LONDON (ShareCast) - (Sharecast News) - Gold and nickel exploration and production company Katoro Gold updated the market on its two projects, the Blyvoor joint venture project (BV) and the Haneti nickel-platinum group metals (PGM) project on Friday.
The AIM-traded firm said that on BV, after completion of the main technical workstream and the subsequent publication of a "comprehensive" competent person's report in May, the funding workstream, which was at an advanced stage already, could progress further, specifically focused on a short-listed group of potential investors and lenders in conjunction with its team of financial advisors.

It said the main objective of the funding workstream was to structure and secure "comprehensive funding", comprising both debt and equity, to fund the complete development, construction and commissioning of the Blyvoor gold tailings project.

Investor and lender negotiations were "advanced at pace", the board said, with several parties submitting initial funding offers and proposals that were within its broad funding requirements and expectations.

Following the recent unrest in the Kwazulu-Natal and Gauteng provinces of South Africa, however, the funding process came to an abrupt standstill with a significant number of the parties on the preferred funder list requesting time to re-assess whether the country risk for their potential investment had been adversely impacted in any material way.

Some of the potential funders had subsequently indicated that they were satisfied the latest events in South Africa did not have any adverse impact on their existing risk rating, and negotiations and discussions with those potential funders had since resumed.

The company said it was awaiting the final decision from those preferred funding parties who had not yet completed their country risk reassessment.

Katoro said its next steps on BV included investor and lender agreement negotiations to be completed, and to conclude final funding arrangement for BV during the latter part of 2021.

It would also conclude future EPC, mining contractor and operator appointments, subject to successful funding.

At Haneti, Katoro said that after its announcement in April, in which a planned diamond drilling project was announced with the objective to intersect the TDEM and magnetic geophysics anomalies, it could now confirm that planning for the campaign was complete.

The planning process involved the "careful consideration" of exploration results to date, to ensure accurate hole positioning and required extensive technical consultation.

It said the drill programme and associated budget for Haneti would now be submitted for approval, and subsequent implementation.

"We are satisfied and encouraged with the continued progress on the BV funding process despite recent delays on account of the political unrest in South Africa," said executive chairman Louis Coetzee.

"The interest and confidence in the merit of the BV as a robust project remains very strong with potential funders.

"The general view in this regard is in fact that the BV is strong and robust enough to mitigate a substantial part of the perceived country risk in its own right."

Coetzee said the company was "similarly excited" to start with the next phase of drilling on the Haneti project, after the confirmatory results of the 2020 RAB drilling programme that "strongly confirmed" the exploration potential of the Haneti project and the merit of continuing with advanced exploration activities.

"The company has also been able to manage its cash reserves very astutely since the last placement in December 2020, which leaves the company in a position to confidently continue with the various work streams discussed above."

At 1411 BST, shares in Katoro Gold were down 6.18% at 0.8p.

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