Caracal Gold PLC (GCAT.L) Half Year interim accounts for 30 June 2021 Chairman’s Report

Caracal Gold plc, the gold producer with operations in East Africa, is pleased to announce its results for the six months ended 30 June 2021.

Chairman’s Report

Caracal Gold PLC has achieved a full transformation in the first half of 2021, following the agreement by Papillon Holdings plc, the London listed investment company, to acquire the Kilimapesa Gold Mine in Kenya from Mayflower Capital Investments Limited during the period.


This 100% acquisition agreement paved the way for Papillon Holdings to delist from the London Stock Exchange (LSE) and planned re-admission to the Official List by way of a Reverse Take Over and trading on the Standard Segment of the Main Market of the LSE as Caracal Gold, which occurred post period in August, as did a contemporaneous dual listing on the Frankfurt Stock Exchange.

The transaction also allowed the newly formed Caracal to activate phase one of our strategy, namely, to become an established and profitable gold producer with multiple mining operations across East Africa, producing in excess of 50,000oz per annum with JORC Compliant reserves and resources of over 2Moz.

The matrix of benefits attached to our first gold acquisition are clear. Kilimapesa is an established, operating gold mine with current gold sales and successive gold pours in 2021. It comprises of the Kilimapesa Hill and the Red Ray deposits, both located close to the Kilimapesa Gold Processing Plant.

The mine restarted operations in 2020, operating at 2.5-3 times that of previous levels. Located on the historically producing Migori Archaean Greenstone Belt, Kilimapesa has a 671,446oz JORC Compliant resource and a well-defined mining optimisation strategy which is currently advancing.

It is also critical to note that the gold mine has significant expansion potential and underscoring the potential to increase gold production. With all the necessary mining permits and licences already in place, Caracal has a clear path to fast-track production at Kilimapesa and continue gold sales under existing gold refining agreements in Europe.

The acquisition of Kilimapesa, which is Caracal’s flagship gold asset, allows the Company to not only gain a foothold into the highly prospective, yet underexplored, East African gold region but also build the starting block of our gold portfolio, which in the future, will include multiple assets located across the region, also home to Barrick Gold and AngloGold Ashanti.

With the stable gold price, forecasted low ASIC costs and strong operating margins, I look forward to updating the market again on the progress at Kilimapesa and on our wider portfolio strategy in East Africa.

Results for the period

For the period to 30 June 2021, the Company’s results included the ongoing running costs of the Company including listing fees on the London Stock Exchange and other advisory costs.

Risks and uncertainties

The key risks that are specific to the enlarged group, that is, the Company together with MGIL and KPGL (which operates Kilimapesa), and the industry in which the group operates include:

• KPGL’s current exploration and/or mining operations are dependent upon the grant, renewal or continuance in force of appropriate surface and/or subsurface use contracts, licences, permits and regulatory approvals and consents which may be valid only for a defined time period, may be subject to limitations and may provide for withdrawal in certain circumstances

• Changes to the current political and regulatory environment in Kenya or any other markets in which the group operates in the future may adversely affect the group

• the profitability of KPGL’s operations and the cash flows generated by these operations are significantly affected by changes in the market price for gold as well as fluctuations in currency exchange rates

• KPGL’s reported mineral resources and mineral reserves are reported in accordance with the Australasian Joint Ore Reserves Committee Code (JORC). There are numerous uncertainties inherent in estimating mineral resources, including factors beyond the control of the group. The estimation of mineral resources and mineral reserves, including the estimation of gold in particular, is a statistical process and the accuracy of any such estimation is a function of the quality of available data and of engineering and geological interpretation and judgement.

• KPGL contracts or leases services and capital equipment from third party providers. Such equipment and services can be scarce and may not be readily available at times and places required.

Going Concern

As stated in Note 1 to the condensed financial statements, the directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

Responsibility Statement

We confirm that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties’ transactions and changes therein).

Cautionary statement

This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Company’s strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.

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Simon Games Thomas


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