Annual Report and Financial Statements
for the year ended 31 December 2024
Company registration number: 10796849
(England and Wales)
Kavango Resources PLC Annual Report and Financial Statements for the year ended 31 December 2024
Company Information...................................................................................................................................... 1
Forward Looking Statements......................................................................................................................... 1
Chairman’s Statement................................................................................................................................... 2
Operations Report.............................................................................................................................................4
Board of Directors and Senior Management........................................................................................15
Strategic Report................................................................................................................................................18
Directors’ Report...............................................................................................................................................25
Corporate Governance Report..................................................................................................................28
Directors’ Remuneration Report................................................................................................................37
Statement of Directors’ responsibilities................................................................................................. 41
Independent auditor’s report to the members of Kavango Resources plc...........................42
Consolidated statement of total comprehensive income........................................................... 49
Consolidated statement of financial position................................................................................... 50
Company statement of financial position............................................................................................51
Consolidated statement of changes in equity...................................................................................52
Company statement of changes in equity......................................................................................... 54
Consolidated statement of cash flows................................................................................................. 56
Company statement of cash flows.........................................................................................................57
Notes to the financial statements........................................................................................................... 58
CONTENTS
Investor and academic site visit to
Zimbabwe exploration camp
1
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
COMPANY INFORMATION
REGISTERED OFFICE
Salisbury House, Suite 425
London Wall
London EC2M 5PS
United Kingdom
REGISTERED NUMBER
10796849 (England and Wales)
REGISTRARS
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey GU9 7XX
United Kingdom
BROKERS
First Equity Limited
Salisbury House
London Wall
London EC2M 5QQ
United Kingdom
AUDITOR
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
United Kingdom
SOLICITORS
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
United Kingdom
PRINCIPAL BANKERS
Lloyds
198-200 The Marlowes
Hemel Hempstead
Hertfordshire HP1 1BH
United Kingdom
Barclays PLC
Level 15
1 Churchill Place
Canary Wharf
London
E14 5HP
United Kingdom
WEBSITE
www.kavangoresources.com
DIRECTORS
David Smith
Non-Executive Chairman
Peter Wynter Bee
Non-Executive Director
Matthew Benjamin Turney
Chief Executive Officer
Brett Grist
Chief Operating Officer
(Resigned 29 May 2024)
Hillary Nyakunengwa Gumbo
Founder & Executive Director
Jeremy S. Brett
Executive Director
(Resigned 27 May 2024)
Donald McAlister
(Appointed 6 June 2024)
Alexandra Gorman
(Appointed 6 June 2024)
COMPANY SECRETARY
Brett Grist
(Resigned 30 September 2024)
Lorraine Whitehorn
(Appointed 30 September 2024)
Forward Looking Statements
This Annual Report and Accounts 2024 contains certain forward-looking statements with respect to the financial condition,
sustainability related matters, results of operations and business of the group, including the strategic priorities; financial,
investment and capital targets; and Kavango Resources Plc’s (‘Kavango’) ability to contribute to Kavango’s environmental, social
and governance (‘ESG’) ambitions, targets and commitments described herein.
Statements that are not historical facts, including statements about the group’s beliefs and expectations, are forward-looking
statements. Words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, ‘potential’ and ‘reasonably
possible’, variations of these words and similar expressions are intended to identify forward looking statements. These
statements are based on current plans, estimates and projections, and therefore no undue reliance should be placed on them.
Forward-looking statements apply only as of the date they are made. Kavango makes no commitment to revise or update
any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking
statement.
Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors, including
ESG related factors, could cause actual results to differ, in some instances materially, from those anticipated or implied in any
forward-looking statement.
CHAIRMAN’S STATEMENT
2
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
CHAIRMAN’S STATEMENT
I am pleased to present the financial results for Kavango
Resources Plc (“Kavango” or the “Company”), the group
focussed on metals production and exploration
in Botswana and Zimbabwe, for the year ended
31 December 2024.
In 2024, the Company raised £3.8 million via convertible
loan notes (“CLN”), issued to our Deputy Chairman and
our majority shareholder, providing sufficient capital
to progress the first phase of the CapEx programme
in Zimbabwe. A further £6.5 million was raised via
subscription from a combination of new and existing
shareholders post year end, placing Kavango in a strong
position for a junior mining company going into 2025.
The new shares were issued and the subscription funds
released following the publication of the FCA approved
prospectus in January 2025.
BOTSWANA
In Botswana, the Company started 2024 with the
announcement of the completion of the Kalahari Copper
Belt (“KCB”) airborne geophysical survey and having
undertaken a number of drilling campaigns, had by the
year end gathered valuable data to build a vectoring
model and determine the geophysics for the next phase of
drilling. The large Karakubis Copper Project, part of our KCB
mineral rights package, appears increasingly prospective
for large-scale copper deposits.
During the year a technical report completed by a
recognised mining advisor on the Ditau Project (“Ditau”)
concluded that Ditau is an attractive early-stage
exploration project with the potential to host a variety of
mineralisation styles.
A large amount of geological and geophysical work has
now been completed across the area covered by the
Kalahari Suture Zone (“KSZ”) licences which has confirmed
a number of important geological features. The expert
Technical Report has been received and the results and
recommendations of this will be used by the Company to
advance the project.
ZIMBABWE
In Zimbabwe, Kavango is a gold producer whilst also
exploring for gold deposits on the greenstone belt, where
the focus has been those claims highly prospective for gold
with the potential to be brought into production quickly.
During 2024, the Company entered into agreements for the
purchase of claims known as the Hillside & Leopard Gold
Projects (“Hillside & Leopard”), where results continue to
identify a growing number of opportunities for near-term
gold production. Prospect 3 has the profile for an open pit
operation and heap leaching, using modern innovative
mechanised mining technology developed through the
experience of Australian miners. We believe that Zimbabwe
has the potential for hosting a multitude of bulk mineable
gold deposits.
In March 2024, Kavango Mining was established to mine
gold at Hillside & Leopard.
The Company is assessing the potential for large-scale
underground bulk mining at the Nara Gold Project (“Nara”).
The option for the acquisition of claims expires on 30 June
2025 and our work in 2024 leads us to believe that Nara
could be developing into a significant opportunity for
Kavango.
The announcement in 2024 of the intention to implement
a secondary listing on the Victoria Falls Stock Exchange
following the publication of the prospectus is a progression
of our commitment to invest heavily in Zimbabwe’s gold
exploration and mining sectors and endorses our intention
to promote local ownership in Kavango, in keeping with
the Company’s strategy and that of the Zimbabwe
Government’s stated “Vision 2030” to transform Zimbabwe
into a knowledge driven and industrialising upper
middle-income economy.
More detailed information about the Company’s projects
in Botswana and Zimbabwe is provided in the CEO report.
During 2024, the Group incurred a loss of US$ 8,662,000
equivalent to a loss of US$ 0.59 cents per share (2023: US$
3,293,000, equivalent to a loss of US$ 0.45 cents per share).
In June 2024, the directors, having considered commercial
needs, restructured the Board of Kavango (the “Board”)
and were delighted when Peter Wynter Bee agreed to
assume the role of Deputy Chairman. Donald McAlister
and Alex Gorman joined as Non-Executive Directors and
have considerably strengthened the dynamic of the Board.
As recently announced, Alex will join the Company full time
during mid 2025 as Chief Operating Officer and move to
Zimbabwe.
I should like to take this opportunity on behalf of the Board
to thank our dedicated workforce, led by our CEO and
highly experienced executive team, based in Botswana
and Zimbabwe, supported by consultants of the highest
quality, for their hard work throughout the year, and
our shareholders for their continued support and for
enthusiastically sharing our vision.
Kavango started and ended 2024 in a strong position and
as 2025 progresses, the Company continues to build a
robust operation with the immediate focus on near term
free cashflow generation, with the potential to maximise
shareholder value whilst also striving for excellence by
adhering to the highest ethical principles, demonstrating
unwavering integrity through its actions and committing to
sustainable practices in all aspects of the business.
We look forward to updating the market in due course.
David Smith
Chairman
25 April 2025
CHAIRMAN’S STATEMENT
OPERATIONS
REPORT
3
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Exploration drilling
OPERATIONS REPORT
4
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
It is difficult for a company like Kavango to communicate
to shareholders quite how much effort goes into proper
metals exploration. Even relatively small areas of ground,
such as the 900 hectares we are exploring in Zimbabwe,
can pose complex challenges to solve. Exploration over
thousands of square kilometres, as we are doing in
Botswana, is even more demanding.
However, Kavango is a unique company on the London
Stock Exchange, thanks to the exceptional support of our
major shareholder Purebond and Director Peter Wynter
Bee. Through Purebond and Peter’s strong financial
backing, Kavango has been able to perform more like
a private equity backed business rather than a listed
start-up.
The speed at which our team has worked our ground in
Zimbabwe has been extremely impressive. We have been
able to pursue ambitious and aggressive exploration,
to the point we could be on the cusp of moving into
substantial cash flow generation.
2024 laid the foundation for what I hope will be our
breakthrough year in 2025.
ZIMBABWE
In Zimbabwe, Kavango made outstanding progress
over the course of 2024. In this year’s annual report, I will
present a detailed, month-by-month account of how
much work our team has done. I am incredibly proud of
the effort everyone has put in. This was a year in which we
embedded ourselves in this country’s economy and forged
strong partnerships with local and national stakeholders.
Coming into 2024, our objective was to make at least one
significant gold discovery that we could advance towards
production. As things stand, we believe we could have
made up to three, possibly even four such discoveries. We
now await drill results in eager anticipation, and I hope to
be able to write in next year’s report that we have received
the confirmation of the results our team’s hard work
deserves.
During 2024, we learned a lot about operating in Zimbabwe
and have gone a long way to prove that this country is
“open for business”. Our work in the field has demonstrated
the clear potential in Zimbabwe’s goldfields for modern
exploration. The next stage for Kavango will be to prove
that these goldfields can be developed quickly through
modern mechanised mining.
Each month, our exploration team provides a written
progress report. I share highlights from each report below:
•
January: Hillside
•
Following field mapping of artisanal workings across
the Hillside Gold Project (“Hillside Project”), three
initial Prospects were identified for drilling in Q4 2023,
comprising Prospect 1 - Bill’s Luck, Prospect 2 - Britain,
and Prospect 3 - Nightshift.
•
One preliminary exploration hole was drilled on
each project to ascertain the types of lithology
and structural features present, test grade and
distribution together with intersection widths present
in any potential hosting quartz-vein shears.
•
An additional target was identified at Prospect
4 - Steenbok, and was drilled in January. Further
exploration holes were planned for this target.
•
January: Nara
•
A geochemical soil sampling programme with a total
of 1,777 samples was undertaken in conjunction with
reconnaissance geological mapping.
• Provisional pXRF (X-Ray Fluorescence) analyses were
completed on the soil samples.
•
A large tailings dump, estimated to contain around
240,000 tonnes, was augur drilled on a 20m hole
spacing. A total of 90 drill holes were completed
generating 273 samples. The samples were batched
and sent for analysis.
•
January: Leopard
•
The Environmental Impact Assessment (EIA) was
completed on the Leopard project, in preparation for
an initial geochemical soil sampling program.
•
A drone survey completed over both the Leopard
prospect areas (North & South), over a total area
of 8.96km2. The data collected included Magnetics,
Digital Terrain Mapping (“DTM”), orthorectified
photography.
•
February: Hillside
•
The Company commenced ground IP (Induced
Polarisation) surveys over four of its Hillside Project
Mines producing
> 1million oz. (to 1990)
Known Gold Deposits
Greenstone Belts
Major Cities
KEY
Kavango’s target area
Bulawayo
Filabusi
Greenstone Belt
OPERATIONS REPORT
ZIMBABWE
5
OPERATIONS REPORT
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
prospects. The results of the work were to inform
future expanded drilling programs.
•
Kavango completed 16-line kms of IP survey lines
over targeted areas within four prospects on the
Hillside Project.
•
These IP surveys were designed to identify sulphide
bodies associated with high-grade gold-bearing
shear structures related to historic and artisanal
workings.
•
Drilling on four prospects within the Hillside Project:
•
Four diamond core holes were completed for a
total of 1,306m at four prospects on the Hillside
Project gold targets.
•
Visual observations from the cores were very
encouraging and samples were dispatched for
assay.
•
An additional 1,400m of diamond drilling was
planned to test targets identified from the IP survey
programme and assess intersections observed in
the drilling.
•
February: Nara
•
Access and infrastructure preparation was
completed at Nara Project for a drilling programme
to be based on an initial geological mapping
exercise, proposed ground geophysics, and assays
from soil geochemistry programmes.
•
February: Leopard
•
Preparation was underway for ground geophysical
surveys and geochemical soil sampling programmes
at the Leopard Project.
•
March: Hillside
•
The Company formed a subsidiary in Zimbabwe;
Kavango Mining (Pty) Limited (“Kavango Mining”).
Kavango Mining was established to become the
Company’s mining arm in Zimbabwe.
•
Further, the Company signed its first contract to
commence immediate gold mining operations at the
Hillside Project (“Hillside”) (the “Mining Contract”).
•
Moving into mining provided significant proof
of progress in Kavango’s development by both
affording a route to revenue, and in enabling the
Company to navigate the challenges associated with
production ahead of the Company’s aim of achieving
larger scale production in the longer term.
•
March: Nara
•
Mapping of zones of interest, identified from old
workings and artisanal mining was carried out over
seven zones: South Zone, Far East Zone, Box Zone,
House Zone, Old Football pitch (covering Kent mine),
Killarney mine west extension and the Far West Zone.
•
A programme of ground magnetic surveys was
initiated to identify areas of interest utilising both
Gradient Array IP and stacked Schlumberger sections.
•
Equity Drilling Zimbabwe started drill programme
at Nara with NASSDD001 on the South Zone and
was completed at a depth of 151,40m. Lithologies
intersected include meta volcanoclastic sediments
and meta basalt. Several carbonate altered shear
zones were noted.
•
In March 2024, Kavango received a maiden Resource
Estimate (the “Resource Estimate”) for two tailings
dumps on the Nara Project.
•
The Resource Estimate highlights the potential for the
tailings dumps to provide Kavango with a significant
near-term source of gold production and early,
non-dilutive free cash flow:
•
The Mineral Resource Estimate concludes that the
two Nara tailings dumps tested together contain:
•
An Indicated Mineral Resource of
293,000 tonnes at an average of
0.62 grams per tonne (“g/t”) gold, for a total of
5,860 ounces gold contained.
•
An Inferred Mineral Resource of 11,900t at 0.66g/t
gold, for a total of 253 ounces gold contained.
•
Some 96% of the Mineral Resource has been
categorised as Indicated thus placing it into a
relatively high resource category for the early
stage of the project, demonstrating confidence in
the continuity of the material.
•
Future extraction costs will be operational, with no
mining required.
•
The Mineral Resource Estimate also identified
upside potential at the tailings dump, highlighting
the opportunity to increase tonnage at
as-yet-untested depths.
•
Kavango is assessing options to commercialise
the gold in the Nara tailings dump.
•
The Company plans to use free cash flow
generated by any tailings production to
advance its wider exploration activities targeting
large-scale, bulk-mineable metal deposit
discoveries in Zimbabwe.
•
March: Leopard
•
Soil sampling programme initiated with 10 lines
(line 22 to 31) over Lonely North, totalling 15-line
kilometre and consisting of 602 samples.
OPERATIONS REPORT
CONTINUED
OPERATIONS REPORT
6
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
•
Soil sampling programme initiated with 14 lines
(Line 8 to 21) over Lonely North, totalling 24-line
kilometre and consisting of 601 samples.
•
April: Hillside
•
First assay results from Hillside Prospect 2.
•
Hole BRDD001 was a scoping hole sited to target
mineralisation below multiple sets of artisanal
workings on the northern margin of a broad
deformation zone.
•
BRDD001 was drilled to a total depth of 400.40 m
and intersected an intensely deformed and well
mineralised zone, 7.2m wide, hosting gold and
associated sulphides in anastomosing shears, at a
relatively shallow depth.
•
Best results* in the hole include:
•
7.2 m @ 9.95 g/t gold from 50.64 m and
including 1.61 m @ 31.57 g/t gold.
•
2.00 m @ 2.12 g/t gold from 86.00 m.
•
An IP survey identified a series of IP (chargeability
& resistivity) anomalies interpreted to represent a
set of anastomosing shears hosted within a broad
deformation zone, approximately 700m wide.
•
There are no artisanal workings over interpreted
additional shears in the central part of the
deformation zone.
•
Kavango intends to test the gold-bearing potential
of these shears in future exploration by drilling a
fence of holes to test for a bulk-mineable gold
deposit across the entire zone.
•
The first assay results from the Hillside Prospect 4
were received:
•
Hole SKDD001 was a scoping hole sited to target
mineralisation in steeply dipping shear zone below
artisanal workings.
•
SKDD001 was drilled to a total depth of 247.40 m
and intersected the targeted shear zone being
worked by the artisanal miners.
•
Best results* in the hole include:
•
2.53 m @ 29.08 g/t gold from 97.47 m,
associated with visible gold (average peak
grade of 212.07 g/t over 0.34 m).
•
1.32 m @ 1.80 g/t gold from 214.46 m.
•
The hole contains multiple further broad zones
of geochemically anomalous gold values
thought to relate to additional shear zones.
•
An IP survey identified three further potential
shear zones, parallel to the one being worked by
artisanal miners.
•
Results were pending on four other holes drilled
across three other Hillside prospects.
•
Kavango Mining to examine near surface
gold mining potential at Prospect 4, based on
intersected grades and ongoing artisanal mining
in the area.
•
April: Nara
•
Completion of the ground magnetic survey over
Nara:
•
A total of 85km of ground magnetic survey lines
were completed over the project area.
•
The survey has defined a 200m wide interpreted
shear corridor along 5km of strike within the
property, hosting a number of magnetic low
lineaments interpreted as shear zones.
•
Historical and artisanal mine workings are located
within the shear corridor and are closely related to
magnetic low lineaments.
•
The magnetic survey has identified a number of
additional exploration targets including:
•
several previously unknown magnetic low
lineaments parallel to the historical workings.
•
areas of magnetic disturbance possibly
representing hydrothermal alteration of
magnetic rocks which may be related to gold
mineralisation.
•
Jogs and flexures along the interpreted shear
zone within the claims.
•
Updated Resource Estimate (the “Resource Estimate”)
for the largest tailings dump at Nara:
•
The updated Resource Estimate for the first time
provides a Measured category of mineral resource.
•
Resource Estimate concludes that the two Nara
tailings dumps tested together contain:
•
Upgrade of 77,664 tonnes (“t”) to Measured
Category, at an average of 0.54 grams per
tonne (“g/t”) gold, for a total of 1,346 ounces of
gold contained.
•
Indicated Mineral Resource of 221,934t at an
average of 0.65 g/t gold, for a total of 4,637
ounces gold contained.
•
An Inferred resource of 12,178t at 0.66g/t gold, for
a total of 257 ounces gold contained.
•
Previously identified upside potential at the
tailings dump remains in addition, highlighting
the opportunity to increase tonnage at as-yet-
untested depths.
OPERATIONS REPORT
CONTINUED
OPERATIONS REPORT
7
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
OPERATIONS REPORT
CONTINUED
•
Future test work will assess the optimal processing
route and will be undertaken at a local facility.
•
Ongoing drilling at Nara.
•
April: Leopard, soil sampling programme underway.
•
May: Hillside
•
Kavango announced in May 2024 that it had agreed
updated terms for exercise of the Hillside call option
with the vendors of the Hillside and Leopard South
Projects. Sale and Purchase Agreements for Hillside
and Leopard South were entered into between
Kavango and the sellers, and the Mining Claims are
in the process of being transferred to Kavango’s
Zimbabwe subsidiary. The option on Leopard North
was in parallel extended to 30 June 2025.
•
First assay results from the Hillside Prospect 3.
•
Hole NSDD001 was a scoping hole sited to target
mineralisation below multiple sets of artisanal
workings at Prospect 3.
•
NSDD001 was drilled to a total depth of 301.40 m
and intersected multiple shear zones hosting sets
of anastomosing gold bearing quartz veins and
associated sulphide mineralisation, totalling over
40m grading >0.5 g/t gold.
•
Mineralisation starts at 12m below surface and IP
anomalies suggest the shears extend to depth.
•
Best results* in the hole include:
•
5.00 m @ 1.68 g/t gold from 97.00 m.
•
0.97 m @ 2.14 g/t gold from 148.00 m.
•
1.00 m @ 3.10 g/t gold from 156.00 m.
•
And includes 11.90m @ 0.92g/t from 148m.
• Interpretation of recently re-processed geophysics
including drone magnetic data and IP data suggests
Prospect 3 and Prospect 2 maybe located on
opposite margins of a major regional deformation
zone that extends 1.2km southeast to Prospect 1.
•
The recently reported BRDD001 (Prospect 2) is
located along the northern margin of the same
deformation zone, and the width of the deformation
zone between Prospect 2 and Prospect 3 is now
estimated to be approximately 600m wide.
•
Kavango planned an extensive ground IP
programme designed to assess the extent and
continuity of the (chargeability & resistivity)
anomalies already identified to understand the
extents of the broad shear zone.
•
Additional drilling was planned to evaluate what
appears to be continuity between Prospects 1 and
2, over the interpreted strike length of 1,200m.
•
Results provided confirmation of a likely extensive
mineralised system.
•
May: Nara
•
Ongoing drilling at Nara.
Mineralised drill core, Gold assays in red
OPERATIONS REPORT
8
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
•
May: Leopard, as above
•
On going soil sampling programme.
•
June: Hillside
•
An IP programme was completed with 16.47km of
Gradient IP and 6.42km of Stacked Schlumberger
data.
•
June: Nara
•
Ongoing drilling at Nara.
•
June: Leopard
•
Samples dispatched for analysis.
•
July: Hillside
•
An IP programme was completed with 13.15km of
Gradient IP and 5.57km of Stacked Schlumberger
data.
•
July: Nara
•
Samples dispatched for analysis.
•
July: Leopard
•
Awaiting assay results for the soil sampling
programme.
•
August: Hillside
•
Additional further significant assay results received
from Prospect 2:
•
Results from the three diamond holes completed
at Prospect 2 (BRDD001, BRDD002 & BRDD003,
collectively the “Holes”) have returned what
Kavango believes to be significant assay results.
•
The Holes were designed to test for geological
continuity of structures, both along strike and with
increasing depth, as well as evaluating grade
variation, within multiple shear zones hosting gold
producing artisanal workings at surface.
•
The Holes are considered to provide further
evidence of a wider gold mineralised system that it
believes extends across the Hillside project area.
•
BRDD001, previously reported, was drilled to a total
depth of 400.40 m, and intersected an intensely
deformed and well mineralised zone, 7.2 m
wide, hosting gold and associated sulphides in
anastomosing shears, at a relatively shallow depth.
•
Best results* in the Hole include:
•
7.2 m @ 9.95 g/t gold from 50.64 m and
including 1.61 m @ 31.57 g/t gold.
•
2.00 m @ 2.12 g/t gold from 86.00 m.
•
BRDD002 was drilled to a total depth of 364.40
m and intersected several narrow shear zones
where gold and associated sulphides were
hosted in narrow quartz veins at 163 m and 263 m
respectively.
•
Best results* in the hole include:
•
2.00 m @ 0.53 g/t gold from 163.00 m.
•
1.00 m @ 3.73 g/t gold from 263.00 m.
•
BRDD003 was drilled under the historic Britain mine
to a total depth of 355.40 m and intersected a
series of shear zones, hosting gold and associated
sulphides in anastomosing quartz veins, at various
intervals down hole.
•
Best results* in the hole include:
•
2.00 m @ 5.27 g/t gold from 312.50 m and
including 0.50 m @ 11.01 g/t gold.
•
1.00 m @ 7.94 g/t gold from 315.00 m and
including 0.50 m @ 15.33 g/t gold.
•
Gold assay results were received for its recent soil
sampling programme at Prospect 4.
•
The soil sampling programme returned anomalous
gold in soil values over an area of 1.5km², which is
underlain by greenstones and granites offset by a
regional shear with multiple quartz-vein complexes
producing gold from artisanal surface workings:
•
Kavango received 582 assay results for soil
samples collected over 1.5km², with anomalous
values received across much of the gridded area.
•
The soil samples were assayed for gold using a
bottle roll cyanide leach technique at Performance
Laboratories in Zimbabwe in conjunction, with
handheld pXRF readings for other elements carried
out by the Company.
•
Anomalous gold values appeared to be closely
associated both with the E-W trending shears
favoured by the artisanal and historical miners,
and the SSW – NNE trending structures interpreted
from geophysics.
•
Gold values appeared across the whole grid and
are open to the W and E.
•
These assay results confirm a larger mineralised
system presently being worked only locally by the
artisanal miners. They also indicate the possible
presence of additional potential gold bearing
structures not yet tested or worked.
OPERATIONS REPORT
CONTINUED
9
OPERATIONS REPORT
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
•
August: Nara
•
On 13 August 2024, the Company announced assay
results from its first six diamond holes drilled at Nara.
These confirmed the presence of a gold mineralising
system at Nara, highlighting anomalous gold zones
underneath and directly associated with surface
artisanal gold-producing structures.
•
This followed a total of 85km of ground magnetic
survey lines completed over the project area to
identify geological structures and contacts that may
be associated with gold mineralisation. The survey
defined a 200m wide interpreted shear corridor along
5km of strike within the property, hosting a number of
magnetic low lineaments interpreted as shear zones
which may be associated with gold mineralisation.
•
Seven lines of Stacked Schlumberger Sections were
also completed for 6,600m over selected target
areas. The data from this has since been inverted
and modelled to provide further drill targets. Several
new, previously unknown Induced Polarisation (“IP”)
anomalous zones have been identified, in addition to
further extensions of the existing structures already
hosting mines and artisanal workings. Kavango is
now working to develop its understanding of these
new zones, before testing them with follow-up drilling.
•
August: Leopard
•
Awaiting assay results for the soil sampling
programme.
•
September: Hillside
•
Drilling at Prospect 5 – Vlei.
•
Additional further positive assay results received from
Prospect 3,
•
Hole NSDD002 was a follow-up hole sited to target
mineralisation approximately 200m along strike
from gold mineralisation intersected in NSDD001.
•
Highlights from NSDD001 included 40m of gold
mineralisation grading >0.5 g/t over multiple shear
zones.
•
NSDD002 was drilled to a total depth of 358.40m
and successfully intersected multiple shear zones
hosting sets of gold bearing quartz veins and
associated sulphide mineralisation, totalling more
than 20m grading > 0.5 g/t gold.
•
NSDD003 was drilled as an infill hole between
NSDD001 and NSDD002 to a total depth of 352.40m.
•
NSDD003 also intersected multiple zones of
mineralisation associated with quartz veins,
totalling a similar mineralised width.
•
Best results* in the holes include:
•
8.20m @ 2.93 g/t gold from 66.69m in NSDD002.
•
And includes 0.35m @ 13.82 g/t gold from
68.39m in NSDD002.
•
5.00m @ 1.80 g/t gold from 104.40m in NSDD003.
•
And includes 0.40m @ 5.79 g/t gold from
104.40m in NSDD003.
•
Anomalous IP features suggest the shears extend
to depth.
•
Results provide further confirmation of what
Kavango believes to be a likely extensive
mineralised system, with an open strike >200m.
•
September: Nara
•
Awaiting assay results from complete drilling
programme.
•
September: Leopard
•
Leopard soil sampling assays returned, unfortunately
the results are marred by severe batch effects and
possible contamination which needs to be resolved
before they can be interpreted.
•
October: Hillside
•
Kavango announces its plan for future production
at Prospect 4. High-grade gold mineralisation is
currently being extracted by contract miners on a
small-scale basis at Prospect 4 and trucked 20km
to the Company’s processing facility at the main
Hillside Project area. Although volumes are currently
low, Kavango believes there is significant scope to
increase high-grade gold production at Prospect
4 over the coming 12 months.
•
To this end, Kavango has commissioned an
experienced South African manufacturer to
commence work on designing, building and installing
a gold production plant (the “100t/d Plant”), with the
capacity to process 100 tonnes per day (“t/d”) of
mineralised material.
•
The 100t/d Plant will be designed as a modular plant
so that it can be easily and cheaply relocated to
other projects within Kavango’s inventory, in the event
that Techno-Economic Assessment (“TEA”) studies
at Prospect 4 supports the installation of a larger
production plant.
•
October: Nara
•
Awaiting assay results from complete drilling
programme.
OPERATIONS REPORT
CONTINUED
OPERATIONS REPORT
10
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
•
October: Leopard
•
Resolving issues with soil sampling, resultant assays
and trying to rectify.
•
November: Hillside
•
Awaiting assay results from complete drilling
programme.
•
November: Nara
•
The Company announced a new phase of drilling at
its Nara gold exploration project.
•
The objective for the drill programme was to test
significant, previously unrecognised underground
potential at Nara for laterally extensive gold
mineralisation across multiple mineralised shears
(“reefs”).
•
Following a review of historic and recent exploration
data compiled from Nara, Kavango’s exploration
team identified a new opportunity for the Company
to pursue. The Nara project area contains several
historic mines, including N1 which is reported to have
produced 72,468 ounces (“oz”) of gold at an average
grade of 10 g/t and N2 which is reported to have
produced 18,165 oz of gold at an average grade of
8.9g/t between 1904 and 1964.
•
Kavango’s exploration focus on Nara is the N1 mine.
N1 is currently being mined to 4-level by artisanal
miners who are contracted to the current owner of
Nara. Development levels 5 and 6 have flooded, which
the Company believes has protected the remaining
underground ore body from the artisanal miners.
•
IP surveying over the entire N1 mine zone identified
a discrete resistivity low coincident with the central
portion of the mine workings and the mineralisation
intersected by Hole NAKLDD001.
•
Kavango’s technical team believes the IP results,
along with the new zones of mineralisation
intersected by hole NAKLDD001, offer compelling
evidence for the continuation of gold mineralisation
along strike of the N1 development workings.
•
The Company initiated additional drilling and
approved three holes along strike of Hole NAKLDD001
into areas of the N1 mine zone that historic
development data indicate to be entirely undrilled
and with no known development.
•
Hole NAKDDL002 and Hole NAKLDD004, were designed
to test whether gold mineralisation continues at
depth in areas to the NW and SE of NAKLDD001
respectively, where historic development appears to
be restricted to shallow levels near to the surface.
•
Hole NAKDDL003 was designed to test whether the
mineralised structures at N1 mine extend into an area
southeast of NAKDDL001 that appears to have never
been mined.
•
Further, all three holes have been designed to test the
continuation along strike of the new hanging wall and
foot wall reefs identified in Hole NAKDDL001.
•
November: Leopard
•
Resolving issues with soil sampling, resultant assays
and trying to rectify.
•
December: Hillside
•
The Company announced the commencement of a
resource drilling programme at Prospect 3.
•
The drilling programme was designed to delineate
a mineral resource to form the basis for an open pit
mine, and to obtain sufficient sample to conduct
metallurgical test work.
•
Following receipt of the assay results from NSDD002
and NSDD003, Kavango’s technical team completed
a thorough compilation and review of historic
and current data available to it from Prospect 3.
The technical team modelled the geological and
geophysical data and outlined a target area
approximately 800m in length and 200m wide (350m
at its widest and 45m at its narrowest). The target
area remains open along strike to both the NW and
SE. The target appears to contain multiple wide zones
of gold mineralisation grading >0.5 g/t, with narrower
high-grade zones where contract artisanal miners
are currently producing gold from 12 surface workings
with at least 2 different vein orientations, from
oxidized meta-sediments above a granodiorite next
to NSDD0002.
•
The Company believes these zones of gold
mineralisation are close enough to surface to
represent a possible open-pit gold deposit.
•
Kavango’s technical team has outlined a programme
for potential open-pit mining and heap leach
processing of gold at Prospect 3. This incorporates
4 phases, with each phase being contingent upon
successful completion of the preceding stage:
•
Phase 1 now commenced – Initial resource
definition drilling comprising a grid of 90m deep
diamond core holes over the target area, on a
25m x 50m spacing with the goal of defining an
initial resource containing at least 20,000oz of gold
at > 0.5 g/t. Samples from this program will be
combined with bulk samples from artisanal pits
to complete heap leach metallurgical test work.
Metallurgical testing will seek to determine the
metallurgical recovery of the gold contained in
OPERATIONS REPORT
CONTINUED
11
OPERATIONS REPORT
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
the mineralised material and guide the design of
the heap leach. Selected core samples will also be
used for geotechnical testing to aid in the open pit
mine design.
•
Phase 2 – Pre-mining grade control drilling will
comprise a grid of 14m deep, angled reverse
circulation holes over the target resource area,
on a 10m x 10m spacing. This program will enable
the design of mineable mineralised blocks on the
initial open pit benches.
•
Phase 3 – The TEA will determine the feasibility
of open-pit mining and heap leach processing
at Prospect 3. The TEA will produce a mine plan
for the open-pit and designs for the processing
plant and heap leach pad as well as economic
indicators for the project.
•
Phase 4 – Commence mining and gold
production.
•
The Company received its first multi-element assay
results which identified significant concentrations of
tungsten and other strategic elements across the
Hillside Project.
•
The Company conducted its first phase of Inductively
Coupled Plasma (“ICP”) tests on core samples
collected from four diamond holes drilled at Hillside.
Samples from three sets of cores returned potentially
economic concentrations of tungsten and other
strategic elements, including bismuth, selenium and
molybdenum.
•
Following this success, Kavango will widen its
exploration focus in Zimbabwe to include tungsten
and strategic elements. The Company will now
arrange for further assays to test tungsten values
and widths.
•
December: Nara
•
Drilling completed before Christmas.
•
Re-sampling select drill holes for further gold fire
assay and multi-element analysis.
•
December: Leopard
•
Geological, structural and geochemical interpretation
ongoing.
POST YEAR END:
In March 2025 Kavango announced an increase in
underground potential for both lateral and vertical
continuity at Prospect 1 having intersected a reef, hosting
quartz and sulphide bearing veins, in a previously
inaccessible level of the historic Main Shaft during shaft
restoration. Kavango plans to test the extent of these
reefs through a combination of surface and underground
drilling. If warranted, these results will inform subsequent
drilling with the objective of defining a mineral resource
at Prospect 1 for a larger, longer-term underground mine
than previously anticipated. The Company’s objective is
to establish Prospect 1 as a third area of near-term gold
production at Hillside alongside Prospects 3 and 4. In
parallel, Kavango is proposing to increase the processing
capacity at Prospect 1 to provide flexibility for greater
production.
The drilling programme at Prospect 3 has provided
Kavango with sufficient geological information and sample
material to conduct assay, metallurgical and geotechnical
test work. The company’s focus is now on completing
the test work to allow for an initial maiden resource and
if warranted design of a trial open pit heap leach mining
operation and if able to prove there is a mineable resource
at Prospect 3, the aim to bring that into production in 2025.
BOTSWANA
In Botswana, Kavango focussed its attention primarily
to exploration on its Kalahari Copper Belt (“KCB”) project
in 2024. Interest in the KCB is high and, as of writing this
report, Kavango has the largest independent contiguous
block of prospecting licences in Botswana. Over the last
18 months, China’s MMG has bought Khoemacau Mining
for US$1.8 billion and BHP Billiton (ASX:BHP) has confirmed
an earn-in on Cobre Limited’s prospecting licences on
the northern and southern basin margins of the KCB.
Kavango’s Karakubis project covers the remaining
southern basin margin.
We started the year in the KCB with an airborne
geophysical survey of 2,374 line-km of Time Domain
Electromagnetic (TDEM), magnetic and gravity data. This
work was completed in Q1 and the Company released a
preliminary interpretation of the airborne survey data to
inform drill targeting.
Helicopter-borne gravity clearly defined a WSW-ENE
trending ~9 milliGal gravity high underlying the Kara
Anticline. The Kara gravity high is one of two linear features
in the regional gravity (Kara & Tsootsha gravity highs)
possibly linked to the Okwa Complex, that may indicate
the presence of basement highs defining multiple edges
between two deeper basins, one to the south (Ncojane
Basin) the other to the northeast (Ghanzi Basin) with a
sub-basin to the north and west (Talismanis Basin).
Basin margins along the KCB are considered prospective
sites for Cu-Ag mineralisation. Preliminary interpretation
of magnetic data from this survey combined with
re-processed regional magnetic data and satellite images,
clearly define fold hinge targets in the D’Kar Formation (DKF)
that correlate with preliminary AEM targets. Fold hinges are
associated with mineralisation elsewhere on the KCB, such
as at Sandfire Resources’ (ASX:SFR) Motheo Mine.
OPERATIONS REPORT
CONTINUED
OPERATIONS REPORT
12
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
In May, Kavango announced placement of a drilling
contract for the first phase of stratigraphic drilling on the
KCB at its Karakubis Project. The appointed Contractor was
Mitchell Drilling Botswana (Pty) Ltd (‘Mitchell’), who have
completed multiple successful diamond drilling programs
in the KCB for other clients.
The Phase 1 stratigraphic diamond core drilling
programme consisted of 5,000m on the Karakubis Project
and comprises 10-15 holes to commence in June 2024.
Drilling was designed to test stratigraphic position
and structural features interpreted from heliborne
electromagnetic (AEM) survey data. Drilling was designed
to test targets previously identified by a combination of
historic AEM, and Induced Polarisation (IP) surveys, and
geological interpretation.
Kavango identified several high priority targets for its
first phase of drilling. Drill holes were designed to check
favourable trap sites modelled from geophysical data,
to confirm stratigraphy, and to assess the potential to
host large scale copper-silver mineralisation. Kavango’s
high priority targets were all located above interpreted,
doubly-plunging fold structures over gravity highs where
associated faulting is thought to be favourable for trap site
development.
In October, the Company released an update on the Phase
1 stratigraphic drill campaign at the Karakubis Project on
Botswana’s KCB.
Kavango’s analysis of intersections from its first five
holes identified the same stratigraphic sequences at
Karakubis as those believed to be present around Sandfire
Resources’ (ASX:SFR) Motheo Mine and similar to MMG’s
(HKEX:1208) Zone 5 Deposit. Motheo and Zone 5 are two of
the largest known copper deposits in the KCB.
Further, all five holes demonstrated evidence of both
functioning structural “trap-sites” and substantial
hydrothermal alteration. The confirmation of these
two geological “engines” is an important indicator that
the ground at Karakubis has been subjected to the
correct processes for the accumulation of large-scale
copper-silver deposits.
Finally, the Company, through pXRF analysis, confirmed the
presence of copper, silver, lead and zinc mineralisation in
all five holes it drilled. The combination of these four metals
is highly encouraging for Kavango’s continued exploration
for a major commercial discovery.
In November, Kavango completed Hole KCBDD007, and
then initiated a new programme of ground geophysics
using IP and Controlled Source Audio frequency
Magnetotellurics (“CSAMT”) with the intention of resuming
the Phase 1 drilling programme after completion of the
ground geophysics has been processed, modelled and
interpreted.
These survey programmes have been conducted over
carefully selected drill sections and were designed to test
a number of parameters to help discriminate faults, folds
and possible lithologies using differences in resistivity and
chargeability to resolve the contact position between the
D’Kar and Ngwako Pan Formations at depth, above which
sits the drill targeted zone. The Company completed its
first orientation survey of deep IP, calibrating the method
to achieve quality data over significant depths down from
1,200m to 0m above sea level with a section of 1,200m
depth extent. This data has been peer reviewed, modelled
and inverted.
Ground geophysics is ongoing in the KCB, as of writing this
report.
Elsewhere in Botswana, Kavango focussed on review of its
exploration data at its Ditau and Kalahari Suture Zone (KSZ)
Projects.
For the KSZ, the Company initiated a new NI43-101 report in
H2. Work is ongoing on this, as of writing this report.
In March, the Company published the outcome of a
report from Professor Hamid Mumin on work carried out
for Kavango at Brandon University, Canada. Dr Mumin
identified a possible high potential Banded Iron Formation
(BIF) hosted Lode Gold model at the Ditau Project.
Dr. Mumin’s findings were based on logging of historic
third-party drill core from a previous Kimberlite Project.
Kavango considers Target i10 could represent a large-scale,
continuous system. This and other models including Iron
oxide copper-gold (“IOCG”) continue to offer potential
at Ditau. Moving forward, the Company will continue to
investigate this lead with a particular focus on seeking a JV
partner.
In August, Kavango released a new NI43-101-standard
Report for Ditau in Botswana. The report was completed
by internationally recognised mining advisor, SLR and
recommends next steps for Kavango’s exploration at
Ditau. SLR concluded that Ditau is an attractive early-stage
exploration project with the potential to host a variety of
mineralisation styles warranting a systematic exploration
effort consisting of detailed geophysical surveying and a
significant amount of drilling. Prospective mineralisation
targets include Banded Iron Formation (“BIF”)-hosted
orogenic gold, IOCG, and Rare Earth Element (“REE”)-
bearing carbonatites.
OPERATIONS REPORT
CONTINUED
OPERATIONS REPORT
13
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
OPERATIONS REPORT
CONTINUED
BOTSWANA
Kalahari Copper Belt Project (“KCB”)
Kalahari Suture Zone Project ("KSZ")
Ditau Camp Project (“DITAU”)
Over the next 12 months, in Botswana, we will continue to
focus on exploring Tier 1 copper assets. Our immediate
plan is to complete the current round of geophysics,
followed by drilling two holes, each approximately 1,000
meters deep. The results from this will guide our next steps
in exploration. If feasible, we aim to secure a joint venture
(JV) partner. In Zimbabwe, the business has two main
components: exploration and mining. On the exploration
side, we will continue to advance our work at Hillside and
Nara, with the goal of defining mineable mineral resources.
On the mining front, we will increase production at Hillside
through modern mechanized mining techniques. At Nara,
our focus will be on processing the dump, assuming we
proceed with exercising the option to acquire the project.
On publishing this annual report, Kavango should be weeks
away from receiving final drill results in Zimbabwe. If all
goes to plan, I look forward to reporting to shareholders
next year, our successful transition from being an
exploration company to a modern mechanised miner.
Matthew Benjamin Turney
Chief Executive Officer
25 April 2025
OPERATIONS REPORT
Core logging, Botswana
14
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
15
Board of Directors and Senior Management
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Name
Experience and background
David Smith
(Non-Executive Chairman)
David is a solicitor who has worked in corporate finance and
the equity capital markets for over 40 years with considerable
practical experience of corporate governance, regulatory and
compliance issues, and has advised junior mining companies
extensively throughout his career. From January 2016 to March
2021, he was a partner in Druces LLP, the Company’s solicitors.
Peter Wynter Bee
(Non-Executive Deputy
Chairman)
Peter is an experienced lawyer who has focused on financing
and managing mining companies. He has a strong experience
in joint venture negotiations and raising project finance. Peter
has raised capital for the development of projects since 1990.
He was a founder of Reunion Mining plc which developed
a gold mine in Zambia, a copper mine in Zimbabwe and
the Skorpion zinc mine in Namibia prior to its takeover by
Anglo-American. Peter served until recently as the founding
director and chairman of Moxico Resources plc, the majority
owner and operator of the producing Mimbula Copper Project
in Zambia.
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, Zimbabwe and London. Ben has played a crucial
role in upgrading the Company’s exploration strategy and has
worked with the board to deliver the Company’s strategy.
Board of Directors and Senior Management
16
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Name
Experience and background
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.
Donald McAlister
(Non-Executive Director)
Donald has led numerous successful financings of mining
ventures and has significant experience working in Zimbabwe
and elsewhere in Africa. He was Finance Director of Reunion
Mining PLC from 1994 until its takeover in 1999. He was Finance
Director of Cluff Mining PLC(which became Ridge Mining PLC)
from 2000 until 2009. He served as Finance Director of Mwana
Africa PLC from 2009 until 2013 and served on the Board of
Mwana’s subsidiary companies in Zimbabwe, Feda Rebecca
Gold Mine and Bindura Nickel Corporation. He was a founding
director of Tertiary Minerals and remains on the company’s
Board. Donald has more than 30 years of experience in all
financial aspects of the resources industry. His experience
includes the economic evaluation of gold and base metal
mines and the arrangement of project finance for feasibility
studies and mine development.
Alexandra (“Alex”) Gorman
(Non-Executive Director)
Alex is a trained geologist currently working as a Mining
Analyst at Peel Hunt, covering small and mid-cap mining
companies listed in London. She originally trained as a
geologist, working with Kavango’s Consultant Geologist Dave
Catterall on the Zone 5 copper discovery in the Kalahari
Copper Belt, Botswana. Alex has previously worked in Bank of
Montreal (BMO)’commodities and in various analytical and
consulting roles at Wood Mackenzie.
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
CONTINUED
STRATEGIC REPORT
STRATEGIC
REPORT
17
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Core logging, Zimbabwe
STRATEGIC REPORT
18
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
STRATEGIC REPORT
The Directors present their strategic report on the group for
the year ended 31 December 2024.
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 and Kanye Resources (Pty) Ltd, registered and
domiciled in Botswana. The Company also owns 90% of
Ashmead Holdings (Pty) Ltd, and Icon-Trading Company
(Pty) Ltd and indirectly 90% of Shongwe Resources (Pty) Ltd,
all registered and domiciled in Botswana. The Company
owns 100% of Kavango Zimbabwe (Private) Limited and
indirectly 100% of Kavango Mining (Private) Limited, both
registered and domiciled in Zimbabwe.
The principal activity of the Company and its subsidiaries
(the “Group”) is mining and exploration for base and precious
metals in Botswana and Zimbabwe.
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 2 to 16.
The Directors were pleased to welcome an investment
in the year of £3.8 million by Purebond Limited and Peter
Wynter Bee, which allowed the Company to launch its
Capital Investment & Financing Programme (“Cap Ex
Programme”) to develop the Company’s mining projects
in Zimbabwe. The Cap Ex Programme comprises of staged
capital raises for investment into specific value-generating
projects. A further £6.5 million was raised via subscription
from a combination of new and existing shareholders post
year end.
As a result of this the Company has been able to design a
capital expenditure programme to enhance existing small
scale gold production and undertake exploration drilling
across its four highest ranked targets.
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, covering
an area totalling 14,227.06 km2 and options over claims
covering the Hillside, Leopard, and Nara projects in
Zimbabwe covering an area totalling 13.03 km2. This totals
a large area, together in excess of 14.240.09km2, and
also covers two countries, which the Board considers
significantly mitigates against this risk. The Board
understands the importance of regularly reviewing its
strategy and regularly assessing other opportunities in the
Botswana and Zimbabwe market and/or internationally.
EXPLORATION RISK
Exploration at the KCB, KSZ, Ditau, Hillside, Leopard,
and Nara Projects may not result in the discovery of
economically viable mineral deposits.
Whilst the Directors endeavour to apply what they consider
to be the latest technology to assess projects, the business
of exploration for and identification of minerals and metals,
is speculative and involves a high degree of risk. The
mineral and metal potential of the Group’s projects may
not contain economically recoverable volumes of minerals,
base metals, or precious metals of sufficient quality or
quantity. To mitigate this risk, the Group continues to
evaluate additional opportunities, and where possible and
appropriate, to acquire options over ground to enable
some exploration to be conducted before completing an
acquisition.
Even if there are economically recoverable deposits, delays
in the construction and commissioning of mining projects
or other technical difficulties may make the deposits
difficult to exploit. The exploration and development of
any project may be disrupted, damaged, or delayed by a
variety of risks and hazards which are beyond the control
of the Group. These include (without limitation) geological,
geotechnical, and seismic factors, environmental hazards,
technical failures, adverse weather conditions, acts of God
and government regulations or delays.
19
STRATEGIC REPORT
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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.
MINING RISK
The Company’s technical team is experienced in mining
vein-hosted gold in Zimbabwe, and continuously works to
assess risk to production, the ongoing economic viability
of operations, and to the safety and wellbeing of those
working on site. As the company continues to grow, we
have implemented proactive risk management strategies,
focusing on environmental, operational, and safety
concerns. We engage in regular training programs for our
workforce to ensure adherence to best practices and safety
protocols. By fostering a culture of risk awareness and
resilience, we remain committed to minimising potential
disruptions and enhancing the safety and efficiency of our
mining activities.
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 mining and exploration. The ultimate
development of any project into a mining operation will
inevitably impact considerably on the local landscape
and communities. Some of these projects sit in an area
of considerable natural beauty, or in areas where local
communities are engaged in artisanal mining, and
therefore there could be opposition to mining by some
parties. This may impact on the cost and/or the Group’s
ability to sell or move these projects into production.
While the Group believes that its operations and future
projects are currently, and will be, in substantial compliance
with all relevant material environmental and health and
safety laws and regulations, including relevant international
standards, there can be no assurance that new laws and
regulations, or amendments to, or stringent enforcement of,
existing laws and regulations will not be introduced.
Nevertheless, the Group will continue to vigorously apply
international standards to the design and execution
of any and all of its activities, including engagement
and consultation with local communities, and
non-governmental and Governmental organisations
to ensure any impacts of current and future activities
are minimised and appropriately managed. The Group
has established a comprehensive suite of health, safety,
environmental and community policies which will continue
to underpin all future activities.
FINANCING
The successful exploration or exploitation of natural
resources on any project will require significant capital
investment. The sources of financing currently available
to the Group are through the issue of additional equity
capital in the Company or through bringing in partners
to fund exploration and development costs. The
Group’s ability to raise further funds will depend on the
success of their investment strategy and conditions in
financial and commodity markets. The Group may not
be successful in procuring the requisite funds on terms
which are acceptable to it (or at all) and, if such funding
is unavailable, the Group may be required to reduce the
scope of its investments or anticipated expansion.
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.
An increase in import duties could pose an inflation risk on
supply of materials.
The Group’s activities will be dependent upon the grant
of appropriate licences, concessions, leases, permits, and
regulatory consents that may be withdrawn or made
subject to limitations. There can be no assurance that they
will be granted or renewed or if so, on what terms. There is
also the possibility that the terms of any licence may be
changed other than as represented or expected.
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
STRATEGIC REPORT
CONTINUED
STRATEGIC REPORT
20
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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 26 to the financial statements,
the Group’s business is subject to risks relating to the
financial markets and commodity markets. The buoyancy
of both the aforementioned markets can affect the ability
of the Group to raise funds for exploration. The Group has
identified certain risks pertinent to its business including:
Strategic and Economic:
•
Business environment changes
•
Limited diversification
Operational:
•
Difficulty in obtaining / maintaining / renewing Licences/
approvals
•
Drilling brings inherent risk as it is subject to unknown
ground conditions
Commercial:
•
Failure to maximise value from the projects
•
Loss of interest in key assets
•
Regulatory compliance and legal
Human Resources and Management:
•
Failure to recruit and retain key personnel
•
Human error or deliberate negative action
•
Inadequate management processes
Financial:
•
Restrictions in capital markets impacting available
financial resources
•
Cost escalation, inflation and budget overruns
•
Fraud and corruption
•
Unexpected adverse fluctuations in the currency markets
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.
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
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
STRATEGIC REPORT
CONTINUED
21
STRATEGIC REPORT
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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.
ALIGNED WITH GLOBAL EFFORTS
Increasing global recognition of the need for urgent
climate action is driving the demand for certain ‘critical’
minerals. The Group businesses can contribute to the
clean energy transition, as explorers and producers of
minerals needed for renewable energy infrastructure,
energy storage systems and electric vehicles production.
As a part of this critical and transition minerals supply
chain, the Group are committed to the ethical, safe and
responsible production of mineral products.
At Kavango, we recognise the extensive science revealing
the scale of the climate challenge that we face as a global
society. The Paris Agreement has been ratified by 194
nation states and the European Union, including all parties
to the United Nations Framework Convention on Climate
Change, and represents over 98% of global greenhouse
gas emissions – showing the extent of global recognition
of this threat. As a mineral exploration company and early
stage producer, the Group has just started the process to
inform our business on how best to support the objectives
of the Paris Agreement through the lifetime of our assets.
GOVERNANCE
Our Board, together with its standing committees, and
specifically the ESG Committee, has oversight of our work
on climate change and decarbonisation, as a material
strategic and governance issue. The Board oversees the
company’s approach to managing climate change risk
and delivering on related commitments, recognising:
•
Interdependency – the Group’s operations are
dependent on and have an impact on the natural
environment.
•
Opportunity – as a minerals exploration company
and early stage producer, the Group is growing our
knowledge of the opportunities to best manage our
business and its impacts in the context of climate
change.
•
Influence - as a minerals exploration company and
early stage producer, the Group business model means
that the duration of our ownership of individual assets
may be short or early in the minerals lifecycle, and
therefore that the minerals to which we have title are
not subject to energy intensive processes under our
stewardship, limiting our opportunities to impact on
decarbonisation.
•
Reality – that as a minerals exploration company and
early stage producer, the scope of our systems are
necessarily simple and specific to the exploration and
operating context to which our business is exposed.
Our Chief Executive Officer, together with our Executive
Management, is accountable for executing our approach
to climate change. Reflecting the early stage focus of
our business, as a mineral exploration company and
early stage producer, our team’s performance is linked
to successful identification of minerals, and economic
mineral deposits. We are continuing to develop our
performance recognition and reward systems and intend
that climate-related key performance indicators will form
part of short and long-term incentive plans. This will help to
drive outcomes that protect and create long-term value.
MATERIALITY
In 2025 the Group undertook its first formal materiality
assessment and in parallel have commenced an extensive
upgrade of its enterprise risk management register, to
inform on the double materiality elements of climate
change:
•
The risk that the Group’s activities pose to the
environment, including the climate; and
•
The risks that climate change pose to the Group’s
activities including both transition and physical climate
change impacts.
The outcomes of these processes will inform objectives
and key performance indicators specific to the business
and any material aspects related to climate change.
STRATEGIC REPORT
CONTINUED
STRATEGIC REPORT
22
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
ENGAGEMENT
As part of the materiality assessment, the Group has
applied leading practices including inviting a cross
section of key stakeholders including investors, employees,
Board members, management and others, to formally
participate. The process, lead by an independent
external consultant, is a strategic exercise designed to
identify material environmental, social and governance
(sustainability) topics for disclosure and ongoing
management by the business. The process draws on
internal documentary sources and perspectives, as well
as international sustainability reporting standards and
corporate practice. Topics will be assessed against views
of the significance of our economic, environmental, and
social impacts – in line with good reporting practice -
incorporating outputs from:
•
Internal and external stakeholder survey;
•
Company enhanced enterprise risk register;
•
Peer company disclosures;
•
Industry standards and frameworks of relevance to the
Group’s business.
It is intended that the finalised materiality matrix will be
validated by senior management, with routine reviews as
part of corporate disclosure undertakings, being utilised to
assess frequency of update of the materiality assessment.
CLIMATE CHANGE ACTION PLAN
Within the Group, our inaugural climate change action
plan has been designed to advance activities to
understand the processes and extent of the Group’s
activities as contributors to climate change, as well as
the potential impacts of climate change on the Group
activities. The plan will be updated every three years to
ensure its continued evolution with our business and the
environment.
Our approach to climate change, informing our climate
change action plan, is driven by these key themes:
•
Integrity and governance – the strategic elements of
the plan that relate to the positioning of our business
in a global context, and the governance we anticipate
implementing to reflect this;
•
Climate risks and opportunities– understanding the
impacts that climate change may have on our business,
as well as the impacts our business may have in relation
to climate change;
•
Management, monitoring and reporting – the tactical
elements of the plan that relate to our progress in
managing climate risks and disclosure on same.
Integrity and governance
Business Governance
•
Board Sustainability Committee
mandate
•
Executive Management frameworks
•
Key performance indicators
Strategic Risk Management Frameworks
•
Enhancement of enterprise risk
management system
•
Inaugural materiality survey and
related benchmarking
Climate risks and opportunities
Identifying the Impacts
•
High level climate scenario
modelling and analysis
•
Transition risk assessment
•
Physical risk assessment
Exploring opportunities
•
Opportunities assessment
•
Energy supply security assessment
•
Energy supply contracts
Management, monitoring and
reporting
Business Integration
•
Energy and emissions tracking
•
Scope 1 and 2 energy use and
emissions reporting
•
Opportunities advancement
•
Other TCFD related reporting
Managing Impacts
•
Business continuity planning
CLIMATE-RELATED RISKS, OPPORTUNITIES,
IMPACTS AND DEPENDENCIES
Within the Group, the enhancements that we are making
will allow climate-related risks and opportunities to be
identified, like all strategic risks, as an integral part of our
Enterprise Risk Management and Materiality processes.
These processes will be complemented by supporting
processes to understand:
•
transition risks – arising from changes in the real
economy as a result of global efforts to mitigate or
reduce greenhouse gas emission and adapt to the
existing or expected impacts of climate change.
•
physical risks – arising from changes in planetary
conditions due to increasing greenhouse gas
concentrations, leading to changes in climatic patterns
(chronic) and more frequent and severe weather-
related events (acute).
•
impacts and dependencies – arising from the duality
of the relationship of the business with the natural
environment – where the company has an impact on
natural capital, as well as relying on ecosystem services
to enable it to function.
STRATEGIC REPORT
CONTINUED
23
STRATEGIC REPORT
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
PHYSICAL RISKS
As part of our inaugural climate change action plan, we
have undertaken to complete high level climate scenario
modelling to obtain a view of climate-related risks for the
Group businesses and key parts of our supply chain.
Exposure to physical hazards will be based on third-
party verified and credible global climate data and
climate model providers including sources utilised by
the World Bank Climate Knowledge hub and the World
Resources Institute Aqueduct. Physical risks will initially
be assessed in a high-emissions climate scenario in line
with the Intergovernmental Panel on Climate Change
(IPCC) Representative Concentration Pathway (RCP
8.5). This scenario provides a robust assessment of
potential impacts, as it goes beyond the global base case
assumption of at least 2°C of warming and assumes more
severe physical impacts, allowing us to stress test exposure
of our assets and resilience to physical climate change.
From this process, we expect to identify climate hazards
of concern to our business that will inform further business
actions, development of more detailed business continuity
plans, and, as applicable to the business, transition
planning.
RESPONSIBLE ENERGY AND EMISSIONS
MANAGEMENT
In line with the recommendations of the Task Force on
Climate- Related Financial Disclosures (TCFD), the Group
expects that as a result of the processes that we have
commenced under our inaugural climate change action
plan, that during the three-year plan period, we will be
in a position to commence reporting on energy use and
emissions. Key performance indicators that we expect to
track and report on include:
•
Diesel and petrol used in our exploration and processing
activities
•
Scope 1 emissions from diesel and petrol usage
•
Electricity used at our processing facility
•
Scope 2 emissions from electricity consumption
Data that is compiled will be subject to analysis so as to
inform strategic decisions and investments via our capital
allocation framework, including those which support our
climate change commitments. Investment decisions to
drive decarbonisation within our business and sphere of
influence, consider project returns and portfolio value, in
the context of prevailing and future carbon pricing and the
output of the Group’s risk assessments.
SECTION 172(1) STATEMENT - PROMOTION
OF THE COMPANY FOR THE BENEFIT OF THE
MEMBERS AS A WHOLE
Kavango is a production and exploration business
focussed on gold and copper, operating in Zimbabwe and
Botswana. Kavango’s long term strategy is the exploration
and development of low technical risk gold and copper
projects and to bring them into production. Until there
is a regular income stream the Company is dependent
upon raising funds for its continued operation. The nature
of the business is important to the understanding of the
Company by its members, employees and suppliers.
The Board understands the importance of regularly
reviewing its strategy and of regularly assessing other
opportunities in the Botswana and Zimbabwe market and/
or internationally. In August 2024, the Company announced
that it had designed a capital expenditure programme,
which comprises of a number of staged capital raises for
investment into specific value-generating projects. The
primary objective being to define mineable gold resources
and acquire plant and equipment for larger-scale
production. A number of exploration work streams have
been running in parallel to maximise the speed of growth,
and the move into resource drilling. As Kavango’s business
grows and the Company establishes a track record of
success, the Board anticipates accessing other pools of
capital to fund growth.
The Company engages regularly with its shareholders to
ensure that its strategy, operational results and financial
performance are clearly understood. Kavango engages
with shareholders via roadshows, attending investor
conferences and through regular reporting on the London
Stock Exchange (“LSE”). The Company regularly takes part
in investor conferences, both in the UK and internationally.
LSE announcements include details of the website,
X (formerly Twitter) account and include phone numbers
to contact the Company and its professional advisors.
Kavango is committed to conducting business in an
ethical and honest manner in all the jurisdictions in which
it operates and to implementing and enforcing systems
that ensure bribery is prevented. The Company has a strict
policy regarding anti-bribery and corruption.
The full Corporate Governance policy can be found on the
Company website. www.kavangoresources.com.
The impact of the Company’s activities on its stakeholders,
employees and suppliers and the likely impact of
operations on the environment and local communities
are of foremost importance to the directors when making
business decisions.
STRATEGIC REPORT
CONTINUED
STRATEGIC REPORT
Engagement with local communities is dependent on
jurisdiction and the stage of development but is typically
by public forum or with local or regional leaders, including
site visits and workshops. Wherever possible, local
communities are engaged in safe geological operations
and support functions required for field operations and
the delivery of Kavango’s strategy, for the wider economic
benefit of the local communities in the areas in which the
Kavango group has a presence, which it believes is vital to
the success of the Company.
The Company is committed to continually improving
community development and community investment
programmes through monitoring, measuring, and
managing its social and economic impacts, placing
local people at the centre of development by helping to
build their capacity to control their own development.
Community initiatives have included assistance to a rural
school and sponsorship of a local football team.
The Company seeks to maximise local employment; the
Botswana based team are all Botswana nationals, and in
excess of 90% of the Zimbabwe team are Zimbabwean
nationals.
Kavango strives to develop strong relationships with local
governments and forge government partnership for
socioeconomic diversification and mine development in
rural areas, whilst always conforming to its core values.
The welfare and safety of the Group’s employees,
workforce, contractors and suppliers is of paramount
importance to the directors and executive team who
oversee and strictly enforce the Company safety policy
across the Group. Employee training focuses on operating
safely and considerately.
Kavango is committed to acting professionally and fairly
for the benefit of its members as a whole, in pursuit of
the success of the company. Kavango is committed
to acting with integrity in all its business dealings and
relationships, whilst striving for excellence by adhering to
the highest ethical principles, demonstrating unwavering
integrity through its actions and committing to sustainable
practices in all aspects of the business.
This Strategic Report was approved by the Board of
Directors and is signed on its behalf by:
Matthew Benjamin Turney
Director
25 April 2025
Core yard, Zimbabwe
24
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
STRATEGIC REPORT
CONTINUED
25
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Directors present their annual report on the affairs of
the Group and Company, together with audited financial
statements, for the year ended 31 December 2024.
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
Operational Report.
SUBSEQUENT EVENTS
Details of subsequent events after the year end are
disclosed in note 29 to the financial statements.
DIVIDENDS
The Directors do not propose a dividend in respect of the
year ended 31 December 2024 (2023: 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 (resigned 29 May 2024)
Peter Wynter Bee
Jeremy S. Brett (Resigned 27 May 2024)
Donald McAlister (appointed 6 June 2024)
Alexandra Gorman (appointed 6 June 2024)
Directors’ interests in the ordinary share capital of the
Company at the date of this report are disclosed within the
Directors’ Remuneration Report.
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 26 to
the financial statements.
SUBSTANTIAL SHAREHOLDERS
As of 10 April 2025 (being the closest relevant data for
which data has been provided), the Company had been
notified, in accordance with chapter 5 of the Disclosure
Guidance and Transparency Rules or via disclosures under
s.793 of the Companies Act, of the following voting rights of
3% or more in its issued share capital:
Party name
Number of ordinary
shares
% of share
capital
Purebond Limited
2,140,222,639
70.20%
Peter Wynter Bee*
264,347,338
8.67%
Total
2,404,569,977
78.87%
*Includes shares held by Wynter Bee Resources Limited
Total shares in issue: 3,048,706,821
CAPITAL STRUCTURE
Details of the capital structure of the Company are
included in the Strategic Report and note 22 to the
financial statements.
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
Company 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
budgeted level of spending on exploration and corporate
activities. The Directors are satisfied that following the
successful completion of fundraising in January 2025,
which raised gross proceeds of US$ 8,160,000, the Group
has sufficient cash reserves to sustain the minimum level
of exploration spending that is required as part of licence
conditions and minimum corporate overheads activities
for a period of not less than 12 months from the date of
signing these financial statements. Therefore, the Directors
continue to adopt the going concern basis of accounting
in the preparation of the financial statements.
POLITICAL DONATIONS
The Group made no political donations during the year
(2023: none).
DIRECTORS’ REPORT
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 Quoted Companies Alliance (QCA) Code. This report
should be read in conjunction with the Strategic Report
set out on pages 17 to 23 and the Corporate Governance
Report set out on pages 26 to 34. Together, the Strategic
Report, this Directors’ Report, and other sections of the
Corporate Governance report incorporated by reference,
when taken as a whole, form the Management Report as
required under Rule 4.1.5R of the DTRs.
This Directors’ Report was approved by the Board of
Directors on 25 April 2025 and is signed on its behalf by;
Matthew Benjamin Turney
Director
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
26
Team photo at Bills Luck Mine, Zimbabwe
DIRECTORS’ REPORT
CONTINUED
GOVERNANCE
CORPORATE
GOVERNANCE REPORT
27
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
GOVERNANCE
28
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
The Chairman of the Board of Directors of Kavango has
a responsibility to ensure that Kavango has a sound
corporate governance policy and an effective Board.
As a company listed on the Main Market, the Company
is not required to comply with the provisions of the UK
Corporate Governance Code. However, the Board is
committed to maintaining high standards of corporate
governance and, so far as appropriate given the
Company’s size and the constitution of the Board, looks to
comply with the QCA Code.
In light of the Company’s size and recent history, during the
year, the Company has deviated from the QCA Code in
the respects outlined below. The Board continues to review
its governance arrangements, aided by the appointments
of Donald McAlister and Alex Gorman as Non-Executive
Directors in June 2024. In the year the Company continued
its Board Evaluation process. Governance policies were
also comprehensively reviewed:
• The 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 scope of its activities.
• The Board does not consider an internal audit function
to be required given the size of the Company and
number of transactions.
• A diversity policy as applied to the Company’s
administrative management and supervisory bodies
has been developed and biographies of Directors and
senior management and their relevant experiences are
set out on pages 15 and 16.
• 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.
1. ESTABLISH A STRATEGY AND BUSINESS
MODEL WHICH PROMOTE LONG-TERM
VALUE FOR SHAREHOLDERS
The Company is involved with gold production in
Zimbabwe and precious and base metal exploration in
Botswana and Zimbabwe. Our goal is to deliver long term
value for our shareholders. We aim to do this by identifying
high calibre grassroots and early-stage exploration
projects and advancing these. Consequently we:
• 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.
CORPORATE GOVERNANCE REPORT
29
GOVERNANCE
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
•
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 elections were held in 2024 and the
next Botswana general election must be held no later
than 5 January 2030. In Zimbabwe general elections are
held every 5 years, the latest 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.
Investors can contact us via our website
(https://www.kavangoresources.com/) or by email at
shareholders@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. A third Director will move
to Zimbabwe in 2025. The Company has sponsored an
employee to study internationally for a master’s degree,
CORPORATE GOVERNANCE REPORT
CONTINUED
GOVERNANCE
30
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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 well as sponsorship of a local football team.
As projects move forward, we will seek to bring in partners
who can credibly make the investments move towards
the expansion of mine production. In doing so we have
regard for their ability and desire to move projects
forward, their industry reputation and their commitment
to treating the local communities fairly and protecting
the environment. We enter agreements that allow us to
monitor their activities and have monthly updates on
project progress.
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 2024. 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.
CORPORATE GOVERNANCE REPORT
CONTINUED
31
GOVERNANCE
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
The Company regularly reviews the effectiveness
of its system of internal control, whilst also having
regard to its size and the resources available, and
extensive improvements to its internal controls have
been implemented . As part of the Company’s plans,
we continue to review a number of non-financial
controls covering areas such as regulatory compliance,
business integrity, health and safety, and corporate
social responsibility. A register of Conflicts of Interest
is maintained. Standard Operating Procedures have
been developed for any high safety risk activities, and
Risk Assessments are carried out for new activities.
Safety Performance is measured through key metrics. All
employees are made aware on joining of their obligations
under anti-bribery and corruption legislation, and this is
also reflected in the Company’s key contracts.
The Company’s risk appetite and risk tolerance are
outlined in the Strategic Report on pages 17 to 23.
5. MAINTAIN THE BOARD AS A WELL-
FUNCTIONING, BALANCED TEAM LED BY THE
CHAIR
Having considered commercial needs, Donald McAlister
and Alexandra (Alex) Gorman were appointed to the Board
as Non-Executive Directors. These appointments became
effective on 6 June 2024. Donald McAlister has extensive
experience of operating in Zimbabwe and raising funds.
Alexandra Gorman has worked as a mining analyst and
originally trained as a geologist and worked previously in
Botswana. Alex has agreed to take on the full time executive
role of Chief Operating Officer, expected to take effect in June
2025.
Brett Grist stepped down from the Board on 29 May 2024
and continued in his role within the Company as Chief
Operating Office and Company Secretary until September
2024. Jeremy Brett stepped down from the Board on
27 May 2024 and continues to work in the capacity of
consultant to the Company. In June 2024, Peter Wynter Bee
assumed the role of Deputy Chairman.
Following these changes, the Board currently comprises a
Non-Executive Chairman, two Executive Directors and three
additional independent Non-Executive Directors. David Smith
is the Non-Executive Chairman. During 2024 Deputy Chairman
Peter Wynter Bee subscribed to a Convertible Loan Note in the
Company as part of the Company’s Cap-Ex Programme. In
January 2025, following FCA approval of the prospectus, the
loan notes were converted into 174,129,156 shares, resulting in a
shareholding post the year end of 8.67%. The investment was
carried out at arm’s length and the Board considers that this
does not affect Mr. Wynter Bee’s independence as a Director.
The Directors seek to keep their skills up to date through
continuing professional development and attending relevant
courses. Directors from a technical discipline are encouraged
to maintain professional accreditation.
The Board is working to improve balance between
independence on the one hand, and knowledge of the
Company and industry on the other, to enable it to discharge
its duties and responsibilities effectively. All Directors are
encouraged to use their independent judgement and to
challenge all matters, whether strategic or operational, as they
feel appropriate.
The Company Secretary provides support to the Board
on further enhancing compliance with the QCA Code.
On-boarding training is provided to newly appointed directors
and there is a regular review of Company Policies and
reporting.
Non-Executive Director Donald McAlister, has the role of Chair
of the Audit and Risk Committee.
For the financial year 2024, the Board met bi-monthly, 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.
CORPORATE GOVERNANCE REPORT
CONTINUED
GOVERNANCE
32
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
The table below sets out Directors’ eligible to attend at
Board meetings held during 2024:
Director
Position
Attendance
David Smith
Non Executive
Chairman
(Independent)
17/17
Peter Wynter Bee
Non-Executive Deputy
Chairman
16/17
Ben Turney
Chief Executive Officer
13/17
Hillary Gumbo
Executive Director
12/17
Brett Grist
Chief Operating Officer
(resigned 29/5/24)
5/5
Jeremy S. Brett
Executive Director
(resigned 27/5/24)
0/5
Donald McAlister
Non-Executive Director
(appointed 6/5/24)
9/11
Alexandra Gorman
Non-Executive Director
(appointed 6/5/24)
5/11
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 Donald McAlister and
Alexandra (Alex) Gorman were announced in May 2024 and
their appointments as Non-Executive Directors took effect on
6 June 2024. Donald McAlister has led numerous successful
financings of mining ventures and has significant experience
working in Zimbabwe. Alex Gorman originally trained as a
geologist, working in the Kalahari Copper Belt, Botswana.
All Directors have disclosed any significant commitments to
the Board and confirmed that they have sufficient time to
discharge their duties. The CEO works in excess of 40 hours
per week for the Company, and the other Executive Directors
regularly work between 10 and 40 hours per week on the
Company’s business. The Non-Executive Directors regularly
spend up to 10 hours per week on the Company’s business,
and more when needed.
All Directors retire by rotation at regular intervals in
accordance with the Company’s Articles of Association.
The Directors’ biographies can be found on pages 15 and 16
of this Report and on the Company’s website (https://www.
kavangoresources.com/about-us/directors-management).
In addition, the following Directors are also directors of
the Company’s subsidiaries: Hillary Gumbo is a Director
of Kavango Minerals (Pty) Limited, Shongwe Resources
(Pty) Limited, Kavango Zimbabwe (Private) Limited, and
Kavango Mining Private Limited; Ben Turney is a Director
of Kanye Resources (Pty) Limited, Kavango Zimbabwe
(Private) Limited, Kavango Mining (Private) Limited,
Ashmead Holdings (Private) Limited, and Icon Trading
(Private) Limited.
POLICY FOR NEW APPOINTMENTS
Base salary levels will take into account market data for the
relevant role, internal equity, the individual’s experience, and
their current base salary. Where an individual is recruited
at below market norms, they may be 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, brokers, and other
professional advisors that they deem relevant. In addition,
the Directors have direct access to the advice and services
of the Company Secretary.
7. EVALUATE BOARD PERFORMANCE BASED
ON CLEAR AND RELEVANT OBJECTIVES,
SEEKING CONTINUOUS IMPROVEMENT
During the financial year ended 31 December 2024 the
Board announced a restructuring of the board to meet the
future commercial needs of the Company and is achieving
measurement of progress relative to objectives.
A detailed strategy defined for the Company is used as a
benchmark to measure the performance of the Company
and team moving forwards. Progress reviews are held
periodically to assess progress against key metrics.
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, the shareholders and the
communities in which it operates. We operate in remote
and under-developed areas and ensure our employees
understand their obligations towards the environment and
in respect of anti-bribery and corruption.
Regular calls attended with senior employees serve to refresh
and re-iterate the Company’s ethical standards as they apply
to the operational issues that are discussed on that call.
CORPORATE GOVERNANCE REPORT
CONTINUED
33
GOVERNANCE
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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.
BOARD COMMITTEES AND POLICIES
Audit and Risk Committee
The Audit and Risk Committee is chaired by Donald
McAlister since his appointment in June 2024 and includes
Peter Wynter Bee and David Smith. The Committee is
responsible, amongst other things, for monitoring the
Group’s financial reporting, external and internal audits
and controls, including reviewing and monitoring the
integrity of the Group’s annual and half-yearly financial
statements, reviewing and monitoring the extent of non-
audit work undertaken by external auditors, advising on
the appointment of external auditors, overseeing the
Group’s relationship with its external auditors, reviewing the
effectiveness of the external audit process and reviewing
the effectiveness of the Group’s internal control review
function. The ultimate responsibility for reviewing and
approving the annual report and accounts and the half-
yearly reports remains with the Board. The Audit and Risk
Committee gives due consideration to laws and regulations,
the provisions of the Quoted Companies Alliance (“QCA”)
Code and the requirements of the Listing Rules.
Specific risks are set out in the Strategic Report on pages 17
to 23.
The Remuneration Committee
The Remuneration Committee is chaired by David Smith
and includes Peter Wynter Bee.
Remuneration issues are presented for approval by the
full Board, with any conflicted directors abstaining from
decision-making as appropriate.
Key remuneration-related activities which occurred
during the year included inflation-related increases for
all directors, bonus payments for the CEO and COO and
Company-wide pay proposals. At the last general meeting
of the Company at which a resolution to approve the
directors’ remuneration report was passed in 2024, the
percentage of votes cast was 99.04% for, 0.96% against
and 0.001% withheld.
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
CORPORATE GOVERNANCE REPORT
CONTINUED
GOVERNANCE
34
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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, all employees
of the Group, contractors working for the Group and its
suppliers. The Board believes that the Group, through its
internal controls, has appropriate procedures in place to
reduce the risk of bribery and that all employees, agents,
consultants, and associated persons are made fully 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 undertakes its mining and exploration activities
in a manner that strives to minimise or eliminate
negative impacts and maximise positive impacts of an
environmental or socio-economic nature. The Company
is committed to responsible stewardship of natural
resources and the ecological environment.
The Company aims to continually improve its
environmental performance and the prevention of
pollution, reduce or control the creation, emission or
discharge of any type of pollutant or waste and to reduce
adverse environmental impacts; the integration of
environmental management into management practices
throughout the Group, rehabilitate disturbed land as much
as possible and protect environmental biodiversity; protect
cultural heritage resources; comply with applicable
legal requirements; and train and educate employees in
environmental responsibilities.
During drilling operations, the Company aims to limit any
areas cut or cleared, and to restore these afterwards.
Biodegradable drilling fluids are used, and any spills are
recorded. The Company is keen to reduce its use of fossil
fuels and has installed solar power energy supplies for its
exploration camp and offices in Zimbabwe.
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
its social and economic impacts; placing local people at
the centre of development by helping to build their capacity
to control their own development. The Company seeks
to maximise local employment; all our Botswana based
team are Botswana nationals, and in excess of 90% of our
Zimbabwe team are Zimbabwean nationals. Community
initiatives have included assistance to a rural school,
benefiting female education of a disadvantaged community,
and provision of computer hardware to a school and
sponsorship of a local football team.
DIVERSITY AND INCLUSION POLICY
Purpose: Kavango Resources is committed to fostering
a diverse and inclusive workplace that reflects the
communities we operate in and the global nature of our
business. This policy outlines our approach to diversity and
inclusion, ensuring compliance with the UK Listing Rules
and promoting equitable representation at all levels of the
company.
Scope: This policy applies to all employees, contractors,
board members, and executive management of Kavango
Resources.
POLICY STATEMENT
1. Commitment to Diversity
•
We aim to achieve and maintain diversity in our workforce,
including gender, ethnicity, age, disability, sexual
orientation, and cultural background.
•
At least 40% of our board will be women, and one senior
board position (Chair, CEO, CFO, or SID) will be held by a
woman.
•
At least one board member will be from a minority ethnic
background, as defined by the Office for National Statistics
(excluding White ethnic groups).
2. Recruitment and Promotion
•
Recruitment processes will be designed to attract diverse
candidates and eliminate bias.
•
Promotion and career development opportunities will be
accessible to all employees, ensuring equitable treatment.
3. Data Collection and Reporting
•
We will collect and publish data on the gender identity
and ethnic diversity of our board, senior board positions,
and executive management annually.
CORPORATE GOVERNANCE REPORT
CONTINUED
35
GOVERNANCE
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
•
Diversity targets will be disclosed in our annual financial
report, along with explanations if targets are not met.
4. Training and Awareness
•
Diversity and inclusion training will be mandatory for all
employees and board members.
•
Awareness campaigns will be conducted to foster an
inclusive culture.
5. Accountability
•
The Board of Directors will oversee the implementation of
this policy and monitor progress against diversity targets.
•
Regular reviews will be conducted to ensure compliance
with the UK Listing Rules and adapt to evolving best
practices.
•
Review and Updates: This policy will be reviewed annually
to ensure its effectiveness and alignment with regulatory
requirements.
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 2024
AGM resolutions were passed comfortably. The votes on
all resolutions were taken on a show of hands and the
proxy votes announced, to ensure that full shareholder
representation was reflected.
The Board receives regular updates on the views
of shareholders through briefings and reports from
investor relations advisors, the CEO, Directors, and the
Company’s broker. The Company communicates with
institutional investors frequently through briefings with
management. In addition, analysts’ notes and brokers’
briefings are reviewed to achieve a wide understanding of
investors’ views.
The items included in this report are unaudited unless
otherwise stated.
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 in the pre-development/development stage. The
Board and senior members of staff continue largely to be
remunerated through a combination of modest salaries
or fees, and the grant of share options, and as a result the
total salaries and fees payable to directors have been
unusually modest. As the Company continues to grow it
has developed a more long-term and sustainable policy,
which continues to align the interests of directors and
senior staff with those of shareholders while recognising
that new hires will not initially have a significant equity
position. Accordingly, it is likely that compensation
packages for Executive Directors in particular will need to
move over time to a level more consistent with the market.
As the scale of the Company’s operations grow it is also
likely that executive remuneration will need to rise to a level
comparable with that of other international companies
in our industry, and to reflect requirements to relocate to
local jurisdictions from time to time.
Currently Directors’ remuneration is not subject to specific
performance targets. The Company is sufficiently small
that the Remuneration Committee does not consider
it is necessary to impose such targets as a matter of
principle but believes that exceptional performance
can be rewarded on an ad hoc basis. The Board has not
adopted a specific policy with regard to share option
grants; nonetheless the use of share options will continue
to be an important part of the compensation packages
both for Executive and Non-Executive Directors, particularly
until such time as the Company is generating cash from
operations.
During the reporting period the Board considered the
remuneration of Directors and senior staff and their
employment terms and made recommendations on
the overall remuneration packages. The Remuneration
Committee considers the remuneration of directors
and senior staff, in alignment with the Company’s policy
and makes recommendations to the Board. No Director
takes part in any decision directly affecting their own
remuneration.
CORPORATE GOVERNANCE REPORT
CONTINUED
GOVERNANCE
36
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Overall, Directors emoluments decreased by 12% from
2023 to 2024, as a result of Jeremy Brett and Brett Grist
stepping down as Directors during the year. However,
average Directors’ emoluments increased by 14% as a
result of inflation-related increases for Directors across
the Group and bonus payments for the CEO and COO. In
addition, the CEO’s emoluments has increased by 34%. The
average increase for all employees across the Group was
15%. At the last general meeting of the Company at which
a resolution to approve the directors’ remuneration report
was passed in 2024, the percentage of votes cast was
99.04% for, 0.96% against and 0.001% withheld. The directors
acknowledge and are mindful of their responsibilities
regarding the remuneration of directors. The Directors are
committed to ensuring that remuneration practices align
with the interests of shareholders, suppliers and others,
and reflect the performance and contributions of the
Directors. The Board regularly reviews the remuneration
framework to ensure it remains competitive and fair.
CORPORATE GOVERNANCE REPORT
CONTINUED
37
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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 25
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 2024 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 2024:
Year to 31 December 2024
Salary/
fees
$
Taxable
benefits
$
Other items
in nature of
remuneration
(incl. annual
bonus) $
Long-
term
incentive
awards $
Pension
related
benefits
$
Total
$
Total Fixed
Remuneration
$
Total Variable
Remuneration
$
Ben Turney
192,271
-
64,090
-
-
256,361
192,271
64,090
David Smith
59,103
-
-
-
-
59,103
59,103
-
Hillary Gumbo
63,381
-
-
-
-
63,381
63,381
-
Brett Grist
99,737
-
12,818
-
2,992
115,547
102,729
12,818
Peter Wynter Bee
32,209
-
-
-
-
32,209
32,209
-
Jeremy S. Brett
6,258
-
-
-
-
6,258
6,258
-
Donald McAlister
18,210
-
-
-
-
18,210
18,210
-
Alex Gorman
18,210.
-
-
-
-
18,210
18,210
-
For comparison the emoluments of the Directors who served during the year ended 31 December 2023 are set out below:
Year to 31 December 2023 (restated*) )
Salary
$
Taxable
benefits.
$
Other items
in nature of
remuneration
(incl. annual
bonus) $
Long-
term
incentive
awards $
Pension
related
benefits
$
Total
$
Total Fixed
Remuneration
$
Total Variable
Remuneration
$
Ben Turney
126,467
-
63,662
-
-
190,129
126,467
63,662
David Smith
56,206
-
-
-
-
56,206
56,206
-
Hillary Gumbo
76,496
-
-
-
-
76,496
76,496
-
Brett Grist
126,467
-
12,732
-
2,626
141,825
129,092
12,732
Peter Wynter Bee
30,631
-
-
-
-
30,631
30,631
-
Jeremy S. Brett
158,281
-
-
-
-
158,281
158,281
-
*
The comparative balances for the year-ended 31 December 2023 have been restated to correct for an overstatement of the share based payment
charge attributable to Directors and to include remuneration of directors received from subsidiaries.
38
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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 2024, the Company continued to make payments into a money purchase
pension scheme for Brett Grist whilst he remained an employee of the Company. The Company did not make pension
contributions for any of the other Directors and did not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors or past Directors.
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 2024 (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
Subject to
performance
measures?
Vesting date
Expiry date
Hillary Gumbo
Option
06/11/2018
£0.025
2,400,000
No
06/11/2018
04/11/2028
Option
01/05/2019
£0.025
280,000
No
01/05/2019
01/05/2029
Option
01/05/2019
£0.028
500,000
No
01/05/2019
01/05/2029
Option
05/05/2020
£0.008
500,000
No
05/05/2020
05/05/2030
Option
10/08/2021
£0.075
1,000,000
Exercisable only once
the Company’s share
price has closed at
not less than 15 pence
on five trading days
50% vest no earlier
than 12 months
from grant and 50%
vest no earlier than
24 months from grant
10/08/2028
Option
15/3/2023
£0.03
2,820,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
31/10/2023
20/01/2030
Option
17/11/2023
£0.011
1,500,000
No
17/11/2023
17/11/2030
Ben Turney
Option
09/02/2021
£0.033
2,000,000
No
50% vest no earlier
than 12 months
from grant and 50%
vest no earlier than
24 months from grant
09/02/2031
Option
10/08/2021
£0.075
4,500,000
Exercisable only once
the Company’s share
price has closed at
not less than 15 pence
on five trading days
50% vest no earlier
than 12 months
from grant and 50%
vest no earlier than
24 months from grant
10/08/2028
Option
15/03/2023
£0.03
5,000,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
15/03/2023
20/01/2030
DIRECTORS’ REMUNERATION REPORT
CONTINUED
39
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Director
Interest
type
Date of
Grant
Exercise
price
Number
Subject to
performance
measures?
Vesting date
Expiry date
Ben Turney
(continued)
Option
15/03/2023
£0.03
5,000,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
31/10/2023
20/01/2030
Option
17/11/2023
£0.011
40,000,000
No
17/11/2023
17/11/2030
David Smith
Option
09/02/2021
£0.033
1,500,000
No
50% vest no earlier
than 12 months
from grant and 50%
vest no earlier than
24 months from grant
09/02/2031
Option
15/03/2023
£0.03
2,000,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
31/10/2023
20/01/2030
Option
17/11/2023
£0.011
1,500,000
No
17/11/2023
17/11/2030
Jeremy S. Brett
Option
04/01/2022
£0.03
3,000,000
No
31/10/2023
01/12/2028
Option
15/03/2023
£0.03
3,500,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
31/10/2023
20/01/2030
Option
17/11/2023
£0.011
2,500,000
No
17/11/2023
17/11/2030
Peter Wynter
Bee
Option
15/03/2023
£0.03
2,000,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
31/10/2023
20/01/2030
Brett Grist
Option
15/03/2023
£0.03
6,000,000
Exercisable only once
the Company’s share
price has closed at
not less than 6 pence
on five trading days
31/10/2023
20/01/2030
Option
17/11/2023
£0.011
2,500,000
No
17/11/2023
17/11/2030
SHARE SCHEME INTERESTS AWARDED DURING THE YEAR (AUDITED)
No new share options were awarded to Directors during the year ended 31 December 2024. No share options were
exercised by Directors during the year.
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.
DIRECTORS’ REMUNERATION REPORT
CONTINUED
40
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Name of Director
Number of
ordinary
shares held
31 December
2024
Number of
ordinary shares
held 1 January
2024
Number of
warrants held
31 December
2024
Number of
warrants held
1 January 2024
Ben Turney
17,220,551
15,220,551
-
-
Hillary Gumbo
16,520,137
16,520,137
-
-
David Smith
173,939
173,939
-
-
Brett Grist
2,273,424
2,273,424
-
-
Jeremy S. Brett
-
-
-
-
Peter Wynter Bee1
88,218,182
71,468,182
5,000,000
5,000,000
Alex Gorman
-
-
-
-
Donald McAlister
725,664
325,664
-
-
1
Including holdings by Wynter Bee Resources Limited
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.
BOARD DIVERSITY
One individual (16.6%) on the board of Kavango Resources is from a minority ethnic background. The board of Kavango
does not meet the target on female board members – 16.6% of the board (1/6) is female – and none of the prescribed
senior positions on its board of directors are held by a woman.
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 25 April 2024.
David Smith
Chairman
DIRECTORS’ REMUNERATION REPORT
CONTINUED
41
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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 on the
Main Market.
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 pages 15 to 16, 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 25 April 2025 and is signed on its behalf by;
Matthew Benjamin Turney
Director
42
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF KAVANGO RESOURCES PLC FOR
THE YEAR ENDED 31 DECEMBER 2024
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 2024 which
comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company
Statements of Financial Position, the Consolidated and
Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements of Cash
Flows and notes to the financial statements, including
significant accounting policies. The financial reporting
framework that has been applied in their preparation is
applicable law and UK-adopted international accounting
standards and as regards the parent company financial
statements, as applied in accordance with the provisions
of the Companies Act 2006.
In our opinion:
•
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 2024 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.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate. Our evaluation of the directors’ assessment
of the group’s and parent company’s ability to continue to
adopt the going concern basis of accounting included:
•
Challenging the director’s 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;
•
Performing a look back analysis to evaluate historical
accuracy of previous budgets;
•
Vouching available funds at the year end, reviewing the
post year end fund raise and checking the Company’s
cash position at 31 March 2025; and
•
Critically assessing the disclosure made within
the financial statements for consistency with
management’s assessment of going concern.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group’s or parent company’s
ability to continue as a going concern for a period of at
least twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the
relevant sections of this report.
OUR APPLICATION OF MATERIALITY
Overall group
materiality 2024
Overall group
materiality 2023
Basis for overall
group materiality
US$380,000
US$395,000
2% of gross assets
(2023: 2% of
gross assets)
We applied the concept of materiality both in planning
and performing our audit, and in evaluating the effect of
misstatements. At the planning stage, materiality is used to
determine the financial statement areas that are included
within the scope of our audit and the extent of sample
sizes during the audit.
Our calculated level of overall materiality has decreased
from the previous year. This is predominantly due to the
decrease in asset balances as a result of exploration
assets impaired in the year. We do not consider the
43
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
INDEPENDENT AUDITOR’S REPORT
CONTINUED
inherent risks to have increased and therefore consider
materiality based on 2% of gross assets remains
appropriate.
We consider gross assets to be the most significant
determinant of the group’s financial position and
performance used by shareholders, with the key financial
statement balances being intangible exploration and
evaluation assets and cash and cash equivalents. The
going concern of the group is dependent on its ability to
fund operations going forward, as well as on the valuation
of its assets, which represent the underlying value of
the group.
The group was audited to a level of overall materiality
of US$380,000 (2023: US$395,000), the parent
company overall materiality was set at US$379,000
(2023: US$394,999) with performance materiality set
at US$228,000 (2023: US$237,000) for the group and
US$220,000 (2023: US$236,999) for the parent company,
being 60% (2023: 60%) of materiality of the group and
parent company financial statements as a whole. The
performance materiality is based on our assessment of
the relevant risk factors, including previous experience of
misstatements, management’s attitude towards proposed
adjustments, and the level of estimation inherent within the
group and parent company.
We agreed with the Audit Committee that we would report
to the committee all audit differences identified during
the course of our audit in excess of our triviality level of
US$19,000 (2023: US$19,750) for the group and US$19,000
(2023: US$19,749) for the parent company as well as
differences below that threshold that we believe warranted
reporting on qualitative grounds.
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 and the carrying
value of investments in subsidiaries and recoverability of
intercompany receivables (parent company only). We also
addressed the risk of management override of internal
controls, including among other matters, consideration
of whether there was evidence of bias by the directors
that represented a risk of material misstatement due to
fraud. Procedures were then performed to address the
risks identified and for the most significant assessed risks
of material misstatement, the procedures performed
are outlined below in the Key audit matters section of
this report.
An audit was performed on the financial information of
the group’s material operating components which, for the
year ended 31 December 2024, were located in the United
Kingdom, Botswana and Zimbabwe, with the group’s
accounting functions being based in the UK and Botswana.
The Botswanan and Zimbabwean components were
audited by component auditors operating under
our instruction. The audits were performed both for
consolidation purposes as well as local statutory purposes.
There was regular interaction with the component auditors
during all stages of the audit, and we were responsible for
the scope and direction of the audit process.
Component performance materiality applied ranged
between US$170,000 and US$70,000 (2023: US$176,401 and
US$60,600) with component misstatement reporting
threshold between US$17,000 and US$7,000 respectively
(2023: US$14,700 and US$5,050).
We obtained and reviewed remotely the key audit working
papers prepared by the auditors of the Botswanan and
Zimbabwean components, which related to the work
performed on the significant risks identified at group level.
The component auditors provided their findings to us
which were reviewed and challenged accordingly.
The approach detailed above gave us sufficient
appropriate evidence for our opinion on the group
financial statements.
KEY AUDIT MATTERS
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.
44
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Key Audit Matter
How our scope addressed this matter
Classification and carrying value of Intangible Assets - Note 13
The Group has material intangible assets in relation
to capitalised exploration and evaluation costs in
respect of its Botswanan assets totalling $14.1m as at
31 December 2024 (2023: $14.6m).
The exploration projects are at an early stage of
development and value in use cannot be reliably
estimated given the stage of a risk that the carrying
value of these assets have not been correctly
measured in accordance with IFRS 6 Exploration
and Evaluation of Mineral Resources if impairment
indicators are not appropriately identified and an
impairment recorded.
There is also the risk that additions to intangible
assets during the year have been inappropriately
capitalised and not in accordance with the Group’s
accounting policy or IFRS 6.
This risk is considered a key audit matter given the
material balance at year end and high level of
judgement and estimation required to assess the
valuation of these assets each year.
Our work in this area included:
•
Confirmation that the Group has good title to the applicable
exploration licences;
•
A critical review of management’s impairment indicator
assessment paper and challenging key assumptions therein, as
well as undertaking our own assessment on a project-by-project
basis using the impairment indicators within IFRS 6;
•
For legal rights that are due to expire within the going concern
period, challenging management on whether there are any
events and circumstances that would cause the renewal of such
legal rights to be denied and ensure that these legal rights are
considered when assessing indicators of impairment.
•
A review of component auditor’s work in respect of costs
capitalised during the year under review, including the
considerations made in respect of their appropriateness for
capitalisation in accordance with the Group’s accounting policy
and IFRS 6 recognition criteria; and
•
Ensuring disclosures made in the financial statements in relation
to critical accounting judgements are adequate and in line with
our understanding of the group and its activities.
The directors made the strategic decision to reduce the licence area
within the KSZ region in Botswana. This action was taken to enable a
more targeted and efficient exploration programme concentrated on
the remaining licences. Consequently, the accumulated exploration
expenditure associated with the 10 licences that have been assessed
as no longer holding prospects for further exploration has been fully
written off. As a result, an impairment charge amounting to US$
2,737,000 has been recognised in profit or loss.
We consider the judgements and estimates applied to be reasonable
and management’s assessment of the classification and carrying
value of intangible assets to be appropriate.
Carrying value of the investments in subsidiaries and recoverability of intercompany receivables (Company only) – Note 17
Investments in subsidiaries and intercompany
loans are significant assets in the Company’s
accounts, totalling $24.1m as at 31 December 2024
(2023: $16.9m). Given the continuing losses there
is a risk that the investments in subsidiaries and
intercompany loans may not be fully recoverable.
This risk is considered a key audit matter given that
management judgement is required in determining
the recoverable value of these investments and
intercompany receivables which is linked to
the future success of exploration activities and
profitability of the subsidiaries
Our work in this area included:
•
Obtaining confirmation of ownership of the investments;
•
Assessing the recoverability of the investments and
intercompany receivables by reference to the underlying
subsidiaries exploration projects in conjunction with the review of
indicators of impairment in respect of those projects as set out
above.
•
Undertaking a review of the impairment assessment for
investments/intercompany receivables prepared by
management and challenging key inputs and estimates included
therein; and
•
Ensuring disclosures made in the financial statements in relation
to critical accounting judgements are adequate.
Based on the procedures performed, we consider management’s
assessment of the carrying value of investments in subsidiaries and
recoverability of intercompany receivables to be reasonable.
45
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
INDEPENDENT AUDITOR’S REPORT
CONTINUED
OTHER INFORMATION
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.
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
46
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
INDEPENDENT AUDITOR’S REPORT
CONTINUED
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:
-
Listing Rules
-
Companies Act 2006
-
The Bribery Act 2010
-
Anti-Money Laundering Legislation
-
Disclosure rules and Transparency rules for listed
entities
-
Local industry regulations in Botswana and
Zimbabwe where exploration activity took place
-
UK, Botswana and Zimbabwe tax and employment
laws
-
Financial Services and Markets Act 2000
-
Botswana Companies Act 2003
-
Botswana Mines & Minerals Act 1999
•
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:
-
Making enquiries of management;
-
Reviewing board minutes;
-
Reviewing legal and professional fees ledger
accounts for evidence of any litigation or claims
against the group;
-
Reviewing Regulatory News Service (RNS)
announcements; and
-
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:
-
Making enquiries of component auditors;
-
Reviewing correspondences with authorities;
-
Reviewing general ledger account details of legal
expenses; and
-
Reviewing component auditors’ work in these areas
and obtaining their confirmations with respect to
any noted instances of non-compliance with laws
and regulations, including fraud.
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 8 years,
covering the periods ending 31 December 2017 to 31
December 2024.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the group or the parent
company and we remain independent of the group and
the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
47
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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
15 Westferry Circus
Canary Wharf
London E14 4HD
25 April 2025
INDEPENDENT AUDITOR’S REPORT
CONTINUED
FINANCIAL STATEMENTS
48
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
FINANCIAL
STATEMENTS
Core scanning
49
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Notes
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Continuing operations
Revenue
445
-
Cost of sales
(484)
-
Gross loss
(39)
-
Administrative expenses
(1,863)
(2,063)
Pre-licence exploration costs
7
(3,977)
(1,153)
Impairment of exploration assets
13
(2,737)
-
Other gains/(losses) – gain/(loss) on fair value of financial assets
42
(77)
Loss from operating activities
(8,574)
(3,293)
Finance income
5
31
-
Finance expense
6
(119)
-
Loss before taxation
8
(8,662)
(3,293)
Taxation
10
-
-
Loss for the year attributable to owners of the parent
(8,662)
(3,293)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Currency translation differences
(219)
676
Foreign exchange loss on liquidation of subsidiary
-
(7)
Other comprehensive (loss)/income, net of tax
(219)
669
Total comprehensive loss for the year attributable to owners of the parent
(8,881)
(2,624)
Earnings per share from continuing operations attributable to owners of the
parent:
Basic and diluted loss per share (cents)
11
(0.59)
(0.45)
The notes of page 58 to 81 form part of these financial statements.
CONSOLIDATED STATEMENT OF
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Company No. 10796849
FINANCIAL STATEMENTS
50
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Notes
31 Dec
2024
US$’000
31 Dec
2023
US$’000
ASSETS
Non-current assets
Property, plant, and equipment
12
940
352
Intangible assets
13
14,071
14,586
Total non-current assets
15,011
14,938
Current assets
Inventories
103
-
Trade and other receivables
18
1,801
928
Loan receivables
15
571
-
Financial assets at fair value through profit or loss
16
418
378
Cash and cash equivalents
19
1,105
3,393
Total current assets
3,998
4,699
TOTAL ASSETS
19,009
19,637
Liabilities
Current liabilities
Trade and other payables
20
712
1,284
Convertible loan notes
21
4,763
-
Total current liabilities
5,475
1,284
TOTAL LIABILITIES
5,475
1,284
NET ASSETS
13,534
18,353
EQUITY
Share capital
22
1,989
1,663
Share premium
22
29,338
25,789
Share option reserve
23
1,860
1,673
Warrant reserve
24
465
609
Foreign exchange reserve
(569)
(350)
Reorganisation reserve
(1,591)
(1,591)
Accumulated losses
(18,144)
(9,626)
Equity attributable to owners of the company
13,348
18,167
Non-controlling interests
25
186
186
TOTAL EQUITY
13,534
18,353
The notes of page 58 to 81 form part of these financial statements.
The consolidated financial statements of Kavango Resources Plc, company registered number 10796849, were approved by the
board, and authorised for issue on 25 April 2025 and signed on its behalf by:
Matthew Benjamin Turney
Director
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Company No. 10796849
51
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Notes
31 Dec
2024
US$’000
31 Dec
2023
US$’000
ASSETS
Non-current assets
Property, plant and equipment
12
2
-
Investment in subsidiaries
17
24,108
16,856
Total non-current assets
24,110
16,856
Current assets
Trade and other receivables
18
1,152
759
Loan receivables
15
571
-
Financial assets at fair value through profit or loss
16
418
378
Cash and cash equivalents
19
580
3,205
Total current assets
2,721
4,342
TOTAL ASSETS
26,831
21,198
LIABILITIES
Current liabilities
Trade and other payables
20
354
1,065
Convertible loan notes
21
4,763
-
TOTAL LIABILITIES
5,117
1,065
NET ASSETS
21,714
20,133
EQUITY
Share capital
22
1,989
1,663
Share premium
22
29,338
25,789
Share option reserve
23
1,860
1,673
Warrant reserve
24
465
609
Foreign exchange reserve
(474)
(140)
Accumulated losses
(11,464)
(9,461)
TOTAL EQUITY
21,714
20,133
The notes of page 58 to 81 form part of these financial statements.
Under s408 of the Companies Act 2006, the Company is exempt from the requirement to present its own statement of
comprehensive income. The loss after tax for the year ended 31 December 2024 was US$ 2,147,000 (2023: US$ 3,205,000).
The financial statements of Kavango Resources Plc, company registered number 10796849, were approved by the Board, and
authorised for issue on 25 April 2025 and signed on its behalf by
Matthew Benjamin Turney
Director
COMPANY STATEMENT OF
FINANCIAL POSITION
AS AT 31 DECEMBER 2024
FINANCIAL STATEMENTS
52
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Equity attributable to owners of the company
Share
capital
US$’000
Share
premium
US$’000
Reorganisation
reserve
US$’000
Share
option
reserve
US$’000
Warrant
reserve
US$’000
Foreign
exchange
reserve
US$’000
Accumulated
losses
US$’000
Shares to be
issued
US$’000
Total
US$’000
Non-
controlling
interests
US$’000
Total equity
US$’000
As at 31 December 2022
904
19,296
(1,591)
913
650
(1,019)
(6,464)
7
12,696
-
12,696
Loss for the year
-
-
-
-
-
-
(3,293)
-
(3,293)
-
(3,293)
Other comprehensive loss for the year:
Foreign currency exchange difference
-
-
-
-
-
669
-
-
669
-
669
Total comprehensive loss for the year
-
-
-
-
-
669
(3,293)
-
(2,624)
-
(2,624)
Warrants issued
-
(90)
-
-
90
-
-
-
-
-
-
Warrants lapsed
-
-
-
-
(131)
-
131
-
-
-
-
Issue of ordinary shares
759
6,838
-
-
-
-
-
-
7,597
-
7,597
Costs of share issues
-
(255)
-
-
-
-
-
-
(255)
-
(255)
Share-based payments – expensed
-
-
-
760
-
-
-
(7)
753
-
753
Non-controlling interest on acquisition of
subsidiary (note 25)
-
-
-
-
-
-
-
-
-
186
186
Total transactions with owners
759
6,493
-
760
(41)
-
131
(7)
8,095
186
8,281
As at 31 December 2023
1,663
25,789
(1,591)
1,673
609
(350)
(9,626)
-
18,167
186
18,353
Loss for the year
-
-
-
-
-
-
(8,662)
-
(8,662)
-
(8,662)
Other comprehensive loss for the year:
Foreign currency exchange difference
-
-
-
-
-
(219)
-
-
(219)
-
(219)
Total comprehensive loss for the year
-
-
-
-
-
(219)
(8,662)
-
(8,881)
-
(8,881)
Warrants lapsed
-
-
-
-
(144)
-
144
-
-
-
-
Issue of ordinary shares
326
3,584
-
-
-
-
-
-
3,910
-
3,910
Costs of share issues
-
(35)
-
-
-
-
-
-
(35)
-
(35)
Share-based payments – expensed
-
-
-
187
-
-
-
-
187
-
187
Total transactions with owners
326
3,549
-
187
(144)
-
144
-
4,062
-
4,062
As at 31 December 2024
1,989
29,338
(1,591)
1,860
465
(569)
(18,144)
-
13,348
186
13,534
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
53
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Share Capital:
Amount subscribed for share capital at nominal value
Share Premium:
Amount subscribed for share capital in excess of nominal value
Reorganisation Reserve:
Reserve created on issue of shares on acquisition of subsidiaries
Foreign Exchange Reserve
Cumulative translation differences
Accumulated Losses:
Cumulative net gains and losses recognised in the consolidated statement of comprehensive
income
Share Option Reserve:
Cumulative fair value of the charge for share options outstanding
Shares to be issued:
Amount of shares the Company has committed to issue
Warrant Reserve:
Cumulative fair value charge over the vesting period of warrants outstanding
The notes of page 58 to 81 form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONTINUED
FINANCIAL STATEMENTS
54
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Share
Capital
US$’000
Share
Premium
US$’000
Share
Option
Reserve
US$’000
Warrant
Reserve
US$’000
Foreign
Exchange
Reserve
US$’000
Accumulated
losses
US$’000
Shares to
be issued
US$’000
Total
US$’000
As at 31 December 2022
904
19,296
913
650
(885)
(6,387)
7
14,498
Loss for the year
-
-
-
-
-
(3,205)
-
(3,205)
Other comprehensive loss for the year:
Foreign currency exchange difference
-
-
-
-
745
-
-
745
Total comprehensive loss for the year
-
-
-
-
745
(3,205)
-
(2,460)
Warrants issued
-
(90)
-
90
-
-
-
-
Issue of ordinary shares
-
-
-
(131)
-
131
-
-
Costs of share issues
759
6,838
-
-
-
-
-
7,597
Share-based payments – expensed
-
(255)
-
-
-
-
-
(255)
Share-based payments – capitalised
-
-
760
-
-
-
(7)
753
Total transactions with owners
759
6,493
760
(41)
-
131
(7)
8,095
As at 31 December 2023
1,663
25,789
1,673
609
(140)
(9,461)
-
20,133
Loss for the year
-
-
-
-
-
(2,147)
-
(2,147)
Other comprehensive loss for the year:
Foreign currency exchange difference
-
-
-
-
(334)
-
-
(334)
Total comprehensive loss for the year
-
-
-
-
(334)
(2,147)
-
(2,481)
Warrant lapsed
-
-
-
(144)
-
144
-
-
Issue of ordinary shares
326
3,584
-
-
-
-
-
3,910
Costs of share issues
-
(35)
-
-
-
-
-
(35)
Share-based payments – expensed
-
-
187
-
-
-
-
187
Total transactions with owners
326
3,549
187
(144)
-
144
-
4,062
As at 31 December 2024
1,989
29,338
1,860
465
(474)
(11,464)
-
21,714
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
55
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Share Capital:
Amount subscribed for share capital at nominal value
Share Premium:
Amount subscribed for share capital in excess of nominal value
Foreign Exchange Reserve:
Cumulative translation differences
Accumulated Losses:
Cumulative net gains and losses recognised in the Company statement of comprehensive income
Share Option Reserve:
Cumulative fair value of the charge for share options outstanding
Shares to be issued:
Amount of shares the Company has committed to issue
Warrant Reserve:
Cumulative fair value charge over the vesting period of warrants outstanding
The notes of page 58 to 81 form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
CONTINUED
FINANCIAL STATEMENTS
56
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Notes
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Cash flows from operating activities
Loss before taxation
(8,662)
(3,293)
Adjustments for:
Impairment of exploration assets
13
2,737
-
Depreciation
144
12
Share option expense
23
187
753
Expected credit loss allowance on amounts due from shareholder
347
Fair value adjustments
16
(47)
77
Finance income
5
(31)
-
Finance expense
6
119
-
Exchange gain on liquidation of subsidiary
-
(7)
Net cash used in operating activities before changes in working capital
(5,206)
(2,458)
(Increase)/decrease in trade and other receivables
(571)
204
Increase/(decrease) in trade and other payables
109
(28)
Increase in inventories
(103)
-
Net cash used in operating activities
(5,771)
(2,282)
Cash flows from investing activities
Payments for property, plant and equipment
(794)
(259)
Loans advanced to third parties
15
(628)
-
Loans repaid from third parties
15
70
-
Payments for intangible assets
13
(2,299)
(3,315)
Payments for intangible assets (deferred consideration)
14
(678)
-
Payment for Hillside Project acquisition held in escrow
18
(650)
-
Payments for financial assets at fair value through profit or loss
-
(445)
Bank interest received
18
-
Net cash used in investing activities
(4,961)
(4,019)
Cash flows from financing activities
Proceeds from issue of share capital
22
3,910
7,597
Share issue costs
22
(35)
(255)
Proceeds from issue of convertible loan notes
21
4,644
-
Net cash generated from financing activities
8,519
7,342
Net (decrease)/increase in cash and cash equivalents
(2,213)
1,041
Cash and cash equivalents at beginning of year
3,393
2,265
Effects of exchange rates on cash and cash equivalents
(75)
87
Cash and cash equivalents at end of year
1,105
3,393
Note 16 discloses significant non-cash transactions in relation to the Group’s investing activities.
The notes of page 58 to 81 form part of these financial statements.
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
57
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
Notes
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Cash flows from operating activities
Loss before taxation
(2,147)
(3,205)
Adjustments for:
Share based payment expense
23
187
753
Impairment of subsidiaries
118
641
Expected credit loss allowance on amounts due from shareholder
22
347
-
Fair value adjustments
(47)
77
Finance income
5
(31)
-
Finance expense
6
119
-
Net cash used in operating activities before changes in working capital
(1,454)
(1,734)
(Increase)/decrease in trade and other receivables
(102)
214
Decrease in trade and other payables
(12)
(107)
Net cash used in operating activities
(1,568)
(1,627)
Cash flows from investing activities
Payments for financial assets at fair value through profit or loss
-
(445)
Payments for property, plant and equipment
(3)
-
Acquisition of subsidiaries
14
(678)
(1,039)
Payment for Hillside Project acquisition held in escrow
18
(650)
-
Loans advanced to third parties
(628)
-
Loans repaid third parties
70
-
Loans advanced to group companies
17
(7,856)
(3,315)
Bank interest received
18
-
Net cash used in investing activities
(9,727)
(4,799)
Financing activities
Proceeds from issue of share capital and warrants
22
3,910
7,597
Share issue costs
22
(35)
(255)
Proceeds from issue of convertible loan notes
21
4,644
-
Net cash generated from financing activities
8,519
7,342
Net (decrease)/increase in cash and cash equivalents
(2,776)
916
Cash and cash equivalents at beginning of year
3,205
2,214
Effects of exchange rates on cash and cash equivalents
151
75
Cash and cash equivalents at end of year
580
3,205
The notes of page 58 to 81 form part of these financial statements.
COMPANY STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
FINANCIAL STATEMENTS
58
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
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”),
Ashmead Holdings (Pty) Ltd (“Ashmead”) and Icon-Trading Company (Pty) Ltd (“Icon”), all registered and domiciled in Botswana.
The Company owns 100% of Kavango Zimbabwe (Private) Limited, a company registered and domiciled in Zimbabwe which in
turn owns 100% of Kavango Mining (Private) Ltd.
In order to simplify the corporate structure, Navassa Resources Ltd, a fully-owned holding company, was liquidated on 4 June
2024.
The principal activity of the Company and its subsidiaries (the “Group”) is exploration for base and precious metals in Botswana
and Zimbabwe.
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 budgeted level of spending on exploration and corporate
activities. The Directors are satisfied that following the successful completion of fundraising in January 2025, which raised gross
proceeds of US$ 8,160,000, the Group has sufficient cash reserves to sustain the minimum level of exploration spending that is
required as part of licence conditions and minimum corporate overheads activities for a period of not less than 12 months from the
date of signing these financial statements. Therefore, the Directors continue to adopt the going concern basis of accounting in the
preparation of the financial statements.
(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
2024 that had a material effect on the consolidated or company financial statements.
At the date of approval of these financial statements, there were no new standards or amendments to IAS which have not been
applied in these financial statements which were in issue but not yet effective and are expected to have a material impact on the
consolidated and company financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
59
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(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(N) ‘Financial assets’.
(E) REVENUE
The Group generates revenue from its mining contract in Zimbabwe. Revenue is recognised at a point in time when the Group
satisfies its performance obligation by transferring fine gold to a customer. The transfer occurs when the customer obtains
control of the fine gold. Revenue is measured at the fair value of the consideration received, excluding value added taxes or duty.
(F) 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 operates. The consolidated and company financial statements are presented in US$, which is
the Group’s and Company’s presentational currency.
The functional currency of the Company is GBP.
Transactions in currencies other than the functional currency of each entity are recorded at the exchange rate on the date
the transaction occurred. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are recognised in
profit or loss.
On consolidation, the results of each entity in the Group with a non-US$ functional currency are translated into US$ at rates
approximating to those ruling when the transactions took place. All assets and liabilities of these entities are translated at
the rate ruling at the reporting date. The resulting exchange differences are recognised in other comprehensive income and
accumulated in the foreign exchange reserve.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
60
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(G) 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.
(H) COST OF SALES
Cost of sales comprise of direct costs incurred to fulfil the mining contract in Zimbabwe.
(I)
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.
(J) 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.
(K) INVENTORIES
Inventories consist of fine gold to be sold and consumables. Inventories are carried at the lower of cost and net realisable value.
In addition, a number of amendments to accounting standards have become applicable for the current reporting period.
The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these
amended standards.
(L) 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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
61
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(M) 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.
(N) 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, loan receivables, and cash and cash equivalents.
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They arise principally through the provision of goods and services to customers (e.g., trade receivables), but also incorporate
other types of financial assets where the objective is to hold their assets in order to collect contractual cash flows and
the contractual cash flows are solely payments of the principal and interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using
the effective interest rate method, less provision for impairment.
Impairment provisions for trade and other receivables are recognised based on the simplified approach within IFRS 9 Financial
Instruments using the lifetime expected credit losses (“ECL”) method. During this process the probability of the non-payment
of the receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to
determine the lifetime ECL for the receivables. For trade and other receivables, which are reported net, such provisions are
recorded in a separate provision account with the loss being recognised within administrative expenses in the statement of
comprehensive income. On confirmation that the trade or other receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
For loan receivables, a lifetime ECL is recognised when there has been a significant increase in credit risk since initial recognition.
However, if the credit risk on the loan receivable has not increased significantly since initial recognition, the loss allowance is
measured at an amount equal to 12-month ECL.
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.
(O) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at hand and in bank.
(P) FINANCIAL LIABILITIES
Financial liabilities include convertible loan notes, trade and other payables including deferred consideration. All financial
liabilities are recognised initially at fair value, net of transaction costs incurred, and are subsequently stated at amortised cost,
using the effective interest method.
(Q) 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.
(R) 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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
62
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(S) 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.
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 2024 is US$ 14,071,000
(2023: US$ 14,586,000) which was impaired during the year by US$ 2,737,000 (2023: $nil). The recoverability of this carrying value,
and thus potential further impairment, requires use of significant judgments and estimates which are detailed in note 13.
(ii)
Recoverability of investment in subsidiaries and intragroup receivables
In the company financial statements, the carrying value of the Company’s investment in subsidiaries and intragroup receivables
is US$ 24,108,000 (2023: US$ 16,856,000). The recoverability of this balance, whether through joint venture partnership, divestment,
or commencement of production, is driven by the same judgements and uncertainties as the recoverability of the exploration
and evaluation assets held by the subsidiaries and discussed in note 13.
(iii)
Recoverability of amounts due from shareholder
In the consolidated and company financial statements, the carrying value of the amount due from shareholders is US$ 287,000
(2023: US$ 637,000). The Directors are satisfied that this balance is recoverable if the shares are to be reissued to a different
shareholder at a prevailing market price thus no further expected credit loss provision is necessary. Further details are included
in note 22.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
63
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
4.
SEGMENTAL DISCLOSURES
The Group previously had two reportable segments, Exploration and Corporate, which are the Group’s strategic divisions. In the
year ended 31 December 2024, the Group started generating revenue from its mining contract in Zimbabwe, which is considered
to be a separate operating segment. For each of the strategic divisions, the Board reviews internal management reports on a
regular basis. The Group’s reportable segments are:
Exploration: the exploration operating segment is presented as an aggregate of all Botswana and Zimbabwe projects in which
the Group has economic interest as well as pre-licence expenditure. Expenditure on exploration activities for each licence is used
to measure agreed upon expenditure targets for each licence to ensure the licence exploration commitments are met;
Mining: includes the results of the Group’s mining contract operations in Zimbabwe; and
Corporate: the corporate segment includes the Company and intermediate holding companies’ costs in respect of managing
the Group. This includes the cost of employee share options granted by the Company.
Segmental results are detailed below:
31 December 2024
Mining
US$’000
Exploration
US$’000
Corporate
US$’000
Total
US$’000
Revenue
445
-
-
445
Cost of sales
(484)
-
-
(484)
Gross loss
(39)
-
-
(39)
Pre-licence exploration costs
-
(3,977)
-
(3,977)
Impairment of exploration assets
-
(2,737)
-
(2,737)
Administrative and other costs*
-
-
(1,863)
(1,863)
Gain on fair value of financial assets
-
-
42
42
Finance income
-
-
31
31
Finance expense
-
-
(119)
(119)
Loss before tax
(39)
(6,714)
(1,909)
(8,662)
31 December 2023
Mining
US$’000
Exploration
US$’000
Corporate
US$’000
Total
US$’000
Pre-licence exploration costs
-
(1,153)
-
(1,153)
Administrative and other costs*
-
-
(2,063)
(2,063)
Gain on fair value of financial assets
-
-
(77)
(77)
Loss before tax
-
(1,153)
(2,140)
(3,293)
*
Results of the corporate segment include a share-based payment charge of US$ 187,000 (2023: US$ 753,000) and expected credit loss allowance on
amounts due from shareholder of US$ 347,000 (2023: US$ nil).
Segmental assets and liabilities are detailed below:
Non-current assets
Non-current liabilities
31 Dec
2024
US$’000
31 Dec
2023
US$’000
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Exploration: intangible assets and equipment (Botswana)
14,147
14,737
-
-
Exploration: equipment (Zimbabwe)
864
201
-
-
Corporate (London and Mauritius)
-
-
-
-
Total of all segments
15,011
14,938
-
-
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
64
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
4.
SEGMENTAL DISCLOSURES (continued)
Total assets
Total liabilities
31 Dec
2024
US$’000
31 Dec
2023
US$’000
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Exploration (Botswana)
14,508
14,892
73
175
Exploration (Zimbabwe)
1,577
402
285
45
Corporate (London)
2,722
4,343
5,117
1,064
Mining (Zimbabwe)
202
-
-
-
Total of all segments
19,009
19,637
5,475
1,284
5. FINANCE INCOME
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Interest income from cash and cash equivalents
18
-
Interest income from loan receivables (note 15)
13
-
31
-
6.
FINANCE EXPENSE
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Interest on convertible loan notes (note 21)
119
-
7.
PRE-LICENCE EXPLORATION COSTS
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Pre-licence exploration costs incurred in Zimbabwe
3,977
1,153
The Group has options over several licence areas in Zimbabwe, consisting of the Nara Project, and the Leopard and Hillside
Projects. The Group incurs option fees to gain access to the licence areas and perform exploration work to evaluate the potential
of each project. The ownership of exploration data collected remains with the licence holders until the options are exercised.
Further details on each project can be found in the Operations Report.
The terms of the options are summarised below:
NARA PROJECT
The Nara Project comprises 45 contiguous gold claims. On 26 June 2023, the Company entered into an exclusive two-year
option agreement to acquire the claims for US$ 4,000,000 in cash, plus an earn-out based on a declaration of a 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 North and Leopard
South. On 25 July 2023, the Company entered into an exclusive six-month option agreement, subsequently extended by a further
eighteen months until 25 July 2025.
The Company exercised the option over Hillside and Leopard South in April 2024, and extended the Leopard North option until
30 June 2025.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
65
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
7.
PRE-LICENCE EXPLORATION COSTS (continued)
The acquisition of the Hillside Project and Leopard South has not completed by 31 December 2024. The terms of the acquisition
are as follows:
a)
US$ 600,000 cash consideration payment to the sellers of Hillside and US$ 50,000 cash consideration to the sellers of
Leopard South. The total cash payable of US$ 650,000 remains in escrow and is included within the other receivables
balance (note 18) whilst the transaction completes.
b)
A further US$ 1,000,000 of shares are to be issued in the Company in the event that a code compliant resource in excess of
200,000 oz gold is defined.
c)
The Group responsibility for up to $350,000 of debt owed, which is repayable at $10,000 per month.
d)
The Group granted a royalty of 5% of gold production on the properties, capped at a value of $1,500,000, and which the
Company may at its option buy out within 12 months for an issue of 63,125,000 shares in the Company.
e)
Completion is subject to satisfactory transfer by the sellers of the mining claims into Kavango’s Zimbabwe subsidiary, and on
the Company paying the Zimbabwe Special Capital Gains Tax (“SCGT”) due on the transaction.
The Company may exercise the Leopard North option in return for payment of US$ 100,000 and the issue of 34,125,000 shares in
the Company.
8.
LOSS BEFORE TAXATION:
Loss before taxation is stated after charging/(crediting) the following:
Note
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Depreciation charge, net of amounts capitalised as intangible exploration asset
144
12
Employee benefit expenses
9
1,436
1,235
Auditor remuneration, net of amounts recognised in share premium
92
88
Cumulative gain on foreign exchange of liquidated subsidiary
-
(7)
Expected credit loss allowance on amounts due from shareholder
22
(347)
-
Net foreign exchange (gains) and losses
(39)
15
Services provided by the Company’s auditor and its associates
During the year, the Group (including overseas subsidiaries) obtained the following services from the Company’s auditors and its
associates:
31 Dec
2024
US$’000
31 Dec
2023
US$’000
Fees payable to the Company’s auditor and its associates for the audit of the
Company and Group financial statements
86
80
Fees payable to the Company’s auditor for other permitted non-audit services:
-
audit-related assurance services: review of interim report
6
8
-
permitted services relating to a corporate finance transaction: reporting
accountant
45
37
137
125
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
66
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
9.
EMPLOYEES
Employee benefit expenses consisted of the following:
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Wages and salaries
1,578
828
547
438
Social security costs
74
35
28
35
Other post-employment benefits
4
3
4
3
Share-based payment expenses (note 23)
187
760
187
760
1,843
1,626
766
1,236
Less: amounts capitalised as exploration assets
(407)
(391)
-
-
Employee benefits recognised in profit or loss
1,436
1,235
766
1,236
The average monthly number of employees during the year was:
Group
31 Dec 2024
No.
Group
31 Dec 2023
No.
Company
31 Dec 2024
No.
Company
31 Dec 2023
No.
Directors and senior management
7
5
6
4
Administrative staff
17
2
-
-
Technical personnel
47
-
-
-
Field personnel
36
36
-
-
Total
107
43
6
4
Further details of Directors’ remuneration are included in the Directors’ Remuneration Report on pages 37 to 40.
10. TAXATION
31 Dec 2024
US$’000
31 Dec 2023
US$’000
Current taxation
-
-
Deferred taxation
-
-
Total tax charge for the year
-
-
The total tax charge for the year can be reconciled to the loss for the year multiplied by the weighted average applicable tax
rate as follows:
31 Dec 2024
US$’000
31 Dec 2023
US$’000
Loss for the year
(8,662)
(3,293)
Tax at the applicable rate of 19.5% (2023:22.5%)
(1,693)
(740)
Expenses not deductible for tax
37
171
Effect of tax losses not recognised as deferred tax assets
1,656
569
Total tax charge for the year
-
-
The weighted average applicable tax rate of 19.5% (2023: 22.5%) used is a combination of the 25% standard rate of corporation
tax in the UK (2023: 23.5%), 22% standard rate of corporation tax in Botswana (2023: 22%), nil corporation tax rate in Mauritius
(2023: nil) and the expected tax rate applicable to mining companies in Zimbabwe of 15% (2023: 15%).
The Group has approximately US$ 12,370,000 (2023: US$ 7,082,000) of tax losses available to carry forward against future taxable
profits. A deferred tax asset has not been recognised because of uncertainty over future taxable profits against which the losses
may be used. Tax losses can be carried forward indefinitely.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
67
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
11.
EARNINGS PER SHARE
31 Dec 2024
US$’000
31 Dec 2023
US$’000
Loss for the year from continuing operations
8,662
3,293
31 Dec 2024
Number
31 Dec 2023
Number
Weighted average number of ordinary shares for the purpose of calculating basic and
diluted earnings per share
1,466,177,425
732,929,929
31 Dec 2024
US Cents
31 Dec 2023
US Cents
Basic and diluted loss per share attributable to owners of the Company
0.59
0.45
The basic and diluted loss per share attributable to owners of the Company are identical as the share options and warrants
detailed in notes 23 and 24 are considered to be anti-dilutive due to the loss made for the year.
12.
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.
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Net book value
At 1 January
352
172
-
-
Additions
811
259
3
-
Disposals
(17)
-
-
-
Depreciation
(200)
(71)
(1)
-
Translation differences
(6)
(8)
-
-
940
352
2
-
Of the total depreciation charge, US$ 56,000 (2023: US$ 59,000) has been capitalised as an intangible exploration asset (note 13).
The remainder of the depreciation charge relates to equipment in Zimbabwe and is included in pre-exploration expense
(note 7).
13.
INTANGIBLE ASSETS
Intangible assets comprise entirely of exploration and evaluation assets.
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Net book value
At 1 January
14,586
9,679
Additions
2,355
4,241
Impairment
(2,737)
-
Translation differences
(133)
666
Total
14,071
14,586
The additions balance relates to the Group’s exploration activity in Botswana. Details on the exploration activity including
acquisition of new licences can be found in the Operations Report.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
68
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
13.
INTANGIBLE ASSETS (continued)
In the year ended 31 December 2024, the additions balance included capitalised depreciation charge of US$ 56,000 (2023:
US$ 59,000) in relation to property, plant and equipment used in exploration activities. In the year ended 31 December 2023, the
additions balance also included the acquisition of Icon and Ashmead subsidiaries for US$ 1,720,000, which included non-cash
consideration (note 14).
Recoverability of the Group’s exploration and evaluation assets is dependent on the success of the Group in discovering
economic and recoverable mineral resources, especially in the countries of operation where political, economic, legal,
regulatory, and social uncertainties are potential risk factors. The future revenue flows relating to these assets is uncertain
and will also be affected by competition, relative exchange rates and potential new legislation and related environmental
requirements.
The Group’s ability to continue its exploration programs and develop its projects is also dependent on its ability to raise sufficient
finance in future, which is uncertain. The ability of the Group to continue operating within Botswana and Zimbabwe is dependent
on a stable political environment. This may also impact the Group’s legal title to assets held which would affect the valuation of
such assets. There have been no changes made to any past assumptions.
IMPAIRMENT REVIEW
The Directors have undertaken a review to assess whether the following impairment indicators exist as at 31 December 2024 or
subsequently prior to the approval of these financial statements:
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 by successful development or by sale.
As detailed in the Operations Report, the Directors took the decision to reduce the licence area in the KSZ region in Botswana
to allow for a more focused exploration programme on the remaining licences. As a result, the accumulated exploration
expenditure incurred on the 10 licences that are no longer deemed prospective for further exploration has been written off,
leading to an impairment charge of US$ 2,737,000 recognised in profit or loss (2023:US$ nil).
The Board is fully committed to continuing exploration on the Group’s remaining projects and further details on the progress of
the exploration activities can be found in the Operations Report. Notwithstanding this, the Board will continue, through 2025, to
review all projects, to ensure that resources are focussed where there is the greatest opportunity for discovery.
All the Group’s prospecting licences in Botswana are subject, after an initial three-year licence term, to biennial renewals
by the Department of Mines in Botswana. After an initial two renewal periods the renewal of these becomes subject to the
minister’s discretion. Further renewals fall due during 2025. To date the Group’s prospecting licences have always been renewed,
consequently the Company’s Directors and management have a reasonable expectation of further renewals being successful.
In respect of the remaining projects, following the above-mentioned impairment review, no indicators were noted that would
lead to an impairment on any of these remaining projects.
14. ACQUISITION OF ICON-TRADING COMPANY (PTY) LTD AND ASHMEAD HOLDINGS (PTY) LTD
IN 2023
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.
US$ 1,015,000 payable upon on the completion of the acquisition;
b.
US$ 339,000 payable 90 days following the completion of the acquisition; and
c.
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 ended 31 December
2023 (note 13). A non-controlling interest has been recognised as a result of this transaction, totalling US$ 186,000 representing
the 10% of the fair value of the licences acquired. Transaction costs of US$ 27,000 were incurred and added to the cost of the
intangible assets acquired.
The total deferred consideration of US$678,000 was settled in full in during the year ended 31 December 2024.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
69
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
15. LOAN RECEIVABLES
Group and
Company
31 Dec 2024
US$’000
Group and
Company
31 Dec 2023
US$’000
Loan advanced to Pambili
163
-
Loan advanced to Equity Drilling
408
-
571
-
LOAN ADVANCED TO PAMBILI
During the year ended 31 December 2024, the Group provided a loan to Pambili Natural Resources Corporation (“Pambili”), a gold
exploration company listed in Canada of US$ 150,000. The loan is unsecured and repayable by no later than 31 January 2025.
The loan includes an arrangement fee of US$ 15,000 which is accounted for as interest with a corresponding interest income of
US$ 13,000 included within finance income. Subsequent to year end, Pambili defaulted on the loan repayment and the loan was
refinanced through convertible loan notes as disclosed in note 29.
LOAN ADVANCED TO EQUITY DRILLING
During the year ended 31 December 2024, the Group provided a US$ 478,000 loan to its drilling contractor, Equity Drilling
Zimbabwe (Pvt) Limited, to facilitate acquisition of drilling equipment in Zimbabwe. The loan is secured against the assets and is
interest-free. The loan is repayable no later than 31 December 2025 and a total of $70,000 was repaid by 31 December 2024.
16. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Group and
Company
31 Dec 2024
US$’000
Group and
Company
31 Dec 2023
US$’000
Interest in listed entities
418
378
INTEREST IN LISTED ENTITIES
Interest in listed entities comprises of the Company’s investments in Power Metal Resources PLC (“Power Metals”) and Pambili
Natural Resources Corporation (“Pambili”).
Power Metals
At 31 December 2023, the fair value of Group’s investment in Power Metals, an AIM-listed metal exploration company, was
US$ 109,000. The fair value subsequently decreased to US$ 96,000 as at 31 December 2024 with a loss of US$ 11,000 recognised in
profit or loss. A foreign exchange loss of US$ 2,000 has also been recognised.
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$0.05 each. The Company
served a binding conversion notice to Pambili on 29 November 2023, which would have given the Group 8,925,000 shares
representing approximately 16.6% of Pambili’s enlarged issued share capital. As at 31 December 2024, the allotment of these
shares remained outstanding whilst Pambili completed a linked transaction and sought the necessary approvals from TSX-V.
The fair value of the Group’s interest in Pambili as at 31 December 2023 was US$ 269,000.
On 4 July 2024, in order to facilitate the approval of the allotment of shares by TSX-V, the Group agreed to reduce its
shareholding from 16.6% to 14.0% with a corresponding reduction in the number to shares to be issued from 8,925,000 to
7,704,910. The shares were subsequently issued and as at 31 December 2024 the fair value of the Group’s shares in Pambili was
US$ 322,000 as with the corresponding gain of US$ 56,000 recognised in profit or loss. A foreign exchange loss of US$ 6,000 has
also been recognised.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
70
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
16. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
The movement in the fair value of the Company’s interest in listed entities is detailed below:
Group and
Company
31 Dec 2024
US$’000
Group and
Company
31 Dec 2023
US$’000
At 1 January
378
-
Additions
-
445
Gain/(loss) on the change in fair value
47
(77)
Translation differences
(7)
10
At 31 December
418
378
17.
INVESTMENTS IN SUBSIDIARIES
Company
31 Dec 2024
US$’000
31 Dec 2023
US$’000
Shares in subsidiaries
724
2,633
Loans to subsidiaries
23,384
14,223
Total
24,108
16,856
Loans to subsidiaries are interest free and payable on demand.
Navassa Resources Ltd (“Navassa”), a fully owned intermediate holding company, was dissolved on 4 June 2024. As a result
of this transaction, Navassa’s shares in, and intercompany receivable from, Kavango Minerals (Pty) Ltd were hived up to the
Company and the Company’s investment in subsidiaries balance was reduced by $1,909,000 with an impairment charge of
US$ 114,000 (2023: US$ 406,000) recognised in the Company’s profit or loss.
The Directors conducted an impairment review and are satisfied that the carrying value of US$ 24,108,000 (2023: US$ 16,856,000)
is reasonable and no further impairment is necessary (2023: US$ nil). The recoverability of the intercompany balances is
intrinsically linked to the value of the underlying exploration assets in Botswana and the exploration potential in Zimbabwe.
The Directors are satisfied with the progress made in both countries and, whilst a successful realisation of the Company’s
investments whether through a joint venture partnership, divestment, or commencement of production is inherently uncertain,
the Directors consider that the carrying values are supported by market transactions and available geological evidence.
LIST OF SUBSIDIARY UNDERTAKINGS
Name
Country of incorporation and
principal place of business
Nature of business
Proportion of equity shares
held by the Company
Kavango Minerals (Pty) Ltd
Botswana
Mineral exploration
100%
Kanye Resources (Pty) Ltd
Botswana
Mineral exploration
100%
Shongwe Resources (Pty) Ltd
Botswana
Licence holding company
90% (indirect holding)
Ashmead Holdings (Pty) Ltd
Botswana
Licence holding company
90%
Icon-Trading Company (Pty) Ltd
Botswana
Licence holding company
90%
Kavango Zimbabwe (Private) Limited
Zimbabwe
Mineral exploration
100%
Kavango Mining (Private) Ltd
Zimbabwe
Mineral exploration
100% (indirect holding)
The registered address of subsidiaries registered in Botswana is Plot 1306, Government Camp, Francistown, Botswana.
The registered address of Kavango Zimbabwe (Private) Limited is 8A Livingston Road, 8th Street Suburbs, Bulawayo, Zimbabwe.
The registered address of Kavango Mining (Private) Ltd is 8A Livingston Road, 8th Street Suburbs, Bulawayo, Zimbabwe.
All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertaking
held directly by the parent company does not differ from the proportion of ordinary shares held.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
71
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
18. TRADE AND OTHER RECEIVABLES
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Amounts due from shareholders
287
637
287
637
VAT recoverable
242
107
31
28
Other receivables and prepayments
1,272
184
834
94
1,801
928
1,152
759
Other receivables and prepayments include the following:
During the year ended 31 December 2024, the Group advanced a short-term working capital loan to Pambili Natural Resources
Corporation (“Pambili”), a gold exploration company listed on the TSX-V in Canada, of US$ 68,000 (2023: US$ nil).
In April 2024, the Company exercised the option to acquire the Hillside and Leopard North Projects and transferred the exercise price
of US$ 650,000 into an escrow account. The acquisition has not completed by 31 December 2024 and the funds remained in escrow.
Further details on the amounts due from shareholders is included in note 28.
19.
CASH AND CASH EQUIVALENTS
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Cash in bank
991
3,317
580
3,205
Cash in hand
114
76
-
-
Total
1,105
3,393
580
3,205
20. TRADE AND OTHER PAYABLE
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Trade payables
205
230
88
145
Accruals and other payables
485
356
256
224
Deferred consideration (note 14)
-
681
-
681
Other tax and social security
22
17
10
15
Total
712
1,284
354
1,065
21.
CONVERTIBLE LOAN NOTES
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Convertible loan notes – principal
4,644
-
4,644
-
Convertible loan notes – accumulated interest
119
119
Total
4,763
-
4,763
-
In August and December 2024, the Company issued 3,711,668 £1 unsecured convertible loan notes with the principal value of
US$ 4,644,000. The loan notes are repayable in cash 12 months after issue and accumulate interest at 10% per annum. The loan
notes are convertible into ordinary shares of the Company, at the option of the holders, at any time subject to the Company
publishing an FCA-approved prospectus and the Company having sufficient share authorities to issue such conversion
shares. The conversion price is set to be the subscription price achieved in the fundraise in connection with the FCA-approved
prospectus. The instrument meets the definition of a financial liability in its entirety.
As disclosed in note 29, after the year-end the Company completed its fundraise at 0.7 pence per share and published the
FCA-approved prospectus on 28 January 2025. The convertible loan notes were converted in full into ordinary shares of the Company.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
72
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
22. SHARE CAPITAL
Number of
shares
No.
Share capital
US$’000
Share premium
US$’000
Total
US$’000
As at 1 January 2023
705,569,314
904
19,296
20,200
Purebond Placing
600,000,000
759
6,838
7,597
Issue costs
-
-
(255)
(255)
Warrants granted
-
-
(90)
(90)
As at 31 December 2023
1,305,569,314
1,663
25,789
27,452
Share issue
257,113,862
326
3,584
3,910
Issue costs
-
-
(35)
(35)
As at 31 December 2024
1,562,683,176
1,989
29,338
31,327
The Company has one class of ordinary shares of 0.1 penny each which entitle the holders to receive dividends as declared from
time to time and to vote at meetings of the Company. All ordinary shares rank equally with regard the Company’s residual net
assets. There are no restrictions on the transfer of shares.
On 16 May 2024, the Company successfully raised £3,085,366 (US$ 3,910,000) gross proceeds by placing 257,113,862 new ordinary
shares at 1.2 pence each.
The total cash received, before issue costs, by the Company for the shares issued during the year ended 31 December 2024 was
US$ 3,909,375 (2023: US $7,597,000).
In November 2022 the Company raised US$ 4,164,000 through the issue of 194,444,437 shares and 194,444,437 3p warrants.
Of this amount, as at 31 December 2024 and at the date of approval of these financial statements, £500,000 (US$ 626,000;
2023: US$637,000) remain outstanding from one subscriber, Arigo Capital. The Directors have concluded that the amounts are
unlikely to be recovered from the subscriber and therefore, as permitted by the Company’s Articles of Association, the shares will
reissued to a different shareholder. The shares will be reissued at the prevailing market price, which as at 31 December 2024 was
0.825 pence and therefore an expected credit loss provision of US$ 347,000 (2023: US$ nil) has been recognised in profit or loss
to reduce the carrying value of the receivable to US$ 287,000. The receivable is included within the trade and other receivables
balance (note 18).
23. SHARE-BASED PAYMENTS
The Company is party to the following share-based payment arrangements:
(a) Share options issued to employees and others providing similar services;
(b) Warrants issued to third-party suppliers for the provision of exploration and corporate services; and
(c), (d) Warrants issued as part of corporate acquisitions.
The Company also settles some of its capitalised drilling contractor invoices in shares (note 22).
Warrants issued to shareholders as part of fundraising are disclosed in note 24.
Movements in the Share Options Reserve are detailed below:
Share Options
Reserve
US$’000
As at 1 January 2023
913
Share-based payments – expensed
760
As at 31 December 2023
1,673
Share-based payments – expensed
187
As at 31 December 2024
1,860
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
73
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
23. SHARE-BASED PAYMENTS (continued)
(A) SHARE OPTIONS
Share options granted prior to 1 January 2023
In 2018, the Company granted 13,400,000 share options to the Directors and management exercisable at 2.5 pence for a period
of 10 years from date of grant.
In 2019, the Company granted 2,600,000 share options to the Directors and management exercisable at 2.8 pence for a period of
10 years from date of grant.
In May 2020, the Company granted 2,725,000 share options to Directors and management exercisable at 0.8 pence for a period
of 10 years from date of grant.
None of the share options detailed above had vesting conditions attached to them.
In February 2021, the Company granted 3,500,000 share options to the Directors of the Company exercisable at 3.3 pence per
share. The options are subject to the Directors being employed by the Company, with half the options vesting after one year and
the remainder vesting after two years.
In June and August 2021, the Company granted options to the Directors and management which are subject to the following
performance conditions:
(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 January 2022, the Board made firm commitments to a Director and management to issue further options in January 2022
but with the vesting period commencing on 1 December 2021. These were issued on 4 January 2022 but have a grant date of
1 December 2021 and have been accounted for from that date.
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 cancellation of the existing options, leading to an accelerated
recognition of the remaining option charge of US$ 200,000 in the period ended 31 December 2023, and treating the replacement
options as a new grant.
The new and amended options were valid for 7 years from the date of grant, or 7 years from the date of original grant for the
amended options, with the exercise price of 3p.
Of the 42,820,000 new and amended options granted, 37,820,000 are subject the following vesting conditions:
(i)
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
(ii)
the Company share price closing at 7.5p or above on any 5 trading days; or
(iii) 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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
74
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
23. SHARE-BASED PAYMENTS (continued)
A Monte Carlo model was used to calculate the fair value of the options at the date of grant and, for non-CEO options, to
estimate the most likely vesting period. The result of the valuation together with other inputs into the model are detailed below:
3 February 2023
Options
Number of Options
42,820,000
Share price at the date of grant (pence)
1.3
Exercise price (pence)
3.0
Term
7 years
Expected exercise date
On vesting
Dividend yield
0%
Annual risk-free rate
2.98%
Volatility
84.90%
Total fair value
US$ 319,000
Estimated vesting period for non-CEO options
5 to 7 years
On 20 November 2023, the Company granted 48,000,000 share options to Directors exercisable at 1.1p per share for a period of
7 years.
The Company also granted 20,000,000 share options to some consultants of the Group exercisable at 1.1p per share for a period
of 7 years. These options are issued in tranches, with 2,000,000 options issued immediately and the remaining 4,000,000 and
14,000,000 options issues in 12 and 24 months respectively, subject to continuous commercial engagement with the Group.
The fair value of these share options was calculated using the Black-Scholes pricing model and totalled US$ 440,000. The inputs
in the model are as follows:
20 November 2023
Options
Number of Options
68,000,000
Share price at the date of grant (pence)
0.7
Exercise price (pence)
1.1
Term
7 years
Expected exercise date
On expiry
Dividend yield
0%
Annual risk-free rate
3.96%
Volatility
87.29%
No new share options were granted during the year ended 31 December 2024.
Summary
31 Dec 2024
31 Dec 2023
Number of
Options
Average exercise
price (pence)
Number of
Options
Average exercise
price (pence)
At 1 January
146,295,000
2.33
45,475,000
4.24
Granted during the year
-
-
110,820,000
1.83
Cancelled
-
-
(10,000,000)
5.50
Lapsed
(3,000,000)
3.00
-
-
At 31 December
143,295,000
2.33
146,295,000
2.33
Exercisable at 31 December
74,225,000
1.57
74,225,000
1.57
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
75
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
23. SHARE-BASED PAYMENTS (continued)
Share options outstanding as at 31 December 2024 have the following expiry dates and exercise prices:
Scheme
Number of
Options
Weighted
average
exercise price
(pence)
Weighted
average
contractual
life (years)
2018 Options
13,400,000
2.80
3.85
2019 Options
2,600,000
2.50
4.33
2020 Options
2,725,000
0.80
5.34
2021 February Options
3,500,000
3.30
6.11
2021 June Options
4,750,000
5.00
3.43
2021 August Options
8,500,000
6.20
3.61
2023 February Options
39,820,000
3.00
4.82
2023 November Options
68,000,000
1.10
5.89
Total
143,295,000
2.33
5.15
A charge of US$ 187,000 (2023: US$ 753,000) was recognised in profit or loss in respect of the Company share options.
(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 2024, 1 million (2023: 1 million) warrants
are exercisable. The fair value of the warrants issued was based on the fair value of services received and US$ 92,000 has been
capitalised as an intangible exploration asset.
During the year ended 31 December 2022, the Company engaged Tamesis Partners LLP (“Tamesis”) to act as financial advisor
to the Group. In consideration for the provision of the transaction services, Tamesis were awarded with 8,333,334 warrants
exercisable for two years from the date of issuance and with an exercise price of 3p per share. The warrants were valued using
the Black Scholes pricing model with a total fair value of US$ 51,000. The warrants expired unexercised during the year end
31 December 2024.
During the year ended 31 December 2023, the Company issued 14,466,667 broker warrants in connection with the 2022 5p Share
placing. The warrants were valued using the Black Scholes pricing model with the significant inputs summarised below:
3p warrants
Share price at the date of grant (pence)
1.85
Exercise price (pence)
3.0
Dividend yield
0%
Term
2.0 years
Annual risk-free interest rate
3.03%
Volatility
71.5%
Number of warrants issued
14,466,667
Total fair value of the warrants
US$ 90,000
The fair value of broker warrants was charged against share premium. The warrants expired unexercised during the year end
31 December 2024.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
76
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
23. SHARE-BASED PAYMENTS (continued)
(C) ACQUISITION OF KANYE JV
In 2022 the Company issued 75,000,000 warrants to Power Metals to acquire their share of Kanye joint venture consisting of
30 million warrants exercisable at 4.25p, 30 million warrants exercisable at 5.5p and 15 million of variable price warrants where
the exercise price is the higher of: 3p, and the Company’s actual price at a 15% discount to the volume-weighted average share
price on the date of exercise. If all variable price warrants were exercised prior to expiry, Power Metals would have received
15 million replacement warrants, on the same exercise terms and with a 6-month life expiry from issue date.
The fixed exercise price warrants were valued using the Black Scholes pricing model and totalled US$ 211,000. The value of the
15 million variable price warrants was clearly trivial and they lapsed unexercised on 7 January 2023.
(D) ACQUISITION OF SHONGWE RESOURCES (PTY) LTD
In 2022 the Company issued 2,000,000 two-year warrants to LVR GeoExplorers (Pty) Ltd as part of the acquisition of the licences
held in Shongwe Resources (Pty) Ltd. The warrants were valued using the Black Scholes pricing model with a total fair value of
US$ 2,000. The warrants expired unexercised during the year end 31 December 2024.
24. WARRANT RESERVE
Group and
Company
31 Dec 2024
US$’000
Group and
Company
31 Dec 2023
US$’000
At 1 January
609
650
Warrants issued during the year – note 23
-
90
Warrants lapsed during the year – note 23
(144)
(131)
At 31 December
465
609
Details of the warrants outstanding as at 31 December 2024 are as follows:
Warrants
Exercise price
(pence)
Grant date
Expiry date
No of Warrants
outstanding
2021 Spectral Warrants
4.25
20 April 2021
20 April 2025
1,000,000
2022 3.0p Placing
3.00
17 November 2022
28 February 2025
194,444,437
2022 Power Warrants
4.25
25 November 2022
8 January 2025
30,000,000
2022 Power Warrants
5.50
25 November 2022
8 January 2025
30,000,000
255,444,437
During the year ended 31 December 2024, a total of 24,800,001 warrants lapsed unexercised (2023: 195,435,423). No warrants were
exercised during the year (2023: none).
2022 3.0P PLACING
In November 2022 as part of a share placing (note 22) the Company granted 194,444,437 warrants exercisable at 3.0p for a
period of 2 years.
Details of other warrants can be found in note 23(B).
After the year-end, all 2022 Power Warrants and all 2022 3.0p Placing Warrants lapsed unexercised in January and February 2025
respectively.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
77
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
25. NON-CONTROLLING INTERESTS
31 Dec 2024
US$’000
31 Dec 2023
US$’000
At 1 January
186
-
Addition on acquisition of subsidiaries
-
186
At 31 December
186
186
As at 31 December 2024, the Group has 90% shareholding in Icon, Ashmead and Shongwe. The purpose of these entities is to
hold exploration licences in Botswana. Costs incurred in these entities is capitalised as exploration assets. Other comprehensive
income attributable to non-controlling interests was US$ nil (2023: US$ nil).
26. FINANCIAL INSTRUMENTS
(A) CATEGORIES OF FINANCIAL INSTRUMENTS
Financial assets
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Financial assets at amortised cost:
Other receivables
355
637
287
637
Cash and cash equivalents
1,105
3,393
580
3,205
Loan receivables
571
-
571
-
Loans to subsidiaries
-
-
23,384
14,223
2,031
4,030
24,822
18,065
Financial assets at fair value through profit or loss:
Interest in listed securities
418
378
418
378
Total financial assets
2,449
4,408
25,240
18,443
Financial liabilities
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
Financial liabilities at amortised cost:
Trade and other payables
690
587
344
369
Deferred consideration
-
681
-
681
690
1,268
344
1,050
There is no material difference between the carrying value and fair value of the Group’s and Company’s cash balances, other
receivables, loans receivables, loans to subsidiaries and trade and other payables because of their short maturities.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
78
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
26. FINANCIAL INSTRUMENTS (continued)
(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 2024 (2023: 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:
Group and
Company
31 Dec 2024
US$’000
Group and
Company
31 Dec 2023
US$’000
Interest in listed securities
418
378
Level 2 – Valuation techniques using observable inputs
Fair value is determined using inputs other than quoted prices included in Level 1 that are observable, directly or indirectly.
Level 3 – Valuation techniques using significant unobservable inputs
Fair value is dependent on significant inputs that are unobservable.
As at 31 December 2024, the Company and Group had no financial instruments carried at fair value where the fair value is
estimated using Level 2 or Level 3 inputs.
(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.
(i)
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. Currency risk arises on financial instruments that are denominated in a different currency to the entity’s
functional currency in which they are measured. Currency risk is monitored on a regular basis.
The net carrying amount of financial instruments split by currency are set out below:
31 Dec 2024
31 Dec 2023
Group
GBP
US$’000
USD
US$’000
BWP
US$’000
GBP
US$’000
USD
US$’000
BWP
US$’000
Cash and cash equivalents
404
563
138
3,027
304
62
Trade and other receivables
933
-
370
637
-
387
Trade and other payables
(61)
-
(66)
(132)
-
(109)
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
79
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
26. FINANCIAL INSTRUMENTS (continued)
31 Dec 2024
31 Dec 2023
Company
GBP
US$’000
USD
US$’000
BWP
US$’000
GBP
US$’000
USD
US$’000
BWP
US$’000
Cash and cash equivalents
404
176
-
1,084
1
-
Trade and other receivables
933
-
-
637
-
-
Loan to subsidiaries
23,387
-
-
12,442
-
-
Trade and other payables
(61)
(14)
-
(132)
(1)
-
The Group’s and Company’s exposure to foreign currency risk arises only from monetary financial instruments that are
denominated in a different currency to the entity’s functional currency in which they are measured, which is trivial for the Group.
Gains and losses on the intercompany funding loans between the UK and Botswana are capitalised as part of the exploration
and evaluation intangible assets and therefore there is no exposure for the Group as whole. Exposure to currency risk from other
financial instruments is immaterial.
(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 floating rate 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$ 418,000 at of 31 December 2024 (2023: US$ 378,000). Securities
markets fluctuate, frequently on basis of uncontrollable macroeconomic and geopolitical developments. In addition, there can
be developments within a public company that can affect its market valuation. The Directors review public announcements
released by Power Metals and Pambili and monitor the liquidity of their shares to mitigate the financial impact of a sudden
depreciation in their value.
CREDIT RISK
Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual
obligations.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as at
31 December 2024 is detailed below:
For the Group, credit risk arises primarily from cash balances held at banks and loan receivables. The risk in relation to cash
balances is mitigated by using only reputable financial institutions with a high credit rating. The Group’s exposure to the amounts
due from shareholder is discussed in note 22 and the loan receivables are detailed in note 15.
The Company is additionally exposed to credit risk on the intercompany balances with its subsidiaries. The recoverability of
these balances is linked directly to the success of the exploration activities of the Group. As discussed in note 13, no impairment
indicators exist on the exploration assets and thus the balances are deemed to be recoverable.
The Group and Company do not hold any collateral as security.
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Company and its subsidiaries might encounter difficulty in settling its debts
or otherwise meeting its obligations related to financial liabilities. The Company manages this risk by monitoring its financial
resources and carefully planning its exploration expenditure programmes. The Group is dependent upon equity fundraisings to
manage its liquidity risk.
With the exception of the convertible loan notes detailed in note 21, the Group and Company have no external borrowings (2023:
none) and all their liabilities are due within six months. The convertible loan notes have a contractual maturity falling within 6 to
12 months of the year-end, with maximum cash redemption amount of US$ 5,112,000. The convertible loan notes were converted
into ordinary shares of the Company in January 2025.
(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.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
80
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
27. COMMITMENTS
The Group’s licence expenditure commitments are:
31 Dec 2024
US$’000
31 Dec 2023
US$’000
Within 12 months
272
-
Years 2-5
117
510
Total
389
510
As at 31 December 2024 the Group had $163,537 (2023: US$ nil) contractual commitments with either geophysics or drilling
companies and no contingent liabilities (2023: US$ nil). The Group can cancel its option agreements in Zimbabwe with no penalty.
28. RELATED PARTY TRANSACTIONS
Key management personnel consists of Company directors.
KEY MANAGEMENT PERSONNEL COMPENSATION
Group
31 Dec 2024
US$’000
Group
31 Dec 2023
US$’000
(restated*)
Company
31 Dec 2024
US$’000
Company
31 Dec 2023
US$’000
(restated*)
Short-term employee benefits
611
532
563
484
Post-employment benefits
3
3
3
3
Share-based payment expenses
99
437
99
437
713
972
665
924
*
The comparative balances for the year-ended 31 December 2023 have been restated to correct for an overstatement of the share based payment
charge attributable to directors and to include remuneration of directors received from subsidiaries.
Short-term benefits disclosed above include US$ 94,000 (2023: US$ 76,000) of annual bonuses which were accrued at year end
and included within other payables.
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$ 156,000 (2023: US $69,000) and the transaction was carried out at arms-length.
Communication services were provided by Dynamic Investor Relations Ltd, a communications company majority-owned by
Mathew Benjamin Turney who is a director of Kavango Resources Plc. The total fees billed by Dynamic Investor Relations Ltd
during the year were US$ 31,000 (2023: US$ 48,000) and the transaction was carried out at arms-length.
The Group incurred geological consultancy costs of US$ 47,000 (2023: US$ 143,000) provided Jeremy S Brett International
Consulting Ltd, a consulting company owned by Jeremy S Brett whilst he was a director of Kavango Resources Plc.
The transaction was carried out at arms-length.
The Group incurred corporate consultancy costs of US$ nil (2023: US$ 108,000) provided by Peter Wynter Bee, a non-executive
director of the Company. The transaction was carried out at arms-length and the amount remains outstanding as at
31 December 2024 and is included within trade payables.
During the year-ended 31 December 2024, Peter Wynter Bee and Mathew Benjamin Turney subscribed for 16,750,000 and
2,000,000 shares in the Company respectively as part of the May fundraise (note 22). In addition, Donald McAlister subscribed to
400,000 shares in the Company.
During the year-ended 31 December 2024, Peter Wynter Bee subscribed for a total of 1,2000,000 convertible loan notes issued
by the Company. The transaction was at arms-length and the terms of the convertible loan notes are detailed in note 21. As at
31 December 2024, the outstanding amount on the convertible loan notes due to Peter Wynter Bee was US$ 1,503,000 including
US$ 11,000 of accumulated interest.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
81
FINANCIAL STATEMENTS
KAVANGO RESOURCES PLC ANNUAL REPORT 2024
28. RELATED PARTY TRANSACTIONS (continued)
TRANSACTIONS WITH COMPANY SUBSIDIARIES
During the year ended 31 December 2024, Navassa Resources Ltd (“Navassa”), an intermediate holding company was
liquidated. As the part of the liquidation process, Navassa’s loan receivable from and equity holding in Kavango Minerals (Pty) of
US$ 1,879,000 and US$ 28,000 respectively were transferred to the Company. The Company recognised an impairment charge of
US$ 118,000 (2023: US$ 406,000) as part of liquidation process.
During the year the Company advanced funds to Kavango Minerals (Pty) Limited totalling US$ 707,000 (2023: US$ 1,608,000).
The total loan outstanding as at 31 December 2024 was US$ 10,270,000 (2023: US$ 7,903,000). A loss on foreign exchange of
US$ 219,000 (2023: gain of US$ 335,000) was included in the Company’s other comprehensive income.
During the year the Company advanced funds to Kanye Resources (Pty) Ltd totalling US$ 2,774,000 (2023: US$ 1,231,000).
The total loan outstanding as at 31 December 2024 was US$ 7,173,000 (2023: US$ 4,539,000). A loss on foreign exchange of
US$ 140,000 (2023: gain of US$ 147,000) was included in the Company’s other comprehensive income.
During the year the Company advanced funds to Kavango Zimbabwe (Private) Limited totalling US$ 4,302,000 (2023:
US$ 466,000). The total loan outstanding as at 31 December 2024 was US$ 4,660,000 (2023: US$ 466,000).
During the year ended 31 December 2023, as part of the acquisition Ashmead Holdings (Pty) Ltd and Icon-Trading Company
(Pty) Ltd, the Company acquired intercompany receivables from these two entities of US$ 436,000 and US$ 880,000 respectively.
During the year ended 31 December 2024, the Company advanced further funds of US$ 102,000. The total loan outstanding as at
31 December 2024 was US$ 1,393,000 (2023: US$ 1,316,000).
29. EVENTS AFTER THE REPORTING DATE
On 28 January 2025 the Company published an FCA-approved prospectus and raised gross proceeds of £6,566,000
(US$ 8,160,448) by issuing 938,028,569 shares at 0.7 pence per share. The principal and outstanding interest on the convertible
loan notes was also converted into 547,995,076 shares at 0.7 pence per share.
Details of warrants that expired after the year end are included in note 24.
On 7 April 2025, the outstanding loan receivable from Pambili of US$172,000 (£136,000) and the short-term working capital
advance US$ 68,000 (£53,000) were refinanced into a convertible loan note. The convertible loan note is for a term of 12 months
and is convertible into conversion units (“Units”) priced at C$0.05 per Unit. Each Unit comprises one Pambili common share
and one-half of one common share purchase warrant (each whole being a “CLN Warrant”). Each CLN Warrant will entitle the
Company to acquire one common share at a price of C$0.10 per share for a period of 12 months following conversion notice.
On 22 April 2025, Kavango Resources Plc announced that it had entered into a US$5 million convertible loan facility with a
consortium of Zimbabwe-registered pension funds. The loan is interest-free, can be drawn down in three tranches, and is
convertible into new ordinary shares at the USD equivalent of 1 penny per share. Kavango intends for these shares to be listed on
the Victoria Falls Stock Exchange in Zimbabwe, as part of its planned referral listing.
30. ULTIMATE CONTROLLING PARTY
Purebond Limited is the ultimate controlling party of Kavango Resources Plc.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
Designed and
printed by:
perivan.com
www.kavangoresources.com
www.kavangoresources.com