Company registration number: 10796849 (England and Wales)
KAVANGO RESOURCES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1
KAVANGO RESOURCES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CONTENTS
Company Information ........................................................................................................................................ 3
Chairman’s Statement ........................................................................................................................................ 4
Operations Report .............................................................................................................................................. 5
Board of Directors and Senior Management ...................................................................................................... 8
Strategic Report ................................................................................................................................................. 9
Directors Report ............................................................................................................................................... 14
Corporate Governance Report ......................................................................................................................... 16
Directors’ Remuneration Report ...................................................................................................................... 26
Statement of Directors’ responsibilities ........................................................................................................... 30
Independent auditor’s report to the members of Kavango Resources plc ........................................................ 31
Consolidated statement of total comprehensive income .................................................................................. 37
Consolidated statement of financial position ................................................................................................... 38
Company statement of financial position ......................................................................................................... 39
Consolidated statement of changes in equity ................................................................................................... 40
Company statement of changes in equity......................................................................................................... 42
Consolidated statement of cash flows .............................................................................................................. 44
Company statement of cash flows ................................................................................................................... 45
Notes to the financial statements ..................................................................................................................... 46
2
KAVANGO RESOURCES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
COMPANY INFORMATION
Directors
David Smith, Non-Executive Chairman
Peter Wynter Bee, Non-Executive Director
Matthew Benjamin Turney, Chief Executive Officer
Brett Grist, Chief Operating Officer
Hillary Nyakunengwa Gumbo, Founder & Executive Director
Jeremy S. Brett, Executive Director
Company Secretary
Brett Grist
Registered Office
Salisbury House, Suite 425
London Wall
London EC2M 5PS
Registered Number
10796849 (England and Wales)
Registrars
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
Brokers
First Equity Limited
Salisbury House
London Wall
London EC2M 5QQ
Auditor
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Solicitors
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Principal Bankers
NatWest Bank
120-122 Fenchurch Street
London EC2M 5BA
Website
www.kavangoresources.com
3
KAVANGO RESOURCES PLC
CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023
I am pleased to present the financial results for Kavango Resources PLC, the Southern Africa focussed metals
exploration company, for the year ended 31 December 2023.
In what has remained a challenging market for many junior exploration companies we believe Kavango has made
significant progress through 2023. Of particular note are the entry of the company into Zimbabwe where we have
acquired options over three projects, the consolidation of our position in Botswana on the Kalahari Copper Belt (KCB),
and completion of a successful investment of £6 million by Purebond Ltd.
In purely financial terms, during 2023 the Group incurred a loss of US$ 3,293,000, equivalent to a loss of US$ 0.45
cents per share (2022: US$ 2,206,000, US$ 0.49 cents per share).
Kavango’s 2023 drilling in the KCB and KSZ was largely led by geophysical data, and focussed on deep targets. This
was always going to prove challenging; however, the programs were successfully and quickly delivered, and whilst
they did not intersect mineralisation, did provide us with useful geological information to inform our strategy going
forward.
As CEO Ben Turney describes in greater detail later in this report, a re-evaluation of our exploration on the KCB,
carried out in conjunction with consultant David Catterall, suggests greatest potential for us to make a discovery on
the KCB around our Karakubis licences, in western Botswana. Following this, during the year we acquired a 90%
interest in an additional six licences, consolidating our position in this area. An airborne survey was commissioned
over these at the end of 2023, with preliminary results announced in March 2024, and I look forward to seeing this
work progress through 2024.
The entry of the Company into Zimbabwe and entering into option agreements over three exploration areas there was
a significant milestone. The geological similarities of parts of Zimbabwe and western Australia are striking, yet
Zimbabwe has hitherto seen very little modern exploration. We believe this represents a meaningful opportunity,
adjacent to our existing operating base in Botswana, and offering some synergies in how we deliver exploration. Ben
Turney’s hands-on approach of moving to Zimbabwe is already helping us address the challenges of this additional
jurisdiction.
A major corporate development during the year was the investment by Purebond Ltd of £6 million for new shares in
the Company. This, at a time when funding to junior exploration companies has been generally limited, has enabled
the Company to take a longer term and strategic view, to advance into the new ventures in Zimbabwe and to refocus
its KCB exploration. We believe that this will ultimately maximise the opportunity for all shareholders to benefit from
potential exploration success by Kavango in our areas of interest.
As announced in December 2022, we were pleased to welcome Peter Wynter Bee to the company as a Non-Executive
Director in January 2023. Peter’s wide experience of the industry, and in particular of financing mining development,
has already proved instrumental to the Company’s progress in 2023, and I am confident will continue to add to the
Board’s ability to deliver through 2024.
I should like to take this opportunity to thank our employees across Botswana and Zimbabwe for their hard work
during the year and for adapting to Kavango’s ongoing updated strategy. Exploration is challenging both intellectually
and physically, and we are fortunate to have a dedicated team of employees and consultants. Their commitment to the
Kavango cause is of course matched by the commitment shown by the executive directors throughout the year, and I
am grateful to them all for the efforts they have made.
Kavango in common with other junior exploration companies has not seen the advances in the Company’s share price
in 2023 that we believe would be justified to recognise the progress made by, and to come from, the Company. There
were significant purchases of shares by three of my co-directors during the year, which underscores the belief of the
Board in the potential for the Company. Kavango has multiple work streams underway at present, any of which has
the potential to lead to significant news flow. We look forward to updating the market in due course.
David Smith
17 April 2024
4
KAVANGO RESOURCES PLC
OPERATIONS REPORT FOR THE YEAR ENDED 31 DECEMBER 2023
The past year has, I believe, been transformative for Kavango Resources. During the year we acquired options over
three projects in Zimbabwe, where we commenced work at a rapid pace. We also acquired a 90% interest in six
licences in the Kalahari Copper Belt from Australia-based ENRG Elements. As a result, Kavango consolidated a
strong prospective mineral rights package in this prolific copper jurisdiction. In my view, this provides an excellent
opportunity to make commercial discoveries in both countries in 2024.
The mineral rights package provides one half of what is needed for discovery. Financing is the other half, and in this
regard conditions in 2023 remained challenging for most explorers. However, thanks to the outstanding support of
Purebond Limited and their £6m investment for new equity during 2023, Kavango has been put in a position where
it can swiftly advance its projects.
I am very pleased to report that our team has stepped up to this challenge and seized the opportunity put in front of
them.
As well as enhancing our project portfolio, Kavango also strengthened its team. The Company has secured the
services of two experts in their fields, to ensure that we have the appropriate technical firepower to achieve success.
Dave Catterall brings with him vast geological knowledge of the Kalahari Copper Belt, Botswana, where he is
credited with successful discovery of multiple orebodies. In Zimbabwe, Steve Smith has worked to understand and
rank a range of gold exploration projects in Matabeleland, giving Kavango an important competitive edge and ability
to make rapid progress in commencing exploration in a new country.
Other changes to our team in 2023 include the recruitment of Leon de Waal as Exploration Manager for southern
Africa. Leon has extensive mineral exploration experience in the region and has been leading from the front in our
field camps in both Botswana and Zimbabwe.
I would like to acknowledge the commitment made by my co-director Peter Wynter Bee, who during the year
invested £500,000 of his own funds into shares in the Company, confirming his commitment to Kavango’s vision
and potential.
Key operational highlights over 2023 included:
•
In February we completed drilling 1,885.59m across seven holes in the KCB using a combination of Reverse
Circulation ("RC") and diamond drilling. This was targeted by Controlled-Source Audio Magnetotelluric
("CSAMT") survey data and soil sampling data. The program confirmed two out of three technical objectives
and made significant progress on the third. Anticlines and synclines were correctly identified by CSAMT on
PL082. Zones of structural disturbance, brecciation and alteration were also clearly interpreted via CSAMT and
then confirmed in drill core. Kavango's geologists observed evidence of fluid flow, with consequent alteration.
A final test was to intersect the interpreted Ngwako Pan / D'Kar contact. A massive sandstone unit was
intersected. Although the contact was not intercepted, the massive sandstone unit matched the resistive signature
on the CSAMT inversion.
Drilling on PL082 evidenced that we are higher in the D'Kar sequence than we had originally interpreted. This
meant we could make a clear decision to pause work on this licence for now and move to other targets that now
appear more prospective.
A geological review concluded that our four prospecting licences near the Namibian border offered evidence of
shallower stratigraphy. Adjacent property holder ENRG Elements' (ASX:EEL) licences are understood to host
signs of mineralisation and of domal structures. Kavango was able to negotiate terms and acquire a 90% interest
in these during 2023.
In March 2023 we published the outcome of a report from Dr Hamid Mumin, which identified a possible high
potential Banded Iron Formation hosted Lode Gold model at the Ditau Project, and were based on logging of
newly acquired third party drill core Kavango considers Target i10 could represent a large-scale, continuous
system. This and other models including IOCG continue to offer potential at Ditau, and which the Company will
continue to investigate with a particular focus on seeking a JV partner.
In June 2023 we announced the completion of a first stage £1,400,000 equity investment into the Company via
a non-brokered direct subscription, and we were pleased to welcome Purebond Limited as a shareholder.
Following publication of a prospectus in October 2023, we were able to conclude the second stage of the
investment, for a further £4,600,000. Purebond invested at a price of 1p per share, a premium to the then
prevailing share price.
•
•
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KAVANGO RESOURCES PLC
OPERATIONS REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
• The greenstone belts in Zimbabwe host prospective rocks for bulk-mineable gold deposits, based on Kavango's
internal review and analysis. Many of these belts share notable similarities with some of Australia's most prolific
gold-producing regions. Zimbabwe was therefore seen as a high-potential destination for Kavango to invest into,
and in June 2023 we were pleased to announce our entering into a two-year option agreement for the Nara project,
covering 45 gold claims in western Zimbabwe. Kavango has rapidly commenced exploration there and
subsequent to the year end was able to declare a maiden resource for the tailings. These have the advantage of
being low-cost to mine, at surface, and subject to further work may offer a stream of near-term cashflow,
augmenting our financial resources (without dilution) to explore in Zimbabwe.
Subsequently Kavango entered into an exclusive 6-month option, later extended to 23 April 2024, to acquire two
gold exploration projects in Matabeleland, southern Zimbabwe, referred to as Hillside and Leopard. The Hillside
project covers 409 hectares and contains a historic high-grade underground mine that produced a reported 18,000
ounces of gold from ore at a grade of 7.7 grams per tonne over a strike length of more than 350m.
The Leopard project comprises two groups of claims within trucking distance of Nara and located on an adjacent
greenstone belt. It is found in a favourable regional setting, surrounded by historical and modern gold producing
mines. The Project is divided into two separate sites. Site One produced more than 2,000oz from ore grading
3.5g/t gold. Site Two contains three claims that are believed to be an extension of a historic mine (not part of the
property) that is reported to have produced more than 1Moz gold from ore at an average grade of more than
15g/t. Kavango believes Hillside and Leopard each have the potential to host bulk mineable gold deposits.
•
In July 2023 Kavango completed drilling of a hole on the Kalahari Suture Zone, KSZDD003, intended to test
the B1 conductor target. This was successfully drilled to a depth of 606m, despite challenges of lack of water
availability in the arid terrain, and sand cover. The hole passed through a sedimentary sequence and two intrusive
bodies, thought to be of Karoo age. No sulphide was intersected, however a Downhole Electromagnetic
("DHEM") survey was completed and confirmed that the target had successfully been intersected. While we
were disappointed that B1 did not turn out to consist of significant nickel or copper sulphide, we believe we have
an answer on this target. It appears the thicker carbonaceous material, containing coincident graphite and pyrite
rich bands, with minor pyrrhotite veining, is the most probable conductive source.
• Kavango completed a strategic investment into gold mining, exploration, and development company Pambili
Natural Resources Corporation ("Pambili") (TSX-V:PNN), in the form of a US$250,000 convertible loan made
to Pambili. Following the conversion, Kavango will hold 16% of Pambili's total issued share capital.
Pambili is active in Matabeleland in southern Zimbabwe, having established operations there in 2022. Pambili’s
Golden Valley project has a history of high-grade underground mining and gold production. Golden Valley
includes a functional gold processing plant and stamp mill, two historic shafts that present prospective
exploration targets and near surface exploration potential to target a possible larger-scale deposit. Some small-
scale gold production continues at Golden Valley by way of toll-milling third-party ore through an on-site stamp
mill.
By taking a strategic interest in Pambili, Kavango is seeking to build on its first-mover advantage in Matabeleland
by increasing its exposure to a third, highly prospective greenstone belt. Golden Valley is located on a separate
greenstone belt to the one that hosts the Hillside and Nara projects for which we hold options, and a separate
greenstone belt to the one that hosts the Leopard project over which we also hold an option. Involvement in an
active operation will also provide Kavango with invaluable operating know-how in parallel with the ongoing
development of its own operations to generate early cash-flow.
• During Q3, Kavango commenced a 1,306m diamond drill campaign at the Hillside Project in Zimbabwe. This
completed in January 2024 and results are due to be delivered in Q2 2024.
•
In December 2023, Kavango commenced an Airborne Electromagnetic and Gravity survey over its consolidated
Kalahari Copper Belt project. Data is currently being processed, with drill targets to be confirmed. The Company
expects to start drilling in the KCB in mid-Q2 2024.
• Subsequent to the year end, in March 2024, Kavango signed its first contract to commence immediate gold
mining operations at the Hillside Project.
6
KAVANGO RESOURCES PLC
OPERATIONS REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
I believe Kavango has successfully transitioned to position itself with a portfolio of well-understood projects that
may offer lower technical risk than previous projects, and in parallel has achieved strong financial backing. Our
teams on the ground are working hard to deliver successful exploration outcomes from these in 2024, and I look
forward to updating all our shareholders as results come in.
Matthew Benjamin Turney
Chief Executive Officer
17 April 2024
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KAVANGO RESOURCES PLC
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
David Smith (Non-Executive Chairman)
David is a solicitor who has worked in corporate finance and the equity capital markets for over 30 years with
considerable practical experience of corporate governance, regulatory and compliance issues, and 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 Wynter Bee (Non-Executive Director)
Peter is an experienced lawyer who has focused on financing and managing mining companies. He has a strong
experience in joint venture negotiations and raised 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. He is currently
Founder and Chairman of Moxico Resources plc a copper mining company with projects in Zambia and Saudi
Arabia.
Matthew Benjamin (“Ben”) Turney (Chief Executive Officer)
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 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.
Brett Grist (Chief Operating Officer)
Brett graduated in Mining Geology from the Royal School of Mines and has spent more than 25 years in mineral
exploration and development across Africa, the Middle East and Europe, covering base and precious metals, for
companies including Reunion Mining and CASA Mining. He has played a leading role on a range of projects,
including in advancing from early exploration through resource definition, feasibility, and into development. Brett
is an FAusIMM with CP status.
Hillary Nyakunengwa Gumbo (Executive Director)
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.
Jeremy S. Brett (Executive Director)
Jeremy is a senior Geophysical Consultant with 30 years of international mineral exploration in most commodities.
He has a strong background in geology, structural geology, ore deposit models, project management and strategy.
He has a B.Sc. in Geophysics and an M.Sc. in Geology from the University of Toronto. He has consulted to more
than 100 of Canada’s leading junior and major exploration and mining companies and governments on five
continents. Jeremy is a Professional Geoscientist registered in Ontario, Canada.
8
KAVANGO RESOURCES PLC
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their strategic report on the group for the year ended 31 December 2023.
Principal Activity
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 (“Kavango Botswana”), and Kanye Resources
(Pty) Ltd (“Kanye”), registered and domiciled in Botswana. The Company also owns 90% of Shongwe Resources
(Pty) Ltd, and 90% of Ashmead Holdings (Pty) Ltd, and Icon-Trading Company (Pty) Ltd, all registered and
domiciled in Botswana. The Company owns 100% of Kavango Zimbabwe (Private) Limited, a company registered
and domiciled in Zimbabwe. The Company is also the parent company of Navassa Resources Ltd, domiciled in
Mauritius.
The principal activity of the Company and its subsidiaries (the “Group”) is exploration for base and precious metals
in Botswana and Zimbabwe.
Business Review
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 5 to 7.
The Directors were pleased to welcome an investment in the period of £6,000,000 by Purebond Limited, which in
challenging market conditions has allowed the Company to continue its exploration work and to expand into
Zimbabwe. This investment consisted of the issue of 600,000,000 shares at a price of 1p, representing a premium to
the then prevailing share price.
As a result of this the Company has been able to acquire additional licences in Botswana, consolidating an already
extensive mineral exploration rights position in the copper belt of western Botswana, and to commence exploration
on three projects in Zimbabwe.
Principal Risks and Uncertainties
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.
Strategic risk
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.
Concentration risk
The Group has six core exploration assets being licences covering the Kalahari Copper Belt (“KCB”), Kalahari
Suture Zone (“KSZ”) Project, and Ditau in Botswana, and options over claims covering the Hillside, Leopard, and
Nara projects in Zimbabwe. This totals a large area, together in excess of 19,000km2, and also covers two countries,
which the Board considers significantly mitigates against this risk. Nevertheless, 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.
9
KAVANGO RESOURCES PLC
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
Exploration risk
Exploration at the KCB, KSZ, Ditau, Hillside, Leopard, and Nara Projects may not result in success.
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.
Environmental, social, and related regulatory risks
In relation to the Group’s existing projects the environmental impact to date is limited to activities associated with
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.
Financing
The successful exploration or exploitation of natural resources on any project will require significant capital
investment. The only 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.
10
KAVANGO RESOURCES PLC
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
Political, economic, and regulatory regime
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.
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.
Dependence on key personnel
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.
Uninsured risk
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.
Other business risks
In addition to the current principal risks identified above and those disclosed in note 24 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:
Strategic and Economic:
• Business environment changes
• Limited diversification
Operational:
Human Resources and Management:
•
Failure to recruit and retain key personnel
• Human error or deliberate negative action
•
Inadequate management processes
• Difficulty in obtaining / maintaining /
Financial:
renewing Licences / approvals
• Restrictions in capital markets impacting
• Drilling brings inherent risk as it is subject to
available financial resources
unknown ground conditions
Commercial:
Failure to maximise value from the projects
•
• Loss of interest in key assets
• Regulatory compliance and legal
• Cost escalation, inflation and budget overruns
•
Fraud and corruption
• Unexpected adverse
currency markets
fluctuations
the
in
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 anti-
bribery management systems. The Group reviews its business risks and management systems on a regular basis.
11
KAVANGO RESOURCES PLC
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
Key performance indicators
The ongoing performance of the Group is managed and monitored using the following key financial and non-
financial indicators (“KPIs”) on a monthly basis:
Progress with exploration, monitoring licence commitments and environmental compliance; and
•
• Cash management – sufficient to meet its obligations as they fall due.
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.
Capital structure
The Company’s capital consists of ordinary shares which rank pari passu in all respects which are traded on the
Standard List segment of 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
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, but due to the Group’s small scale and
stage of development, have not yet fully implemented the TCFD recommendations. The Directors will work to
evaluate and implement the TCFD recommendations over the next three years.
12
KAVANGO RESOURCES PLC
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit
of its members as a whole, as required by s172 of the Companies Act 2006 (the “Companies Act").
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term,
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Company’s employees,
• Foster the Company’s relationships with suppliers, customers and others, and
• Consider the impact of the Company’s operations on the community and the environment.
The Company operates as a minerals exploration business which is inherently speculative in nature and, without
regular income, is dependent upon fund-raising for its continued operation. The pre-revenue nature of the business
is important to the understanding of the Company by its members, employees and suppliers, and the Directors are
as transparent about the cash position and funding requirements as is allowed under FCA regulations.
The application of the s172 requirements can be demonstrated in relation to the some of the key decisions made
during 2023:
• Updated Corporate Governance Policy: during 2023 the Corporate Governance Policy was updated to
is available at
it remains relevant and
is upheld. This
that s172
ensure
https://kavangoresources.com/about-us/corporate-governance
to ensure
that
• Remunerate the Directors with share options in lieu of cash: during the year, having decided on a plan
to raise new funds to finance operations, the Directors also decided that to maximise funds available for
exploration the Directors would be remunerated in part by share options instead of cash. This has the added
benefit of more fully aligning the interests of the Directors with those of the members.
• Growing our position in Botswana: having established our presence in Botswana and developed a good
working relationship with the Department of Mines, additional licences were acquired in Botswana to
consolidate and upgrade an already extensive holding.
• Expanding into Zimbabwe: during 2023 the Company acquired options over three projects in Zimbabwe.
These provide geographical and commodity diversification, and the Company considers these to offer lower
technical risk.
• Ethical responsibility to the community and the environment: the Board takes seriously its ethical
responsibilities to the communities and environment in which it works. We abide by the local and relevant
UK laws on anti-corruption and bribery. Wherever possible, local communities are engaged in the
geological operations and support functions required for field operations, providing much needed
employment and wider economic benefits to the local communities. In addition, we follow international
best practice on environmental aspects of our work. Our goal is to meet or exceed standards, in order to
ensure we obtain and maintain our social licence to operate from the communities with which we interact.
Examples of our social projects have included support to local schools. We have a 100% Botswana national
in-country team and in excess of 90% of our permanent team in Zimbabwe is of Zimbabwe nationals.
This Strategic Report was approved by the Board of Directors and is signed on its behalf by:
Matthew Benjamin Turney
Director
17 April 2024
13
KAVANGO RESOURCES PLC
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023.
Review of business and future developments
A review of the current and future development of the Group’s and Company’s business is included in the Strategic
Report.
Subsequent events
Details of subsequent events after the year end are disclosed in note 27 to the financial statements.
Dividends
The Directors do not propose a dividend in respect of the year ended 31 December 2023 (2022: none).
Directors
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
Peter Wynter Bee
Jeremy S. Brett
(appointed 1 January 2023)
(appointed 1 January 2023)
Directors’ interests in the ordinary share capital of the Company at the date of this report are disclosed within the
Directors’ Remuneration Report.
Directors’ indemnities
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
Use of financial instruments and financial risk management
Details of the use of financial instruments and associated risk management by the Group are included in note 24 to
the financial statements.
Substantial shareholders
As of 21 February 2024 (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
Purebond Limited
Jarvis Investment Management Ltd
Peter Wynter Bee*
Hargreaves Lansdown Stockbrokers
Total
*Includes shares held by Wynter Bee Resources Limited
Total shares in issue: 1,305,569,314
Capital structure
Number of ordinary shares % of share capital
52.47
5.70
5.47
5.37
69.08
685,000,000
75,395,232
71,468,182
70,086,591
901,950,005
Details of the capital structure of the Company are included in the Strategic Report and note 20 to the financial
statements.
14
KAVANGO RESOURCES PLC
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 (Continued)
Greenhouse gas emissions and energy use
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 Group is exempt
from the Streamlined Energy and Carbon Reporting (SECR) requirements since its energy consumption is less than
40,000 kWh per annum.
Going concern
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 required
level of spending on exploration and corporate activities for a period of not less than 12 months from the date of
signing these financial statements.
As part of the assessment, the Directors have noted that in order to sustain the minimum level of exploration spending
required by the Group’s licence conditions and minimum corporate overheads a further fundraising will be required
within the next 12 months. Successful completion of future fundraisings is inherently uncertain and therefore
constitutes a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going
concern . However, encouraged by positive results of the Group’s exploration activities in Zimbabwe, the Directors
have ambitious plans to further expand the Group’s foothold in the country and are therefore in active discussion
with current and potential shareholders who have indicated their support. The Directors are therefore confident that
they will be able to obtain sufficient working capital to support the Group’s operations and are satisfied that it is
appropriate to continue to adopt the going concern basis of accounting in the preparation of these financial
statements.
Political donations
The Group made no political donations during the year (2022: none).
Auditors and disclosure of information to auditors
Each Director in office at the date of approval of this report has confirmed that:
-
-
so far as the Director is aware, there is no relevant audit information of which the Company’s auditors are
unaware; and
each Director has taken all the steps that he ought to have taken as a director in order to make himself aware
of any relevant audit information and to establish that the Company’s auditors are aware of that information.
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 QCA Code. This report should be read in conjunction with the
Strategic Report set out on pages 9 to 13 and the Corporate Governance Report set out on pages 16 to 25. 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 17 April 2024 and is signed on its behalf by;
Matthew Benjamin Turney
Director
15
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 DECEMBER 2023
This report forms part of the Strategic Report.
The Chairman of the Board of Directors of Kavango Resources plc (‘Kavango’ or ‘the Company’) has a
responsibility to ensure that Kavango has a sound corporate governance policy and an effective Board.
As a company listed on the Standard Segment of the Official List of the UK Listing Authority, 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
appointment of Peter Wynter Bee as a Non-Executive Director in January 2023. In the year the Company revised
the composition of the Audit and Risk Committee, reinstated the Remuneration Committee, and commenced a Board
Evaluation process. Governance policies were also comprehensively reviewed.
- The provisions relating to the composition of the Board and the division of responsibilities were not
complied with during the year as the Board felt these provisions to be inappropriate, given the size of the
Company and the limited scope of its activities.
- The Board do not consider an internal audit function to be required given the size of the Company and
relatively limited number of transactions.
- A diversity policy as applied to the Company’s administrative management and supervisory bodies has not
yet been developed but biographies of Directors and senior management and their relevant experiences are
set out on page 8.
-
Implementation of Board evaluation remains ongoing.
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 non-
compliance.
16
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
1. Establish a strategy and business model which promote long-term value for shareholders
The Company is involved with 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 good quality grassroots and early-
stage exploration projects and advancing these. Consequently we:
•
•
•
use our expertise to identify those areas with potential for discovery of economically feasible deposits;
assess the business environment of Botswana, Zimbabwe, and other potential target territories and their
attractiveness for prospecting and eventual mining operations; and
understand existing interests in prospecting licence areas in order to ensure we can earn-in to existing
interests on terms favourable to our shareholders.
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:
• Reviewing existing exploration data and projects, using a stage-gate approach;
• Establishing close in-country partnerships and financing for our projects;
• Applying the most appropriate yet cost-effective exploration techniques in order to determine whether
further work, using increasingly expensive exploration techniques, is justified; and
• Appreciating the likely realisation routes that will be available to us as a project moves towards
development.
Key challenges include:
• Technical risk; the risk of not being successful in finding a mineral deposit. This is minimised by a
combination of selection of favourable ground, use of appropriate exploration methods, and employment
of skilled personnel.
• Social licence to operate; the risk that exploration results in negative community response. This is
minimised by carrying out consultation ahead of work, ensuring that open routes of communication are
established, and by being part of the community; maximising local benefits such as employment,
implementing community projects where appropriate, and minimising negative impacts.
• Availability of funding; this is mitigated by the employment of senior personnel who are able to identify
opportunities for funding, where possible on equitable terms for the company.
• Availability of personnel; shortage of suitable team members, or issues with retention. The Company has
to compete with other mining industry employers. It has been successful in offering a range of interesting
employment on attractive financial terms to its employees. The Company is keen to nurture talent and
encourages further study, including sponsoring an employee in Botswana to complete a further degree and
working to created student collaborations with universities in Zimbabwe and the UK.
• Risks to the Company’s Prospecting Licences; risk of cancellation. Botswana has a clearly stated mining
law, which sets out requirements for applying for and maintaining Prospecting Licences. The Company
continuously monitors its licences for compliance and maintains dialogue with the mines department. In
Zimbabwe mineral rights are not presently held directly by the Company but are instead held through
Options with third party companies. The Company endeavours to carry out due diligence on both the
underlying Claims and third-party companies, and to identify and mitigate any areas of uncertainty.
• Political Risk; Botswana has historically had a stable government. The next elections are scheduled for
2024 and are expected to be peaceful and democratic. In Zimbabwe elections were successfully held in
2023, the government is stable but there is potential for reviews of legislation, which can cause a lack of
fiscal stability for an investor.
2. Seeking to understand and meet shareholder needs and expectations
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.
Private shareholders
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.
17
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
Investors can contact us via our website (https://www.kavangoresources.com/) or by email at
corporate@kavangoresources.com.
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.
Institutional shareholders
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.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term
success
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 in-
country 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.
Employees
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. 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.
Corporate Culture
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.
Local partners and communities
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 projects move forward, towards potential mining activities, we will seek to bring in partners who can credibly
make the investments move towards 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.
18
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
Audit, risk, and internal controls
(i) Financial controls
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 2023. The key financial
controls are:
- The Board is responsible for reviewing and approving overall Company strategy, approving new
exploration projects and budgets, and for determining the financial structure of the Company including
treasury, tax, and dividend policy. Monthly cash flow forecasts are reported to the Board;
- The Audit and Risk Committee assists the Board in discharging its duties regarding the financial statements,
accounting policies and the maintenance of proper internal business, and operational and financial controls;
- Regular budgeting and forecasting are performed to monitor the Company’s ongoing cash requirements
and cash flow forecasts are reported to the Board on a bimonthly basis;
- Actual results are reported against budget and prior year and are circulated to the Board;
- Regular reviews of exploration results are performed as the basis for decisions regarding future expenditure
commitment, using a stage-gate methodology;
- Due to the international nature of the business, there are, at times, significant foreign exchange rate
movement exposures. Cash flow forecasting is done at the ‘required currency’ level and foreign currency
balances are maintained to meet expected requirements; and
- We manage exploration risk of failure to find economic deposits by low cost early-stage exploration
techniques with detailed analysis of results. Moving projects to more expensive exploration techniques
requires a rigorous review of results data prior to deciding whether to proceed with further work.
(ii) Non-financial controls
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:
• Close management of the day-to-day activities of the Company by the Executive Directors;
• An organisational structure with defined levels of responsibility, which promotes entrepreneurial decision-
making and rapid implementation while minimising risks; and
• Central control over key areas such as capital expenditure authorisation and banking facilities.
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 were implemented during the
year. 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 9 to 11.
19
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
5. Maintain the board as a well-functioning, balanced team led by the chair
Two new Board members, Jeremy S. Brett (Executive Director), and Peter Wynter Bee (Independent Non-Executive
Director) were appointed following a review of the required skills and consideration of appropriate candidates. These
appointments became effective on 1 January 2023. The new Directors have extensive relevant experience in the
mining industry. Mike Moles stepped down from the Board on 31 August 2022 but continued to work with the Company
in a consultancy capacity until early 2023. Following these changes, the Board currently comprises a Non-Executive
Chairman, four Executive Directors and one additional Independent Non-Executive Director. David Smith is the
Non-Executive Chairman. Non-Executive Director Peter Wynter Bee purchased additional shares in the Company during
the year, resulting in a shareholding at year end of 5.47%. The investment was carried out at arm’s length and the Board
consider 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. They
also provide on-boarding training to newly appointed directors and lead regular review of Company Policies and
reporting.
Non-Executive Director, Peter Wynter Bee, has the role of Chair of the Audit and Risk Committee.
For most of the financial year 2023, 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:
• Review of previous meeting minutes and actions arising therefrom;
• Reports by the Executive Directors covering operational and financial matters;
• Exploration updates; and
• Any other business including update of Register of Conflicts.
Directors’ conflict of interest
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’ attendance at Board meetings held during 2023:
Director
David Smith
Ben Turney
Hillary Gumbo
Brett Grist
Jeremy S. Brett
Peter Wynter Bee
Position
Chairman (Independent)
Chief Executive Officer
Executive Director
Chief Operating Officer
Executive Director
Non-Executive Director
Attendance
14/16
15/16
14/16
15/16
14/16
13/16
20
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
6. Ensure that between them the directors have the necessary up to date experience, skills and capabilities
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 Peter Wynter Bee and Jeremy S. Brett were announced in December 2022 and their
appointments took effect on 1 January 2023. Mr. Wynter Bee joined the Company as a Non-Executive Director and
is an experienced lawyer who has focused on financing and managing mining companies. Mr. Brett joined Kavango
as an Executive Director. He is a senior geophysical consultant with 28 years international mineral exploration in
most commodities and has a strong background in geology, structure, ore deposit models, project management &
strategy.
All Directors have disclosed any significant commitments to the Board and confirmed that they have sufficient time
to discharge their duties. The CEO and COO work in excess of 40 hours per week for the Company, and the other
Executive Directors regularly work between 10 and 40 hours 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 8 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) Ltd, Shongwe Resources (Pty) Ltd, Kavango Zimbabwe (Private) Ltd, and Navassa
Resources Ltd; Ben Turney is a director of Kanye Resources (Pty) Ltd, Kavango Zimbabwe (Private) Ltd,
Ashmead Holdings (Private) Ltd, and Icon Trading (Private) Ltd; and Brett Grist is a director of Kanye Resources
(Pty) Ltd, Shongwe Resources (Pty) Ltd, Kavango Minerals Pty Ltd, Ashmead Holdings (Private) Ltd, and Icon
Trading (Private) Ltd. All Directors and senior employees within the Group are male. There is no formal diversity
policy in place due to the current size of the Group, however the Directors remain committed to diversity among
our staff and leadership team, and this is revisited each year.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s
experience, and their current base salary. Where an individual is recruited at below market norms, they may be re-
aligned 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.
Policy on payment for loss of office
Payment for loss of office would be determined by the Board, taking into account contractual obligations.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the
Company’s expense from lawyers, broker, and other professional advisors that they deem relevant. In addition, the
Directors have direct access to the advice and services of the Company Secretary.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
During the financial year ended 31 December 2023 a board evaluation was initiated and is not yet complete. Aided
by the addition of new board members in January 2023, including expansion of non-Executive members, the board
is achieving measurement of progress relative to objectives.
A detailed strategy has been defined for the Company and 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.
21
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
8. Promote a corporate culture that is based on ethical values and behaviours
The Board aims to lead by example and do what is in the best interests of the Company. 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.
9. Maintain structures and processes that are fit for purpose and support good decision-making by the
board
Board programme
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.
Roles of the Board, Chairman and Chief Executive Officer
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.
22
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
Board Committees and Policies
Audit and Risk Committee
The Audit and Risk Committee is chaired by Peter Wynter Bee and includes 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 9 to 11.
The Remuneration Committee
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 Ben Turney and Brett Grist, and Company-wide pay proposals.
Dividend policy
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.
Anti-bribery and corruption policy
The Company has adopted an Anti-Corruption and Bribery Policy. It applies to the Directors and all employees of
the Company. 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 aware
of the Group’s policies and procedures with respect to ethical behaviour, business conduct and transparency.
Health and safety
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.
Environmental policy
Kavango plans to undertake its 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 Company;
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.
23
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
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.
Social policy
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 our 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.
10. Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
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 2023 AGM
resolutions were passed comfortably. The votes on all resolutions were taken on a poll 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.
24
KAVANGO RESOURCES PLC
CORPORATE GOVERNANCE REPORT (continued)
Statement of policy on Directors’ remuneration
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 pre-revenue. 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 that 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.
25
KAVANGO RESOURCES PLC
DIRECTORS’ REMUNERATION REPORT
Directors’ remuneration
The Directors who held office during the year and their appointment dates are listed in the Directors’ Report on page
14.
Directors’ service contracts
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.
Remuneration components
The fees offered to Directors for the year ended 31 December 2023 consisted of a mix of:
• Salaries and fees;
• Ad hoc bonus payments; and
• Share incentive arrangements.
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the year ended 31 December 2023:
Year to 31 December 2023
a.
Salary
$126,467
$56,206
$28,496
$126,467
$30,631
$158,281
Ben Turney
David Smith
Hillary Gumbo
Brett Grist
Peter Wynter Bee
Jeremy S. Brett
c. Other items
in nature of
remuneration
(incl. annual
bonus).
b.
Taxable
benefits.
c. Long-
term
incentive
awards).
e.
Pension
related
benefits.
$63,662
-
-
$12,732
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
g. Total Fixed
Remuneration:
$190,129
$126,467
$56,206
$28,496
$56,206
$28,496
-
-
-
$2,626 $141,825
$129,092
-
-
$30,631
$158,281
$30,631
$158,281
h. Total
Variable
Remuneration:
-
-
-
-
-
For comparison the emoluments of the Directors who served during the year ended 31 December 2022 are set out
below:
Year to 31 December 2022
c. Other items
in nature of
remuneration
(incl. annual
bonus).
b.
Taxable
benefits.
c. Long-
term
incentive
awards).
e.
Pension
related
benefits.
a.
Salary
$113,260
$50,338
$111,036
$103,978
Ben Turney
David Smith
Hillary Gumbo
Brett Grist1
-
-
-
-
Former directors who served during the year
Mike Moles2
$17,726
-
$111,385
-
-
$37,128
-
-
-
-
-
-
Total
$224,644
$50,338
$111,036
-
-
-
$4,233
$145,339
g. Total Fixed
Remuneration:
$113,260
$50,338
$111,036
$108,211
h. Total
Variable
Remuneration:
$111,385
-
-
$37,128
-
$17,726
$17,726
-
1 Brett Grist’s remuneration is in respect of the period from his appointment on 7 February 2022.
2 Resigned 31 August 2022.
26
KAVANGO RESOURCES PLC
DIRECTORS’ REMUNERATION REPORT (continued)
Other items (audited)
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.
Total pension entitlements (audited)
During the year ended 31 December 2023, the Company continued to make payments into a money purchase pension
scheme for Brett Grist. 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.
Payments to past directors and for loss of office (audited)
The Company has not paid any compensation to past Directors for loss of office during the year.
Directors’ interests in share options as at 1 January 2023 (audited)
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
Interest
type
Date of
Grant
Exercise
price
Number
Hillary Gumbo
Option
06/11/2018
£0.025
2,400,000
Option
01/05/2019
£0.025
280,000
Option
01/05/2019
£0.028
500,000
Option
05/05/2020
£0.008
500,000
Option
10/08/2021
£0.075
1,000,000
Ben Turney
Option
09/02/2021
£0.033
2,000,000
Option
10/08/2021
£0.075
4,500,000
Subject to
performance
measures?
No
No
No
No
Exercisable only once
the Company’s share
price has closed at not
less than 15 pence on
five trading days
No
Exercisable only once
the Company’s share
price has closed at not
less than 15 pence on
five trading days
David Smith
Option
09/02/2021
£0.033
1,500,000
No
Jeremy S. Brett
Option
04/01/2022
£0.03
3,000,000
No
Vesting date
06/11/2018
01/05/2019
01/05/2019
05/05/2020
50% vest no earlier
than 12 months from
grant and 50% vest
no earlier than 24
months from grant
50% vest no earlier
than 12 months from
grant and 50% vest
no earlier than 24
months from grant
50% vest no earlier
than 12 months from
grant and 50% vest
no earlier than 24
months from grant
50% vest no earlier
than 12 months from
grant and 50% vest
no earlier than 24
months from grant
31/10/2023
Expiry
date
04/11/2028
01/05/2029
01/05/2029
05/05/2030
10/08/2028
09/02/2031
10/08/2028
09/02/2031
01/12/2028
27
KAVANGO RESOURCES PLC
DIRECTORS’ REMUNERATION REPORT (continued)
Share scheme interests awarded during the year (audited)
The following new share options were awarded to Directors during the year ended 31 December 2023. In each case
the options have a 7 year term. No share options were exercised by Directors during the year.
Director
Interest
type
Date of
Grant
Exercise
price
Number
Subject to performance
measures?
Vesting
date
Expiry
date
Hilary Gumbo
Option
15/3/2023
£0.03
2,820,000
Option
17/11/2023
£0.011
1,500,000
Ben Turney
Option
15/03/2023
£0.03
5,000,000
Option
15/03/2023
£0.03
5,000,000
David Smith
Option
Option
17/11/2023
15/03/2023
£0.011
£0.03
40,000,000
2,000,000
Option
17/11/2023
£0.011
1,500,000
Brett Grist
Option
15/03/2023
£0.03
6,000,000
Option
17/11/2023
£0.011
2,500,000
Jeremy S. Brett
Option
15/03/2023
£0.03
3,500,000
Option
17/11/2023
£0.011
2,500,000
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
No
Exercisable only once the
Company’s share price has
closed at not less than 6 pence
on five trading days
Exercisable only once the
Company’s share price has
closed at not less than 6 pence
on five trading days
No
Exercisable only once the
Company’s share price has
closed at not less than 6 pence
on five trading days
No
Exercisable only once the
Company’s share price has
closed at not less than 6 pence
on five trading days
No
Exercisable only once the
Company’s share price has
closed at not less than 6 pence
on five trading days
No
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
17/11/2023
17/11/2030
15/03/2023
20/01/2030
31/10/2023
20/01/2030
17/11/2023
31/10/2023
17/11/2030
20/01/2030
17/11/2023
17/11/2030
31/10/2023
20/01/2030
17/11/2023
17/11/2030
31/10/2023
20/01/2030
17/11/2023
17/11/2030
31/10/2023
20/01/2030
Directors’ interests in the share capital of the Company:
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 2023
15,220,551
16,520,137
173,939
2,273,424
-
71,468,182
Number of
ordinary shares
held 1 January
2023
8,970,551
16,520,137
173,939
920,245
-
6,218,182
Ben Turney
Hillary Gumbo
David Smith
Brett Grist
Jeremy S. Brett
Peter Wynter Bee1
1 Including holdings by Wynter Bee Resources Limited
2 Warrants expired during the year
Number of
warrants held 31
December 2023
Number of
warrants held 1
January 2023
-
-
-
-
-
5,000,000
7,460,2282
2,625,0002
-
-
-
-
28
KAVANGO RESOURCES PLC
DIRECTORS’ REMUNERATION REPORT (continued)
Consideration of employment conditions elsewhere in the Group
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.
UK 10-year performance graph
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.
UK 10-year CEO table and UK percentage change table
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.
Relative importance of spend on pay
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.
Other matters
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 17 April 2024.
David Smith
Chairman
29
KAVANGO RESOURCES PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
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 a Standard Listing.
In preparing these financial statements, the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
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.
Directors’ responsibility statement pursuant to Disclosure and Transparency Rules
Each of the Directors, whose names and functions are listed on page 8, confirm that to the best of their knowledge
and belief:
•
•
the financial statements prepared in accordance with UK-adopted International Accounting Standards and in
conformity with the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position
and loss of the Company and Group; and
the Annual Report and financial statements, including the Strategic Report, include a fair review of the
development and performance of the business and the position of the Company and Group, together with a
description of the principal risks and uncertainties that they face.
This responsibility statement was approved by the Board of Directors on 17 April 2024 and is signed on its behalf
by;
Matthew Benjamin Turney
Director
30
KAVANGO RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAVANGO RESOURCES
PLC FOR THE YEAR ENDED 31 DECEMBER 2023
Opinion
We have audited the financial statements of Kavango Resources Plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December 2023 which comprise the Consolidated Statement of Total 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:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2023 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act
2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for 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.
Material uncertainty related to going concern
We draw attention to note 2a) to the financial statements, which indicates that the group will require further funding
in the next 12 months in order to sustain its budgeted level of exploration spending and to meet the minimum
corporate overheads. For the year ended 31 December 2023, the group incurred losses from operations of
US$3,293,000 and continues to generate losses due to the group not being revenue generative in the year. The
group’s ability to meet all of the operating costs and budgeted spend requirements on the group’s exploration licences
for the next 12 months from the date of signing the financial statements is reliant on the group raising further finance.
The directors are confident in their ability to raise the necessary funds to enable the group to meet their obligations.
These events or conditions, along with the other matters as set forth in note 2a), indicate that a material uncertainty
exists that may cast significant doubt on the parent company’s ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s 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 ability to continue to adopt the going concern basis of accounting included:
• Challenging the directors’ forecasts prepared to assess the group’s and parent company’s ability to meet its
financial obligations as they fall due for a period of at least 12 months from the date of approval of the financial
statements. We have assessed the reasonableness of the forecasts based on comparing them to previous years,
current year management accounts and supporting evidence; and
• Critically assessed the disclosure made within the financial statements for consistency with management’s
assessment of going concern s.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
31
KAVANGO RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAVANGO RESOURCES
PLC FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
Emphasis of matter
We draw attention to notes 3a)(iv) and 20 of the financial statements, which describe an amount of US$637,000
(2022: US$693,000) that remains outstanding at the Statement of financial position date in respect of the November
2022 share placing. Whilst the directors are confident that the balance will be obtained through receipt or re-issuance
to other potential subscribers, the balance remains outstanding at the date of signing the financial statements.
Our opinion is not modified in this respect.
Our application of materiality
Overall group materiality 2023
Overall group materiality 2022
Basis for overall group materiality
US$395,000
US$264,000
2% of gross assets (2022: 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 increased from the previous year. This is predominantly due to the
increase in asset balances as a result of fundraising during the year and engaging in further exploration activity. 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$395,000 (2022: US$264,000), the parent company
overall materiality was set at US$394,999 (2022: US$263,999) with performance materiality set at US$237,000
(2022: US$158,400) for the group and $236,999 (2022: US$158,399) for the parent company, being 60% (2022:
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$19,750 (2022: US$13,200) for the group and US$19,749
(2022: US$ 10,500) as well as differences below that threshold that we believe warranted reporting on qualitative
grounds.
Our approach to the audit
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, the carrying value of investments in subsidiaries and recoverability of intercompany receivables (parent
company only), the valuation of share options and warrants and related party transactions. 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 significant operating components which, for the
year ended 31 December 2023, were located in the United Kingdom and Botswana, with the group’s accounting
functions being based in the UK and Botswana.
The Botswanan components were audited by a component auditor operating under our instruction. The audits were
performed both for consolidation purposes as well as local statutory purposes. There was regular interaction with
32
KAVANGO RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAVANGO RESOURCES
PLC FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
the component auditor during all stages of the audit, and we were responsible for the scope and direction of the audit
process.
Component materiality applied ranged between US$294,000 and US$101,000 with performance materiality of
between US$176,401 and US$60,600 respectively.
We obtained and reviewed remotely the key audit working papers prepared by the auditors of the Botswanan
component, which related to the work performed on the significant risks identified at group level. The component
auditor also 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
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. In addition to the matter described in the material
uncertainty related to going concern section we have determined the matters described below to be the key audit
matters to be communicated in our report.
Key Audit Matter
How our scope addressed this matter
Classification and carrying value of Intangible
Assets
The group has material intangible assets in relation to
capitalised exploration and evaluation costs and a
balance of US$14,618,000
the
Consolidated Statement of Financial Position as at 31
December 2023.
is reported
in
There is a risk that the carrying value of these assets
have not been correctly measured in accordance with
IFRS 6 Exploration for and Evaluation of Mineral
Resources as the carrying value is subject to
management judgement in respect of the indicator of
impairment considerations.
There is also the risk that additions to intangible assets
the year have not been appropriately
during
capitalised in line with IFRS 6.
This risk is considered a key audit matter given the
material balance at year end and high level of
estimation uncertainty.
See note 11 to the financial statements.
Carrying value of the investment in subsidiary and
recoverability of intercompany receivables
(Company only)
Our work in this area included:
• Reviewing costs capitalised during the year under
review, including the considerations made in
respect of their appropriateness for capitalisation
in accordance with IFRS 6’s recognition criteria;
• Confirmation that the group has good title to the
applicable exploration licences, including new
licences obtained during the year;
• Reviewing management’s impairment indicator
the key
assessment paper and challenging
assumptions and inputs, as well as assessing
whether there were any impairment indicators in
accordance with IFRS 6; and
• Ensuring that the disclosures made in the financial
statements are in accordance with IFRS 6 and
other applicable accounting standards.
Based on the audit procedures performed, we found
management’s assessment of the classification and
carrying value of intangible assets to be appropriate and
the judgements and estimates applied reasonable.
Investments in subsidiaries and intercompany loans,
as shown in Note 16 are significant assets in the parent
company’s statement of financial position. Given the
continuing losses, there is a risk that the investments
Our work in this area included:
• Confirming of ownership of investments;
33
KAVANGO RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAVANGO RESOURCES
PLC FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
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
investments and
intercompany receivables which is linked to the future
success of exploration activities and profitability of
the subsidiaries.
these
See note 16 to the financial statements
Other information
• Assessing the recoverability of investments and
to
receivables by
reference
intercompany
underlying net asset values;
• Reviewing management’s impairment assessment
of
investments/intercompany receivables and
challenging the key assumptions and inputs; and
the financial
• Ensuring disclosures made
statements are adequate.
in
Based on the procedures performed, we consider if the
carrying value of investment in subsidiaries 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.
Opinions on other matters prescribed by the Companies Act 2006
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:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
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:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
•
not been received from branches not visited by us; or
the parent company financial statements and the part of the directors’ remuneration report to be audited are not
in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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.
34
KAVANGO RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAVANGO RESOURCES
PLC FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
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.
Auditor’s responsibilities for the audit of the financial statements
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:
• We obtained an understanding of the group and parent company and the sector in which they operate to identify
laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management, industry research, application
of cumulative audit knowledge and experience of the sector.
• We determined the principal laws and regulations relevant to the group and parent company in this regard to
be those arising from:
o Listing Rules
o Companies Act 2006
o The Bribery Act 2010
o Anti-Money Laundering Legislation
o Disclosure rules and Transparency rules for listed entities
o Local industry regulations in Botswana where exploration activity took place; and
o UK and Botswana tax and employment laws
• We designed our audit procedures to ensure the audit team considered whether there were any indications of
non-compliance by the group and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Making enquiries of management
o Reviewing board minutes
o Reviewing legal and professional fees ledger accounts for evidence of any litigation or claims against
the group;
o Reviewing Regulatory News Service (RNS) announcements; and
o Reviewing the group’s related party transactions and disclosures.
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered,
in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls,
that the potential for management bias was identified in relation to the classification and carrying value of
intangible assets and the carrying value of investments in subsidiary and recoverability of intercompany
receivables (parent company only) as described in the Key audit matters section of this report above.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by
performing audit procedures which included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business. Aside from the non-rebuttable presumption of a risk
of fraud arising from management override of controls, we did not identify any significant fraud risks.
• We communicated with component auditors throughout the audit process and performed the following in
respect of matters of non-compliance with laws and regulations including fraud at the group and component
levels:
o Making enquiries of component auditors;
o Reviewing correspondences with authorities;
o Reviewing nominals of legal expenses; and
o Reviewing component auditors’ work in these areas and obtaining their confirmation.
35
KAVANGO RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAVANGO RESOURCES
PLC FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
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.
Other matters which we are required to address
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 7 years,
covering the periods ending 31 December 2017 to 31 December 2023.
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.
Use of our report
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)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
17 April 2024
15 Westferry Circus
Canary Wharf
London E14 4HD
36
KAVANGO RESOURCES PLC
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Continuing operations
Administrative expenses
Pre-licence exploration costs
Other (losses)/gains – (loss)/gain on fair value of financial assets
Loss before taxation
Taxation
31 Dec
2023
US$’000
31 Dec
2022
US$’000
Notes
5
6
8
(2,063)
(1,153)
(77)
(3,293)
-
(2,218)
-
12
(2,206)
-
Loss for the year attributable to owners of the parent
(3,293)
(2,206)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Currency translation differences
Foreign exchange loss on liquidation of subsidiary
Other comprehensive gain/(loss), net of tax
676
(7)
669
(545)
-
(545)
Total comprehensive loss for the year attributable to owners of the parent
(2,624)
(2,751)
Earnings per share from continuing operations attributable to owners of the
parent:
Basic and diluted loss per share (cents)
9
(0.45)
(0.49)
The notes of page 46 to 76 form part of these financial statements.
37
KAVANGO RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Assets
Non-current assets
Property, plant, and equipment
Intangible assets
Total non-current assets
Current assets
Trade and other receivables
Financial assets at fair value through profit or loss
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Shares to be issued
Share option reserve
Warrant reserve
Foreign exchange reserve
Reorganisation reserve
Accumulated losses
Equity attributable to owners of the company
Non-controlling interests
Total equity
Notes
31 Dec
2023
US$’000
31 Dec
2022
US$’000
10
11
17
15
18
19
20
20
21
22
23
352
14,586
14,938
928
378
3,393
4,699
172
9,679
9,851
1,151
-
2,265
3,416
19,637
13,267
1,284
1,284
1,284
571
571
571
18,353
12,696
1,663
25,789
-
1,673
609
(350)
(1,591)
(9,626)
18,167
186
18,353
904
19,296
7
913
650
(1,019)
(1,591)
(6,464)
12,696
-
12,696
The notes of page 46 to 76 form part of these financial statements.
The consolidated financial statements of Kavango Resources Plc, company registered number 10796849, were approved
by the board, and authorised for issue on 17 April 2024 and signed on its behalf by:
……………………
Matthew Benjamin Turney
Director
38
KAVANGO RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Assets
Non-current assets
Investment in subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Financial assets at fair value through profit or loss
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium
Shares to be issued
Share option reserve
Warrant reserve
Foreign exchange reserve
Accumulated losses
Total equity
Notes
31 Dec
2023
US$’000
31 Dec
2022
US$’000
16
17
15
18
19
20
20
21
22
16,856
16,856
11,825
11,825
759
378
3,205
4,342
925
-
2,214
3,139
21,198
14,964
1,065
1,065
466
466
20,133
14,498
1,663
25,789
-
1,673
609
(140)
(9,461)
20,133
904
19,296
7
913
650
(885)
(6,387)
14,498
The notes of page 46 to 76 form part of these financial statements.
Under s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own statement of
comprehensive income. The loss after tax for the year ended 31 December 2023 was US$ 3,205,000 (2022: US$
2,054,000).
The financial statements of Kavango Resources Plc, company registered number 10796849, were approved by the
board, and authorised for issue on 17 April 2024 and signed on its behalf by
……………………
Matthew Benjamin Turney
Director
39
KAVANGO RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Equity attributable to owners of the company
Share
capital
Share
premium
Reorganisation
reserve
Share option
reserve
Warrant
reserve
US$’000
US$’000
US$’000
US$’000
US$’000
As at 1 January 2022
Loss for the year
Other comprehensive loss for the year:
Foreign currency exchange difference
Total comprehensive loss for the year
Warrants issued
Issue of ordinary shares
Costs of share issues
Share-based payments – expensed
Share-based payments – capitalised
Total transactions with owners
As at 31 December 2022
Loss for the year
Other comprehensive loss for the year:
Foreign currency exchange difference
Total comprehensive loss for the year
Warrants issued
Warrants lapsed
Issue of ordinary shares
Costs of share issues
Share-based payments – expensed
Non-controlling interest on acquisition
of subsidiary (note 23)
Total transactions with owners
544
-
-
-
-
360
-
-
-
360
904
-
-
-
-
-
759
-
-
-
759
10,985
-
(1,591)
-
-
-
1,471
7,100
(260)
-
-
8,311
-
-
-
-
-
-
-
-
19,296
-
(1,591)
-
-
-
(90)
-
6,838
(255)
-
-
6,493
-
-
-
-
-
-
-
-
-
457
-
-
-
-
-
-
456
-
456
913
-
-
-
-
-
-
-
760
-
760
As at 31 December 2023
1,663
25,789
(1,591)
1,673
1,764
-
-
-
(1,471)
-
-
-
357
(1,114)
650
-
-
-
90
(131)
-
-
-
-
(41)
609
Foreign
exchange
reserve
US$’000
(474)
-
(545)
(545)
-
-
-
-
-
-
(1,019)
-
669
669
-
-
-
-
-
-
-
Accumulated
losses
Shares to be
issued
Total
US$’000
US$’000
US$’000
Non-
controlling
interests
US$’000
Total
equity
US$’000
(4,258)
(2,206)
-
(2,206)
-
-
-
-
-
-
(6,464)
(3,293)
-
(3,293)
-
131
-
-
-
-
131
363
-
-
-
-
(1,081)
-
180
545
(356)
7
-
-
-
-
-
-
-
(7)
-
(7)
7,790
(2,206)
(545)
(2,751)
-
6,379
(260)
636
902
7,657
12,696
(3,293)
669
(2,624)
-
-
7,597
(255)
753
-
8,095
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
186
186
7,790
(2,206)
(545)
(2,751)
-
6,379
(260)
636
902
7,657
12,696
(3,293)
669
(2,624)
-
-
7,597
(255)
753
186
8,281
(350)
(9,626)
-
18,167
186
18,353
40
KAVANGO RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
Share Capital:
Share Premium:
Amount subscribed for share capital at nominal value
Amount subscribed for share capital in excess of nominal value
Reorganisation Reserve:
Reserve created on issue of shares on acquisition of subsidiaries
Foreign Exchange Reserve
Cumulative translation differences
Accumulated Losses:
Share Option Reserve:
Shares to be issued:
Warrant Reserve:
Cumulative net gains and losses recognised in the consolidated statement of comprehensive income
Amount recognised for the fair value of share options outstanding
Amount of shares the Company has committed to issue
Amount recognised for the fair value of warrants outstanding
The notes of page 46 to 76 form part of these financial statements.
41
KAVANGO RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share
Capital
Share
Premium
US$’000 US$’000
Share
Option
Reserve
US$’000
Warrant
Reserve
US$’000
Foreign
Exchange
Reserve
US$’000
Accumulated
losses
Shares to be
issued
Total
US$’000
US$’000
US$’000
As at 1 January 2022
Loss for the year
Other comprehensive loss for the year:
Foreign currency exchange difference
Total comprehensive loss for the year
Warrants issued
Issue of ordinary shares
Costs of share issues
Share-based payments – expensed
Share-based payments – capitalised
Total transactions with owners
As at 31 December 2022
Loss for the year
Other comprehensive loss for the year:
Foreign currency exchange difference
Total comprehensive loss for the year
Warrant issued
Warrant lapsed
Issue of ordinary shares
Costs of share issues
Share-based payments – expensed
Total transactions with owners
544
-
10,985
-
-
-
-
360
-
-
-
360
904
-
-
-
-
-
759
-
-
759
-
-
1,471
7,100
(260)
-
-
8,311
19,296
-
-
-
(90)
-
6,838
(255)
-
6,493
457
-
-
-
-
-
-
456
-
456
913
-
-
-
-
-
-
-
760
760
1,764
-
-
-
(1,471)
-
-
-
357
(1,114)
650
-
-
-
90
(131)
-
-
-
(41)
56
-
(941)
(941)
-
-
-
-
-
-
(885)
-
745
745
-
-
-
-
-
-
(4,333)
(2,054)
-
(2,054)
-
-
-
-
-
-
(6,387)
(3,205)
-
(3,205)
-
131
-
-
-
131
As at 31 December 2023
1,663
25,789
1,673
609
(140)
(9,461)
42
363
-
-
-
-
(1,081)
-
180
545
(356)
7
-
-
-
-
-
-
-
(7)
(7)
-
9,836
(2,054)
(941)
(2,995)
-
6,379
(260)
636
902
7,657
14,498
(3,205)
745
(2,460)
-
-
7,597
(255)
753
8,095
20,133
KAVANGO RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
Share Capital:
Share Premium:
Amount subscribed for share capital at nominal value
Amount subscribed for share capital in excess of nominal value
Foreign Exchange Reserve:
Cumulative translation differences
Accumulated Losses:
Share Option Reserve:
Shares to be issued:
Warrant Reserve:
Cumulative net gains and losses recognised in the company statement of comprehensive income
Amount recognised for the fair value of share options outstanding
Amount of shares the Company has committed to issue
Amount recognised for the fair value of warrants outstanding
The notes of page 46 to 76 form part of these financial statements.
43
KAVANGO RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Loss before taxation
Adjustments for:
Depreciation
Share option expense
Directors’ fees and other expenses settled by issue of shares
Fair value adjustments
Exchange gain on liquidation of subsidiary
Net cash used in operating activities before changes in working capital
Notes
21a
20
15
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at fair value through profit or loss
Payments for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital and warrants
Share issue costs
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rates on cash and cash equivalents
Cash and cash equivalents at end of year
20
20
31 Dec
2023
US$’000
31 Dec
2022
US$’000
(3,293)
(2,206)
12
753
-
77
(7)
(2,458)
204
(28)
(2,282)
(259)
(445)
-
(3,315)
(4,019)
7,597
(255)
7,342
1,041
2,265
87
3,393
-
456
16
(12)
-
(1,746)
(189)
376
(1,559)
(73)
-
228
(2,758)
(2,603)
4,593
(260)
4,333
171
2,308
(214)
2,265
Note 11 discloses significant non-cash transactions in relation to the Group’s investing activities.
The notes of page 46 to 76 form part of these financial statements.
44
Notes
31 Dec
2023
US$’000
31 Dec
2022
US$’000
(3,205)
(2,054)
21a
16
20
15
16
20
20
753
641
-
77
(1,734)
214
(107)
(1,627)
(445)
-
(1,039)
(3,315)
(4,799)
7,597
(255)
7,342
916
2,214
75
3,205
456
-
16
(12)
(1,594)
(94)
200
(1,488)
-
228
-
(2,715)
(2,487)
4,593
(260)
4,333
358
2,069
(213)
2,214
KAVANGO RESOURCES PLC
COMPANY STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Loss before taxation
Adjustments for:
Share option expense
Impairment of investment in subsidiaries
Directors’ fees and other expenses settled by issue of shares
Fair value adjustments
Net cash used in operating activities before changes in working capital
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Payments for financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of subsidiaries
Loans advanced to group companies
Net cash used in investing activities
Financing activities
Proceeds from issue of share capital and warrants
Share issue costs
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rates on cash and cash equivalents
Cash and cash equivalents at end of year
The notes of page 46 to 76 form part of these financial statements.
45
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. Corporate information
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”) and during the year the Company acquired 90% of Ashmead Holdings (Pty) Ltd (“Ashmead”) and 90%
of 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. The Company is also the parent
company of Navassa Resources Ltd, domiciled in Mauritius.
In order to simplify the corporate structure, Kanye Resources Plc was dissolved on 28 November 2023, and Navassa
Resources Ltd is expected to be liquidated in early 2024.
The principal activity of the Company and its subsidiaries (the “Group”) is exploration for base and precious metals in
Botswana and Zimbabwe.
2. Significant Accounting policies
(a) Basis of preparation
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.
Going concern
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 required level of spending on exploration and
corporate activities for a period of not less than 12 months from the date of signing these financial statements.
As part of the assessment, the Directors have noted that in order to sustain the minimum level of exploration spending
required by the Group’s licence conditions and minimum corporate overheads a further fundraising will be required within
the next 12 months. Successful completion of future fundraisings is inherently uncertain and therefore constitutes a material
uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern. However, encouraged by
positive results of the Group’s exploration activities in Zimbabwe, the Directors have ambitious plans to further expand
the Group’s foothold in the country and are therefore in active discussion with current and potential shareholders who have
indicated their support. The Directors are therefore confident that they will be able to obtain sufficient working capital to
support the Group’s operations and are satisfied that it is appropriate to continue to adopt the going concern basis of
accounting in the preparation of these financial statements.
46
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
2. Significant Accounting policies (continued)
(b) New and amended standards and interpretations
There were no new standards, amendments or interpretations effective for the first time for periods beginning on or after 1
January 2023 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.
(c) Basis of consolidation
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 contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Group's voting rights and potential voting rights.
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.
(d) Investment in subsidiaries
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(k) ‘Financial assets’.
(e) Foreign currencies
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, or each branch within an entity, operates. The consolidated and company
financial statements are presented in US$, which is the Group’s and Company’s presentational currency.
The functional currency of the Company is GBP.
Transactions in currencies other than the functional currency of each entity are recorded at the exchange rate on the date
the transaction occurred. Foreign exchange gains and losses resulting from the settlement of such transactions, and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are
recognised in profit or loss.
47
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
2. Significant Accounting policies (continued)
(e) Foreign currencies (continued)
On consolidation, the results of each entity in the Group with a non-US$ 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.
(f) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker (“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.
(g) Taxation
Income tax expense represents the sum of the current tax and deferred tax charge for the year.
Current tax
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
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.
(h) Pre-licence exploration costs
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.
48
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
2. Significant Accounting policies (continued)
(i)
Intangible Assets
Exploration and evaluation costs
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.
(j) Property, plant and equipment
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:
- Geological and field equipment including vehicles: 4-10 years
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.
49
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
2. Significant Accounting policies (continued)
(k) Financial 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.
Amortised cost
Financial assets held at amortised cost comprise trade and other 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.
Fair value through profit or loss
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.
(l) Financial liabilities
Financial liabilities include 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.
(m) Derivative financial instruments
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.
(n) Equity
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.
50
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
2. Significant Accounting policies (continued)
(o) Share based payments
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.
51
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
3. Critical accounting estimates and judgements
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.
(a) Sources of estimation uncertainty
(i) Valuation of exploration and evaluation assets
The carrying value of exploration assets in the consolidated financial statements as at 31 December 2023 is US$ 14,586,000
(2022: US$ 9,679,000). The recoverability of this carrying value, and thus potential impairment, requires use of significant
judgments and estimates which are detailed in note 11.
(ii) Recoverability of investment in subsidiaries and intragroup receivables
In the company financial statements, the carrying value of the Company’s investment in subsidiaries and intragroup
receivables is US$ 16,856,000 (2022: US$ 11,825,000). The recoverability of this balance 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 11.
(iii) Valuation of share-based payments
Accounting for some equity-settled share-based payment awards requires the use of valuation models to estimate their fair
values and vesting periods. These models require the Directors to make assumptions regarding the share price volatility,
risk free rate and expected life of awards in order to determine the fair values of the awards at grant dates.
(iv) Recoverability of amounts due from shareholders
In the consolidated and company financial statements, the carrying value of the amount due from shareholders is US$
637,000 (2022: US$ 693,000). The Directors are satisfied that this balance is recoverable and therefore no expected credit
loss provision is necessary, further details are included in note 20.
52
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
4. Segmental disclosures
The Group has two reportable segments, Exploration and Corporate, which are the Group’s strategic divisions. 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. 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.
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:
Continuing operations
Corporate (London and Mauritius)*
Exploration (Zimbabwe)
Loss before tax
Taxation
Loss after tax
31 Dec
2023
US$’000
31 Dec
2022
US$’000
(2,140)
(1,153)
(3,293)
-
(3,293)
(2,206)
-
(2,206)
-
(2,206)
*Results of the corporate segment include a share-based payment charge of US$ 760,000 (2022: US$ 456,000) and a loss
on fair value of financial assets of US$ 77,000 (2022: gain of US$ 12,000).
Segmental assets and liabilities are detailed below:
Non-current assets
31 Dec
2023
31 Dec
2022
US$’000
Non-current liabilities
31 Dec
2023
US$’000
31 Dec
2022
US$’000
Exploration: intangible assets and equipment (Botswana)
Exploration: equipment (Zimbabwe)
Corporate (London and Mauritius)
Total of all segments
US$’000
14,737
201
-
14,938
9,851
-
-
9,851
-
-
-
-
-
-
-
-
Exploration (Botswana)
Exploration (Zimbabwe)
Corporate (London)
Total of all segments
Total assets
31 Dec
2023
US$’000
31 Dec
2022
US$’000
Total liabilities
31 Dec
2023
US$’000
31 Dec
2022
US$’000
14,892
402
4,343
19,637
10,112
-
3,155
13,267
175
45
1,064
1,284
106
-
465
571
53
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
5. Pre-licence exploration costs
Pre-licence exploration costs incurred in Zimbabwe
31 Dec
2023
US$’000
31 Dec
2022
US$’000
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 option terms are summarised below:
Nara Project
The Nara Project comprises 45 contiguous gold claims. On 26 June 2023, the Company has 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 code-
compliant 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.
Leopard and Hillside Projects
The Hillside Project comprises 44 gold claims, plus additional claims covering an area of 896Ha at Leopard. On 25 July
2023, the Company entered into an exclusive six-month option agreement to acquire the claims for US$ 500,000 in cash
and 84,000,000 shares, plus a conditional deferred payment based on a declaration of a code-compliant resource estimate.
If the Company exercises the option, it will also take on outstanding debts relating to the projects of US$ 400,000.
On 23 January 2024, the option term was extended by 90 days until 23 April 2024.
54
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
6. Loss before taxation:
Loss before taxation is stated after charging/(crediting) the following:
Depreciation charge, net of amounts capitalised as intangible exploration asset
Employee benefit expenses
Auditor remuneration, net of amounts recognised in share premium
Cumulative gain on foreign exchange of liquidated subsidiary
Net foreign exchange losses and (gains)
Services provided by the Company’s auditor and its associates
Note
7
31 Dec
2023
US$’000
31 Dec
2022
US$’000
12
1,235
88
(7)
15
-
963
127
-
(37)
During the year, the Group (including overseas subsidiaries) obtained the following services from the Company’s auditors
and its associates:
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 and its associates for the audit of the company
and group financial statement - additional fees in respect of the prior year
Fees payable to the Company’s auditor for other permitted non-audit services:
-
-
audit-related assurance services: review of interim report
permitted services relating to a corporate finance transaction: reporting accountant
31 Dec
2023
US$’000
31 Dec
2022
US$’000
80
-
-
8
37
125
74
24
2
27
127
55
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
7. Employees
Employee benefit expenses consisted of the following:
Wages and salaries
Social security costs
Other post-employment benefits
Share-based payment expenses (note 21)
Less: amounts capitalised as exploration assets
Employee benefits recognised in profit or loss
The average monthly number of employees during the year was:
Directors and senior management
Administrative staff
Field personnel
Total
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
828
35
3
760
1,626
(391)
1,235
894
56
16
456
1,422
(459)
963
438
35
3
760
1,236
-
1,236
447
56
4
456
963
-
963
Group
Company
31 Dec
2023
No.
31 Dec
2022
No.
31 Dec
2023
No.
31 Dec
2022
No.
5
2
36
43
5
2
53
60
4
-
-
4
4
-
-
4
Further details of Directors’ remuneration are included in the Directors’ Remuneration Report on pages 26 to 29.
8. Taxation
Current taxation
Deferred taxation
Total tax charge for the year
31 Dec
2023
US$’000
31 Dec
2022
US$’000
-
-
-
-
-
-
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:
Loss for the year
Tax at the applicable rate of 22.5% (2022:18.9%)
Expenses not deductible for tax
Effect of tax losses not recognised as deferred tax assets
Total tax charge for the year
56
31 Dec
2023
US$’000
31 Dec
2022
US$’000
(3,293)
(2,206)
(740)
171
569
-
(417)
92
325
-
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
8. Taxation (continued)
The weighted average applicable tax rate of 22.5% (2022: 18.9%) used is a combination of the 23.5% standard rate of
corporation tax in the UK (2022: 19%), 22% standard rate of corporation tax in Botswana (2022: 22%), nil corporation tax
rate in Mauritius (2022: nil) and the expected tax rate applicable to mining companies in Zimbabwe of 15%.
The Group has approximately US$ 7,082,000 (2022: US$ 13,188,000) 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.
9. Earnings per share
Loss for the year from continuing operations
31 Dec
2023
US$’000
31 Dec
2022
US$’000
3,293
2,206
31 Dec
2023
Number
31 Dec
2022
Number
Weighted average number of ordinary shares for the purpose of calculating
basic and diluted earnings per share
732,929,929
0
445,030,409
8
31 Dec
2023
US Cents
31 Dec
2022
US Cents
Basic and diluted loss per share attributable to owners of the Company
0.45
0.49
The basic and diluted loss per share attributable to owners of the Company are identical as the share options and warrants
detailed in notes 21 and 22 are considered to be anti-dilutive due to the loss made for the year.
10. Property, plant, and equipment
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.
Net book value
At 1 January
Additions
Acquisition of Kanye JV (note 13)
Disposals on reclassification of JV (note 13)
Depreciation
Translation differences
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
172
259
-
-
(71)
(8)
352
221
73
22
-
(129)
(15)
172
-
-
-
-
-
-
-
24
-
-
(24)
-
-
-
Of the total depreciation charge, US$ 59,000 (2022: US$ 129,000) has been capitalised as an intangible exploration asset
(note 11). The remainder of the depreciation charge relates to equipment in Zimbabwe and is included in pre-exploration
expense (note 5).
57
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
11. Intangible assets
Intangible assets comprise entirely of exploration and evaluation assets.
Net book value
At 1 January
Additions
Acquisition of Kanye JV (note 13)
Deemed disposal on reclassification of Kanye JV (note 13)
Translation differences
Total
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
9,679
4,241
-
-
666
14,586
5,075
3,594
1,530
-
(520)
9,679
-
-
-
-
-
-
956
-
-
(956)
-
-
The additions balance relates to the Group’s exploration activity in Botswana and Zimbabwe. Details on the exploration
activity including acquisition of new licences can be found in the Operations Report.
In the year ended 31 December 2023, the additions balance included the following non-cash transactions:
- Acquisition of Icon and Ashmead subsidiaries for US$ 1,720,000 included non-cash consideration (note 12).
- Capitalised share-based payment costs of US$ nil (2022: US$ 143,000) for contractors paid in warrants in the
Company (note 21).
- Drilling contractor costs of US$ nil (2022: US$ 373,000) settled in the Company shares.
- Capitalised depreciation charge of US$ 59,000 (2022: US$ 129,000) in relation to property, plant and equipment used
in exploration activities.
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.
58
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
11. Intangible assets (continued)
Impairment review
The Directors have undertaken a review to assess whether the following impairment indicators exist as at 31 December
2023 or subsequently prior to the approval of these financial statements:
1. Licences to explore specific areas have expired or will expire in the near future and are not expected to be renewed;
2. No further substantive exploration expenditure is planned for a specific licence;
3. Exploration and evaluation activity in a specific licence area have not led to the discovery of commercially viable
quantities of mineral resources and the Board has decided to discontinue such activities in the specific area; and
4. Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full of successful development or by
sale.
Following their assessment, the Directors concluded that no impairment indicators exist and thus no impairment charge is
necessary (2022: US$ nil). The Board is fully committed to continuing exploration on the Group’s existing 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 2024, 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 2024. To date Kavango’s prospecting licences have always been
renewed, consequently the Company’s Directors and management have a reasonable expectation of further renewals being
successful.
12. Acquisition of Icon-Trading Company (Pty) Ltd and Ashmead Holdings (Pty) Ltd
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:
a.
b.
c.
US$ 1,015,000 payable upon on the completion of the acquisition;
US$ 339,000 payable 90 days following the completion of the acquisition; and
US$ 339,000 payable 180 days following the completion of the acquisition.
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 (note 11). 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.
59
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
13. Acquisition of Kanye JV in 2022
On 21 September 2020, the Company entered into a joint venture agreement with Power Metal Resources plc (“Power
Metals”) to set up Kanye JV to jointly own and develop licences in the Kalahari Copper Belt and Ditau regions in Botswana.
On 25 November 2022, the Company acquired Power Metals’ interest in the Kanye JV for the following consideration:
1. 60 million new ordinary shares in the Company plus a mixture of warrants (see note 21c);
2. Royalty Agreement: Power Metals will receive a 1% Net Smelter Return (“NSR”) across the Kanye licence areas
held by Kanye JV as at 8 July 2022. If the Company is able to secure, within two years of the SPA, an NSR of greater
than 2%, the excess over 2% will be split between the parties equally.
3. Sell-on Premium: if the Company sells all or part of Kanye JV for in excess of GBP 7.5 million within 24 months of
the SPA, Power Metals will be paid a proportion of the gross excess received by Kavango above GBP 7.5 million.
Kanye JV does not meet the definition of a business as defined in IFRS 3 Business Combination and therefore represents
an asset purchase. The consideration for the acquisition is a share-based payment, which is measured at the fair value of
the equity instruments issued, as the fair value of the interest in the licences acquired cannot be measured reliably at their
current stage of development. The fair value of the Company shares issued of US$ 1,302,000 was their quoted market price
of 1.8 pence on the acquisition date whilst the warrants were valued at US$ 211,000 (refer to note 21c for valuation
technique and inputs) giving a total consideration of US$ 1,513,000.
The royalty agreement and the sell-on premium represent future liabilities which will be recognised when crystallised.
The assets acquired and liabilities assumed as the result of the acquisition consisted of exploration and evaluation intangible
assets of US$ 1,530,000, property plant and equipment of US$ 23,000 and trade and other liabilities of US$ 40,000.
14. Acquisition of Shongwe Resources (Pty) Limited in 2022
In January 2020 the Group entered into a farm-in agreement with LVR GeoExplorers (Pty) Ltd (“LVR”) in respect of two
licenses wholly owned by LVR. During the year ended 31 December 2021, the Group acquired a 25% interest in the LVR
licences that was transferred into intangible exploration assets.
During the year ended 31 December 2022 the licences were transferred to Shongwe Resources (Pty) Limited, a newly
created company in Botswana with the Group initially holding 25% of the shares in Shongwe Resources (Pty) Limited,
representing its share in the licences. The Group subsequently acquired a further 65% of the shares in Shongwe Resources
(Pty) Limited, taking its interest in the licences to 90%, for the following consideration:
1. 2 million new ordinary shares in the Company at an issue price of 5.5p per share; and
2. 2 million warrants at an exercise price of 8.5p expiring on 25 November 2024.
Shongwe does 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 for the acquisition is a share-based payment, which
is measured at the fair value of the equity instruments issued, as the fair value of the interest in the licences acquired cannot
be measured reliably at their current stage of development. The fair value of the Company shares issued at 5.5p per share
was US$131,000 whilst the warrants were valued at US$ 2,000 (refer to note 21d) for valuation technique and inputs)
giving a total consideration of US$ 133,000.
The consideration was capitalised as intangible exploration assets and included as additions in the year (note 11). There is
no non-controlling interest recognised as a result of this transaction. The Group will carry LVR’s 10% holding through to
bankable feasibility study.
60
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
15. Financial assets at fair value through profit or loss
Interest in listed entities
Interest in listed entities
Group and Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
378
-
Interest in listed entities comprises of the Company’s investments in Power Metal Resources PLC (“Power Metals”) and
Pambili Natural Resources Corporation (“Pambili”).
Power Metals
During the year ended 31 December 2022, the Company disposed of its holding of 11 million shares in Power Metals for
a cash consideration of US$ 228,000.
During the year ended 31 December 2023, the Company reacquired 11 million shares in Power Metals for US$ 195,000.
As at 31 December 2023, the fair value of these shares declined to $109,000 with a loss of US$ 87,000 recognised in profit
or loss. Power Metals is listed on the AIM market of the London Stock Exchange.
Pambili
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$0.05 each. The Company served a binding conversion notice to Pambili on 29 November 2023, which would give
the Company 8,925,000 shares representing approximately 16.6% of Pambili’s enlarged issued share capital. As at 31
December 2023 and the date of approval these financial statements the allotment of these shares remained outstanding
whilst Pambili completes a linked transaction and obtains the necessary approvals from TSX-V. The fair value of the
Company’s interest in Pambili as at 31 December 2023 was US$ 269,000.
The movement in the fair value of the Company’s interest in listed entities is detailed below:
At 1 January
Additions
(Loss) / gain on the change in fair value
Translation differences
Disposals
At 31 December
Group and Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
-
445
(77)
10
216
-
12
-
378
(228)
-
61
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
16. Investments in subsidiaries
Company
Shares in subsidiaries
Loans to subsidiaries
Total
31 Dec
2023
US$’000
31 Dec
2022
US$’000
2,633
14,223
16,856
2,347
9,478
11,825
Loans to subsidiaries are interest free and payable on demand.
During the year-ended 31 December 2023, the Company acquired 90% interest in Icon and Ashmead for a total
consideration of US$ 1,015,000 cash paid on acquisition, plus deferred cash consideration of US$ 678,000 and transaction
costs of US$ 27,000 (note 12).
Kanye Resources Plc was dissolved on 28 November 2023 with a loss on liquidation of US$ 235,000 recognised in the
Company’s profit or loss. Cumulative gain on foreign exchange of US$ 7,000 was recognised in Group’s profit or loss.
On 31 December 2023, in preparation for a planned liquidation of Navassa Resources Ltd., the Company impaired the
carrying value of its loan receivable from and the cost of investment in the entity by US$ 122,000 and US$ 284,000
respectively, leading to an impairment loss of US$ 406,000 recognised in the Company’s profit or loss.
During the year-ended 31 December 2022, as a result of the Company obtaining full control of Kanye JV (note 13), the
Company derecognised its share of the assets and liabilities of the JV and recognised a loan to subsidiaries, as the control
of the assets and liabilities was deemed to have passed to the underlying subsidiaries. A gain of US$ 94,000 was therefore
recognised in the Company’s profit or loss for the year-ended 31 December 2022 representing the difference between the
carrying value of net assets transferred and the nominal value of the loan.
The Directors conducted an impairment review and are satisfied that the carrying value of US$ 16,856,000 (2022: US$
11,825,000) is reasonable and no further impairment is necessary (2022: US$ nil), as the recoverability of the intercompany
balances are intrinsically linked to the value of the underlying exploration assets. The recoverability of the Group’s
exploration assets is discussed in note 11.
List of subsidiary undertakings
Name
Country of incorporation and
principal place of business
Nature of business
Proportion of equity shares
held by the Company
Mauritius
Navassa Resources Ltd
Botswana
Kavango Minerals (Pty) Ltd
Botswana
Kanye Resources (Pty) Ltd
Botswana
Shongwe Resources (Pty) Ltd
Botswana
Ashmead Holdings (Pty) Ltd
Icon-Trading Company (Pty) Ltd
Botswana
Kavango Zimbabwe (Private) Limited Zimbabwe
Holding company
Mineral exploration
Mineral exploration
Licence holding company
Licence holding company
Licence holding company
Mineral exploration
100%
100% (indirect holding)
100%
90% (indirect holding)
90%
90%
100%
The registered address of Navassa Resources Ltd is Level 3, 35 Cybercity Ebene, Mauritius.
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.
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.
62
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
17. Trade and other receivables
Amounts due from shareholders
VAT recoverable
Other receivables and prepayments
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
637
107
184
928
693
335
123
1,151
637
28
94
759
693
111
121
925
Further details on the amounts due from shareholders is included in note 20.
18. Cash and cash equivalents
Cash in bank
Cash in hand
Total
19. Trade and other payables
Trade payables
Accruals and other payables
Deferred consideration (note 12)
Other tax and social security
Total
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
3,317
76
3,393
2,228
37
2,265
3,205
-
3,205
2,214
-
2,214
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
230
356
681
17
1,284
300
226
-
45
571
145
224
681
15
1,065
291
131
-
44
466
63
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
20. Share Capital
As at 1 January 2022
Reserve transfer from warrant reserve
Exercise of B warrants
Exercise of 4.25p warrants
May Placing
November Placing
Acquisition of Kanye JV
Acquisition of Shongwe
Shares issued to drilling contractor
Director subscriptions: Mike Moles
Issue costs
As at 31 December 2022
Purebond Placing
Issue costs
Warrants granted
As at 31 December 2023
Number of
shares
No.
406,470,762
-
1,625,000
2,181,818
25,000,000
194,444,437
60,000,000
2,000,000
13,478,951
368,346
-
705,569,314
600,000,000
-
-
1,305,569,314
Share capital
Share premium
Total
US$’000
US$’000
US$’000
544
-
2
3
31
234
72
2
16
-
-
904
759
-
-
1,663
10,985
1,471
51
122
903
3,930
1,230
128
720
16
(260)
19,296
6,838
(255)
(90)
25,789
11,529
1,471
53
125
934
4,164
1,302
130
736
16
(260)
20,200
7,597
(255)
(90)
27,452
The Company has one class of ordinary shares of 0.1 penny each which entitle the holders to receive dividends as declared
from time to time and to vote at meetings of the Company. All ordinary shares rank equally with regard the Company’s
residual net assets. There are no restrictions on the transfer of shares.
During the year ended 31 December 2023 the Company raised US$ 7,597,000 through the issue of 600,000,000 shares.
Details of the warrants issued during the year are included in note 22.
The total cash received, before issue costs, by the Company for the shares issued during the year ended 31 December 2023
was US$ 7,597,000 (2022: US $4,593,000).
In November 2022 the Company raised US$ 4,164,000 through the issue of 194,444,437 shares and 194,444,437 3p
warrants. Of this amount, as at 31 December 2023 and at the date of approval of these financial statements, £500,000 (US$
637,000; 2022: US$605,000) remain outstanding from one subscriber, Arigo Capital, and are included within the trade and
other receivables balance (note 17). The Directors are in continued discussions with Arigo Capital on arranging a settlement
solution and expect this to be resolved in the first half of 2024. However, should the funds ultimately not be received, the
Directors have the ability to issue the shares to a new subscriber for a similar premium or may cancel the shares. Therefore,
no expected credit loss provision has been recognised as at 31 December 2023 (2022: US$ nil).
64
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
21. Share-based payments
The Company is party to the following share-based payment arrangements:
(a)
(b)
(c), (d) Warrants issued as part of corporate acquisitions.
Share options issued to employees and others providing similar services;
Warrants issued to third-party suppliers for the provision of exploration and corporate services; and
The Company also settles some of its capitalised drilling contractor invoices in shares (note 20).
Warrants issued to shareholders as part of fundraising are disclosed in note 22.
Movements in the Share Options Reserve are detailed below:
As at 1 January 2022
Share-based payments – expensed
As at 31 December 2022
Share-based payments – expensed
As at 31 December 2023
(a) Share Options
Share options granted prior to 1 January 2022
Share Options
Reserve
US$’000
457
456
913
760
1,673
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:
(i) a minimum service period, ranging between 6 and 24 months;
(ii) the Company share has to hit a set threshold on any 5 trading days; and
(iii) the option holder has to be employed on the date of exercise, unless employment is terminated by the Company and
‘good leaver provisions’ apply.
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 addition, 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 options have a grant date of 1 December
2021 and have been accounted for from that date (“2021 Unissued Options”).
65
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
21. Share based payments (continued)
(a) Share Options (continued)
Share options granted in the year ended 31 December 2022
There were no new options granted during the year. On 4 January 2022 the Company executed 4,500,000 option agreements
in relation to the 2021 Unissued Options, which are accounted for as being issued in the preceding year.
Share options granted in the year ended 31 December 2023
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 cancelation 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:
(i)
(iii)
(iv)
a minimum service period, ranging between 6 and 18 months and the Company share price closing at 6p or above
on any 5 trading days; or
the Company share price closing at 7.5p or above on any 5 trading days; or
change of control of the Company.
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:
Number of Options
Share price at the date of grant (pence)
Exercise price (pence)
Term
Expected exercise date
Dividend yield
Annual risk-free rate
Volatility
Total fair value
Estimated vesting period for non-CEO options
66
3 February 2023
Options
42,820,000
1.3
3.0
7 years
On vesting
0%
2.98%
84.90%
US$ 319,000
5 to 7 years
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
21. Share based payments (continued)
(a) Share Options (continued)
Share options granted in the year ended 31 December 2023 (continued)
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 issues 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:
Number of Options
Share price at the date of grant (pence)
Exercise price (pence)
Term
Expected exercise date
Dividend yield
Annual risk-free rate
Volatility
Summary
20 November 2023
Options
68,000,000
0.7
1.1
7 years
On expiry
0%
3.96%
87.29%
31 Dec 2023
31 Dec 2022
Number of
Options
Average
exercise price
(pence)
Number of
Options
Average
exercise price
(pence)
At 1 January
Granted during the year
Cancelled
Lapsed
At 31 December
45,475,000
110,820,000
(10,000,000)
-
146,295,000
4.24
1.83
5.50
-
2.33
46,475,000
-
-
(1,000,000)
45,475,000
Exercisable at 31 December
114,295,000
2.42
20,475,000
4.25
-
-
5.00
4.24
4.25
67
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
21. Share based payments (continued)
(a) Share Options (continued)
Summary (continued)
Share options outstanding as at 31 December 2023 have the following expiry dates and exercise prices:
Scheme
2018 Options
2019 Options
2020 Options
2021 February Options
2021 June Options
2021 August Options
2023 February Options
2023 November Options
Total
Number of
Options
Weighted average
exercise price
(pence)
Weighted average
contractual life
(years)
13,400,000
2,600,000
2,725,000
3,500,000
4,750,000
8,500,000
42,820,000
68,000,000
146,295,000
2.80
2.50
0.80
3.30
5.00
6.20
3.00
1.10
2.33
4.85
5.33
6.34
7.11
4.43
4.61
5.82
6.89
6.14
A charge of US$ 760,000 (2022: US$ 456,000) was recognised in profit or loss in respect of the Company share options.
(b) Supplier warrants
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 2023, 1 million
(2022: 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 the significant inputs summarised below:
Share price at the date of grant (pence)
Exercise price (pence)
Dividend yield
Term
Annual risk-free interest rate
Volatility
Number of warrants issued
Total fair value of the warrants
3p warrants
1.85
3.0
0%
2.0 years
4.04%
72.6%
8,333,334
US$ 51,000
68
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
21. Share based payments (continued)
(b) Supplier warrants (continued)
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:
Share price at the date of grant (pence)
Exercise price (pence)
Dividend yield
Term
Annual risk-free interest rate
Volatility
Number of warrants issued
Total fair value of the warrants
3p warrants
1.85
3.0
0%
2.0 years
3.03%
71.5%
14,466,667
US$ 90,000
The fair value of broker warrants was charged against share premium.
(c) Acquisition of Kanye JV
In 2022 the Company issued 75,000,000 warrants to Power Metals as part of the acquisition of Kanye JV (note 13),
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 with the significant inputs summarised
below:
Share price at the date of grant (pence)
Exercise price (pence)
Dividend yield
Term
Annual risk-free interest rate
Volatility
Number of warrants issued
Total fair value of the warrants
4.25p warrants
1.8
4.25
0%
2.17 years
3.26%
71.2%
30,0000,000
US$ 123,000
5.5p warrants
1.8
5.5
0%
2.17 years
3.26%
71.2%
30,000,0000
US$ 88,000
The value of the 15 million variable price warrants was clearly trivial and they lapsed unexercised on 7 January 2023.
(d) Acquisition of Shongwe Resources (Pty) Ltd
As disclosed in note 14, in 2022 the Company issued 2,000,000 warrants to LVR 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 the significant
inputs summarised below:
Share price at the date of grant (pence)
Exercise price (pence)
Dividend yield
Term
Annual risk-free interest rate
Volatility
Number of warrants issued
Total fair value of the warrants
69
8.5p warrants
1.7
8.5
0%
2.0 years
4.04%
72.7%
2,000,000
US$ 2,000
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
22. Warrant reserve
At 1 January
Transfer to share premium
Share-based payments – note 21
Warrants issued during the year – note 21
Warrants lapsed during the year
At 31 December
Group and Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
650
-
-
90
(131)
609
1,764
(1,471)
357
-
-
650
Details of the warrants outstanding as at 31 December 2023 are as follows:
Warrants
Exercise price
(pence)
2021 Spectral Warrants
2022 3.0p Placing
2023 5.0p Broker Warrants
2022 Shongwe Warrants
2022 Tamesis Warrants
2022 Power Warrants
2022 Power Warrants
4.25
3.00
3.00
8.50
3.00
4.25
5.50
Grant date
Expiry date
20 April 2021
17 November 2022
17 November 2022
17 November 2022
17 November 2022
25 November 2022
25 November 2022
20 April 2025
17 November 2024
17 November 2024
17 November 2024
17 November 2024
8 January 2025
8 January 2025
No of Warrants
outstanding
1,000,000
194,444,437
14,466,667
2,000,000
8,333,334
30,000,000
30,000,000
280,244,438
During the year ended 31 December 2023, a total of 195,435,423 warrants lapsed unexercised (2022: none).
2022 3.0p Placing
In November 2022 as part of a share placing (note 20) the Company granted 194,444,437 warrants exercisable at 3.0p for
a period of 2 years.
No 3.0p warrants were exercised during the year (2022: none).
Details of other warrants can be found in note 21(b).
23. Non-controlling interests
At 1 January
Addition on acquisition of subsidiaries
At 31 December
31 Dec
2023
US$’000
31 Dec
2022
US$’000
-
186
186
-
-
-
As at 31 December 2023, 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 (2022: US$ nil). The acquisition of Icon and
Ashmead in November 2023 is detailed in note 12 and the acquisition of Shongwe during the year ended 31 December
2022 is detailed in note 14.
70
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
24. Financial instruments
(a) Categories of financial instruments
Financial assets
Financial assets at amortised cost:
Other receivables
Cash and cash equivalents
Loans to subsidiaries
Financial assets at fair value through profit or loss:
Interest in listed securities
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
637
3,393
-
4,030
693
2,265
-
2,958
637
3,205
14,223
18,065
693
2,214
9,624
12,531
378
-
-
378
-
Total financial assets
4,408
2,958
18,443
12,531
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables
Deferred consideration
Group
Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
31 Dec
2023
US$’000
31 Dec
2022
US$’000
587
681
1,268
526
-
526
369
681
1,050
466
-
466
There is no material difference between the carrying value and fair value of the Group’s and Company’s cash balances,
other receivables, loans to subsidiaries and trade and other payables because of their short maturities.
(b) Fair value hierarchy
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 2023 (2022: none).
Level 1 – Quoted market prices
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:
Interest in listed securities
Group and Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
378 x
-
71
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
24. Financial instruments (continued)
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 2023, 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.
(c) Risk Management
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
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.
72
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
24. Financial instruments (continued)
(i) Currency risk
Currency risk is the risk that 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:
Group
GBP
US$’000
31 Dec 2023
USD
US$’000
BWP
US$’000
GBP
US$’000
31 Dec 2022
USD
US$’000
BWP
US$’000
Cash and cash equivalents
Trade and other receivables
Trade and other payables
3,027
637
(132)
304
-
-
(
62
387
(109)
2,226
704
(453)
2
-
-
37
(11)
(73)
Company
GBP
US$’000
31 Dec 2023
USD
US$’000
BWP
US$’000
GBP
US$’000
31 Dec 2022
USD
US$’000
BWP
US$’000
Cash and cash equivalents
Trade and other receivables
Loan to subsidiaries
Trade and other payables
1,084
637
12,442
(132)
1
-
-
(1)
(
-
-
-
-
2,213
704
2,201
(436)
1
-
9,624
-
-
-
-
(30)
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.
In the year ended 31 December 2022 the Company redenominated its group loans to subsidiaries in Botswana from USD
to GBP. The Company is therefore no longer exposed to the currency risk on the loans. Gains and losses on the
intercompany funding loans 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.
(ii) Interest rate risk
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 external borrowing and are not relying
on interest income for funding.
(iii) Equity price risk
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$ 378,000 at of 31 December 2023 (2022: US$ nil).
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 monitor the liquidity of their shares to mitigate the financial impact
of a sudden depreciation in their value. As the shares in Pambili remain to be issued, the Company’s interest in Pambili is
illiquid.
73
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
24. Financial instruments (continued)
Credit risk
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 2023 is detailed below:
For the Group, credit risk arises primarily from cash balances held at banks. The risk is mitigated by using only reputable
financial institutions with a high credit rating. The Group’s exposure to the amounts due from shareholders is discussed in
note 20.
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 11, 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
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.
The Group and Company have no external borrowings (2022: none) and all their liabilities are due within six months.
(d) Capital risk management
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.
25. Commitments
The Group’s licence expenditure commitments are:
Within 12 months
Years 2-5
Total
31 Dec
2023
US$’000
31 Dec
2022
US$’000
-
510
510
1,496
473
1,969
As at 31 December 2023 the Group had no (2022: US$ nil) contractual commitments with either geophysics or drilling
companies and no contingent liabilities (2022: US$ nil). The Group can cancel its option agreements in Zimbabwe with no
penalty.
74
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
26. Related party transactions
Key management personnel consists of Company directors.
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payment expenses (note 21)
Group and Company
31 Dec
2023
US$’000
31 Dec
2022
US$’000
473
3
760
1,236
503
4
456
963
Short-term benefits disclosed above include US$76,000 (2022: US$ nil) of annual bonuses which were accrued at year end
and included within other payables.
Transactions with other related parties
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 $69,000 (2022: US $95,000) and the transaction was carried out at arms-
length.
Communication services were provided 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 $48,000 (2022: US$ 65,000) and the transaction was carried out at arms-length.
The Group incurred corporate consultancy costs of US$ 108,000 (2022: US$ nil) provided by Peter Wynter Bee, a non-
executive director of the Company. The transaction was carried out at arms-length and the amount remains outstanding as
at 31 December 2023 and is included within trade payables.
Transactions with Company subsidiaries
During the year the Company advanced funds to Kavango Minerals (Pty) Limited totalling US$ 1,608,000 (2022: US$
1,505,000). In addition, US $128,000 of intercompany receivable previously held by Navassa Resources Ltd was
transferred to the Company (detailed below). The total loan outstanding as at 31 December 2023 was US$ 7,903,000 (2022:
US$ 5,831,000). A gain on foreign exchange 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$ 1,231,000 (2022: US$
3,031,000). A portion of the loan was previously held via Kanye Resources Plc, a subsidiary of the Company which was
liquidated during the year with US$ 235,000 of the loan written-off. The total loan outstanding as at 31 December 2023
was US$ 4,539,000 (2022: US$ 3,396,000). A gain on foreign exchange of US$ 147,000 was included in the Company’s
other comprehensive income.
During the year the Company advanced funds to Navassa Resources Ltd totalling US$ 13,000 (2022:US$ nil). In addition,
Navassa Resources Ltd used US$ 128,000 of its intercompany receivable from Kavango Minerals (Pty) Limited to settle
part of its debt with the Company. The Company impaired the carrying value of its loan receivable from and the cost of
investment in Navassa Resources Ltd by US$ 122,000 and US$ 284,000 respectively. The total loan outstanding as at 31
December 2023 was US$ nil (2022: US$ 251,000). A loss on foreign exchange of US$ 14,000 was included in the
Company’s profit or loss.
During the year the Company advanced funds to Kavango Zimbabwe (Private) Limited totalling US$ 466,000 (2022: US$
nil). The total loan outstanding on 31 December 2023 was US$ 466,000 (2022: US$ nil).
During the year, 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, which remain
outstanding as at 31 December 2023.
75
KAVANGO RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (continued)
27. Events after the reporting date
After the year-end, the Company formed a new subsidiary in Zimbabwe, Kavango Mining (Pvt) Limited, which on 8 March
2024 signed its first contract to commence immediate gold mining operations at the Hillside Project. The contract is not
contingent on the Company exercising its option to acquire the project and is planned to represent the Group’s first revenue
stream. An update on the Group’s exploration activities is included in the Operations Report.
28. Ultimate Controlling Party
The Directors do not believe that there is an ultimate controlling party of the Group.
76