Katoro Gold PLC shares fell sharply on Friday as it announced a narrowed loss but few available cash reserves, and said it needs further funds to support its ongoing working capital.
The stock was down 18% at 0.070 pence in London on Friday afternoon.
The London-based gold and nickel exploration and development company said its pretax loss for the first half of 2023 was £311,094 compared with £540,225 the year before.
Katoro reduced its operating loss to £311,101 from £697,422 and reported no revenue, unchanged from the first half of 2022. Administrative expenses decreased 46% to £261,265.
Katoro had a net liability position of £303,280 at June 30, down from a net asset position of £487,584 at the same time last year. Available cash reserves had fallen to just £25,443 from £342,481.
Consequently, Katoro said it expects existing cash resources to run out by around the end of September, and must complete a fundraise by this time to fund its ongoing working capital.
‘In the past the group has raised funds via equity contributions from new and existing shareholders,’ Katoro explained, ‘enabling [it] to remain a going concern until such time that revenues are earned through the sale or development and mining of a mineral deposit.
‘There can be no assurance that such funds will continue to be available on reasonable terms, or at all in future.’
However, Katoro added that it ‘has a strong proven track record’ of sourcing funding ‘even in difficult market conditions,’ and is considering multiple avenues such as credit loan notes, capital placing and support from shareholder Kibo Energy PLC, and/or its corporate broker SI Capital Ltd.
Previously, in April Katoro raised £150,000 through a share placing, which were used for ongoing working capital and to progress the assessment and consolidation of its asset portfolio.
On Friday, Executive Chair Louis Coetzee said: ‘I remain confident in the company’s ongoing efforts to consolidate and advance the Katoro portfolio towards the creation and unlocking of shareholder value.
‘We are optimistic about the various initiatives currently underway and look forward to what these may deliver during the second half of 2023.’
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