, and executive management of Kavango Resources.
•
Review and Updates: This policy will be reviewed annually to ensure its effectiveness and alignment with regulatory requirements.
The Company communicates with shareholders through the Annual Report and Accounts, full-year, and half-year results announcements, the (AGM) and one-to-one meetings with large existing or potential new shareholders. The Company regularly posts LSE announcements covering operational and corporate matters, such as drilling results and significant changes in ownership positions across projects that it acquires or divests. A range of corporate information (including all Company announcements and a corporate presentation) is also available to shareholders, investors and the public on the Company's corporate website, https://www.kavangoresources.com/ and also on its X (formerly known as Twitter) feed @KAV.
The Board maintains that, if there is a resolution passed at a general meeting with 20% votes cast against, the Company will seek to understand the reason for the result and, where appropriate, take suitable action. Notices of general meetings can be found here: https://www.kavangoresources.com/investor-relations/notices. All 2024 AGM resolutions were passed comfortably. The votes on all resolutions were taken on a show of hands and the proxy votes announced, to ensure that full shareholder representation was reflected.
The Board receives regular updates on the views of shareholders through briefings and reports from investor relations advisors, the CEO, Directors, and the Company's broker. The Company communicates with institutional investors frequently through briefings with management. In addition, analysts' notes and brokers' briefings are reviewed to achieve a wide understanding of investors' views.
The items included in this report are unaudited unless otherwise stated.
At the AGM in 2021 the shareholders of the Company adopted a formal remuneration policy as laid out in the 2020 Annual Report and summarised below.
The Company's policy is to maintain levels of remuneration so as to attract, motivate, and retain Directors and Senior Executives of the highest calibre who can contribute their experience to deliver industry-leading performance with the Company's operations. The Company is nonetheless mindful of the need to balance this objective with the fact that it is in the pre-development/development stage. The Board and senior members of staff continue largely to be remunerated through a combination of modest salaries or fees, and the grant of share options, and as a result the total salaries and fees payable to directors have been unusually modest. As the Company continues to grow it has developed a more long-term and sustainable policy, which continues to align the interests of directors and senior staff with those of shareholders while recognising that new hires will not initially have a significant equity position. Accordingly, it is likely that compensation packages for executive directors in particular will need to move over time to a level more consistent with the market. As the scale of the Company's operations grow it is also likely that executive remuneration will need to rise to a level comparable with that of other international companies in our industry, and to reflect requirements to relocate to local jurisdictions from time to time.
Currently Directors' remuneration is not subject to specific performance targets. The Company is sufficiently small that the Remuneration Committee does not consider it is necessary to impose such targets as a matter of principle but believes that exceptional performance can be rewarded on an ad hoc basis. The Board has not adopted a specific policy with regard to share option grants; nonetheless the use of share options will continue to be an important part of the compensation packages both for executive and non-executive directors, particularly until such time as the Company is generating cash from operations.
During the reporting period the Board considered the remuneration of directors and senior staff and their employment terms and made recommendations on the overall remuneration packages. The Remuneration Committee considers the remuneration of directors and senior staff, in alignment with the Company's policy and makes recommendations to the Board. No Director takes part in any decision directly affecting their own remuneration.
Overall, Directors' emoluments decreased by 12% from 2023 to 2024, as a result of Jeremy Brett and Brett Grist stepping down as directors during the year. However, average directors' emoluments increased by 14% as a result of inflation-related increases for directors across the Group and bonus payments for the CEO and COO. In addition, the CEO's emoluments has increased by 34%. The average increase for all employees across the Group was 15%. At the last general meeting of the Company at which a resolution to approve the directors' remuneration report was passed in 2024, the percentage of votes cast was 99.04% for, 0.96% against and 0.001% withheld. The directors acknowledge and are mindful of their responsibilities regarding the remuneration of directors. The directors are committed to ensuring that remuneration practices align with the interests of shareholders, suppliers and others, and reflect the performance and contributions of the directors. The Board regularly reviews the remuneration framework to ensure it remains competitive and fair.
The Directors who held office during the year and their appointment dates are listed in the Directors' Report on page 16.
All Directors have rolling service contracts with the Company which have notice periods of no more than 12 months on either side. Contracts are available for inspection at the Company's Registered offices.
The fees offered to Directors for the year ended 31 December 2024 consisted of a mix of:
Set out below are the emoluments of the Directors for the year ended 31 December 2024:
| Year to 31 December 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| a. Salary/fees \$ |
b. Taxable benefits \$ |
c. Other items in nature of remuneratio n (incl. annual bonus) \$ |
c. Long term incentive awards) \$ |
e. Pension related benefits \$ |
Total \$ | g. Total Fixed Remunerati on \$ |
h. Total Variable Remunerati on \$ |
||
| Ben Turney | 192,271 | - | 64,090 | - | - | 256,361 | 192,271 | 64,090 | |
| David Smith | 59,103 | - | - | - | - | 59,103 | 59,103 | - | |
| Hillary Gumbo | 63,381 | - | - | - | - | 63,381 | 63,381 | - | |
| Brett Grist | 99,737 | - | 12,818 | - | 2,992 | 115,547 | 102,729 | 12,818 | |
| Peter Wynter Bee | 32,209 | - | - | - | - | 32,209 | 32,209 | - | |
| Jeremy S. Brett | 6,258 | - | - | - | - | 6,258 | 6,258 | - | |
| Donald McAlister | 18,210 | - | - | - | - | 18,210 | 18,210 | - | |
| Alex Gorman | 18,210. | - | - | - | - | 18,210 | 18,210 | - |
For comparison the emoluments of the Directors who served during the year ended 31 December 2023 are set out below:
| Year to 31 December 2023 (restated*) | ||||||||
|---|---|---|---|---|---|---|---|---|
| a. Salary \$ |
b. Taxable benefits. \$ |
c. Other items in nature of remuneration (incl. annual bonus). \$ |
c. Long term incentive awards). \$ |
e. Pension related benefits. \$ |
Total \$ | g. Total Fixed Remuneration \$ |
h. Total Variable Remuneration \$: |
|
| Ben Turney | 126,467 | - | 63,662 | - | - | 190,129 | 126,467 | 63,662 |
| David Smith | 56,206 | - | - | - | - | 56,206 | 56,206 | - |
| Hillary Gumbo | 76,496 | - | - | - | - | 76,496 | 76,496 | - |
| Brett Grist | 126,467 | - | 12,732 | - | 2,626 | 141,825 | 129,092 | 12,732 |
| Peter Wynter Bee | 30,631 | - | - | - | - | 30,631 | 30,631 | - |
| Jeremy S. Brett | 158,281 | - | - | - | - | 158,281 | 158,281 | - |
*The comparative balances for the year-ended 31 December 2023 have been restated to correct for an overstatement of the share based payment charge attributable to directors and to include remuneration of directors received from subsidiaries.
Ben Turney and Brett Grist were awarded bonuses in the period in recognition of their efforts in moving the Company forward. As a result, an element of remuneration was variable however, the majority was fixed as per the above table.
During the year ended 31 December 2024, the Company continued to make payments into a money purchase pension scheme for Brett Grist whilst he remained an employee of the Company. The Company did not make pension contributions for any of the other Directors and did not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors or past Directors.
The Company has not paid any compensation to past Directors for loss of office during the year.
The Directors' interests in share options at the beginning of the financial year or, if later, on the date of the appointment of the person as a director of the company, are presented in the table below.
| Director | Interes t type |
Date of Grant |
Exercise price |
Number | Subject to performance measures? |
Vesting date | Expiry date |
|---|---|---|---|---|---|---|---|
| Hillary Gumbo | Option | 06/11/2018 | £0.025 | 2,400,000 | No | 06/11/2018 | 04/11/2028 |
| Option | 01/05/2019 | £0.025 | 280,000 | No | 01/05/2019 | 01/05/2029 | |
| Option | 01/05/2019 | £0.028 | 500,000 | No | 01/05/2019 | 01/05/2029 | |
| Option | 05/05/2020 | £0.008 | 500,000 | No | 05/05/2020 | 05/05/2030 | |
| Option | 10/08/2021 | £0.075 | 1,000,000 | Exercisable only once the Company's share price has closed at not less than 15 pence on five trading days |
50% vest no earlier than 12 months from grant and 50% vest no earlier than 24 months from grant |
10/08/2028 | |
| Option | 15/3/2023 | £0.03 | 2,820,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
31/10/2023 | 20/01/2030 | |
| Option | 17/11/2023 | £0.011 | 1,500,000 | No | 17/11/2023 | 17/11/2030 |
| Ben Turney | Option | 09/02/2021 | £0.033 | 2,000,000 | No | 50% vest no earlier than 12 months from grant and 50% vest no earlier than 24 |
09/02/2031 |
|---|---|---|---|---|---|---|---|
| Option | 10/08/2021 | £0.075 | 4,500,000 | Exercisable only once the Company's share price has closed at not less than 15 pence on five trading days |
months from grant 50% vest no earlier than 12 months from grant and 50% vest no earlier than 24 months from grant |
10/08/2028 | |
| Option | 15/03/2023 | £0.03 | 5,000,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
15/03/2023 | 20/01/2030 | |
| Option | 15/03/2023 | £0.03 | 5,000,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
31/10/2023 | 20/01/2030 | |
| Option | 17/11/2023 | £0.011 | 40,000,000 | No | 17/11/2023 | 17/11/2030 | |
| David Smith | Option | 09/02/2021 | £0.033 | 1,500,000 | No | 50% vest no earlier than 12 months from grant and 50% vest no earlier than 24 months from grant |
09/02/2031 |
| Option | 15/03/2023 | £0.03 | 2,000,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
31/10/2023 | 20/01/2030 | |
| Option | 17/11/2023 | £0.011 | 1,500,000 | No | 17/11/2023 | 17/11/2030 | |
| Jeremy S. Brett | Option | 04/01/2022 | £0.03 | 3,000,000 | No | 31/10/2023 | 01/12/2028 |
| Option | 15/03/2023 | £0.03 | 3,500,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
31/10/2023 | 20/01/2030 | |
| Option | 17/11/2023 | £0.011 | 2,500,000 | No | 17/11/2023 | 17/11/2030 | |
| Peter Wynter Bee |
Option | 15/03/2023 | £0.03 | 2,000,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
31/10/2023 | 20/01/2030 |
| Brett Grist | Option | 15/03/2023 | £0.03 | 6,000,000 | Exercisable only once the Company's share price has closed at not less than 6 pence on five trading days |
31/10/2023 | 20/01/2030 |
| Option | 17/11/2023 | £0.011 | 2,500,000 | No | 17/11/2023 | 17/11/2030 |
No new share options were awarded to Directors during the year ended 31 December 2024. No share options were exercised by Directors during the year.
The table below shows the Directors interests in shares and warrants, including those held by connected persons, as at year end.
Although there are no shareholding guidelines for Non-Executive Directors, they are each encouraged to hold shares in the Company. The Company believes this provides alignment with the interests of other shareholders and that it does not affect their independence.
| Name of Director | Number of ordinary shares held 31 December 2024 |
Number of ordinary shares held 1 January 2024 |
Number of warrants held 31 December 2024 |
Number of warrants held 1 January 2024 |
|---|---|---|---|---|
| Ben Turney | 17,220,551 | 15,220,551 | - | - |
| Hillary Gumbo | 16,520,137 | 16,520,137 | - | - |
| David Smith | 173,939 | 173,939 | - | - |
| Brett Grist | 2,273,424 | 2,273,424 | - | - |
| Jeremy S. Brett | - | - | - | - |
| Peter Wynter Bee1 | 88,218,182 | 71,468,182 | 5,000,000 | 5,000,000 |
| Alex Gorman | - | - | - | - |
| Donald McAlister | 725,664 | 325,664 | - | - |
1 Including holdings by Wynter Bee Resources Limited
The Directors have not consulted with employees about executive pay but consider that the current remuneration of Executive Directors is consistent with pay and employment benefits across the wider Group.
The Directors have considered the requirement for a UK 10-year performance graph comparing the Group's Total Shareholder Return with that of a comparable indicator. The Directors do not currently consider that including the graph will be meaningful because the Company is not paying dividends and is currently incurring losses. In addition, and as mentioned above, the remuneration of Directors is not currently directly linked to share price performance, and therefore the inclusion of this graph is not considered to be useful to shareholders at the current time. The Directors will review the inclusion of this table for future reports.
The Directors have considered the requirement for a UK 10-year CEO table and UK percentage change table. The Directors do not currently consider that including these tables would be meaningful as remuneration is not currently linked to share price performance, therefore any comparison across years or with the employee group would be significantly skewed and would not add any information of value to shareholders. The Directors will review the inclusion of this table for future reports.
The Directors have considered the requirement to present information on the relative importance of spend on pay compared to shareholder dividends paid. Given that the Company does not currently pay dividends the Directors have not considered it necessary to include such information.
One individual (16.6%) on the board of Kavango Resources is from a minority ethnic background. The board of Kavango does not meet the target on female board members – 16.6% of the board (1/6) is female – and none of the prescribed senior positions on its board of directors are held by a woman.
The Company does not currently have any annual or long-term incentive schemes in place for any of the Directors, other than the share options disclosed above and as such there are no additional disclosures in this respect.
Approved by the Board on 25 April 2024.
David Smith Chairman
The Directors are responsible for preparing the Annual Report, Strategic Report, Directors' Report, Governance Report and Directors' Remuneration Report along with the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK-adopted International Accounting Standards and in conformity with the Companies Act 2006.
Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that year. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies with on the Main Market.
In preparing these financial statements, the Directors are required to:
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed on page 16, confirm that to the best of their knowledge and belief:
This responsibility statement was approved by the Board of Directors on 25 April 2025 and is signed on its behalf by;
Matthew Benjamin Turney Director
We have audited the financial statements of Kavango Resources Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the group's and parent company's ability to continue to adopt the going concern basis of accounting included:
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
| Overall group materiality 2024 | Overall group materiality 2023 | Basis for overall group materiality |
|---|---|---|
| US\$380,000 | US\$395,000 | 2% of gross assets (2023: 2% of |
| gross assets) |
We applied the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. At the planning stage, materiality is used to determine the financial statement areas that are included within the scope of our audit and the extent of sample sizes during the audit.
Our calculated level of overall materiality has decreased from the previous year. This is predominantly due to the decrease in asset balances as a result of exploration assets impaired in the year. We do not consider the inherent risks to have increased and therefore consider materiality based on 2% of gross assets remains appropriate.
We consider gross assets to be the most significant determinant of the group's financial position and performance used by shareholders, with the key financial statement balances being intangible exploration and evaluation assets and cash and cash equivalents. The going concern of the group is dependent on its ability to fund operations going forward, as well as on the valuation of its assets, which represent the underlying value of the group.
The group was audited to a level of overall materiality of US\$380,000 (2023: US\$395,000), the parent company overall materiality was set at US\$379,000 (2023: US\$394,999) with performance materiality set at US\$228,000 (2023: US\$237,000) for the group and US\$220,000 (2023: US\$236,999) for the parent company, being 60% (2023: 60%) of materiality of the group and parent company financial statements as a whole. The performance materiality is based on our assessment of the relevant risk factors, including previous experience of misstatements, management's attitude towards proposed adjustments, and the level of estimation inherent within the group and parent company.
We agreed with the Audit Committee that we would report to the committee all audit differences identified during the course of our audit in excess of our triviality level of US\$19,000 (2023: US\$19,750) for the group and US\$19,000 (2023: US\$19,749) for the parent company as well as differences below that threshold that we believe warranted reporting on qualitative grounds.
In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we considered the areas involving significant accounting estimates and judgements by the directors, and including future events that are inherently uncertain, in particular the carrying value of intangible assets and the carrying value of investments in subsidiaries and recoverability of intercompany receivables (parent company only). We also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Procedures were then performed to address the risks identified and for the most significant assessed risks of material misstatement, the procedures performed are outlined below in the Key audit matters section of this report.
An audit was performed on the financial information of the group's material operating components which, for the year ended 31 December 2024, were located in the United Kingdom, Botswana and Zimbabwe, with the group's accounting functions being based in the UK and Botswana.
The Botswanan and Zimbabwean components were audited by component auditors operating under our instruction. The audits were performed both for consolidation purposes as well as local statutory purposes. There was regular interaction with the component auditors during all stages of the audit, and we were responsible for the scope and direction of the audit process.
Component performance materiality applied ranged between US\$170,000 and US\$70,000 (2023: US\$176,401 and US\$60,600) with component misstatement reporting threshold between US\$17,000 and US\$7,000 respectively (2023: US\$14,700 and US\$5,050).
We obtained and reviewed remotely the key audit working papers prepared by the auditors of the Botswanan and Zimbabwean components, which related to the work performed on the significant risks identified at group level. The component auditors provided their findings to us which were reviewed and challenged accordingly.
The approach detailed above gave us sufficient appropriate evidence for our opinion on the group financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key Audit Matter | How our scope addressed this matter | ||||
|---|---|---|---|---|---|
| Classification and carrying value of Intangible Assets - Note 13 |
|||||
| The Group has material intangible assets in relation to capitalised exploration and evaluation costs in respect of its Botswanan assets totalling \$14.1m as at 31 December 2024 (2023: \$14.6m). The exploration projects are at an early stage of development and value in use cannot be reliably estimated given the stage of a risk that the carrying value of these assets have not been correctly measured in accordance with IFRS 6 Exploration and Evaluation of Mineral Resources if impairment indicators are not appropriately identified and an impairment recorded. There is also the risk that additions to intangible assets during the year have been inappropriately capitalised and not in accordance with the Group's accounting policy or IFRS 6. This risk is considered a key audit matter given the |
Our work in this area included: • Confirmation that the Group has good title to the applicable exploration licences; • A critical review of management's impairment indicator assessment paper and challenging key assumptions therein, as well as undertaking our own assessment on a project-by-project basis using the impairment indicators within IFRS 6; • For legal rights that are due to expire within the going concern period, challenging management on whether there are any events and circumstances that would cause the renewal of such legal rights to be denied and ensure that these legal rights are considered when assessing indicators of impairment. • A review of component auditor's work in respect of costs capitalised during the year under review, including the considerations made in respect of their appropriateness for capitalisation in accordance with the Group's |
||||
| material balance at year end and high level of judgement and estimation required to assess the valuation of these assets each year. |
accounting policy and IFRS 6 recognition criteria; and • Ensuring disclosures made in the financial statements in relation to critical accounting judgements are adequate and in line with our understanding of the group and its activities. |
||||
| The directors made the strategic decision to reduce the licence area within the KSZ region in Botswana. This action was taken to enable a more targeted and efficient exploration programme concentrated on the remaining licences. Consequently, the accumulated exploration expenditure associated with the 10 licences that have been assessed as no longer holding prospects for further exploration has been fully written off. As a result, an impairment charge amounting to US\$ 2,737,000 has been recognised in profit or loss. |
|||||
| We consider the judgements and estimates applied to be reasonable and management's assessment of the classification and carrying value of intangible assets to be appropriate. |
| Carrying value of the investments in subsidiaries and recoverability of intercompany receivables (Company only) – Note 17 Investments in subsidiaries and intercompany loans are significant assets in the Company's accounts, totalling \$24.1m as at 31 December 2024 (2023: \$16.9m). Given the continuing losses there is a risk that the investments in subsidiaries and intercompany loans may not be fully recoverable. This risk is considered a key audit matter given that management judgement is required in determining the recoverable value of these investments and intercompany receivables which is linked to the future success of exploration activities and profitability of the subsidiaries |
Our work in this area included: • Obtaining confirmation of ownership of the investments; • Assessing the recoverability of the investments and intercompany receivables by reference to the underlying subsidiaries exploration projects in conjunction with the review of indicators of impairment in respect of those projects as set |
||||
|---|---|---|---|---|---|
| out above. • Undertaking a review of the impairment assessment for investments/intercompany receivables prepared by management and challenging key inputs and estimates included therein; and • Ensuring disclosures made in the financial statements in relation to critical accounting judgements are adequate. Based on the procedures performed, we consider management's assessment of the carrying value of investments in subsidiaries and recoverability of intercompany receivables to be reasonable. |
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities.This description forms part of our auditor's report.
We were appointed by the Board of Directors on 20 March 2018 to audit the financial statements for the period ending 31 December 2017 and subsequent financial periods. Our total uninterrupted period of engagement is 8 years, covering the periods ending 31 December 2017 to 31 December 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the group or the parent company and we remain independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Daniel Hutson (Senior Statutory Auditor) 15 Westferry Circus For and on behalf of PKF Littlejohn LLP Canary Wharf Statutory Auditor London E14 4HD
25 April 2025
| 31 Dec | 31 Dec | ||
|---|---|---|---|
| Notes | 2024 US\$'000 |
2023 US\$'000 |
|
| Continuing operations | |||
| Revenue | 445 | - | |
| Cost of sales | (484) | - | |
| Gross loss | (39) | - | |
| Administrative expenses | (1,863) | (2,063) | |
| Pre-licence exploration costs | 7 | (3,977) | (1,153) |
| Impairment of exploration assets | 13 | (2,737) | - |
| Other gains/(losses) – gain/(loss) on fair value of financial assets | 42 | (77) | |
| Loss from operating activities | (8,574) | (3,293) | |
| Finance income | 5 | 31 | - |
| Finance expense | 6 | (119) | - |
| Loss before taxation | 8 | (8,662) | (3,293) |
| Taxation | 10 | - | - |
| Loss for the year attributable to owners of the parent | (8,662) | (3,293) | |
| Other comprehensive income | |||
| Items that may be subsequently reclassified to profit or loss: | |||
| Currency translation differences | (219) | 676 | |
| Foreign exchange loss on liquidation of subsidiary | - | (7) | |
| Other comprehensive (loss)/income, net of tax | (219) | 669 | |
| Total comprehensive loss for the year attributable to owners of the parent | (8,881) | (2,624) | |
| Earnings per share from continuing operations attributable to owners of the parent: |
|||
| Basic and diluted loss per share (cents) | 11 | (0.59) | (0.45) |
| 31 Dec | 31 Dec | ||
|---|---|---|---|
| Notes | 2024 US\$'000 |
2023 US\$'000 |
|
| Assets | |||
| Non-current assets | |||
| Property, plant, and equipment | 12 | 940 | 352 |
| Intangible assets | 13 | 14,071 | 14,586 |
| Total non-current assets | 15,011 | 14,938 | |
| Current assets | |||
| Inventories | 103 | - | |
| Trade and other receivables | 18 | 1,801 | 928 |
| Loan receivables | 15 | 571 | - |
| Financial assets at fair value through profit or loss | 16 | 418 | 378 |
| Cash and cash equivalents | 19 | 1,105 | 3,393 |
| Total current assets | 3,998 | 4,699 | |
| Total assets | 19,009 | 19,637 | |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | 20 | 712 | 1,284 |
| Convertible loan notes | 21 | 4,763 | - |
| Total current liabilities | 5,475 | 1,284 | |
| Total liabilities | 5,475 | 1,284 | |
| Net assets | 13,534 | 18,353 | |
| Equity | |||
| Share capital | 22 | 1,989 | 1,663 |
| Share premium | 22 | 29,338 | 25,789 |
| Share option reserve | 23 | 1,860 | 1,673 |
| Warrant reserve | 24 | 465 | 609 |
| Foreign exchange reserve | (569) | (350) | |
| Reorganisation reserve | (1,591) | (1,591) | |
| Accumulated losses | (18,144) | (9,626) | |
| Equity attributable to owners of the company | 13,348 | 18,167 | |
| Non-controlling interests | 25 | 186 | 186 |
| Total equity | 13,534 | 18,353 |
The notes of page 55 to 85 form part of these financial statements.
The consolidated financial statements of Kavango Resources Plc, company registered number 10796849, were approved by the board, and authorised for issue on 25 April 2025 and signed on its behalf by:
…………………… Matthew Benjamin Turney Director
| 31 Dec 2024 |
31 Dec 2023 |
||
|---|---|---|---|
| Notes | US\$'000 | US\$'000 | |
| Assets | |||
| Non-current assets | |||
| Property, plant, and equipment | 12 | 2 | - |
| Investment in subsidiaries | 17 | 24,108 | 16,856 |
| Total non-current assets | 24,110 | 16,856 | |
| Current assets | |||
| Trade and other receivables | 18 | 1,152 | 759 |
| Loan receivables | 15 | 571 | - |
| Financial assets at fair value through profit or loss | 16 | 418 | 378 |
| Cash and cash equivalents | 19 | 580 | 3,205 |
| Total current assets | 2,721 | 4,342 | |
| Total assets | 26,831 | 21,198 | |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | 20 | 354 | 1,065 |
| Convertible loan notes | 21 | 4,763 | - |
| Total liabilities | 5,117 | 1,065 | |
| Net assets | 21,714 | 20,133 | |
| Equity | |||
| Share capital | 22 | 1,989 | 1,663 |
| Share premium | 22 | 29,338 | 25,789 |
| Share option reserve | 23 | 1,860 | 1,673 |
| Warrant reserve | 24 | 465 | 609 |
| Foreign exchange reserve | (474) | (140) | |
| Accumulated losses | (11,464) | (9,461) | |
| Total equity | 21,714 | 20,133 |
The notes of page 55 to 85 form part of these financial statements.
Under s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own statement of comprehensive income. The loss after tax for the year ended 31 December 2024 was US\$ 2,147,000 (2023: US\$ 3,205,000).
The financial statements of Kavango Resources Plc, company registered number 10796849, were approved by the board, and authorised for issue on 25 April 2025 and signed on its behalf by
…………………… Matthew Benjamin Turney Director
| Equity attributable to owners of the company | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Share capital |
Share premium |
Reorganisation reserve |
Share option reserve |
Warrant reserve |
Foreign exchange reserve |
Accumulated losses |
Shares to be issued |
Total | Non controlling interests |
Total equity |
|
| US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | |
| As at 31 December 2022 | 904 | 19,296 | (1,591) | 913 | 650 | (1,019) | (6,464) | 7 | 12,696 | - | 12,696 |
| Loss for the year | - | - | - | - | - | - | (3,293) | - | (3,293) | - | (3,293) |
| Other comprehensive loss for the year: | |||||||||||
| Foreign currency exchange difference | - | - | - | - | - | 669 | - | - | 669 | - | 669 |
| Total comprehensive loss for the year | - | - | - | - | - | 669 | (3,293) | - | (2,624) | - | (2,624) |
| Warrants issued | - | (90) | - | - | 90 | - | - | - | - | - | - |
| Warrants lapsed | - | - | - | - | (131) | - | 131 | - | - | - | - |
| Issue of ordinary shares | 759 | 6,838 | - | - | - | - | - | - | 7,597 | - | 7,597 |
| Costs of share issues | - | (255) | - | - | - | - | - | - | (255) | - | (255) |
| Share-based payments – expensed |
- | - | - | 760 | - | - | - | (7) | 753 | - | 753 |
| Non-controlling interest on acquisition of subsidiary (note 25) |
- | - | - | - | - | - | - | - | - | 186 | 186 |
| Total transactions with owners | 759 | 6,493 | - | 760 | (41) | - | 131 | (7) | 8,095 | 186 | 8,281 |
| As at 31 December 2023 | 1,663 | 25,789 | (1,591) | 1,673 | 609 | (350) | (9,626) | - | 18,167 | 186 | 18,353 |
| Loss for the year | - | - | - | - | - | - | (8,662) | - | (8,662) | - | (8,662) |
| Other comprehensive loss for the year: | |||||||||||
| Foreign currency exchange difference | - | - | - | - | - | (219) | - | - | (219) | - | (219) |
| Total comprehensive loss for the year | - | - | - | - | - | (219) | (8,662) | - | (8,881) | - | (8,881) |
| Warrants lapsed | - | - | - | - | (144) | - | 144 | - | - | - | - |
| Issue of ordinary shares | 326 | 3,584 | - | - | - | - | - | - | 3,910 | - | 3,910 |
| Costs of share issues | - | (35) | - | - | - | - | - | - | (35) | - | (35) |
| Share-based payments – expensed |
- | - | - | 187 | - | - | - | - | 187 | - | 187 |
| Total transactions with owners | 326 | 3,549 | - | 187 | (144) | - | 144 | - | 4,062 | - | 4,062 |
| As at 31 December 2024 | 1,989 | 29,338 | (1,591) | 1,860 | 465 | (569) | (18,144) | - | 13,348 | 186 | 13,534 |
| Share Capital: | Amount subscribed for share capital at nominal value |
|---|---|
| Share Premium: | Amount subscribed for share capital in excess of nominal value |
| Reorganisation Reserve: | Reserve created on issue of shares on acquisition of subsidiaries |
| Foreign Exchange Reserve | Cumulative translation differences |
| Accumulated Losses: | Cumulative net gains and losses recognised in the consolidated statement of comprehensive income |
| Share Option Reserve: | Cumulative fair value of the charge for share options outstanding |
| Shares to be issued: | Amount of shares the Company has committed to issue |
| Warrant Reserve: | Cumulative fair value charge over the vesting period of warrants outstanding |
| Share Capital |
Share Premium |
Share Option Reserve |
Warrant Reserve |
Foreign Exchange Reserve |
Accumulated losses |
Shares to be issued |
Total | |
|---|---|---|---|---|---|---|---|---|
| US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | US\$'000 | |
| As at 31 December 2022 | 904 | 19,296 | 913 | 650 | (885) | (6,387) | 7 | 14,498 |
| Loss for the year | - | - | - | - | - | (3,205) | - | (3,205) |
| Other comprehensive loss for the year: | ||||||||
| Foreign currency exchange difference | - | - | - | - | 745 | - | - | 745 |
| Total comprehensive loss for the year | - | - | - | - | 745 | (3,205) | - | (2,460) |
| Warrants issued | - | (90) | - | 90 | - | - | - | - |
| Issue of ordinary shares | - | - | - | (131) | - | 131 | - | - |
| Costs of share issues | 759 | 6,838 | - | - | - | - | - | 7,597 |
| Share-based payments – expensed |
- | (255) | - | - | - | - | - | (255) |
| Share-based payments – capitalised |
- | - | 760 | - | - | - | (7) | 753 |
| Total transactions with owners | 759 | 6,493 | 760 | (41) | - | 131 | (7) | 8,095 |
| As at 31 December 2023 | 1,663 | 25,789 | 1,673 | 609 | (140) | (9,461) | - | 20,133 |
| Loss for the year | - | - | - | - | - | (2,147) | - | (2,147) |
| Other comprehensive loss for the year: | ||||||||
| Foreign currency exchange difference | - | - | - | - | (334) | - | - | (334) |
| Total comprehensive loss for the year | - | - | - | - | (334) | (2,147) | - | (2,481) |
| Warrant lapsed | - | - | - | (144) | - | 144 | - | - |
| Issue of ordinary shares | 326 | 3,584 | - | - | - | - | - | 3,910 |
| Costs of share issues | - | (35) | - | - | - | - | - | (35) |
| Share-based payments – expensed |
- | - | 187 | - | - | - | - | 187 |
| Total transactions with owners | 326 | 3,549 | 187 | (144) | - | 144 | - | 4,062 |
| As at 31 December 2024 | 1,989 | 29,338 | 1,860 | 465 | (474) | (11,464) | - | 21,714 |
| Share Capital: | Amount subscribed for share capital at nominal value |
|---|---|
| Share Premium: | Amount subscribed for share capital in excess of nominal value |
| Foreign Exchange Reserve: | Cumulative translation differences |
| Accumulated Losses: | Cumulative net gains and losses recognised in the company statement of comprehensive income |
| Share Option Reserve: | Cumulative fair value of the charge for share options outstanding |
| Shares to be issued: | Amount of shares the Company has committed to issue |
| Warrant Reserve: | Cumulative fair value charge over the vesting period of warrants outstanding |
| Notes | 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Loss before taxation | (8,662) | (3,293) | |
| Adjustments for: | |||
| Impairment of exploration assets | 13 | 2,737 | - |
| Depreciation | 144 | 12 | |
| Share option expense | 23 | 187 | 753 |
| Expected credit loss allowance on amounts due from shareholder | 347 | - | |
| Fair value adjustments | 16 | (47) | 77 |
| Finance income | 5 | (31) | - |
| Finance expense | 6 | 119 | - |
| Exchange gain on liquidation of subsidiary | - | (7) | |
| Net cash used in operating activities before changes in working capital | (5,206) | (2,458) | |
| (Increase)/decrease in trade and other receivables | (571) | 204 | |
| Increase/(decrease) in trade and other payables | 109 | (28) | |
| Increase in inventories | (103) | - | |
| Net cash used in operating activities | (5,771) | (2,282) | |
| Cash flows from investing activities | |||
| Payments for property, plant and equipment | (794) | (259) | |
| Loans advanced to third parties | 15 | (628) | - |
| Loans repaid from third parties | 15 | 70 | - |
| Payments for intangible assets | 13 | (2,299) | (3,315) |
| Payments for intangible assets (deferred consideration) | 14 | (678) | - |
| Payment for Hillside Project acquisition held in escrow | 18 | (650) | - |
| Payments for financial assets at fair value through profit or loss | - | (445) | |
| Bank interest received | 18 | - | |
| Net cash used in investing activities | (4,961) | (4,019) | |
| Cash flows from financing activities | |||
| Proceeds from issue of share capital | 22 | 3,910 | 7,597 |
| Share issue costs | 22 | (35) | (255) |
| Proceeds from issue of convertible loan notes | 21 | 4,644 | - |
| Net cash generated from financing activities | 8,519 | 7,342 | |
| Net (decrease)/increase in cash and cash equivalents | (2,213) | 1,041 | |
| Cash and cash equivalents at beginning of year | 3,393 | 2,265 | |
| Effects of exchange rates on cash and cash equivalents | (75) | 87 | |
| Cash and cash equivalents at end of year | 1,105 | 3,393 | |
Note 16 discloses significant non-cash transactions in relation to the Group's investing activities.
| Notes | 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Loss before taxation | (2,147) | (3,205) | |
| Adjustments for: | |||
| Share based payment expense | 23 | 187 | 753 |
| Impairment of subsidiaries | 118 | 641 | |
| Expected credit loss allowance on amounts due from shareholder | 22 | 347 | - |
| Fair value adjustments | (47) | 77 | |
| Finance income | 5 | (31) | - |
| Finance expense | 6 | 119 | - |
| Net cash used in operating activities before changes in working capital | (1,454) | (1,734) | |
| (Increase)/decrease in trade and other receivables | (102) | 214 | |
| Decrease in trade and other payables | (12) | (107) | |
| Net cash used in operating activities | (1,568) | (1,627) | |
| Cash flows from investing activities | |||
| Payments for financial assets at fair value through profit or loss | - | (445) | |
| Payments for property, plant and equipment | (3) | - | |
| Acquisition of subsidiaries | 14 | (678) | (1,039) |
| Payment for Hillside Project acquisition held in escrow | 18 | (650) | - |
| Loans advanced to third parties | (628) | - | |
| Loans repaid third parties | 70 | - | |
| Loans advanced to group companies | 17 | (7,856) | (3,315) |
| Bank interest received | 18 | - | |
| Net cash used in investing activities | (9,727) | (4,799) | |
| Financing activities | |||
| Proceeds from issue of share capital and warrants | 22 | 3,910 | 7,597 |
| Share issue costs | 22 | (35) | (255) |
| Proceeds from issue of convertible loan notes | 21 | 4,644 | - |
| Net cash generated from financing activities | 8,519 | 7,342 | |
| Net (decrease)/increase in cash and cash equivalents | (2,776) | 916 | |
| Cash and cash equivalents at beginning of year | 3,205 | 2,214 | |
| Effects of exchange rates on cash and cash equivalents | 151 | 75 | |
| Cash and cash equivalents at end of year | 580 | 3,205 |
Kavango Resources Plc (the "Company") is a public limited company listed on the main market of the London Stock Exchange and incorporated and domiciled in England. Its registered address is Salisbury House, London Wall, Suite 425, London United Kingdom EC2M 5PS.
The Company is the ultimate parent company of Kavango Minerals (Pty) Ltd ("Kavango Botswana"), and Kanye Resources (Pty) Ltd ("Kanye"), registered and domiciled in Botswana. The Company also owns 90% of Shongwe Resources (Pty) Ltd ("Shongwe"), Ashmead Holdings (Pty) Ltd ("Ashmead") and Icon-Trading Company (Pty) Ltd ("Icon"), all registered and domiciled in Botswana. The Company owns 100% of Kavango Zimbabwe (Private) Limited, a company registered and domiciled in Zimbabwe which in turn owns 100% of Kavango Mining (Private) Ltd.
In order to simplify the corporate structure, Navassa Resources Ltd, a fully-owned holding company, was liquidated on 4 June 2024.
The principal activity of the Company and its subsidiaries (the "Group") is exploration for base and precious metals in Botswana and Zimbabwe.
The consolidated and company financial statements have been prepared in accordance with UK-adopted International Accounting Standards ("IAS") and in conformity with the requirements of the Companies Act 2006 and in accordance with Listing Rules. The consolidated and company financial statements have also been prepared under the historical cost convention, except for revaluation of certain financial instruments.
The consolidated and company financial statements are presented in US Dollars ("US\$"), which is the Group's and Company's presentational currency rounded to the nearest thousand unless otherwise stated.
The preparation of financial statements in conformity with IAS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.
The consolidated and company financial statements have been prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have considered all relevant available information about the current and future position of the Group, including the Group's cash position and the budgeted level of spending on exploration and corporate activities. The Directors are satisfied that following the successful completion of fundraising in January 2025, which raised gross proceeds of US\$ 8,160,000, the Group has sufficient cash reserves to sustain the minimum level of exploration spending that is required as part of licence conditions and minimum corporate overheads activities for a period of not less than 12 months from the date of signing these financial statements. Therefore, the Directors continue to adopt the going concern basis of accounting in the preparation of the financial statements.
There were no new standards, amendments or interpretations effective for the first time for periods beginning on or after 1 January 2024 that had a material effect on the consolidated or company financial statements.
At the date of approval of these financial statements, there were no new standards or amendments to IAS which have not been applied in these financial statements which were in issue but not yet effective and are expected to have a material impact on the consolidated and company financial statements.
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group.
All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
Non-controlling interests in subsidiaries are identified separately from equity attributable to the owner of the Company. On acquisition of subsidiaries, non-controlling interests are measured at their proportionate share of the fair value of the acquiree's identifiable net assets. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests.
In the company financial statements, equity investments in Company's subsidiaries are stated at cost, which is the fair value of the consideration paid, less any impairment provision. The investment in subsidiaries balance on the Company's statement of financial position also includes the carrying value of long-term intercompany loans which are measured in accordance with note 2(n) 'Financial assets'.
The Group generates revenue from its mining contract in Zimbabwe. Revenue is recognised at a point in time when the Group satisfies its performance obligation by transferring fine gold to a customer. The transfer occurs when the customer obtains control of the fine gold. Revenue is measured at the fair value of the consideration received, excluding value added taxes or duty.
The functional currency for each entity, or for each branch within an entity, in the Group is the currency of the primary economic environment in which the entity operates. The consolidated and company financial statements are presented in US\$, which is the Group's and Company's presentational currency.
The functional currency of the Company is GBP.
Transactions in currencies other than the functional currency of each entity are recorded at the exchange rate on the date the transaction occurred. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are recognised in profit or loss.
On consolidation, the results of each entity in the Group with a non-US\$ functional currency are translated into US\$ at rates approximating to those ruling when the transactions took place. All assets and liabilities of these entities are translated at the rate ruling at the reporting date. The resulting exchange differences are recognised in other comprehensive income and accumulated in the foreign exchange reserve.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker ("CODM"). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Cost of sales comprise of direct costs incurred to fulfil the mining contract in Zimbabwe.
Income tax expense represents the sum of the current tax and deferred tax charge for the year.
Current tax payable is based on the taxable profit for the year calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. None of the entities in the Group generate taxable profits.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases and is accounted for using the balance sheet liability method.
Deferred tax is calculated at the tax rates that have been enacted or substantively enacted and are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Judgement is applied in making assumptions about future taxable income, including nickel prices, production, rehabilitation costs and expenditure to determine the extent to which the Group recognises deferred tax assets, as well as the anticipated timing of the utilisation of the losses.
Exploration costs incurred prior to the Group obtaining exploration legal rights are recognised in profit or loss as they are incurred. When the Group enters into an option agreement to acquire a licence, all associated option costs and exploration expenditure incurred prior to the option being exercised are treated as pre-licence exploration costs and included in profit or loss.
Inventories consist of fine gold to be sold and consumables. Inventories are carried at the lower of cost and net realisable value.
In addition, a number of amendments to accounting standards have become applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.
The Group capitalises expenditure in relation to exploration and evaluation of mineral assets when the legal rights are obtained. Expenditure included in the initial measurement of exploration and evaluation assets, and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling to evaluate the technical feasibility and commercial viability of extracting a mineral resource and other in country supporting activities. The Group capitalises staff costs of employees directly involved in the exploration activities of the Group except for employee share option charges.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas. Whenever the exploration for and evaluation of mineral resources does not lead to the discovery of commercially viable quantities of mineral resources or the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to profit or loss.
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following rates:
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation charge on assets that are directly involved in exploration activities are capitalised as exploration intangible assets.
Financial assets are classified at initial recognition into one of the categories listed below, depending on the purpose for which the asset was acquired.
Financial assets held at amortised cost comprise trade and other receivables, loan receivables, and cash and cash equivalents.
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (e.g., trade receivables), but also incorporate other types of financial assets where the objective is to hold their assets in order to collect contractual cash flows and the contractual cash flows are solely payments of the principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions for trade and other receivables are recognised based on the simplified approach within IFRS 9 Financial Instruments using the lifetime expected credit losses ("ECL") method. During this process the probability of the non-payment of the receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime ECL for the receivables. For trade and other receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administrative expenses in the statement of comprehensive income. On confirmation that the trade or other receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
For loan receivables, a lifetime ECL is recognised when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the loan receivable has not increased significantly since initial recognition, the loss allowance is measured at an amount equal to 12-month ECL.
Financial assets held at fair value through the profit or loss comprise equity investments held. These are carried in the statement of financial position at fair value. Subsequent to initial recognition, changes in fair value are recognised in profit or loss.
Cash and cash equivalents comprise of cash at hand and in bank.
Financial liabilities include convertible loan notes, trade and other payables including deferred consideration. All financial liabilities are recognised initially at fair value, net of transaction costs incurred, and are subsequently stated at amortised cost, using the effective interest method.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss.
An equity instrument is any contract that evidences a residual interest in the assets of a company after deducting all of its liabilities. Equity instruments issued are recorded at the proceeds received net of direct issue costs.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. Depending on the nature of the goods or services received and in accordance with the relevant accounting policy, the share-based payment expense is either recognised in profit or loss, capitalised as Exploration and Evaluation asset or recognised as deduction in share premium. A corresponding increase in the warrant reserve or share option reserve is also recognised.
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The grant date fair value of share-based payment awards granted to employees and others providing similar services is recognised in profit or loss, with a corresponding increase in the share options reserve, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Market vesting conditions are factored into the fair value of the award at grant date. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
When share-based payments awards are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital and the share premium account. The fair value of the awards exercised or forfeited prior to vesting and previously recognised in the share options reserve or warrants reserve is transferred to accumulated losses for capital maintenance purposes.
In the application of the accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions which affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. The estimates and associated assumptions are based on historical experience, expectations of future events and other factors that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the revision is made.
The carrying value of exploration assets in the consolidated financial statements as at 31 December 2024 is US\$ 14,071,000 (2023: US\$ 14,586,000) which was impaired during the year by US\$ 2,737,000 (2023: \$nil). The recoverability of this carrying value, and thus potential further impairment, requires use of significant judgments and estimates which are detailed in note 13.
In the company financial statements, the carrying value of the Company's investment in subsidiaries and intragroup receivables is US\$ 24,108,000 (2023: US\$ 16,856,000). The recoverability of this balance, whether through joint venture partnership, divestment, or commencement of production, is driven by the same judgements and uncertainties as the recoverability of the exploration and evaluation assets held by the subsidiaries and discussed in note 13.
In the consolidated and company financial statements, the carrying value of the amount due from shareholders is US\$ 287,000 (2023: US\$ 637,000). The Directors are satisfied that this balance is recoverable if the shares are to be reissued to a different shareholder at a prevailing market price thus no further expected credit loss provision is necessary. Further details are included in note 22.
The Group previously had two reportable segments, Exploration and Corporate, which are the Group's strategic divisions. In the year ended 31 December 2024, the Group started generating revenue from its mining contract in Zimbabwe, which is considered to be a separate operating segment. For each of the strategic divisions, the Board reviews internal management reports on a regular basis. The Group's reportable segments are:
Exploration: the exploration operating segment is presented as an aggregate of all Botswana and Zimbabwe projects in which the Group has economic interest as well as pre-licence expenditure. Expenditure on exploration activities for each licence is used to measure agreed upon expenditure targets for each licence to ensure the licence exploration commitments are met;
Mining: includes the results of the Group's mining contract operations in Zimbabwe; and
Corporate: the corporate segment includes the Company and intermediate holding companies' costs in respect of managing the Group. This includes the cost of employee share options granted by the Company.
Segmental results are detailed below:
| 31 December 2024 | Mining US\$'000 |
Exploration US\$'000 |
Corporate US\$'000 |
Total US\$'000 |
|---|---|---|---|---|
| Revenue | 445 | - | - | 445 |
| Cost of sales | (484) | - | - | (484) |
| Gross loss | (39) | - | - | (39) |
| Pre-licence exploration costs | - | (3,977) | - | (3,977) |
| Impairment of exploration assets | - | (2,737) | - | (2,737) |
| Administrative and other costs* | - | - | (1,863) | (1,863) |
| Gain on fair value of financial assets | - | - | 42 | 42 |
| Finance income | - | - | 31 | 31 |
| Finance expense | - | - | (119) | (119) |
| Loss before tax | (39) | (6,714) | (1,909) | (8,662) |
| 31 December 2023 | Mining US\$'000 |
Exploration US\$'000 |
Corporate US\$'000 |
Total US\$'000 |
|---|---|---|---|---|
| Pre-licence exploration costs | - | (1,153) | - | (1,153) |
| Administrative and other costs* | - | - | (2,063) | (2,063) |
| Gain on fair value of financial assets | - | - | (77) | (77) |
| Loss before tax | - | (1,153) | (2,140) | (3,293) |
*Results of the corporate segment include a share-based payment charge of US\$ 187,000 (2023: US\$ 753,000) and expected credit loss allowance on amounts due from shareholder of US\$ 347,000 (2023: US\$ nil).
Segmental assets and liabilities are detailed below:
| Non-current assets | Non-current liabilities | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Exploration: intangible assets and equipment (Botswana) | 14,147 | 14,737 | - | - |
| Exploration: equipment (Zimbabwe) | 864 | 201 | - | - |
| Corporate (London and Mauritius) | - | - | - | - |
| Total of all segments | 15,011 | 14,938 | - | - |
| Total assets | Total liabilities | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Exploration (Botswana) | 14,508 | 14,892 | 73 | 175 |
| Exploration (Zimbabwe) | 1,577 | 402 | 285 | 45 |
| Corporate (London) | 2,722 | 4,343 | 5,117 | 1,064 |
| Mining (Zimbabwe) | 202 | - | - | - |
| Total of all segments | 19,009 | 19,637 | 5,475 | 1,284 |
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Interest income from cash and cash equivalents | 18 | - |
| Interest income from loan receivables (note 15) | 13 | - |
| 31 | - |
| 31 Dec | 31 Dec |
|---|---|
| 2024 | 2023 |
| US\$'000 | US\$'000 |
| Interest on convertible loan notes (note 21) 119 |
- |
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Pre-licence exploration costs incurred in Zimbabwe | 3,977 | 1,153 |
The Group has options over several licence areas in Zimbabwe, consisting of the Nara Project, and the Leopard and Hillside Projects. The Group incurs option fees to gain access to the licence areas and perform exploration work to evaluate the potential of each project. The ownership of exploration data collected remains with the licence holders until the options are exercised. Further details on each project can be found in the Operations Report.
The terms of the options are summarised below:
The Nara Project comprises 45 contiguous gold claims. On 26 June 2023, the Company entered into an exclusive two-year option agreement to acquire the claims for US\$ 4,000,000 in cash, plus an earn-out based on a declaration of a codecompliant resource estimate.
The option fee is \$220,000 payable in 6-monthly instalments in advance and as part of the agreement the Company is required to spend a minimum of US\$ 500,000 on exploration in the first year, with a total exploration spend of US\$ 2,000,000 over the option term.
The Hillside Project comprises 44 gold claims, plus additional claims covering an area of 896Ha at Leopard North and Leopard South. On 25 July 2023, the Company entered into an exclusive six-month option agreement, subsequently extended by a further eighteen months until 25 July 2025.
The Company exercised the option over Hillside and Leopard South in April 2024, and extended the Leopard North option until 30 June 2025.
The acquisition of the Hillside Project and Leopard South has not completed by 31 December 2024. The terms of the acquisition are as follows:
The Company may exercise the Leopard North option in return for payment of US\$ 100,000 and the issue of 34,125,000 shares in the Company.
Loss before taxation is stated after charging/(crediting) the following:
| Note | 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|---|
| Depreciation charge, net of amounts capitalised as intangible exploration asset | 144 | 12 | |
| Employee benefit expenses | 9 | 1,436 | 1,235 |
| Auditor remuneration, net of amounts recognised in share premium | 92 | 88 | |
| Cumulative gain on foreign exchange of liquidated subsidiary | - | (7) | |
| Expected credit loss allowance on amounts due from shareholder | 22 | (347) | - |
| Net foreign exchange (gains) and losses | (39) | 15 |
During the year, the Group (including overseas subsidiaries) obtained the following services from the Company's auditors and its associates:
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Fees payable to the Company's auditor and its associates for the audit of the Company and Group financial statements Fees payable to the Company's auditor for other permitted non-audit services: |
86 | 80 |
| - review of interim report |
6 | 8 |
| - permitted services relating to a corporate finance transaction: reporting accountant |
45 | 37 |
| 137 | 125 |
Employee benefit expenses consisted of the following:
| Group | Company | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Wages and salaries | 1,578 | 828 | 547 | 438 |
| Social security costs | 74 | 35 | 28 | 35 |
| Other post-employment benefits | 4 | 3 | 4 | 3 |
| Share-based payment expenses (note 23) | 187 | 760 | 187 | 760 |
| 1,843 | 1,626 | 766 | 1,236 | |
| Less: amounts capitalised as exploration assets | (407) | (391) | - | - |
| Employee benefits recognised in profit or loss | 1,436 | 1,235 | 766 | 1,236 |
The average monthly number of employees during the year was:
| Group | Company | |||
|---|---|---|---|---|
| 31 Dec 2024 No. |
31 Dec 2023 No. |
31 Dec 2024 No. |
31 Dec 2023 No. |
|
| Directors and senior management | 7 | 5 | 6 | 4 |
| Administrative staff | 17 | 2 | - | - |
| Technical personnel | 47 | - | - | - |
| Field personnel | 36 | 36 | - | - |
| Total | 107 | 43 | 6 | 4 |
Further details of Directors' remuneration are included in the Directors' Remuneration Report on pages 35 to 38.
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Current taxation | - | - |
| Deferred taxation | - | - |
| Total tax charge for the year | - | - |
The total tax charge for the year can be reconciled to the loss for the year multiplied by the weighted average applicable tax rate as follows:
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Loss for the year | (8,662) | (3,293) |
| Tax at the applicable rate of 19.5% (2023:22.5%) Expenses not deductible for tax Effect of tax losses not recognised as deferred tax assets |
(1,693) 37 1,656 |
(740) 171 569 |
| Total tax charge for the year | - | - |
The weighted average applicable tax rate of 19.5% (2023: 22.5%) used is a combination of the 25% standard rate of corporation tax in the UK (2023: 23.5%), 22% standard rate of corporation tax in Botswana (2023: 22%), nil corporation tax rate in Mauritius (2023: nil) and the expected tax rate applicable to mining companies in Zimbabwe of 15% (2023: 15%).
The Group has approximately US\$ 12,370,000 (2023: US\$ 7,082,000) of tax losses available to carry forward against future taxable profits. A deferred tax asset has not been recognised because of uncertainty over future taxable profits against which the losses may be used. Tax losses can be carried forward indefinitely.
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Loss for the year from continuing operations | 8,662 | 3,293 |
| 31 Dec 2024 Number |
31 Dec 2023 Number |
|
| Weighted average number of ordinary shares for the purpose of calculating basic and diluted earnings per share |
1,466,177,425 | 732,929,929 |
| 31 Dec 2024 US Cents |
31 Dec 2023 US Cents |
|
| Basic and diluted loss per share attributable to owners of the Company | 0.59 | 0.45 |
The basic and diluted loss per share attributable to owners of the Company are identical as the share options and warrants detailed in notes 23 and 24 are considered to be anti-dilutive due to the loss made for the year.
Property, plant, and equipment consists of exploration field equipment, which includes all fixed assets in Botswana and Zimbabwe, including vehicles used in field activities by geology staff.
| Group | Company | ||||
|---|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
||
| Net book value | |||||
| At 1 January | 352 | 172 | - | - | |
| Additions | 811 | 259 | 3 | - | |
| Disposals | (17) | - | - | - | |
| Depreciation | (200) | (71) | (1) | - | |
| Translation differences | (6) | (8) | - | - | |
| 940 | 352 | 2 | - |
Of the total depreciation charge, US\$ 56,000 (2023: US\$ 59,000) has been capitalised as an intangible exploration asset (note 13). The remainder of the depreciation charge relates to equipment in Zimbabwe and is included in pre-exploration expense (note 7).
Intangible assets comprise entirely of exploration and evaluation assets.
| Group | ||
|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Net book value | ||
| At 1 January | 14,586 | 9,679 |
| Additions | 2,355 | 4,241 |
| Impairment | (2,737) | - |
| Translation differences | (133) | 666 |
| Total | 14,071 | 14,586 |
The additions balance relates to the Group's exploration activity in Botswana. Details on the exploration activity including acquisition of new licences can be found in the Operations Report.
In the year ended 31 December 2024, the additions balance included capitalised depreciation charge of US\$ 56,000 (2023: US\$ 59,000) in relation to property, plant and equipment used in exploration activities. In the year ended 31 December 2023, the additions balance also included the acquisition of Icon and Ashmead subsidiaries for US\$ 1,720,000, which included non-cash consideration (note 14).
Recoverability of the Group's exploration and evaluation assets is dependent on the success of the Group in discovering economic and recoverable mineral resources, especially in the countries of operation where political, economic, legal, regulatory, and social uncertainties are potential risk factors. The future revenue flows relating to these assets is uncertain and will also be affected by competition, relative exchange rates and potential new legislation and related environmental requirements.
The Group's ability to continue its exploration programs and develop its projects is also dependent on its ability to raise sufficient finance in future, which is uncertain. The ability of the Group to continue operating within Botswana and Zimbabwe is dependent on a stable political environment. This may also impact the Group's legal title to assets held which would affect the valuation of such assets. There have been no changes made to any past assumptions.
The Directors have undertaken a review to assess whether the following impairment indicators exist as at 31 December 2024 or subsequently prior to the approval of these financial statements:
As detailed in the Operations Report, the Directors took the decision to reduce the licence area in the KSZ region in Botswana to allow for a more focused exploration programme on the remaining licences. As a result, the accumulated exploration expenditure incurred on the 10 licences that are no longer deemed prospective for further exploration has been written off, leading to an impairment charge of US\$ 2,737,000 recognised in profit or loss (2023:US\$ nil).
The Board is fully committed to continuing exploration on the Group's remaining projects and further details on the progress of the exploration activities can be found in the Operations Report. Notwithstanding this, the Board will continue,
through 2025, to review all projects, to ensure that resources are focussed where there is the greatest opportunity for discovery.
All the Group's prospecting licences in Botswana are subject, after an initial three-year licence term, to biennial renewals by the Department of Mines in Botswana. After an initial two renewal periods the renewal of these becomes subject to the minister's discretion. Further renewals fall due during 2025. To date the Group's prospecting licences have always been renewed, consequently the Company's Directors and management have a reasonable expectation of further renewals being successful.
In respect of the remaining projects, following the above-mentioned impairment review, no indicators were noted that would lead to an impairment on any of these remaining projects.
In November 2023 the Group entered into an agreement with Global Exploration Technologies (Pty) Limited to acquire a 90% interest in six licence areas by acquiring 90% of the issued shares of Icon and Ashmead.
The total consideration was US\$ 1,720,000 and comprised of the following:
The two entities acquired do not meet the definition of a business as defined in IFRS 3 Business Combination and therefore represents an asset purchase, being the interest in the licences.
The consideration was capitalised as intangible exploration assets and included as additions in the year ended 31 December 2023 (note 13). A non-controlling interest has been recognised as a result of this transaction, totalling US\$ 186,000 representing the 10% of the fair value of the licences acquired. Transaction costs of US\$ 27,000 were incurred and added to the cost of the intangible assets acquired.
The total deferred consideration of US\$678,000 was settled in full in during the year ended 31 December 2024.
| Group and Company | |||
|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
||
| Loan advanced to Pambili | 163 | - | |
| Loan advanced to Equity Drilling | 408 | - | |
| 571 | - |
During the year ended 31 December 2024, the Group provided a loan to Pambili Natural Resources Corporation ("Pambili"), a gold exploration company listed in Canada of US\$ 150,000. The loan is unsecured and repayable by no later than 31 January 2025. The loan includes an arrangement fee of US\$ 15,000 which is accounted for as interest with a corresponding interest income of US\$ 13,000 included within finance income. Subsequent to year end, Pambili defaulted on the loan repayment and the loan was refinanced through convertible loan notes as disclosed in note 29.
During the year ended 31 December 2024, the Group provided a US\$ 478,000 loan to its drilling contractor, Equity Drilling Zimbabwe (Pvt) Limited, to facilitate acquisition of drilling equipment in Zimbabwe. The loan is secured against the assets
and is interest-free. The loan is repayable no later than 31 December 2025 and a total of \$70,000 was repaid by 31 December 2024.
| Group and Company | |
|---|---|
| 31 Dec | 31 Dec |
| 2023 | 2024 |
| US\$'000 | US\$'000 |
| 378 | 418 |
Interest in listed entities comprises of the Company's investments in Power Metal Resources PLC ("Power Metals") and Pambili Natural Resources Corporation ("Pambili").
At 31 December 2023, the fair value of Group's investment in Power Metals, an AIM-listed metal exploration company, was US\$ 109,000. The fair value subsequently decreased to US\$ 96,000 as at 31 December 2024 with a loss of US\$ 11,000 recognised in profit or loss. A foreign exchange loss of US\$ 2,000 has also been recognised.
During the year ended 31 December 2023, the Company subscribed to a US\$ 250,000 convertible loan note issued by Pambili, a gold exploration company listed on the TSX Venture Exchange ("TSX-V") in Canada. The convertible loan note was interest-free and convertible at par plus US\$ 75,000 redemption premium into ordinary shares in Pambili at CAD\$0.05 each. The Company served a binding conversion notice to Pambili on 29 November 2023, which would have given the Group 8,925,000 shares representing approximately 16.6% of Pambili's enlarged issued share capital. As at 31 December 2024, the allotment of these shares remained outstanding whilst Pambili completed a linked transaction and sought the necessary approvals from TSX-V. The fair value of the Group's interest in Pambili as at 31 December 2023 was US\$ 269,000.
On 4 July 2024, in order to facilitate the approval of the allotment of shares by TSX-V, the Group agreed to reduce its shareholding from 16.6% to 14.0% with a corresponding reduction in the number to shares to be issued from 8,925,000 to 7,704,910. The shares were subsequently issued and as at 31 December 2024 the fair value of the Group's shares in Pambili was US\$ 322,000 as with the corresponding gain of US\$ 56,000 recognised in profit or loss. A foreign exchange loss of US\$ 6,000 has also been recognised.
The movement in the fair value of the Company's interest in listed entities is detailed below:
| Group and Company | ||
|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| At 1 January Additions |
378 - |
- 445 |
| Gain/(loss) on the change in fair value Translation differences |
47 (7) |
(77) 10 |
| At 31 December | 418 | 378 |
| Company | 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|---|---|---|
| Shares in subsidiaries | 724 | 2,633 |
| Loans to subsidiaries | 23,384 | 14,223 |
| Total | 24,108 | 16,856 |
Loans to subsidiaries are interest free and payable on demand.
Navassa Resources Ltd ("Navassa"), a fully owned intermediate holding company, was dissolved on 4 June 2024. As a result of this transaction, Navassa's shares in, and intercompany receivable from, Kavango Minerals (Pty) Ltd were hived up to the Company and the Company's investment in subsidiaries balance was reduced by \$1,909,000 with an impairment charge of US\$ 114,000 (2023: US\$ 406,000) recognised in the Company's profit or loss.
The Directors conducted an impairment review and are satisfied that the carrying value of US\$ 24,108,000 (2023: US\$ 16,856,000) is reasonable and no further impairment is necessary (2023: US\$ nil). The recoverability of the intercompany balances is intrinsically linked to the value of the underlying exploration assets in Botswana and the exploration potential in Zimbabwe. The Directors are satisfied with the progress made in both countries and, whilst a successful realisation of the Company's investments whether through a joint venture partnership, divestment, or commencement of production is inherently uncertain, the Directors consider that the carrying values are supported by market transactions and available geological evidence.
| Name | Country of incorporation and principal place of business |
Nature of business | Proportion of equity shares held by the Company |
|---|---|---|---|
| Kavango Minerals (Pty) Ltd | Botswana | Mineral exploration | 100% |
| Kanye Resources (Pty) Ltd | Botswana | Mineral exploration | 100% |
| Shongwe Resources (Pty) Ltd | Botswana | Licence holding company | 90% (indirect holding) |
| Ashmead Holdings (Pty) Ltd | Botswana | Licence holding company | 90% |
| Icon-Trading Company (Pty) Ltd | Botswana | Licence holding company | 90% |
| Kavango Zimbabwe (Private) Limited | Zimbabwe | Mineral exploration | 100% |
| Kavango Mining (Private) Ltd | Zimbabwe | Mineral exploration | 100% (indirect holding) |
The registered address of subsidiaries registered in Botswana is Plot 1306, Government Camp, Francistown, Botswana.
The registered address of Kavango Zimbabwe (Private) Limited is 8A Livingston Road, 8th Street Suburbs, Bulawayo, Zimbabwe.
The registered address of Kavango Mining (Private) Ltd is 8A Livingston Road, 8th Street Suburbs, Bulawayo, Zimbabwe.
All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertaking held directly by the parent company does not differ from the proportion of ordinary shares held.
| Group | Company | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Amounts due from shareholders | 287 | 637 | 287 | 637 |
| VAT recoverable | 242 | 107 | 31 | 28 |
| Other receivables and prepayments | 1,272 | 184 | 834 | 94 |
| 1,801 | 928 | 1,152 | 759 |
Other receivables and prepayments include the following:
During the year ended 31 December 2024, the Group advanced a short-term working capital loan to Pambili Natural Resources Corporation ("Pambili"), a gold exploration company listed on the TSX-V in Canada, of US\$ 68,000 (2023: US\$ nil).
In April 2024, the Company exercised the option to acquire the Hillside and Leopard North Projects and transferred the exercise price of US\$ 650,000 into an escrow account. The acquisition has not completed by 31 December 2024 and the funds remained in escrow.
Further details on the amounts due from shareholders is included in note 28.
| Group | Company | ||||
|---|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
||
| Cash in bank | 991 | 3,317 | 580 | 3,205 | |
| Cash in hand | 114 | 76 | - | - | |
| Total | 1,105 | 3,393 | 580 | 3,205 |
| Group | Company | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Trade payables | 205 | 230 | 88 | 145 |
| Accruals and other payables | 485 | 356 | 256 | 224 |
| Deferred consideration (note 14) | - | 681 | - | 681 |
| Other tax and social security | 22 | 17 | 10 | 15 |
| Total | 712 | 1,284 | 354 | 1,065 |
| Group | Company | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Convertible loan notes – principal | 4,644 | - | 4,644 | - |
| Convertible loan notes – accumulated interest | 119 | 119 | ||
| Total | 4,763 | - | 4,763 | - |
In August and December 2024, the Company issued 3,711,668 £1 unsecured convertible loan notes with the principal value of US\$ 4,644,000. The loan notes are repayable in cash 12 months after issue and accumulate interest at 10% per annum. The loan notes are convertible into ordinary shares of the Company, at the option of the holders, at any time subject to the Company publishing an FCA-approved prospectus and the Company having sufficient share authorities to issue such conversion shares. The conversion price is set to be the subscription price achieved in the fundraise in connection with the FCA-approved prospectus. The instrument meets the definition of a financial liability in its entirety.
As disclosed in note 29, after the year-end the Company completed its fundraise at 0.7 pence per share and published the FCA-approved prospectus on 28 January 2025. The convertible loan notes were converted in full into ordinary shares of the Company.
| Number of shares |
Share capital | Share premium | Total | ||
|---|---|---|---|---|---|
| No. | US\$'000 | US\$'000 | US\$'000 | ||
| As at 1 January 2023 | 705,569,314 | 904 | 19,296 | 20,200 | |
| Purebond Placing | 600,000,000 | 759 | 6,838 | 7,597 | |
| Issue costs | - | - | (255) | (255) | |
| Warrants granted | - | - | (90) | (90) | |
| As at 31 December 2023 | 1,305,569,314 | 1,663 | 25,789 | 27,452 | |
| Share issue | 257,113,862 | 326 | 3,584 | 3,910 | |
| Issue costs | - | - | (35) | (35) | |
| As at 31 December 2024 | 1,562,683,176 | 1,989 | 29,338 | 31,327 |
The Company has one class of ordinary shares of 0.1 penny each which entitle the holders to receive dividends as declared from time to time and to vote at meetings of the Company. All ordinary shares rank equally with regard the Company's residual net assets. There are no restrictions on the transfer of shares.
On 16 May 2024, the Company successfully raised £3,085,366 (US\$ 3,910,000) gross proceeds by placing 257,113,862 new ordinary shares at 1.2 pence each.
The total cash received, before issue costs, by the Company for the shares issued during the year ended 31 December 2024 was US\$ 3,909,375 (2023: US \$7,597,000).
In November 2022 the Company raised US\$ 4,164,000 through the issue of 194,444,437 shares and 194,444,437 3p warrants. Of this amount, as at 31 December 2024 and at the date of approval of these financial statements, £500,000 (US\$ 626,000; 2023: US\$637,000) remain outstanding from one subscriber, Arigo Capital. The Directors have concluded that the amounts are unlikely to be recovered from the subscriber and therefore, as permitted by the Company's Articles of Association, the shares will reissued to a different shareholder. The shares will be reissued at the prevailing market price, which as at 31 December 2024 was 0.825 pence and therefore an expected credit loss provision of US\$ 347,000 (2023: US\$ nil) has been recognised in profit or loss to reduce the carrying value of the receivable to US\$ 287,000. The receivable is included within the trade and other receivables balance (note 18).
The Company is party to the following share-based payment arrangements:
The Company also settles some of its capitalised drilling contractor invoices in shares (note 22).
Warrants issued to shareholders as part of fundraising are disclosed in note 24.
Movements in the Share Options Reserve are detailed below:
| Share Options Reserve US\$'000 |
|
|---|---|
| As at 1 January 2023 | 913 |
| Share-based payments – expensed | 760 |
| As at 31 December 2023 | 1,673 |
| Share-based payments – expensed | 187 |
| As at 31 December 2024 | 1,860 |
Share options granted prior to 1 January 2023
In 2018 the Company granted 13,400,000 share options to the Directors and management exercisable at 2.5 pence for a period of 10 years from date of grant.
In 2019 the Company granted 2,600,000 share options to the Directors and management exercisable at 2.8 pence for a period of 10 years from date of grant.
In May 2020 the Company granted 2,725,000 share options to Directors and management exercisable at 0.8 pence for a period of 10 years from date of grant.
None of the share options detailed above had vesting conditions attached to them.
In February 2021 the Company granted 3,500,000 share options to the Directors of the Company exercisable at 3.3 pence per share. The options are subject to the Directors being employed by the Company, with half the options vesting after one year and the remainder vesting after two years.
In June and August 2021, the Company granted options to the Directors and management which are subject to the following performance conditions:
The options are valid for 7 years from the date of grant. Some of these options were subsequently replaced during the year ended 31 December 2023.
In January 2022 the Board made firm commitments to a Director and management to issue further options in January 2022 but with the vesting period commencing on 1 December 2021. These were issued on 4 January 2022 but have a grant date of 1 December 2021 and have been accounted for from that date.
On 3 February 2023, the Company granted 32,820,000 of new options to the Group's Directors, employees and contractors. The Company also amended the vesting conditions and exercise price of 10,000,000 existing share options to align them with the new grant.
The Directors have elected to account for the amendment as a cancellation of the existing options, leading to an accelerated recognition of the remaining option charge of US\$ 200,000 in the period ended 31 December 2023, and treating the replacement options as a new grant.
The new and amended options were valid for 7 years from the date of grant, or 7 years from the date of original grant for the amended options, with the exercise price of 3p.
Of the 42,820,000 new and amended options granted, 37,820,000 are subject the following vesting conditions:
]
The exercise of the options is subject to continuous employment or commercial engagement with the Group on the day of exercise, unless terminated by the Group or the usual 'good leaver provisions' apply. The vesting period of these options is therefore variable and is linked to market-based performance conditions.
The remaining 5,000,000 options were granted to the Company CEO on the same terms as above except there is no continuous employment requirements. Therefore, and in accordance with applicable accounting standard their fair value was recognised in full on the date of grant.
A Monte Carlo model was used to calculate the fair value of the options at the date of grant and, for non-CEO options, to estimate the most likely vesting period. The result of the valuation together with other inputs into the model are detailed below:
| 3 February 2023 | |
|---|---|
| Options | |
| Number of Options | 42,820,000 |
| Share price at the date of grant (pence) | 1.3 |
| Exercise price (pence) | 3.0 |
| Term | 7 years |
| Expected exercise date | On vesting |
| Dividend yield | 0% |
| Annual risk-free rate | 2.98% |
| Volatility | 84.90% |
| Total fair value | US\$ 319,000 |
| Estimated vesting period for non-CEO options | 5 to 7 years |
On 20 November 2023, the Company granted 48,000,000 share options to Directors exercisable at 1.1p per share for a period of 7 years.
The Company also granted 20,000,000 share options to some consultants of the Group exercisable at 1.1p per share for a period of 7 years. These options are issued in tranches, with 2,000,000 options issued immediately and the remaining 4,000,000 and 14,000,000 options issues in 12 and 24 months respectively, subject to continuous commercial engagement with the Group.
The fair value of these share options was calculated using the Black-Scholes pricing model and totalled US\$ 440,000. The inputs in the model are as follows:
| 20 November 2023 | |
|---|---|
| Options | |
| Number of Options | 68,000,000 |
| Share price at the date of grant (pence) | 0.7 |
| Exercise price (pence) | 1.1 |
| Term | 7 years |
| Expected exercise date | On expiry |
| Dividend yield | 0% |
| Annual risk-free rate | 3.96% |
| Volatility | 87.29% |
No new share options were granted during the year ended 31 December 2024.
Summary
| 31 Dec 2024 | 31 Dec 2023 | |||
|---|---|---|---|---|
| Number of Options |
Average exercise price (pence) |
Number of Options |
Average exercise price (pence) |
|
| At 1 January | 146,295,000 | 2.33 | 45,475,000 | 4.24 |
| Granted during the year | - | - | 110,820,000 | 1.83 |
| Cancelled | - | - | (10,000,000) | 5.50 |
| Lapsed | (3,000,000) | 3.00 | - | - |
| At 31 December | 143,295,000 | 2.33 | 146,295,000 | 2.33 |
| Exercisable at 31 December | 74,225,000 | 1.57 | 74,225,000 | 1.57 |
Share options outstanding as at 31 December 2024 have the following expiry dates and exercise prices:
| Scheme | Number of Options |
Weighted average exercise price (pence) |
Weighted average contractual life (years) |
|---|---|---|---|
| 2018 Options | 13,400,000 | 2.80 | 3.85 |
| 2019 Options | 2,600,000 | 2.50 | 4.33 |
| 2020 Options | 2,725,000 | 0.80 | 5.34 |
| 2021 February Options | 3,500,000 | 3.30 | 6.11 |
| 2021 June Options | 4,750,000 | 5.00 | 3.43 |
| 2021 August Options | 8,500,000 | 6.20 | 3.61 |
| 2023 February Options | 39,820,000 | 3.00 | 4.82 |
| 2023 November Options | 68,000,000 | 1.10 | 5.89 |
| Total | 143,295,000 | 2.33 | 5.15 |
A charge of US\$ 187,000 (2023: US\$ 753,000) was recognised in profit or loss in respect of the Company share options.
In April 2021, the Company entered into the partnership agreement with Spectral Geophysics Ltd ("Spectral") for Spectral to conduct a total of 15 time-domain electromagnetic ("TDEM") surveys for the KSZ project. Under the terms of the agreement, Spectral are entitled to up to a total of 3 million warrants exercisable at 4.25p per share for a period of 4 years. The warrants vest in tranches of 1 million each for every 5 completed TDEM surveys. As at 31 December 2024, 1 million (2023: 1 million) warrants are exercisable. The fair value of the warrants issued was based on the fair value of services received and US\$ 92,000 has been capitalised as an intangible exploration asset.
During the year ended 31 December 2022, the Company engaged Tamesis Partners LLP ("Tamesis") to act as financial advisor to the Group. In consideration for the provision of the transaction services, Tamesis were awarded with 8,333,334 warrants exercisable for two years from the date of issuance and with an exercise price of 3p per share. The warrants were valued using the Black Scholes pricing model with a total fair value of US\$ 51,000. The warrants expired unexercised during the year end 31 December 2024.
During the year ended 31 December 2023, the Company issued 14,466,667 broker warrants in connection with the 2022 5p Share placing. The warrants were valued using the Black Scholes pricing model with the significant inputs summarised below:
| 3p warrants | |
|---|---|
| Share price at the date of grant (pence) | 1.85 |
| Exercise price (pence) | 3.0 |
| Dividend yield | 0% |
| Term | 2.0 years |
| Annual risk-free interest rate | 3.03% |
| Volatility | 71.5% |
| Number of warrants issued | 14,466,667 |
| Total fair value of the warrants | US\$ 90,000 |
The fair value of broker warrants was charged against share premium. The warrants expired unexercised during the year end 31 December 2024.
In 2022 the Company issued 75,000,000 warrants to Power Metals to acquire their share of Kanye joint venture consisting of 30 million warrants exercisable at 4.25p, 30 million warrants exercisable at 5.5p and 15 million of variable price warrants where the exercise price is the higher of: 3p, and the Company's actual price at a 15% discount to the volume-weighted average share price on the date of exercise. If all variable price warrants were exercised prior to expiry, Power Metals would have received 15 million replacement warrants, on the same exercise terms and with a 6-month life expiry from issue date.
The fixed exercise price warrants were valued using the Black Scholes pricing model and totalled US\$ 211,000. The value of the 15 million variable price warrants was clearly trivial and they lapsed unexercised on 7 January 2023.
In 2022 the Company issued 2,000,000 two-year warrants to LVR GeoExplorers (Pty) Ltd as part of the acquisition of the licences held in Shongwe Resources (Pty) Ltd. The warrants were valued using the Black Scholes pricing model with a total fair value of US\$ 2,000. The warrants expired unexercised during the year end 31 December 2024.
| Group and Company | ||
|---|---|---|
| 31 Dec | 31 Dec 2023 |
|
| 2024 | ||
| US\$'000 | US\$'000 | |
| At 1 January | 609 | 650 |
| Warrants issued during the year – note 23 | - | 90 |
| Warrants lapsed during the year – note 23 | (144) | (131) |
| At 31 December | 465 | 609 |
Details of the warrants outstanding as at 31 December 2024 are as follows:
| Exercise price | No of Warrants | |||
|---|---|---|---|---|
| Warrants | (pence) | Grant date | Expiry date | outstanding |
| 2021 Spectral Warrants | 4.25 | 20 April 2021 | 20 April 2025 | 1,000,000 |
| 2022 3.0p Placing | 3.00 | 17 November 2022 | 28 February 2025 | 194,444,437 |
| 2022 Power Warrants | 4.25 | 25 November 2022 | 8 January 2025 | 30,000,000 |
| 2022 Power Warrants | 5.50 | 25 November 2022 | 8 January 2025 | 30,000,000 |
| 255,444,437 |
During the year ended 31 December 2024, a total of 24,800,001 warrants lapsed unexercised (2023: 195,435,423). No warrants were exercised during the year (2023: none).
In November 2022 as part of a share placing (note 22) the Company granted 194,444,437 warrants exercisable at 3.0p for a period of 2 years.
Details of other warrants can be found in note 23(b).
After the year-end, all 2022 Power Warrants and all 2022 3.0p Placing Warrants lapsed unexercised in January and February 2025 respectively.
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| At 1 January | 186 | - |
| Addition on acquisition of subsidiaries | - | 186 |
| At 31 December | 186 | 186 |
As at 31 December 2024, the Group has 90% shareholding in Icon, Ashmead and Shongwe. The purpose of these entities is to hold exploration licences in Botswana. Costs incurred in these entities is capitalised as exploration assets. Other comprehensive income attributable to non-controlling interests was US\$ nil (2023: US\$ nil).
| Financial assets | Group | Company | ||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
| Financial assets at amortised cost: | ||||
| Other receivables | 355 | 637 | 287 | 637 |
| Cash and cash equivalents | 1,105 | 3,393 | 580 | 3,205 |
| Loan receivables | 571 | - | 571 | - |
| Loans to subsidiaries | - | - | 23,384 | 14,223 |
| 2,031 | 4,030 | 24,822 | 18,065 | |
| Financial assets at fair value through profit or loss: | ||||
| Interest in listed securities | 418 | 378 | 418 | 378 |
| Total financial assets | 2,449 | 4,408 | 25,240 | 18,443 |
| Financial liabilities | Group | Company | |||||
|---|---|---|---|---|---|---|---|
| 31 Dec | 31 Dec | 31 Dec | 31 Dec | ||||
| 2024 | 2023 | 2024 | 2023 | ||||
| US\$'000 | US\$'000 | US\$'000 | US\$'000 | ||||
| Financial liabilities at amortised cost: | |||||||
| Trade and other payables | 690 | 587 | 344 | 369 | |||
| Deferred consideration | - | 681 | - | 681 | |||
| 690 | 1,268 | 344 | 1,050 |
There is no material difference between the carrying value and fair value of the Group's and Company's cash balances, other receivables, loans receivables, loans to subsidiaries and trade and other payables because of their short maturities.
Some of the Company's financial assets are measured at fair value at the end of each reporting period. Valuation techniques in determining the fair values are divided into three levels based on the quality of inputs.
There were no transfers between fair value hierarchies in the year ended 31 December 2024 (2023: none).
Fair value is determined by reference to unadjusted quoted prices for identical assets and liabilities in active markets where the quoted price is readily available.
The following financial assets are recognised in these financial statements at fair value through profit or loss and are classified within the Level 1 category:
| Group and Company | ||
|---|---|---|
| 31 Dec | 31 Dec | |
| 2024 | 2023 | |
| US\$'000 | US\$'000 | |
| Interest in listed securities | 418 | 378 |
Level 2 – Valuation techniques using observable inputs
Fair value is determined using inputs other than quoted prices included in Level 1 that are observable, directly or indirectly.
Level 3 – Valuation techniques using significant unobservable inputs
Fair value is dependent on significant inputs that are unobservable.
As at 31 December 2024, the Company and Group had no financial instruments carried at fair value where the fair value is estimated using Level 2 or Level 3 inputs.
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training, management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The main financial risks arising from the Group's and Company's financial instruments are market risk, credit risk and liquidity risk.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. This risk comprises currency risk, interest rate risk and equity price risk.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Currency risk arises on financial instruments that are denominated in a different currency to the entity's functional currency in which they are measured. Currency risk is monitored on a regular basis.
The net carrying amount of financial instruments split by currency are set out below:
| 31 Dec 2024 | 31 Dec 2023 | |||||
|---|---|---|---|---|---|---|
| GBP US\$'000 |
USD US\$'000 |
BWP US\$'000 |
GBP US\$'000 |
USD US\$'000 |
BWP US\$'000 |
|
| Cash and cash equivalents | 404 | 563 | 138 | 3,027 | 304 | 62 |
| Trade and other receivables | 933 | - | 370 | 637 | - | 387 |
| Trade and other payables | (61) | - | (66) | (132) | - | (109) |
| 31 Dec 2024 | 31 Dec 2023 | |||||
|---|---|---|---|---|---|---|
| GBP US\$'000 |
USD US\$'000 |
BWP US\$'000 |
GBP US\$'000 |
USD US\$'000 |
BWP US\$'000 |
|
| Cash and cash equivalents | 404 | 176 | - | 1,084 | 1 | - |
| Trade and other receivables | 933 | - | - | 637 | - | - |
| Loan to subsidiaries | 23,387 | - | - | 12,442 | - | - |
| Trade and other payables | (61) | (14) | - | (132) | (1) | - |
The Group's and Company's exposure to foreign currency risk arises only from monetary financial instruments that are denominated in a different currency to the entity's functional currency in which they are measured, which is trivial for the Group.
Gains and losses on the intercompany funding loans between the UK and Botswana are capitalised as part of the exploration and evaluation intangible assets and therefore there is no exposure for the Group as whole. Exposure to currency risk from other financial instruments is immaterial.
Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in interest rates. The exposure to this risk is not considered as the Company and Group have no floating rate external borrowing and are not relying on interest income for funding.
The Group and Company are exposed to the equity price risk through their investments in ordinary shares of Power Metals and shares to be issued in Pambili with total carrying value of US\$ 418,000 at of 31 December 2024 (2023: US\$ 378,000). Securities markets fluctuate, frequently on basis of uncontrollable macroeconomic and geopolitical developments. In addition, there can be developments within a public company that can affect its market valuation. The Directors review public announcements released by Power Metals and Pambili and monitor the liquidity of their shares to mitigate the financial impact of a sudden depreciation in their value.
Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as at 31 December 2024 is detailed below:
For the Group, credit risk arises primarily from cash balances held at banks and loan receivables. The risk in relation to cash balances is mitigated by using only reputable financial institutions with a high credit rating. The Group's exposure to the amounts due from shareholder is discussed in note 22 and the loan receivables are detailed in note 15.
The Company is additionally exposed to credit risk on the intercompany balances with its subsidiaries. The recoverability of these balances is linked directly to the success of the exploration activities of the Group. As discussed in note 13, no impairment indicators exist on the exploration assets and thus the balances are deemed to be recoverable.
The Group and Company do not hold any collateral as security.
Liquidity risk arises from the possibility that the Company and its subsidiaries might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Company manages this risk by monitoring its financial resources and carefully planning its exploration expenditure programmes. The Group is dependent upon equity fundraisings to manage its liquidity risk.
With the exception of the convertible loan notes detailed in note 21, the Group and Company have no external borrowings (2023: none) and all their liabilities are due within six months. The convertible loan notes have a contractual maturity falling within 6 to 12 months of the year-end, with maximum cash redemption amount of US\$ 5,112,000. The convertible loan notes were converted into ordinary shares of the Company in January 2025.
The Board's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital. The Company and Group have no external borrowing and thus capital consists entirely of equity.
The Group's licence expenditure commitments are:
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 |
|
|---|---|---|
| Within 12 months | 272 | - |
| Years 2-5 | 117 | 510 |
| Total | 389 | 510 |
As at 31 December 2024 the Group had \$163,537 (2023: US\$ nil) contractual commitments with either geophysics or drilling companies and no contingent liabilities (2023: US\$ nil). The Group can cancel its option agreements in Zimbabwe with no penalty.
Key management personnel consists of Company directors.
| Group | Company | |||
|---|---|---|---|---|
| 31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 (restated*) |
31 Dec 2024 US\$'000 |
31 Dec 2023 US\$'000 (restated*) |
|
| Short-term employee benefits | 611 | 532 | 563 | 484 |
| Post-employment benefits | 3 | 3 | 3 | 3 |
| Share-based payment expenses | 99 | 437 | 99 | 437 |
| 713 | 972 | 665 | 924 |
*The comparative balances for the year-ended 31 December 2023 have been restated to correct for an overstatement of the share based payment charge attributable to directors and to include remuneration of directors received from subsidiaries.
Short-term benefits disclosed above include US\$ 94,000 (2023: US\$ 76,000) of annual bonuses which were accrued at year end and included within other payables.
Technical, consulting and administrative services were provided to Kavango Minerals (Pty) Ltd by 3D Exploration Limited, a technical company majority-owned by Hilary Gumbo who is a Director of Kavango Minerals (Pty) Ltd. The total fees billed by 3D Exploration during the year were US\$ 156,000 (2023: US \$69,000) and the transaction was carried out at arms-length.
Communication services were provided by Dynamic Investor Relations Ltd, a communications company majority-owned by Mathew Benjamin Turney who is a director of Kavango Resources Plc. The total fees billed by Dynamic Investor Relations Ltd during the year were US\$ 31,000 (2023: US\$ 48,000) and the transaction was carried out at arms-length.
The Group incurred geological consultancy costs of US\$ 47,000 (2023: US\$ 143,000) provided Jeremy S Brett International Consulting Ltd, a consulting company owned by Jeremy S Brett whilst he was a director of Kavango Resources Plc. The transaction was carried out at arms-length.
The Group incurred corporate consultancy costs of US\$ nil (2023: US\$ 108,000) provided by Peter Wynter Bee, a nonexecutive director of the Company. The transaction was carried out at arms-length and the amount remains outstanding as at 31 December 2024 and is included within trade payables.
During the year-ended 31 December 2024, Peter Wynter Bee and Mathew Benjamin Turney subscribed for 16,750,000 and 2,000,000 shares in the Company respectively as part of the May fundraise (note 22). In addition, Donald McAlister subscribed to 400,000 shares in the Company.
During the year-ended 31 December 2024, Peter Wynter Bee subscribed for a total of 1,2000,000 convertible loan notes issued by the Company. The transaction was at arms-length and the terms of the convertible loan notes are detailed in note 21. As at 31 December 2024, the outstanding amount on the convertible loan notes due to Peter Wynter Bee was US\$ 1,503,000 including US\$ 11,000 of accumulated interest.
During the year ended 31 December 2024, Navassa Resources Ltd ("Navassa"), an intermediate holding company was liquidated. As the part of the liquidation process, Navassa's loan receivable from and equity holding in Kavango Minerals (Pty) of US\$ 1,879,000 and US\$ 28,000 respectively were transferred to the Company. The Company recognised an impairment charge of US\$ 118,000 (2023: US\$ 406,000) as part of liquidation process.
During the year the Company advanced funds to Kavango Minerals (Pty) Limited totalling US\$ 707,000 (2023: US\$ 1,608,000). The total loan outstanding as at 31 December 2024 was US\$ 10,270,000 (2023: US\$ 7,903,000). A loss on foreign exchange of US\$ 219,000 (2023: gain of US\$ 335,000) was included in the Company's other comprehensive income.
During the year the Company advanced funds to Kanye Resources (Pty) Ltd totalling US\$ 2,774,000 (2023: US\$ 1,231,000). The total loan outstanding as at 31 December 2024 was US\$ 7,173,000 (2023: US\$ 4,539,000). A loss on foreign exchange of US\$ 140,000 (2023: gain of US\$ 147,000) was included in the Company's other comprehensive income.
During the year the Company advanced funds to Kavango Zimbabwe (Private) Limited totalling US\$ 4,302,000 (2023: US\$ 466,000). The total loan outstanding as at 31 December 2024 was US\$ 4,660,000 (2023: US\$ 466,000).
During the year ended 31 December 2023, as part of the acquisition Ashmead Holdings (Pty) Ltd and Icon-Trading Company (Pty) Ltd, the Company acquired intercompany receivables from these two entities of US\$ 436,000 and US\$ 880,000 respectively. During the year ended 31 December 2024, the Company advanced further funds of US\$ 102,000. The total loan outstanding as at 31 December 2024 was US\$ 1,393,000 (2023: US\$ 1,316,000).
On 28 January 2025 the Company published an FCA-approved prospectus and raised gross proceeds of £6,566,000 (US\$ 8,160,000) by issuing 938,028,569 shares at 0.7 pence per share. The principal and outstanding interest on the convertible loan notes was also converted into 547,995,076 shares at 0.7 pence per share.
Details of warrants that expired after the year end are included in note 24.
On 7 April 2025, the outstanding loan receivable from Pambili of US\$172,000 (£136,000) and the short-term working capital advance US\$ 68,000(£53,000) were refinanced into a convertible loan note. The convertible loan note is for a term of 12 months and is convertible into conversion units ("Units") priced at C\$0.05 per Unit. Each Unit comprises one Pambili common share and one-half of one common share purchase warrant (each whole being a "CLN Warrant"). Each CLN Warrant will entitle the Company to acquire one common share at a price of C\$0.10 per share for a period of 12 months following conversion notice.
On 22 April 2025, Kavango Resources PLC announced that it had entered into a US\$5 million convertible loan facility with a consortium of Zimbabwe-registered pension funds. The loan is interest-free, can be drawn down in three tranches, and is convertible into new ordinary shares at the USD equivalent of 1 penny per share. Kavango intends for these shares to be listed on the Victoria Falls Stock Exchange in Zimbabwe, as part of its planned referral listing.
Purebond Limited is the ultimate controlling party of Kavango Resources Plc.
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