Company Registration No. 09829720 (England and Wales)

CARACAL GOLD PLC (FORMALLY PAPILLON HOLDINGS PLC)

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE 18 MONTH PERIOD ENDING 30 JUNE 2022

CARACAL GOLD PLC

COMPANY INFORMATION

Directors Simon Games-Thomas

Rachel Johnston

Gerard Kisbey-Green

Riaan Lombard

Robbie McCrae

Stefan Muller

H.E. Daniel Kazungu

Company number 09829720

Company Secretary Cargil Management Services Limited

27-28, Eastcastle Street,

London

W1W 8DH

Registered Office 7-28 Eastcastle Street,

London

W1W 8DH

Auditors PKF Littlejohn LLP

15 Westferry Circus

Canary Wharf

London E14 4HD

Registrar Share Registrars Ltd

Suite E, First Floor,

9 Lion & Lamb Yard

Farnham

Surrey GU9 7LL

Legal Adviser to the DMH Stallard LLP

Company 6 New Street Square

London

EC4A 3BF

Brokers Novum Securities Limited

10 Grosvenor Gardens,

Belgravia,

London

SW1W 0DH

CARACAL GOLD PLC

CONTENTS

Strategic Report

- Chairman’s Statement

- Chief Executive’s Statement

- Strategy and Business Model

- Environment, Social and Governance Policy

- Principal Risks and Uncertainties

- Section 172 Statement

Directors' Report

Directors’ Remuneration Report

Corporate Governance Report

Independent Auditors' Report

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Parent Statement of Financial Position

Consolidated Statement of Cash Flows

Parent Statement of Cash Flows

Consolidated Statement of Changes in Equity

Parent Statement of Changes in Equity

Notes to the Consolidated and Parent Financial Statements

CARACAL GOLD PLC STRATEGIC REPORT

CHAIRMAN’S STATEMENT

Dear Shareholders

I am pleased to be writing to you as the new Chair of Caracal Gold plc. The period under

review has been a busy and transformational period for the Company with the acquisition

of the Kilimapesa Mine on 31 August 2021 (acquired via a reverse acquisition, see note 5

for further details) and the concurrent placing to raise funds for the Group’s ongoing

working capital and the satisfaction of acquisition-related liabilities. The Company has

continued to raise further funds through the issue of smaller placings during the period

under review. The Group have used these proceeds to progress notably in the growth of

the Kilimapesa mining plant as well as the introduction of our Heap Leach Operations.

Production has increased substantially with the result in our Revenue increasing to £7m

for the period. However, the Group still remains loss making for the period.

Having overcome the global challenges stemming from COVID-19 pandemic we are

delighted to be readmitted to the London Stock exchange and look forward to building

future opportunities for our new shareholders. Due to the hard work of our staff our

operations have both resumed and grown, and we have expanded and upgraded our

operations at Kilimapesa. As the world is returning to normal, we remain focused on the

continuing growth of our operations along with the health and safety of our employees,

suppliers and local communities. Against the background of a global pandemic the gold

price has remained a supportive factor and offers the prospect of stronger financial returns

as our efficiency continues to improve.

Strategic Focus

The Board is aware of the risk of having a single asset in production and so we believe the

acquisition in Tanzania will serve to start to reduce that risk. There has been an extensive

drilling programme carried out at Kilimapesa which has supported the increase in JORC

resource to 1,300,000 ounces. Gold Production has reached 12,000 ounces per annum

and is on track to reach 16,000 ounces in 2023 and 24,000 by 2024.

Values and Culture

As the Board has been expanded through the appointment of new Directors so has the

breadth of the skill set available. We believe in a strong corporate governance structure

with management accountability and active oversight from the Board.

Three Board Committees, Audit, ESG and Remuneration, provide oversight and guidance

in these areas, ensuring adoption of the correct strategies with the highest standards

available along with protecting shareholder interests.

Caracal is committed to sustainable development and recognises that the long-term

sustainability of our business is dependent upon responsible stewardship in both the

protection of the environment and the efficient management of the exploration and

extraction of mineral resources, and the sustainable use of resources for the benefit of all

our stakeholders.

The mine is located in an area of high unemployment and so we are proud of the fact that

we have created over 350 jobs for locals and over a hundred further jobs for Kenyans from

other Districts. We liaise with the local community through our Community Liaison Officer

and we also try to purchase locally where possible. We view our people as one of the key

pillars of the company and are proud of the fact that in 18 months we have delivered

around 500 new job opportunities.

CARACAL GOLD PLC STRATEGIC REPORT

Performance

The focus of the Board and Management is on the development of the operations at

Kilimapesa, the upgrading of plant and machinery, grade improvement and the acquisition

of further prospects. The Company has invested in a new Laboratory and a new Elution

Plant as part of the programme of improvements which we believe will assist in our drive

to improve standards, improve grades and drive returns. The company has also recently

invested in a new fleet of work vehicles to improve efficiency, reduce downtime and

breakdowns and offer a higher level of personal safety to the operators.

It is the intention of the Board to continue to invest in its operations, assets, people, and

community as the company continues to grow whilst respecting the impact and influence

of climate change and continuing to operate in a responsible manner.

In May 2022 it was agreed to acquire 100% of Tyacks Gold Limited ('Tyacks'), the holder

of the licences collectively referred to as the Nyakafuru Project ('Nyakafuru' or the

'Project') in Tanzania. The Project is located in the world-class Lake Victoria Gold Fields

in northern Tanzania, 140km southwest of Mwanza, Tanzania's second largest city, and

60km from Barrick Gold's 18Moz Bulyanhulu Gold Mine. This is an established high-

grade shallow gold resources of 658,751oz at 2.08g/t contained within four deposits over

280 km2. This resource is amenable to development as a large scale conventional open

pit operation and Carbon-in-Leach processing plant.

This will double Caracal's total gold resources to 1,330,197 ounces prior to impending

resource update at Kilimapesa - delivering on the goal of building an emerging East

African focussed gold producer.

The future is extremely promising for the Caracal Group and let me take this opportunity

to thank all our shareholders for your support in this expansion.

Chairman

8 November 2022

CARACAL GOLD PLC STRATEGIC REPORT

CHIEF EXECUTIVE’S STATEMENT

2021 was a transformative year for Caracal Gold PLC and all of its stakeholders. The

standout event was the acquisition of the Kilimapesa Gold Mine in Kenya which

concluded with the successful RTO on the LSE in September 2021.

This acquisition positioned Caracal as an established East African based and focussed

gold producer and explorer and provided the Board and Management the platform to

attract funding to optimise and grow our Kilimapesa operations and pursue our strategy

of expanding our portfolio in the region.

In line with this strategy, in November 2021 we announced the acquisition of Tyacks Gold

Limited (Tyacks) in Tanzania (see note 13 for further details on this acquisition). This

transaction significantly grew our resource base with high quality ounces, it made us a

multiple asset company and diversified our physical and geographic footprint. After a

comprehensive legal and technical review, a final SPA was signed with the shareholders

of Tyacks for the acquisition of 100% of Tyacks Gold and has begun work on the ground

with whilst awaiting completion of all regulatory approvals which are in process.

At Kilimapesa work by the production team increased the number of ounces and

confidence in our resources at Kilimapesa. Consequently they finalised the strategy for

increasing production and optimising recoveries and costs at Kilimapesa and also made

significant progress on ESG and community related areas.

With Caracal’s robust business fundamentals providing a strong platform from which to

grow, we go into the next year excited at the opportunities in front of us, particularly the

near-term opportunity for Kilimapesa to become a 24,000oz per annum producer during

2024 and for the ongoing increase of our resource base from exploration activities in both

Kenya and Tanzania.

Highlights

Kilimapesa Gold Mine

Progress at Kilimapesa is across the board.

On the exploration side drilling activities commenced in January 2022 and have continued

through the period, the highlight of these activities was the announcement of an updated

MRE. This was the 1st significant exploration to be done on the license area in over 11

years.

Being based in a significant gold producing greenstone belt the project has significant

exploration upside both within the mining license, where we plan to grow confidence and

extend mine life, and within the wider exploration permit, where we continue to explore

for large, shallow, high grade, open pit projects.

The Kilimapesa expansion project commenced in March 2022.

An expansion to 24,000oz per annum is underway at Kilimapesa. This expansion

focusses on the processing of the lower grade ore being mined from the Kilimapesa Hill

deposit through a heap leach processing facility with a capacity of 65,000tpm along with

the required expansion of mining activities and infrastructure to support the expanded

production.

CARACAL GOLD PLC STRATEGIC REPORT

The Kilimapesa Gold Mine employs 496 people, of which 470 are Kenyan highlighting

Caracal’s commitment to developing in country talent. Our investment is transforming the

Trans Mara South region and our ongoing community initiatives directly benefit the people

on the ground through investment into schools, roads, water projects and environmental

initiatives.

Tyacks Gold

During the year Caracal successfully acquired 100% of Tyacks, which owns 11

exploration licenses in the Lake Victoria Gold Fields. The licenses are collectively known

as the Nyakafura Project. The acquisition creates a major new gold mine development

opportunity for Caracal in one of Africa’s largest gold producing regions.

Nyakafura contains established high grade shallow gold resources of 658,751oz within

four known, closely located deposits. Work done historically by major gold producer

Resolute Mining have shown that these projects are amenable to large scale,

conventional open pit mining and Carbon-in-Leach processing.

Looking forward to 2022, Caracal will commence with rehabilitating the infrastructure

(camp, offices, workshops, vehicles etc), the existing core will be relogged and selected

samples sent away for assay all of this work culminating in the preparation of a drilling

plan which we expect to commence in the 4th QTR of 2022.

OUTLOOK

2022/2023 is set to be an exciting year for the group. Our ongoing exploration programs

in Kenya and Tanzania will play an important role in growing our resource base and

confidence in our resources which will translate into improving returns for all stakeholders

from our shareholders to our social partners on the ground. The construction of the

Kilimapesa expansion will complete and the production of 24,000oz will cement Caracal’s

profile as a upcoming producer, the success of the expansion at Kilimapesa will have a

positive impact for all stakeholders including shareholders, social partners and the

Kenyan Govt to name a few. The development plan for Tanzania and the next phase of

Kilimapesa will also evolve and become clear to all of us during the year.

I would like to take this opportunity to thank our shareholders, employees, members of

the Board, our local communities and all stakeholders for their continued commitment to

the Company and ongoing support during the period. With the expansion at Kilimapesa,

the ongoing exploration we are excited by the near and long-term prospects of becoming

a diversified +50,000oz per annum producer and +3moz resource owner.

Chief Executive Officer

8 November 2022

CARACAL GOLD PLC STRATEGIC REPORT

STRATEGY AND BUSINESS MODEL

The company’s strategy is to become a mid-tier, leading independent, diversified producer

and explorer. We plan to develop and exploit our portfolio of producing and advanced

exploration projects in Kenya and Tanzania. To this end we have developed and are

carrying out the work programs to deliver maximum value and have recruited a

management team with all the necessary experience to deliver on the work programs and

project potential.

In Kenya the clear plan and strategy is to deliver on the expansion project increasing

production to 24,000oz per month and to continue to grow and increase confidence in the

resources at the project. Our regional exploration strategy to discover and prove additional

commercially viable, shallow open pit style deposits within the license area is progressing

well and will deliver results.

In Tanzania the strategy is to confirm the historical results and to carry out some additional

exploration so that an updated mineral resource estimate can be published and from that

work on the development plan for production can commence. With historic resources and

significant opportunity for additional resources we are targeting 50,000oz per annum

production from Nyakafura as our base case.

Despite many challenges including COVID good progress was made during 2021,

including:

• Gold production was uninterrupted for the entire period,

• Expansion plan for Kilimapesa was finalized and work commenced,

• Board of Directors was strengthened with 2 NED and 1 executive appointments,

• Management was strengthened with key appointments across disciplines,

• Tanzania project was acquired growing resources and securing future growth.

The company continues to review opportunities to build the company’s portfolio particularly

in the immediate region once these include advanced projects that will provide immediate

additional resources ounces and production.

CARACAL GOLD PLC STRATEGIC REPORT

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG") POLICY

ESG PILLARS

Environmental

Minimise our footprint and act with environmental stewardship in the

areas of compliance, energy consumption and carbon emissions, water

quality and consumption, noise, dust, air,

vibrations, rehabilitation and

closure

Social

Protect (health & safety) and grow our people (training, inclusion,

retention)

Enhance and share the benefits across local communities and

stakeholders (social impact, cultural heritage, local

procurement and

local recruitment)

Governance

Strong ethical principles and controls to ensure we do business the right

way (sound structure, corporate policies, codes of conducts, risk

identification and management as well as public disclosure)

ENVIRONMENTAL

Caracal is committed to sustainable development and recognises that the long-term

sustainability of our business is dependent upon responsible stewardship in both the

protection of the environment and the efficient management of the exploration and

extraction of mineral resources, and the sustainable use of resources for the benefit of all

our stakeholders.

We seek to minimise our environmental footprint, mitigating any adverse impacts, and to

promote sustainable development in the areas in which we operate. Our values and

business principles as a Company are based on a “zero harm” environmental

management performance.

We conduct Environmental Impact Assessments prior to commencing mining activities and

put in place environmental management plans - examples of actions conducted at the

Kilimapesa mine include:

- Partnering with the National Environment Management Authority (NEMA) to plant

6,000 trees in collaboration with 10 local schools;

- Segregation, recycling, reuse of all waste produced and the disposal of waste is

conducted by a NEMA accredited and licensed waste handler; and

- Regular monitoring of water, air and soil as well as noise by NEMA accredited

laboratories

During this reporting period, Kilimapesa mine transitioned from being fully powered by

generators to receiving 67% of its powered from the Kenyan national grid, of which 80%

is renewable geothermal energy. The mine’s energy consumption from December 2021

up to August 2022 is 294,680 kWh, from the National grid and 218,162kWh powered by

the Genset. Our average monthly emissions while on the national grid is 208.93 metric

tons and 123.552 metric tons while on Genset.

Caracal Gold recognises that climate change is one of the most critical challenges facing

society, the environment and our planet. As a responsible explorer and producer, we will

CARACAL GOLD PLC STRATEGIC REPORT

be looking at ways of identifying, assessing and implementing actions in response to

climate change challenges and the transition to a low carbon future.

SOCIAL

Employees

Caracal Gold’s people are the driving force behind our exploration and mining activities.

We seek to treat our people fairly and with respect and ensure they have the opportunity

to develop and reach their potential. We comply with the labour legislation where we work.

Over this reporting period, the capability of the team has been strengthened to match our

organisational growth and expansion.

We work in areas where the unemployment rate is high and therefore local employment is

an important part of sharing benefits with surrounding communities. Currently the

Kilimapesa mine, employs a total of 485 people of which 94% are national Kenyan staff

and 73% come directly from the neighbouring villages.

Learning and training activities are central to staff engagement, learning and development

as such, we provide on-the-job training through an internship scheme that currently has 3

interns in Exploration, 1 in Human Resources, 1 in the store keeping and 2 in the

processing plant.

We actively promote diversity in the workforce and are proud to have increased the

number of female staff from 14 to 32 during the reporting period at the Kilimapesa mine.

We also have 1 female board member.

Health & Safety

Caracal Gold places its employees first, as they represent the backbone of the Company

and our ongoing success relies on them staying safe, healthy and happy in their jobs. We

work in complex environments with a wide range of potential risks to be managed and so

providing a safe working environment is our highest priority. Our business principles,

policies and management plans are based on targeting the achievement of a “zero harm”

performance.

At the Kilimapesa mine, an Occupational health and safety plan is in place to manage risks

and opportunities, prevent work-related injuries and ill health to workers and providing safe

and healthy workplaces. During the reporting period, we have had 0 fatalities and 1 Lost

Time in Injury (LTI).

Stakeholder engagement

Caracal Gold believes that a strong social license to operate in our host countries and local

communities is built on mutual respect and open two-way dialogue. This social license is

fundamental to the long-term viability and success of our business.

Our stakeholders include our employees, contractors, suppliers, business partners, local

communities and government authorities, including all individuals who live in proximity to

our operations or who may be impacted by our business relationships.

Community Stakeholder engagement is conducted on a weekly basis through a dedicated

Community Liaison Officer and the local monitoring committee (“the Moyoi committee”)

CARACAL GOLD PLC STRATEGIC REPORT

which was created in 2000 to facilitate communication between the community and the

mine. It currently meets every Friday to discuss matters affecting the community such as

grievances, community development initiatives, local procurement and local employment.

COMMUNITY

Caracal Gold recognises that our activities have impacts on the communities where we

work. We also recognize the positive role we can play to enable sustainable development

by treating impacted stakeholders justly so that they don’t lose out, and fairly so that they

gain from the presence of the company.

Caracal’s vision is to create genuine value for our stakeholders and continually improve

our sustainability performance, as a good corporate citizen and neighbour, sharing the

benefits of responsible mining and ensuring that we leave a legacy of positive socio-

economic impact in the areas in which operate.

At our Kilimapesa mine, examples of community development initiatives include:

• Education within the local community: sponsorship of a computer teacher,

assistance with electricity bills and construction of 2 pre-school classrooms

• Water: drilling of a borehole for a local high school that also supplies water to the

local communities, provision of a livestock watering point

• Local procurement: we seek to procure as much as locally as possible and during

this reporting period USD 233,000 was spent on local supplies

GOVERNANCE

Caracal Gold recognises that the long-term success and viability of its business requires

responsible stewardship of its environmental impact, a strong social license to operate and

ethical business practices. We are committed to complying with all national and

international laws, regulations and standards that apply to our business.

Caracal Gold has appointed a new board composed of 3 non-executive directors, the Chief

Executive Officer, Technical Director and Managing Director, who all bring extensive

corporate, technical, financial and ESG (environmental, social and governance)

experience to the company. The board assumes overall responsibility for all the

environmental, social and governance aspects of the company and meets at least once a

quarter.

In June 2022, the ESG Committee was created and held its first meeting. Its aim is to

advise the Board of Directors and support the Company’s management team in relation to

the development and implementation of the Corporation’s ESG initiatives, policies,

compliance systems, and monitoring processes.

A suite of group governance policies has been drafted. These will be validated and

communicated to all staff for the next reporting period. These policies address subjects of

ethical conduct, anti-bribery and corruption, whistleblowing as well as environmental and

social responsibility, and health and safety.

CARACAL GOLD PLC STRATEGIC REPORT

PRINCIPAL RISKS AND UNCERTAINTIES

The Company operates in an uncertain environment and is subject to a number of risk

factors. The Directors have carried out a robust assessment of the risks and consider the

following risk factors are of particular relevance to the Group’s activities, although it

should be noted that this list is not exhaustive and that other risk factors not presently

known or currently deemed immaterial may apply.

Description

Impact

Mitigation

Strategic Risks

• Concentration Risk - Group’s reliance on its

assets in Kenya, as Tanzania is a new and

non non-producing asset.

• Whilst the Group will not experience

competition for its sales, it may encounter

competition in identifying and acquiring

further rights for attractive gold properties

• The Group’s success depends in large

measure on its key personnel – loss of key

personnel may have a material effect on the

implementing the Group strategy.

Medium

• Board actively seeking to diversify

current portfolio risk by acquiring

further exploration and production

assets.

• Adding to the Group’s technical

team capability and deploying

capital prudently to maximise return

for shareholders.

• Have embarked on a programme of

training and educating successors in

roles for key personnel

Financial Risks

• Raising additional funding to develop further

exploration, development and production

programmes.

• Dependency on UK Stock market trading to

raise further cash when necessary

• The profitability of operations and cash flows

generated will be significantly affected by

changes in the Gold price.

• Changes in the Group’s capital costs and

operating costs are likely to have a

significant impact on its profitability.

High

• Regular review of cashflow, working

capital and funding options.

• Build strong and sustainable

relationships with key shareholders

• Prudent approach to budgeting and

strong financial stewardship -

managing commitments and liquidity

to ensure the Group has sufficient

capital to meet spending

commitments.

• The use of hedging and risk

management will be reviewed on an

ongoing basis and implemented

where necessary.

HSSE and Operational Risks:

• The Group’s mining licences and contracts

are dependent on renewal to continue

operating – any failure to secure

continuation will have a material effect on

the Group

• Dependence on availability of leases,

services and personnel from third parties

• Material incidents such as adverse weather

conditions or mechanical difficulties.

Shortages of power, water and weather

conditions may all impact operations

High

• As a group Caracal manages its

relationships with the local and

federal authorities carefully.

• Careful consideration and

assessment of third-party

contractors technical, financial and

HSSE capabilities prior to entering

into contracts for services

• Ensure that all stages of the

exploration and production work

programme have been rigorously

stress tested and risk assessed

CARACAL GOLD PLC STRATEGIC REPORT

Legal and Compliance Risks:

• Inaccurate reporting on Reserves and

Resources as mineral reserve data is not

necessarily indicative of future results of

operations

• Fraud and corruption

• Litigation

• The Group’s involvement in exploration may

result in the Group becoming subject to

liability for pollution, leaks and other damage

to the environment

Medium

• The Group hires qualified technicians

to write and analyse resource data

• Employment of suitably qualified staff

and external advisers to ensure full

compliance

• Insurance in place

• Risk assessment and due diligence

of all counterparties that the Group

deals with

• Please see ESG policy

Country Risks

• Changes to the current political and

regulatory environment in Kenya may

adversely affect the Group

•

Governments, regulations and the

environmental laws may adversely change

• Licence renewal and continuance in force of

appropriate surface and/or surface use

contract may have a material adverse impact

if not renewed.

• Sovereign risk including political, economic

or social uncertainty, changes in policy, law

or regulation

High

• Engaging in constructive discussions

with Government and key

stakeholders.

• Employment of suitably qualified staff

and external advisers to ensure full

compliance

•

Regular monitoring of political,

regulatory and HSSE changes.

•

Diversification of operations and

assets in different countries reduces

single country risk.

CARACAL GOLD PLC DIRECTORS’ REPORT

SECTION 172 STATEMENT

The Directors acknowledge their duty under s.172 of the Companies Act 2006 and

consider that they have, both individually and together, acted in the way that, in good faith,

would be most likely to promote the success of the Company for the benefit of its members

as a whole. The Directors have regard to the interests of our Company employees and

other stakeholders including our impact in the community, the environment and our

reputation, when making their decisions. The Directors consider what is likely to promote

the success of the Company for our members in the long-term in all their decision making.

In doing so, they have had regard (amongst other matters) to:

• the likely consequences of any decision in the long term:

The Company’s long-term strategic objectives, including progress made during the year

and principal risks to these objectives, are shown on pages 11-12 above. The Company

has invested significant funding to follow its strategy to upgrade and improve the mine site

at Kilimapesa. These investments have been made to protect the long-term viability of the

mine and the future of its employees.

• the interests of the Company’s employees:

Our employees are fundamental to us achieving our long-term strategic objectives and the

Company continues to invest in the well-being and training of its employees through

regular training sessions. Caracal also has a preference to hire locally wherever possible.

• the need to foster the Company’s business relationships with suppliers, customer and

others, including government:

A consideration of our relationship with wider stakeholders and their impact on our long-

term strategic objectives is disclosed above in our ESG policy statement on pages 8-10.

The Company has ensured that local suppliers are involved in the supply of goods and

services to the Company by ensuring their involvement in the tendering process.

We have extremely good relationships with both local and federal government officials.

Despite the change in Kenyan National leadership over the Summer of 2022, the

company has maintained its relationship with the mining minister, local governor and the

relevant parliamentary secretaries.

• the impact of the Company’s operations on the community and the environment:

The Group operates honestly and transparently by constantly reporting to the market and

shareholders and by the senior staff and Board being available for discussion of specific

issues. We consider the impact on the environment on our day-to-day operations and how

we can minimise this. The Company is fully integrated with the local community and has

appointed a Community Liaison Manager to maintain these relationships.

Regular meetings are held with the community and our Senior Management and our Chief

Operating Officer, Riaan Lombard. We regularly invite community Leaders to site for clear

strategy and dialogue on all aspects of the mine and community development.

• the desirability of the Company maintaining a reputation for high standards of

business conduct:

Our intention is to behave in a responsible manner, operating within the high standard of

business conduct and good corporate governance. The Company has built a team of

CARACAL GOLD PLC DIRECTORS’ REPORT

external professional advisors whose role is to provide advice and guidance on all aspects

of the company’s business and interactions with business and government.

Group Policies are being continuously developed on good governance and employee

relationships within the business.

• the need to act fairly as between members of the Company:

Our intention is to behave responsibly towards our shareholders and treat them fairly and

equally, so that they too may benefit from the successful delivery of our strategic

objectives.

• the need to have continued engagement, transparency and faith from all our

shareholders.

The Chief Executive Officer, Mr. Robbie McCrae regularly speaks to key shareholders

and gauges their thoughts on operations withing the company, whether it be expansion,

exploration drilling results or general questions about the future running of the business.

Further, our Chief Executive Officer produces various videos to update the market on a

regular basis.

In future the board and the Chief Executive Officer are looking at a more

comprehensively enhanced Investor programme.

__________________

Director

8 November 2022

CARACAL GOLD PLC DIRECTORS’ REPORT

DIRECTORS’ REPORT

The directors present their report together with the audited consolidated financial

statements of Caracal Gold Plc for the 18 months ended 30 June 2022.

Principal Activity

The principal activity of the Company and its subsidiaries (the “Group”) is the exploration,

development and mining of gold in Kenya, exploration assets in Tanzania and the

development of further projects to expand its operations within this industry.

On 31 August 2021, the Company acquired the holding company of Mayflower Gold

Investments Limited (MGIL) and thus a 100% indirect interest in Kilimapesa Gold Pty Ltd

(KPGL), whose principal activity is an established gold mine and gold processing

operation in Kenya. This was accounted for as a reverse acquisition - See note 5 below

for further details. A contemporaneous placing was also completed on this date to raise

funds for the Group’s ongoing working capital requirements.

Results and dividends

The results for the period and the financial position of the Group are shown in the following

consolidated financial statements. The Group has incurred a pre-tax loss of £15.5m

(2020: loss of £1.7m). The Group has net liabilities of £2.1m (2020: £4.8m).

The Directors do not recommend the payment of a dividend (2020: £Nil). The nature of

the Company's business means that it is unlikely that the Directors will recommend a

dividend in the next few years. The Directors believe the Company should seek to

generate capital growth for its Shareholders. The Company may recommend distributions

at some future date when it becomes commercially prudent to do so, having regard to the

availability of the Company's distributable profits and the retention of funds required to

finance future growth.

Financial and Performance Review

Income Statement

The gross loss for the period was £2.1m compared to the prior year loss of £1.0m. This

represents an increase in the levels of production and as a percentage of sales has

improved by nearly 50%. Though the Group is still making a loss there are positive signs

for the future as sales of precious metals have increased to £6,858,000. As our plant

becomes more operational and our productivity increases we expect this to continue to

improve in the next accounting period.

Administration costs increased to £7.2m, with one off costs for the LSE Listing (£1.1m)

and the reverse acquisition expenses (£3.3m) bringing the net loss for the period to

£15.5m.

Balance Sheet

Intangible Assets represent the exploration and evaluation assets arising as a result of

the acquisition of Tyacks.

Tangible Assets have increased from £3.8M to £5.7M notably due to the purchase of Drill

Rigs and continued mining asset investment.

Cash flows

Net cash outflows from operating activities increased to £7.4M due to the cost of the

reverse acquisition and the increased operations at the mine.

CARACAL GOLD PLC DIRECTORS’ REPORT

We had notable cash inflows from share proceeds which naturally went on continued

growth and expansion within the Caracal Group.

Key Performance Indicators (”KPI’s”)

The Board has identified two main financial KPIs for the Group which allow them to

monitor financial performance and plan future investment activities. These are detailed

below.

30 June

2022

31 December

2020

Cash and cash equivalents

£80,000

£121,000

Administrative expense as a percentage of total

assets

74%

Please note, that these KPIs are provisional and the Board will be looking to increase the

number of KPIs reported to the shareholders as the Group continues on its growth

strategy.

Business Review and Future Developments

A review of the business and likely future developments of the Company are contained

in the CEO’s Statement above.

Going Concern

The consolidated financial statements have been prepared on a going concern basis. The

Group’s assets are not currently generating substantial revenues and therefore an

operating loss has been reported. An operating loss is expected in the 12 months

subsequent to the date of these financial statements. As a result the Group will need to

raise funding to provide additional working capital within the next 12 months. The ability of

the Group to meet its projected expenditure is dependent on these further equity injections

and / or the raising of cash through bank loans or other debt instruments. These conditions

necessarily indicate that a material uncertainty exists that may cast significant doubt over

the Group’s ability to continue as a going concern and therefore their ability to realise their

assets and discharge their liabilities in the normal course of business. Whilst

acknowledging this material uncertainty, the directors remain confident of raising finance

and therefore, the directors consider it appropriate to prepare the consolidated financial

statements on a going concern basis. The consolidated financial statements do not include

the adjustments that would result if the Group were unable to continue as a going concern.

The auditors have made reference to going concern by way of a material uncertainty within

the financial statements.

Risk Management

There is no formal programme of hedging for either commodity, interest rate or foreign

exchange at this stage. However, where appropriate, such risks are managed through

purchase or sale contracts with suppliers, banks or other institutions or companies.

Financial risk management is detailed out in note 4 to these consolidated financial

statements.

Principal Risks and Uncertainties

The principal risks and uncertainties are included in the Strategic Report above and note

note 4 to these consolidated financial statements.

CARACAL GOLD PLC DIRECTORS’ REPORT

Share Capital and Substantial Share Interests

The Company has been notified of the following interests of 3 per cent. or more in its

issued share capital as at 2nd November 2022:

Shareholding

Percentage of the

Company’s

Ordinary Share

Capital

Hargreaves Lansdown (Nominees)

Limited (including James Longley)

559,666,299

29.8%

Vidacos Nominees Limited

257,588,929

13.7%

Interactive Investor Services Limited

160,251,406

8.5%

Pershing Nominees Limited

110,585,953

5.9%

Mansa Capital

98,500,000

5.2%

Jarvis Investment Management Limited

81,349,084

4.3%

Directors

The directors of the Company who served during the year ended 30 June 2021 and to

the date of this report are listed below:

Simon Games-Thomas appointed 31 August 2021

Rachel Johnston appointed 1 March 2022

Gerard Kisbey-Green appointed 31 August 2022

Riaan Lombard appointed 18 July 2022

Robbie McCrae appointed 31 August 2021

H.E. Dan Kazungu appointed 7 March2022

Stefan Muller appointed 18 July 2022

Lord Nicholas Monson resigned 31 August 2021

Anthony Eastman resigned 31 August 2022

James Longley resigned 5 February 2022

Charles Tatnall resigned 5 February 2022

Directors’ interests

At the date of this report the directors and their connected parties held the following

beneficial interest in the ordinary share capital of the Company:

Director

Shareholding

Percentage of the

Company’s

Ordinary Share

Capital

Warrants*

Simon Games-Thomas

15,000,000

Rachel Johnston

Gerard Kisbey-Green

55,300,000

2.9%

30,000,000

Riaan Lombard

Robbie McCrae

102,500,000

5.5%

30,000,000

Stefan Muller

Daniel Kazungu

* these warrants will only vest when the milestones are reached as shown in note 5 of

these consolidated accounts.

Directors’ remuneration

Directors’ remuneration is disclosed in the Remuneration Report.

Directors’ and Officers’ Indemnity Insurance

CARACAL GOLD PLC DIRECTORS’ REPORT

The Company had in force during the period and has in force at the date of this report a

qualifying indemnity in favour of its directors against the financial exposure that they may

incur in the course of their professional duties as Directors and officers of the Company

and/or its subsidiaries.

Supplier Payment Policy

It is the Company’s payment policy to pay its suppliers in conformance with industry

norms. Trade payables are paid in a timely manner within contractual terms, which is

generally 30 to 45 days from the date an invoice is received.

Streamlined Energy and Carbon Reporting

As per the Streamlined Energy and Carbon Reporting (“SECR”) Regulations published in

2018 quoted companies and large unquoted companies that have consumed more than

40,000 kilowatt-hours (kWh) of energy in the reporting period must include energy and

carbon information within their directors’ report. The Company do not currently exceed

this threshold and are therefore presently exempt from the SECR reporting requirements.

The subsidiaries are excluded from reporting under this requirement.

Financial risk and management of capital

The major balances and financial risks to which the Company is exposed to and the

controls in place to minimise those risks are disclosed in Note 4.

The Board considers and reviews these risks on a strategic and day-to-day basis in order

to minimise any potential exposure.

Corporate Governance

A report on Corporate Governance is set out below in the Corporate Governance Report.

Requirements of the Listing Rules

Listing Rule 9.8.4 requires the Company to include certain information in a single

identifiable section of the Annual Report or a cross reference table indicating where the

information is set out. The Directors confirm that there are no disclosures required in

relation to Listing Rule 9.8.4

Provision of Information to Auditors

The Directors who held office at the date of approval of this Report of the Directors confirm

that, so far as they are individually aware, there is no relevant audit information of which

the Group’s auditor is unaware; and each Director has taken all the steps that they ought

to have taken as Director to make themselves aware of any relevant audit information

and to establish that the Group’s auditor is aware of that information.

On 23 February 2022, Jeffreys Henry LLP resigned as auditors and the Company

engaged new auditors. PKF Littlejohn LLP have expressed their willingness to continue

in office and a resolution to re-appoint them will be proposed at the annual general

meeting.

Annual general meeting

The Company will hold its annual general meeting for 2022 and the date will be

announced on the Company website.

Political and charitable contributions

The Company have not yet made a charitable donation for in 2022 (2020 £nil). No political

donations were made in either year. Charitable donations to local schools are taking place

in the current year 2022/2023.

CARACAL GOLD PLC DIRECTORS’ REPORT

Post Balance Sheet Events

On 3 August 2022, the Company paid £343,308 as part of the final consideration for the

purchase of Tyacks. The final payment of £482,155 is still due to be paid. These amounts

have been accounted for as a deferred consideration creditor in the accounts.

On 18 July 2022, the Company entered into a Convertible Loan Note Instrument with

Koenig Vermoegensvermaltungsgesellschaft MBH (“Koenig”), a company incorporated

and registered in Germany, for £2 million at an interest rate of 8% per annum. The

conversion price being agreed as £0.06 per Ordinary share, save that where the price per

ordinary share falls below £0.06, the conversion price shall be 90% of the 10 day VWAP

price of an ordinary share. 266 million warrants were also issued to Koenig, at an exercise

price of £0.0085 and exercisable for 2 years from the date of grant.

Statement of Directors Responsibilities

The Directors are responsible for preparing the Annual Report, Report of the Directors,

Remuneration Report and the financial statements in accordance with applicable law and

regulations.

Company law requires the Directors to prepare consolidated financial statements for each

financial year. Under that law the Directors have elected to prepare the consolidated

financial statements in accordance with UK-adopted international accounting standards.

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

of the profit or loss for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent; and

• prepare the consolidated financial statements on the going concern basis unless

it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient

to show and explain the Group’s transactions and disclose with reasonable accuracy at

any time the financial position of the Group and enable them to ensure that the

consolidated financial statements comply with the Companies Act 2006. They are also

responsible for safeguarding the assets of the Group 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 financial statements may

differ from legislation in other jurisdictions.

Directors’ Responsibility Statement Pursuant to Disclosure and Transparent Rules

Each of the Directors, confirm that, to the best of their knowledge and belief:

• The Financial Statements prepared in accordance with UK-adopted international

accounting standards and give a true and fair view of the assets, liabilities, financial

position and loss of the Group and Company; and

• the Annual Report and Financial Statements, including the Business review, includes

a fair review of the development and performance of the business and the position of

the Group and Company, together with a description of the principal risks and

uncertainties that they face.

CARACAL GOLD PLC DIRECTORS’ REPORT

This report was approved and authorised for issue by the board on 5 November 2022 and

signed on its behalf by:

__________________

Director

8 November 2022

CARACAL GOLD PLC REMUNERATION REPORT

DIRECTORS’ REMUNERATION REPORT

Introduction

The Company has established a Remuneration Committee during the year. The

Committee reviews the scale and structure of the Directors’ fees, taking into account the

interests of shareholders and the performance of the Group and Directors.

The Company’s auditors, PKF Littlejohn LLP are required by law to audit certain

disclosures and where disclosures have been audited, they are indicated as such.

Statement of Caracal Gold Plc’s policy on directors’ remuneration by the chair of

the Remuneration Committee

As chair of the Remuneration Committee I am pleased to introduce our Directors’

Remuneration Report. One of the Remuneration Committee’s aims is to provide clear,

transparent remuneration reporting for our shareholders which adheres to the best

practice corporate governance principles that are required for listed organisations.

Remuneration Policy

The Remuneration Committee, in forming its policy on remuneration, gives due

consideration to the needs of the Group, the shareholders, and the provisions of the QCA

Code. The ongoing policy of the Remuneration Committee is to provide competitive

remuneration packages to enable the Group to retain and motivate its key executives and

to cost-effectively incentivise them to deliver long-term shareholder value. It also applies

the broader principle that Caracal Gold’s executive remuneration should be competitive

with the remuneration of directors of comparable companies. The Remuneration

Committee keeps itself informed of relevant developments and best practice in the field

of remuneration and seeks advice where appropriate from external advisers. It maintains

oversight of the remuneration of staff, which is the responsibility of the Chief Executive

Officer. The remuneration policy for the non-executive directors is determined by the

Board, considering best practice.

Remuneration Committee

The remuneration committee consists of Simon Games-Thomas, Rachel Johnstone and

Dan Kazungu. This committee's primary function is to review the performance of

executive and non-executive directors and senior employees and set their remuneration

and other terms of employment.

The key activities of the Remuneration Committee are:

• to determine and agree with the Board the framework or broad policy for the

remuneration of the Company's chair, chief executive, and such other members of

the executive management as it is designated to consider;

• in determining such policy, take into account all factors which it deems necessary

including relevant legal and regulatory requirements;

• recommend and monitor the level and structure of remuneration for senior

management;

• when setting remuneration policy for directors, review and have regard to the

remuneration trends across the Company, and review the on-going appropriateness

and relevance of the remuneration policy;

• obtain reliable, up-to-date information about remuneration in other companies;

• approve the design of, and determine targets for, any performance related pay

schemes operated by the Company and approve the total annual payments made

under such schemes;

CARACAL GOLD PLC REMUNERATION REPORT

• ensure that contractual terms on termination, and any payments made, are fair to the

individual, and the Company, that failure is not rewarded and that the duty to mitigate

loss is fully recognised; and

• oversee any major changes in employee benefits structures throughout the

Company.

Directors’ remuneration (audited):

18 month

period

ended 30

June 2022

£’000

Year

ended 31

December

2020

£’000

Salary

/Fees

Bonus

based

payment

Total

£’000

Non-Executive

Directors

Rachel Johnston4

Daniel Muzee5

Anthony Eastman1

Lord Monson1

Simon Games-Thomas3

Subtotal

122

130

Executive Directors

Robbie McCrae3

217

234

Gerard Kisbey-Green3

149

166

James Longley2

106

173

Charles Tatnall2

163

Subtotal

568

100

636

160

Total

690

100

866

220

1 Resigned as a director on 31 August 2021

2 Resigned as a director 5 February 2022

3 Appointed as a director on 31 August 2021

4 Appointed as a director on 1 March 2022

5 Appointed as a director 7 March 2022

Remuneration Components

The main components of Director remuneration that are currently considered by the

Board for the remuneration of directors are base salaries, cash bonuses and share-based

payments which were included in the Prospectus as part of the acquisition.

The following are the agreed Annual Base Salaries:

Chief Executive Officer, Robbie McCrae - £180,000 per annum.

Technical Executive Director, Gerard Kisbey-Green - £150,000 per annum.

Director (Chief Operating Officer), Riaan Lombard - £160,000 ($180,000) per

annum. This director will also receive a bonus of 8,500,000 shares after 2 full years of

employment completion from February 2022.

CARACAL GOLD PLC REMUNERATION REPORT

Position

Annual Salary

Committee Salaries

( Audit , Remuneration, ESG)

Simon Games-

Thomas

Chairman, Non-

Executive

£45,000 £24,000

Rachel Johnstone

Non-Executive

£25,000

£24,000

Dan Kazungu

Non-Executive

£25,000

£24,000

Stefan Muller

Non-Executive

£25,000

N/A

No pension contributions were made by the company on behalf of its directors, and no

excess retirement benefits have been paid out to current or past directors. The Company

has not paid any compensation to past Directors.

Presently, the Company have no set KPIs for the directors although this is set to be

reviewed in the coming accounting year.

Recruitment Policy

Base salary levels will take into account market data for the relevant role, internal

relativities, their individual experience and their current base salary. Where an individual

is recruited at below market norms, they may be re-aligned over time, subject to

performance in the role. Benefits will generally be in accordance with the approved policy.

For external and internal appointments, the Board may agree that the Company will meet

certain relocation and/or incidental expenses as appropriate.

Payment for loss of Office

The Committee will honour the Executive Director’s contractual entitlements. Service

contracts do not contain liquidated damages clauses. If a contract is to be terminated, the

Committee will determine such mitigation as it considers fair and reasonable in each case.

There is no agreement between the Company and its Executive Director or employees,

providing for compensation for loss of office or employment that occurs because of a

takeover bid.

The Committee reserves the right to make additional payments where such payments are

made in good faith in discharge of an existing legal obligation (or by way of damages for

breach of such an obligation); or by way of settlement or compromise of any claim arising

in connection with the termination of an Executive Director’s office or employment.

Service Agreements and letters of appointment (unaudited) (terms/notice

assumed)

Executive Directors

Date of Service

Agreement

Term

Notice period

Gerard Kisbey-Green

31 August 2021

N/A *

3 months

Robbie McCrae

31 August 2021

N/A*

3 months

Non-Executive

Directors

Date of Service

Agreement/Letter

of Appointment

Term

Notice period

Simon Games-Thomas

31 August 2021

N/A*

6 months

Dan Kazungu

31 March 2022

N/A*

3 months

Rachel Johnston

31 January 2022

N/A*

3 months

* contract terms are to be reviewed and agreed to 3 years by the remuneration committee.

Contract Notice Periods also to be amended to 3 months.

CARACAL GOLD PLC REMUNERATION REPORT

The terms of all Directors’ appointments are subject to their re-election by the Company’s

shareholders at any Annual General Meeting at which all Directors stand for re-election.

Percentage change tables (unaudited)

No calculation has yet been made to compare the Chief Executive Officer’s percentage

change of remuneration to that of the average employee as Robbie McCrae was

appointed midway through the 18 month period. This table will be included in the next

accounting period.

Company performance graph (unaudited)

The Directors have considered the requirement for a UK 10-year performance graph

comparing the Company's Total Shareholder Return with that of a comparable indicator.

The Directors do not currently consider that including the graph will be meaningful in its

position as a mining company during its first year on the LSE. The Directors will review

the inclusion of this table for future reports.

Relative Importance of spend on pay (audited)

The table below illustrates a comparison between total remuneration to distributions to

shareholders and loss before tax for the financial period ended 30 June 2022 and 31

December 2020:

Year ended

Employee

remuneration

Distributions to

shareholders

Operational cash

inflow /(outflow)

30 June 2022

2,068,000

(7,386,000)

31 December 2020

210,000

(771,000)

Employee remuneration does not include fees payable to the Directors. Further details

can be found above.

Operational cash outflow has been shown in the table above as cash flow monitoring and

forecasting in an important consideration for the Board when determining cash-based

remuneration for Directors and employees.

Approval by shareholders

At the next annual general meeting of the company a resolution approving this report is

to be proposed as an ordinary resolution. The Board considers shareholder feedback

received and guidance from shareholder bodies. This feedback, plus any additional

feedback received from time to time, is considered as part of the Company’s annual policy

on remuneration.

This report was approved by the board on 8 November 2022.

On Behalf of the Board

Simon Games- Thomas (Committee Member, Group Chairman)

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

CORPORATE GOVERNANCE REPORT

Introduction:

The Directors recognise the importance of sound corporate governance and are currently

in the process of applying The Quoted Company Alliance Corporate Governance Code

for Small and Medium size Companies (2018) (the ‘QCA Code’) to their corporate

processes. They believe this is the most appropriate recognised governance code for a

company of the Company’s size and with a Standard Listing on the London Stock

Exchange. The Directors believe that the QCA Code will provide the Company with the

framework to help ensure that a strong level of governance is developed and maintained,

enabling the Company to embed a governance culture into its organisation.

They are aware that there are currently several areas of non-compliance which include:

(i) the formal developments and publication of Key Performance Indicators (“KPIs”) that

are relevant to the business, (ii) the adoption of an appropriate Corporate & Social

Responsibility (“CSR”) policy.

The QCA Code has ten principles of corporate governance that the Company is

committed to apply within the foundations of the business by the end of the next financial

reporting period. These principles are:

1. Establish a strategy and business model which promote long-term value for

shareholders;

2. Seek to understand and meet shareholder needs and expectations;

3. Take into account wider stakeholder and social responsibilities and their implications

for long term success;

4. Embed effective risk management, considering both opportunities and threats,

throughout the organisation;

5. Maintain the board as a well-functioning balanced team led by the Chair;

6. Ensure that between them the Directors have the necessary up to date experience,

skills and capabilities;

7. Evaluate board performance based on clear and relevant objectives, seeking

continuous improvement;

8. Promote a corporate culture that is based on ethical values and behaviours;

9. Maintain governance structures and processes that are fit for purpose and support

good decision-making by the Board; and

10. Communicate how the Company is governed and is performing by maintaining a

dialogue with shareholders and other relevant stakeholders.

Here follows a short explanation of how the Company applies each of the principles,

including where applicable an explanation of why there is a deviation from those

principles.

Principle One

Business Model and Strategy

The Group has a mining licence in Kenya and has recently acquired several exploration

licences in Tanzania. It has a clear strategy of exploring and developing this and future

opportunities which has been set out in the Chief Executive’s Statement. Further to earlier

comments on risk and strategy the company is committed to broadening its area and

scope of operations as appropriate.

Principle Two

Understanding Shareholder Needs and Expectations

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

The Board is committed to maintaining good communication and having constructive

dialogue with its shareholders. They will be encouraged to attend the AGM and website

communications will be improved in the coming year.

Principle Three

Considering wider stakeholder and social responsibilities

The Board recognises that the long-term success of the Company is reliant upon open

communication with its internal and external stakeholders: investee companies,

shareholders, contractors, suppliers, regulators and other stakeholders. The Company

has created close ongoing relationships with a broad range of its stakeholders and will

ensure that it provides them with regular opportunities to raise issues and provide

feedback to the Company. The Company is committed to delivering lasting benefit to the

local communities and environments where we work as well as to our shareholders,

employees and contractors. As the company evolves we anticipate that this aspect of

community engagement will evolve further.

Principle Four

Risk Management

The Board is responsible for ensuring that procedures are in place and are being

implemented effectively to identify, evaluate and manage the significant risks faced by

the Group. It is in the process of establishing a framework of internal financial controls

to address financial risk and regularly reviews the non-financial risks to ensure all

exposures are adequately managed. The Group maintains appropriate insurance cover

in respect of legal actions against the Directors as well as against material loss or claims

against the Group. The principal risks and uncertainties are as set out in the Strategic

Report. An internal audit function is expected to be established in the coming year to

ensure risk management is properly managed.

Principle Five

A Well Functioning Board of Directors

The Board will maintain a balance of executives and non-executive directors. Currently

there are 3 non-executives including the Chairman and 2 Executives. There are no

mandatory hours for directors to be available for Company business although the CEO is

required to commit 100% of his working time (based on a 40 hour working week) to the

Company. The non-executive directors are available for any Company business when it

may arise.

Further information about the directors can be found on the company website at

www.caracalgold.com. The biographical details of these Directors are set out within

Principle Six below. All Directors are subject to re-election in accordance with the

Company’s articles of association (“Articles”). The Company’s Articles state that one-third

of the Directors shall retire by rotation and be subject to re-election at each Annual

General Meeting.

The Board meets formally in person and by telephone multiple times throughout the year

and at least four times per year. The Board also holds regular informal project appraisal

and strategy discussions, to examine operations, opportunities and assess risks.

The directors encourage a collaborative Board culture to ensure that each decision

reached is always in the Company's and its shareholders' best interests and that any one

individual opinion never dominates the decision-making process. The Board seeks, so far

as possible, to achieve decisions by consensus and all directors are encouraged to use

their independent judgement and to challenge all matters whether strategic or

operational.

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

The Board delegates certain decisions to an Audit Committee and a Remuneration

Committee. The Audit Committee, of which Simon Games- Thomas is Chair, has joint

responsibility for reviewing the year end accounts with the Auditor. The Remuneration

Committee, of which Daniel Kazungu is Chair, reviews the remuneration of the executive

directors on an annual basis. Both committees are dedicated to establish and maintain

robust internal financial control systems for the Company. The Company has not held a

Nominations Committee to date.

Attendance at Board and Committee Meetings

The Group will report annually in the Directors’ Report on the number of Board and

committee meetings held during the year and the attendance record of individual

Directors. Directors meet formally and informally both in person and by telephone. To

date the following directors have attended the following meetings:

Director

Board

Meetings

Audit

Committee

Remuneration

Committee

Robbie McCrae

Gerard Kisbey-Green

6/6

Simon Games- Thomas

6/6

1/1

Rachel Johnston

1/1

Dan Kazungu

1/1

Principle Six

Appropriate Skills and Experience of the Directors

The Company believes that the Directors have wide ranging experience working

for/and/or advising businesses operating within the natural resources sector. They also

have an extensive network of relationships to reach key decision-makers to help achieve

their strategy.

The Board recognises that it currently has only one female Director and is aware, that as

it grows, it will look to recruit and develop a diverse and more gender-balanced team.

Biographies of the Board are as included below.

Mr David Simon Games-Thomas, Non-Executive Chairman (born 1955, aged 66)

Mr Simon Games-Thomas has over 30 years’ experience in the global financial and

commodity markets. His career has involved extended periods in running trading

operations in precious metals, base metals and agricultural products as well as having

set up and run his own futures brokerage.

Simon also has significant experience in the financing of advanced exploration and

development projects and mining operations in Africa, Asia and Europe using debt and

commodity linked debt instruments. Simon held senior management roles in London,

Sydney and Singapore for banks such as UBS, JP Morgan, Merrill Lynch, Rothschild and

Lehman Brothers.

Simon is the founder and director of Pegasus. Since leaving banking he has founded a

firm offering financing and risk management advice and re-structuring advice to

corporates in Africa, South America and Australia. He is also a shareholder in a

renewable energy start-up and establishing a commodity lending and trade finance fund.

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

Gerard-Anthony Kisbey-Green, Executive Director (born 1962, aged 60)

Gerard Kisbey-Green has over 34 years of experience in the mining and related financial

industry. After graduating as a Mining Engineer in South Africa, Gerard gained experience

on South African mines, eventually working in various management positions for several

large South African mining companies. During that time, he worked on gold, platinum and

coal mines primarily in South Africa but also in Germany and Australia. Gerard then

moved into the financial markets where he spent 17 years, the first 5 of which as a mining

equity analyst on the Johannesburg Stock Exchange where he was rated amongst the

top analysts in the Financial Times; annual rankings. He then moved into mining

corporate finance and worked in South Africa for 5 years and England for 7 years for

banks including JPMorgan Chase, Investec and Standard Bank.

Gerard has significant experience in IPO’s, including in capital raisings, M&A

transactions, and has worked with industry participants such Nomads, broker, and other

advisors on deals that cover a diversity of commodities and geographic locations. On

leaving the banking industry, Gerard became CEO of Peterstow Aquapower (SA), which

is a mining technology company, and Director of Peterstow Holdings. Gerard then held

the positions of President and CEO of Aurigin Resources, a Toronto-based private

company focused on gold exploration in East Africa, between December 2012 and

September 2018. He joined the Board of Goldplat plc in August 2014 as a NonExecutive

Director and assumed the role of Chief Executive Officer of Goldplat plc in February

2015—a position he held until April 2019. Gerard re-joined the Board of Goldplat plc in

May 2020 as a non-executive Director. He is currently working as a private consultant

and is the Mining Lead for Sutton International Limited, a private company developing

mining projects – primarily in Africa.

Robert Andrew McCrae, Executive Director (born 1973, aged: 49)

Robert McCrae has over 25 years’ experience in the mining and exploration industry in

Africa. Mr McCrae qualified with a BCom Economics and Financing from the University

of Witwatersrand. He has been involved in the exploration, development and financing of

projects in over 15 African countries across a broad range of commodities including

precious metals, gemstones, base metal, bulk commodities and industrial minerals. He

has managed both the development of these projects for both private and listed

companies and has acted in roles of project owner as well as project/construction

contractor. Mr MCrae was the founding shareholder of Mining Project Development ltd,

which owned the Zanaga Iron Ore Project in the Republic of Congo prior to its acquisition

by Glencore.

Mr McCrae has held senior executive management positions with a number of Australian

Securities Exchange listed mining and exploration companies, including CEO of Minbos

Resources, which had several high-grade phosphate projects in Angola and the

Democratic Republic of Congo and COO of Black Mountain Resources which operated a

high grade vermiculite mine and phosphate exploration project located in Uganda. He

was also a founder of Luiri Gold Limited, which explored and developed gold projects in

Zambia and where he was also involved on the listing onto the Toronto Stock Exchange.

Between 1994 and 2006, Mr McCrae was Director, Business Development of MDM

Engineering (Pty) ltd, an African focused natural resource contracting and process

engineering companies in Africa, which was responsible for the construction of

processing plants for a number of major gold and copper operations throughout Africa.

Rachel Johnstone, non-Executive Director (born 1979, aged:43)

Ms Johnston brings to the Board a wealth of experience, having worked in various roles

across Africa's mining sector over a ten-year period. She is currently working as an

independent consultant on sustainability across the continent - advising mining companies

on stakeholder engagement, sustainability reporting, supervising Environmental and

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

Social Impact Assessments (ESIA) and the implementation of Environmental, Social, and

Governance (ESG) programs and initiatives.

Previous roles held include Group CSR Manager at tier-one gold producer Endeavour

Mining, where she was responsible for managing its West African assets and CSR

Consultant at TSX-listed True Gold Mining. In addition, Ms Johnston was also CEO of

auger drilling business, Sahara Geoservices, based in Burkina Faso. Through these roles,

she garnered significant practical experience of the social, administrative, management,

governmental and labour relations issues that arise in the development and day-to-day

operation of mining projects in Africa.

Before joining the mining sector, Ms Johnston also managed community humanitarian and

development projects in Central and West Africa. She holds a Masters' Degree in

International Development Management and a National Higher Diploma in Mining

Engineering.

Her strong focus on social, environmental, health and safety management and community

engagement are perfectly aligned to the corporate ethos and operating practices of the

Company. The Board of Directors believe that Ms Johnston will add significant value to

the Board of Directors and further strengthen our broad ESG and ESIA activities in East

Africa.

Stefan Muller, non-executive Director (born 1971, aged: 51)

Mr. Müller has extensive corporate and financial experience having supported over 250

capital market transactions during his career and served on the boards of a number of

national and international companies. He started his career at Dresdner Bank AG in

international securities trading before becoming Senior Vice President at Bankhaus Sal

Oppenheim (Europe's largest private bank at the time). He subsequently worked in asset

management before founding DGWA - Deutsche Gesellschaft für Wertpapieranalyse

GmbH (German Institute for Asset and Equity Allocation and Valuation), a German

Investment Banking Boutique focused on the global mining and resources industry, where

he is still CEO. He is also a board member of the German Federation of International

Mining and Mineral Resources (FAB), and a member of the DIN Technical Committee,

which is establishing a new ISO standard for lithium. His corporate and financial

experience will support the Company in delivering on its growth strategy.

Although there is no formal process to keep Directors’ skill sets up-to-date at present the

Board will look to implement access to training where skill gaps have been highlighted.

However, the Company’s lawyers and brokers provide regular updates on governance,

financial reporting and Listing rules and the Board is able to obtain advice from other

external bodies when necessary.

Principle Seven

Evaluation of Board Performance

Internal evaluation of the Board, the Committees and individual Directors will be

undertaken on an annual basis in the form of peer appraisal and discussions to determine

the effectiveness and performance against targets and objectives. As a part of the

appraisal the appropriateness and opportunity for continuing professional development

whether formal or informal is discussed and assessed.

Principle Eight

Corporate Culture

The Board recognises that their decisions regarding strategy and risk will impact the

corporate culture of the Group as a whole which in turn will impact the Group’s

performance. The Directors are very aware that the tone and culture set by the Board will

greatly impact all aspects of the Group and the way that consultants or other

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

representatives behave. The corporate governance arrangements that the Board has

adopted are designed to instil a firm ethical code to be followed by Directors, consultants

and representatives alike throughout the entire organisation. The Group strives to achieve

and maintain an open and respectful dialogue with representatives, regulators, suppliers

and other stakeholders. Therefore, the importance of sound ethical values and

behaviours is crucial to the ability of the Group to successfully achieve its corporate

objectives. The Board places great importance on this aspect of corporate life and seeks

to ensure that this flows through everything that the Group does. The Directors are

focused on ensuring that the Group maintains an open culture facilitating comprehensive

dialogue and feedback and enabling positive and constructive challenge. The Group has

adopted, a code for Directors' dealings in securities which is appropriate for a company

whose securities are traded on this main market and is in accordance with the

requirements of the Market Abuse Regulation which came into effect in 2016.

Issues of bribery and corruption are taken seriously. The Group has a zero-tolerance

approach to bribery and corruption and has recently put an anti-bribery and corruption

policy in place to protect the Group, its employees and those third parties to which the

business engages with.

Principle Nine

Maintenance of Governance Structures and Processes

The Group’s governance structures are appropriate for a company of its size. The Board

also meets regularly and the Directors continuously maintain an informal dialogue

between themselves. The Chairman is responsible for the effectiveness of the Board as

well as primary contact with shareholders, while the execution of the Group’s investment

strategy is a matter reserved for the Chief Executive. The current Governance structure

is outlined below:

Audit committee

The audit committee comprises the three directors: Simon Games-Thomas, Rachel

Johnston and H.E. Dan Kazungu and the Chief Financial Officer Paul Reeves and meets

at least once a period. The committee's terms of reference are in accordance with the UK

Corporate Governance Code. The committee has been established to review the

company's financial and accounting policies, interim and final results and annual report

prior to their submission to the board, together with management reports on accounting

matters and internal control and risk management systems. It reviews the auditors'

management letter and considers any financial or other matters raised by both the

auditors and employees. The Committee met once in the period, with 100% attendance.

The committee considers the independence of the external auditors and ensures that,

before any non-audit services are provided by the external auditors, they will not impair

the auditors' objectivity and independence. Before the current auditors were appointed

they had acted as the Company’s Reporting Accountants. Any future work by the auditors

for non-audit services will need to be approved by the Board to ensure it does not affect

the independence or objectivity of the external auditor.

The Committee has primary responsibility for making recommendations to the board in

respect of the appointment, re-appointment and removal of the external auditors. Having

assessed the performance objectivity and independence of the auditors, the Committee

will be recommending the reappointment of PKF Littlejohn LLP as auditors to the

Company at the 2022 Annual General Meeting.

The Group does not currently have an internal audit function but will continue to monitor

the situation and look to hire an internal auditor if this is deemed necessary.

CARACAL GOLD PLC CORPORATE GOVERNANCE REPORT

Remuneration committee

The Remuneration Committee comprises the three directors: H.E. Dan Kazungu (Chair),

Simon Games-Thomas and Rachel Johnston. The primary function of the Committee is

to advise the board on overall remuneration packages of the directors after consideration

of remuneration policies, employment terms, current remunerations of the Board and

advisors and the policies of comparable companies in the Industry. No third parties have

provided advice that materially assisted the Remuneration Committee during the year.

The Committee met once in the period, with 100% attendance.

The remuneration committee determines the company's policy for the remuneration of

executive directors, having regard to the UK Corporate Governance Code and its

provisions on directors' remuneration. This is set out in the Directors’ Remuneration

report.

Principle Ten

Shareholder Communication

The Board is committed to maintaining good communication and having constructive

dialogue with its shareholders in compliance with regulations applicable to companies

quoted on the LSE’s Main Market. All shareholders are encouraged to attend the

Company's Annual General Meeting where they will be given the opportunity to interact

with the Directors.

Investors also have access to current information on the Company through its website,

www.caracalgold.com, and via Simon Games-Thomas, Non-Executive Chairman, who is

available to answer investor relations enquiries.

On Behalf of the Board

Director

8 November 2022

CARACAL GOLD PLC

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CARACAL

GOLD PLC

Qualified opinion

We have audited the financial statements of Caracal Gold PLC (the ‘parent company’) and

its subsidiaries (the ‘group’) for the period ended 30 June 2022 which comprise the

Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company

Statements of Financial Position, the Consolidated and Parent Company Statements of

Cash Flows, the Consolidated and Parent Company Statements of Changes in Equity 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, except for the effects of the matter described in the Basis for qualified

opinion section of our report:

• 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 30 June 2022 and of the group’s loss for the

period 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 qualified opinion

On 31 August 2021 the Parent Company acquired, by way of a transaction outside the

scope of IFRS 3 (See page 62), an operating mine (Kilimapesa). The year-end of the Parent

Company was changed in the period from December to June to align with that of the

operating mines. The last audit and therefore the last date for which financial statements

were prepared for Kilimapesa was for the period ended 30 June 2020. In order to ensure

that the reporting period following the transaction was no longer than the permitted 18

months, financial figures for Kilimapesa were prepared for the 12 months to 31 December

2020. These financial figures were unaudited and the work performed thereon by the

component auditor did not allow us to obtain sufficient appropriate audit evidence on

comparative figures and opening balances. Any adjustment to these figures would have a

consequential effect on the loss for the year ended 31 December 2020.

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 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

qualified opinion.

CARACAL GOLD PLC

Other matter

The financial statements of Kilimapesa for the year ended 31 December 2020, forming the

comparative figures in these financial statements for the period ending 30 June 2022, are

not audited. The reason as to why the financial statements of Kilimapesa form the

comparatives is explained on page 62. Those financial statements are not audited as they

were prepared on a proforma basis to ensure that, following the accounting treatment of the

acquisition, that the Group’s accounting period did not exceed 18 months.

Material uncertainty related to going concern

We draw attention to note 2 in the financial statements, which indicates that the Group's

assets are not currently generating substantial revenues and therefore an operating loss has

been reported. Additional funding is required to bring the mine into profitable production

and as at the date of this report, whilst management are confident that these will occur and

are in active discussions to secure such funding, there is no guarantee that they will happen

within the required timelines. As stated in note 2, these events or conditions, along with

the other matters as set forth in note 2, indicate that a material uncertainty exists that may

cast significant doubt on the company’s ability to continue as a going concern. Our opinion

is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the director’s use of the going

concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the company’s ability to continue to adopt

the going concern basis of accounting included:

• Management’s assessment of going concern: we discussed with management the

process undertaken in preparing the going concern assessment.

• Assessment of assumptions within the trading and cash flow forecasts: we challenged

the assumptions used in the forecasts, in particular the sales growth rates, gross margins

and cash flows generated from operations against actuals achieved in recent financial

years.

• We tested the numerical accuracy of the model used to prepare the forecasts.

• Cash balances: we agreed the Group cash balances to the amounts included in the

forecast.

• Sensitivity analysis: evaluation of sensitivities over the Group’s cash flows to changes

in the significant inputs and assumptions used. The analysis considered reasonably

possible adverse effects that could arise as a result of a significant decrease in sales as

this is considered to be the most significant variable in the cash flow forecasts.

• Discussed with management the funding options available and their status.

• Post year end trading performance: comparison of the post year end trading results to

the forecasts so as to evaluate the accuracy and achievability of the forecasts prepared.

• Disclosures: evaluation of the adequacy of the relevant going concern disclosures

within the financial statements

CARACAL GOLD PLC

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

We set certain quantitative thresholds for materiality. These, together with qualitative

considerations, helped us to determine the scope of our audit and the nature, timing and

extent of our audit procedures on the individual financial statement line items and

disclosures and in evaluating the effect of misstatements, both individually and in

aggregate, on the financial statements as a whole. Comparative are not provided for

materiality as this is the first year audit.

Group financial statements

Parent company financial

statements

Overall materiality

£549,000

£250,600

Performance

materiality

£356,800

£163,000

Basis for

determining

materiality

5% of adjusted losses before

tax

5% of losses before tax

Rationale for the

benchmark applied

We believe loss before tax to be the main driver of the group as

material amounts of revenues and expenses occurred in

Kilimapesa Pty Gold (main trading subsidiary). We consider this

to be the key benchmark for the group given that current and

potential investors will be most interested in potential earnings of

the group.

Parent company had incurred material amount of expense due to

listing in the current period, therefore we believe that losses before

tax would be the key benchmark for the parent company. This was

deemed to be the key driver given the one off nature of this

expense.

Performance materiality for the group financial statements was set at £356,000 and the

parent company was set at £163,000, being 65% of materiality for the financial statements

as a whole respectively. The performance materiality for the group and parent company is

based on our assessment of the relevant risk factors e.g. previous experience of

misstatements, management’s attitude towards proposed adjustments, and the level of

estimation inherent within the group and parent company.

We agreed to report to those charged with governance all corrected and uncorrected

misstatements we identified through our audit with a value in excess of £27,000 for the

group and for the parent company a value in excess of £11,500. We also agreed to report

any other audit misstatements below that threshold that we believe warranted reporting on

qualitative grounds.

CARACAL GOLD PLC

Our approach to the audit

The scope of our audit was influenced by our application of materiality.

In designing our audit, we determined materiality, as above, and assessed the risk of

material misstatement in the financial statements. In particular, we looked at areas

involving significant accounting estimates and judgement by the directors and considered

future events that are inherently uncertain. We also addressed the risk of management

override of internal controls, including evaluating whether there was evidence of bias by

the directors that represented a risk of material misstatement due to fraud.

Of the four components of the group, a full scope audit was performed on the complete

financial information of one component, and for the components not considered significant,

we performed an analytical review together with substantive testing as appropriate on some

areas based on group audit risk applicable to those components

The full scope component was located in Kenya. The component auditor worked under our

instruction. The audit of the remaining components was performed in London, conducted

by PKF Littlejohn LLP using a team with specific experience of auditing publicly listed

entities. The Senior Statutory Auditor interacted regularly with the component audit team

during all stages of the audit and was responsible for the scope and direction of the audit

process. This, in conjunction with additional procedures performed, gave us appropriate

evidence for our opinion on the group and parent company financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most

significance in our audit of the financial statements of the current period and include the

most significant assessed risks of material misstatement (whether or not due to fraud) we

identified, including those which had the greatest effect on: the overall audit strategy, the

allocation of resources in the audit; and directing the efforts of the engagement team. These

matters were addressed in the context of our audit of the financial statements as a whole,

and in forming our opinion thereon, and we do not provide a separate opinion on these

matters. In addition to the matters described in the Basis for qualified opinion and Material

uncertainty related to going concern sections we have determined the matters described

below to be the key audit matters to be communicated in our report.

Key Audit Matter

How the scope of our audit responded to

the key audit matter

Note (7) - Revenue recognition

Under ISA (UK) 240 there is a rebuttable

presumption that there is a risk of fraud in

revenue recognition.

There is the risk that revenue in relation to the sale

of metals has not been recognized accurately in

accordance with IFRS 15, and that revenue is

incomplete due to incorrect cut-off.

The Group had revenues of £6.8m which is a

significant increase to that reported in prior period.

Owing to the magnitude of the increase, the

revenue generating nature of the group and the

need to ensure that revenue has been correctly

Our work in this area included:

• Obtaining an understanding of the internal

control environment in operation for the

material income streams;

• Ensuring that sufficient and appropriate

disclosures have been made in relation to

revenue recognition and in accordance with

the requirements of IFRS 15;

• Reviewing the Group's revenue recognition

policy to ensure that it is in accordance with

IFRS15; and

• Reviewing the work performed by the

component auditors which included:

CARACAL GOLD PLC

recognised in the correct period, we determined

revenue to be a key audit matter.

- Review component auditor understanding

of the internal control environment in

operation for the material income streams

and undertaking a walk-through to ensure

that the key controls within these systems

have been operating in the period under

audit;

- Substantive transactional testing of income

recognised in the financial statements,

including deferred and accrued income

balances recognised at the year-end; and

- A review of post year end receipts to

ensure completeness of income recorded in

the accounting period.

Based on the audit work performed revenue has

been not materially misstated within the financial

statements.

Notes (14) and (15) - Valuation of PPE,

mining and intangible assets.

The group hold PPE, mining and intangible assets

with a net book value of £2.4m, and £3.1m. The

Group was loss making during the year and requires

additional funding as a result. There is the risk that

there are impairment triggers and that these assets

should be impaired.

Management perform impairment assessments to

support the carrying values of these assets. The

assessments contain judgements and estimates.

As a result of the materiality of the asset balances

held and the level of estimation and judgement

involved in performing the impairment reviews,

we determined the carrying value of PPE, mining

and Intangible assets to be a key audit matter.

Our work in this area included:

• Holding meetings with management to

review management assessment of operating

activity levels and development of the assets

undertaken in the year and future plans;

• Examining title documents such as licence

agreements and other supporting

documentation to assess the legal and

beneficial ownership of the mines;

• Reviewing management’s impairment

indicators assessment for the mines against

the criteria in the accounting standard in

order to determine whether their assessment

is complete and in accordance with the

requirements;

• Obtaining and reviewing the key inputs into

the Group’s Discounted Cash Flow models

and challenging the reasonableness of the

key inputs included in the models such as

gold prices, reserves, capex, interest rates

and discount rates;

• Testing the mathematical integrity of the

Group’s model and ensuring that the basis of

preparation of the model is in line with our

expectations; and

• Reviewing the Competent Persons Report

(“CPR”) in relation to the mines and

assessing the competency of the preparer.

The carrying value of the assets at the period end

are not materially misstated but note that this is

dependent on:

• Sufficient funds being raised to ensure

production targets can be met;

• Expected production targets are achieved;

and

CARACAL GOLD PLC

• Licences are renewed.

Should any of the above considerations not be met

then the assets may need to be impaired in light of

facts and circumstances known to us at period end.

Note (13) - Accounting for the acquisition

On 31 August 2021 the Company acquired the

holding company of Mayflower Gold Investments

Limited (MGIL) and thus a 100% indirect interest

in Kilimapesa Gold Pty Ltd (KPGL), whose

principal activity is an established gold mine and

gold processing operation in Kenya. Management

have considered that the acquisition falls outside the

scope of IFRS 3 (“Business Combinations”) and

have applied the reverse acquisition accounting

methodology to account for the transaction.

There is a risk that the transaction has been

incorrectly accounted for within the financial

statements.

This has been determined to be a key audit matter

to the fact that the transaction was key into turning

the Company into a Group with trading operations

and a mining asset.

Our work in this area included:

•

Reviewing management’s analysis of the

transaction and postings made to account for

the acquisition;

• Agreeing all inputs in management’s analysis

to supporting documentation;

• Reviewing journals processed as at the date of

acquisition to

ensure that they are in

compliance with IFRS; and

• Assessing the fair value of identifiable assets

and liabilities at the date of acquisition.

Based on the audit work performed the acquisition

accounting is not materially misstated for within

the financial statement.

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:

CARACAL GOLD PLC

• 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 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;

• 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 directors’ responsibilities statement, 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:

CARACAL GOLD PLC

• 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, evaluation of

internal control and through our experience in 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

- Employment Act 2008

- Money Laundering Regulations 2007

- GDPR

- Local laws and regulations, including tax, in the jurisdictions where each

subsidiary operates

• We designed our audit procedures to ensure the audit team considered whether there

were any indications of non-compliance by the group or parent company with those

laws and regulations. These procedures included, but were not limited to:

- review of legal and professional fees and correspondences to understand the

nature of the costs and the existence of any non-compliance with laws and

regulations;

- discussion with management regarding potential non-compliance; and

- review of minutes of meetings of those charged with governance and RNS

• 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 and revenue recognition , the

potential for management bias was identified in relation to the going concern of the

group and parent company and as noted above, we addressed this by challenging

the assumptions and judgements made by management when auditing that

significant accounting estimate.

• 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.

• The audit team addressed any matters of non-compliance with laws and regulations,

including fraud at the group and component levels by communicating with

component auditor and including procedures in the group instructions to detect non-

compliance, 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

CARACAL GOLD PLC

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 4 July 2022 to audit the financial statements

for the period ending 30 June 2022 and subsequent financial periods. Our total

uninterrupted period of engagement is one financial18 month period covering the period

ending 30 June 2022.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the

group or the parent company and we remain independent of the group and the parent

company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with

Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so

that we might state to the company’s members those matters we are required to state to

them in an auditor’s report and for no other purpose. To the fullest extent permitted by

law, we do not accept or assume responsibility to anyone, other than the company and the

company's members as a body, for our audit work, for this report, or for the opinions we

have formed.

Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus

For and on behalf of PKF Littlejohn LLP Canary Wharf

Statutory Auditor London E14 4HD

8 November 2022

CARACAL GOLD PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 18 MONTH PERIOD ENDING 30 JUNE 2022

Note

18 months

ended

30 June

2022

£’000

12 months

ended

31 December

2020

£’000

Continuing operations

Revenue

6,858

1,399

Cost of sales

(9,007)

(2,353)

Gross loss

(2,149)

(954)

Administrative expenses

(7,188)

(10)

Listing costs

(1,146)

Share-based payments

(84)

Operating loss before finance costs

(10,567)

(964)

Finance costs (net)

(744)

(110)

Other income

Foreign exchange

(941)

(616)

Reverse acquisition expense

(3,298)

Loss before taxation

(15,548)

(1,690)

Taxation

Loss for the period

(15,548)

(1,690)

Other comprehensive income – items

that may be reclassified subsequently to

profit and loss account

Translation of foreign operations

(65)

511

Total other comprehensive income

(65)

511

Total comprehensive income for the

period attributable to the owners of the

Parent Company

(15,613)

(1,179)

Earnings per share – basic and diluted

(pence)

(1.09p)

(0.12p)

The notes on pages 48 to 79 form part of these financial statements.

CARACAL GOLD PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

Note

As at

30 June

2022

£’000

As at

31 December

2020

£’000

Non-Current Assets

Intangible assets

2,392

Property, plant and equipment

5,689

3,758

Total Non-Current Assets

8,081

3,758

Current Assets

Inventories

712

575

Trade and other receivables

826

737

Cash and cash equivalents

121

Total Current Assets

1,618

1,433

Total Assets

9,699

5,191

Equity and Liabilities

Share capital

1,879

4,430

Share premium

14,306

Translation reserve

444

509

Reverse acquisition reserve

6,481

Share-based payment reserve

148

Retained earnings

(25,321)

(9,773)

Total Equity

(2,063)

(4,834)

Non-Current Liabilities

Deferred tax liability

552

Provisions and contingent liabilities

1,989

Amount due to related parties

8,433

Loans and borrowings – non-interest

bearing

Loans and borrowings – interest bearing

167

142

Total Non-Current Liabilities

2,708

8,623

Current Liabilities

Trade and other payables

7,357

1,330

Loans and borrowings – non-interest

bearing

Loans and borrowings – interest bearing

1,697

Total Current Liabilities

9,054

1,402

Total Liabilities

11,762

10,025

Total Equity and Liabilities

9,699

5,191

The notes on pages 48 to 79 form part of these financial statements.

Approved by the Board and authorised for issue on 8 November 2022.

Director

CARACAL GOLD PLC

PARENT COMPANY STATEMENT OF FINANCIAL POSITION

Company Registration No. 09829720

Note

As at

30 June

2022

£’000

As at

31 December

2020

£’000

Non-Current Assets

Investments

9,537

Property, plant and equipment

302

Total Non-Current Assets

9,839

Current Assets

Trade and other receivables

7,108

Cash and cash equivalents

Total Current Assets

7,134

Total Assets

16,973

Equity and Liabilities

Share capital

1,879

132

Share premium

14,306

602

Share-based payment reserve

148

Retained earnings

(7,655)

(2,595)

Total Equity

8,678

(1,861)

Non-Current Liabilities

Provisions and contingent liabilities

619

Total Non-Current Liabilities

619

Current Liabilities

Trade and other payables

6,019

1,423

Convertible loan notes

1,657

450

Total Current Liabilities

7,676

1,873

Total Liabilities

8,295

1,873

Total Equity and Liabilities

16,973

The Company has taken advantage of the exemption under section 408 of the Companies Act

2006 by choosing not to present its individual Statement of Comprehensive Income and related

notes that form part of these approved financial statements.

The Company’s loss for the period from operations is £5,060,000 (2020: loss of £1,074,000).

The notes on pages 48 to 79 form part of these financial statements.

Approved by the Board and authorised for issue on 8 November 2022.

Director

CARACAL GOLD PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE 18 MONTH PERIOD ENDED 30 JUNE 2022

18 months

ended

30 June

2022

£’000

12 months

ended

31 December

2020

£’000

Cash flows from operating activities

Operating loss – continuing operations

(15,548)

(1,690)

Adjustments for:

Depreciation/amortisation

825

456

Finance costs (net)

744

110

Other income

(2)

Foreign exchange movement

290

168

Shares issued in lieu of fees

856

Share-based payments

Reverse acquisition share-based payment

expense

3,298

Operating cash outflows before working

capital movements

(9,453)

(956)

(Increase)/decrease in trade and other

receivables

(19)

Increase in trade and other payables

2,223

195

Increase in inventories

(137)

(91)

Net cash outflows from operating activities

(7,386)

(771)

Net cash flows from investing activities

Cash acquired on acquisition

Expenditure on intangibles

(548)

Expenditure of fixed assets

(1,094)

Net cash outflows from investing activities

(1,560)

Net cash flows from financing activities

(Repayments) on external loans

(168)

(25)

Proceeds from external loans

1,207

Increase in previous owners parent company loan

(eliminated in consolidation in current year)

1,027

Finance costs (net)

(65)

(110)

Proceeds from issue of share capital

8,378

Cost of share issues

(442)

Net cash inflows from financing activities

8,910

892

Net (decrease)/ increase in cash and cash

equivalents

(36)

121

Cash and cash equivalents at the beginning of the

period

121

Effect of exchange rates on cash

(5)

(11)

Cash and cash equivalents at the end of the

period

121

Significant non-cash transactions

The only significant non-cash transactions were the issue of shares and warrants detailed

in notes 23 and 24.

The notes on pages 48 to 79 form part of these financial statements.

CARACAL GOLD PLC

PARENT COMPANY STATEMENT OF CASH FLOWS

FOR THE 18 MONTH PERIOD ENDED 30 JUNE 2022

18 months

ended

30 June

2022

£’000

12 months

ended

31 December

2020

£’000

Cash flows from operating activities

Operating loss

(5,060)

(1,074)

Adjustments for:

Depreciation

Finance costs (net)

546

144

Share-based payment – incentives

Shares issued for services

856

Operating cash outflows before working

capital movements

(3,547)

(930)

(Increase)/decrease in trade and other

receivables

(98)

468

Increase in trade and other payables

2,201

631

Net cash outflows from operating activities

(1,444)

169

Net cash flows from investing activities

Purchase of tangible fixed assets

(128)

Purchase of Investments

(548)

Cash advanced to subsidiaries

(6,997)

Net cash outflows from investing activities

(7,673)

Net cash flows from financing activities

Proceeds from external loans

1,207

Convertible loan note cash repayments

(25)

Finance costs (net)

(144)

Proceeds from issue of share capital

8,378

Cost of share issues

(442)

Net cash inflows from financing activities

9,143

(169)

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the

period

Cash and cash equivalents at the end of the

period

Significant non-cash transactions

The only significant non-cash transactions were the issue of shares and warrants detailed

in notes 23 and 24.

The notes on pages 48 to 79 form part of these financial statements

CARACAL GOLD PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 18 MONTH PERIOD ENDED 30 JUNE 2022

capital

£’000

premium

£’000

Share-

based

payment

reserve

£’000

Reverse

acquisit

ion

reserve

£’000

Foreign

currency

reserve

£’000

Retained

earnings

£’000

Total

£’000

Balance at 31

December 2019

4,430

(2)

(8,083)

(3,655)

Loss for the year

(1,690)

Other

comprehensive

income

511

Total

comprehensive

income for the

period

511

(1,690)

(1,179)

Balance at 31

December 2020

4,430

509

(9,773)

(4,834)

Loss for period

(15,548)

Other

comprehensive

income

(65)

Total

comprehensive

income for the

period

(65)

(15,548)

(15,613)

Transfer to reverse

acquisition reserve

(4,430)

4,430

Recognition of plc

equity at acquisition

date

132

602

6,443

7,177

Issue of shares for

acquisition of

subsidiary

462

4,156

(7,690)

(3,072)

Issue of shares for

placings

946

7,682

8,628

Issue of shares to

settle debt

159

1,429

1,588

Issue of shares in

lieu of fees

143

1,285

1,428

Warrants exercised

Share based-

payment

148

3,298

3,446

Cost of share issues

(849)

Total transactions

with owners

(2,551)

14,306

148

6,481

18,384

Balance at 30 June

2022

1,879

14,306

148

6,481

444

(25,321)

(2,063)

The notes on pages 48 to 79 form part of these financial statements.

CARACAL GOLD PLC

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE 18 MONTH PERIOD ENDED 30 JUNE 2022

capital

£’000

premium

£’000

Share-

based

payment

reserve

£’000

Loan note

equity

reserve

£’000

Retained

earnings

£’000

Total

£’000

Balance at 31

December 2019

132

602

(1,543)

(787)

Loss for the period

(1,074)

Equity element of the

issue of 10%

convertible loan

notes

(22)

Total

comprehensive

income for the

period

(22)

(1,052)

Balance at 31

December 2020

132

602

(2,595)

(1,861)

Loss for period

(5,060)

Other

comprehensive

income

Total

comprehensive

income for the

period

(5,060)

Issue of shares for

acquisition of

subsidiary

462

4,156

4,618

Issue of shares for

placings

946

7,682

8,628

Issue of shares to

settle debt

159

1,430

1,589

Issue of shares in

lieu of fees

143

1,285

1,428

Warrants exercised

Share based-

payment

148

Cost of share issues

(849)

Total transactions

with owners

1,747

13,704

148

15,599

Balance at 30 June

2022

1,879

14,306

148

(7,655)

8,678

The notes on pages 48 to 79 form part of these financial statements.

CARACAL GOLD PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 18 MONTH PERIOD ENDED 30 JUNE 2022

1 General information

Caracal Gold Plc (‘the Company’ or ‘CGP’) (formerly Papillon Holdings plc) is a public

limited company with its shares traded on the Main Market of the London Stock Exchange.

The address of the registered office is 27-28 Eastcastle Street, London, W1W 8DN. The

Company was incorporated and registered in England and Wales on 19 October 2015 as

a private limited company and re-registered on 24 June 2016 as a public limited company.

It changed its name on 10 September 2021 to Caracal Gold Plc. The Company’s

registered number is 09829720.

The principal activity of the Company and its subsidiaries (the “Group”) is the exploration,

development and mining of gold in Kenya and Tanzania, and the development of further

projects to expand its operations within this industry.

On 31 August 2021, the Company acquired the holding company of Mayflower Gold

Investments Limited (MGIL) and thus a 100% indirect interest in Kilimapesa Gold Pty Ltd

(KPGL), whose principal activity is an established gold mine and gold processing operation

in Kenya. This was accounted for as a reverse acquisition - See note 5 below for further

details.

These consolidated financial statements were approved for issue by the Board of directors

on 5 November 2022.

2 Accounting policies

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with UK-

adopted international accounting standards and requirements of the Companies Act 2006.

The Financial Statements have also been prepared under the historical cost convention,

as modified by the revaluation of financial assets at fair value through profit or loss.

The functional currency for each entity in the Group is determined as the currency of the

primary economic environment in which it operates. The functional currency of the parent

company CGP is Pounds Sterling (£) as this is the currency that finance is raised in. The

functional currency of its subsidiary KPGL is the Kenyan Shilling and the functional

currency of its subsidiary Tyacks is the Tanzanian Shilling. For both subsidiaries these are

the currencies that mainly influences labour, material and other costs of providing services.

The Group has chosen to present its consolidated financial statements in Pounds Sterling

(£), as the Directors believe it is a more convenient presentational currency for users of

the consolidated financial statements. Foreign operations are included in accordance with

the policies set out below.

During the year the Company changed its accounting reference date from 31 December

to 30 June to align itself with its newly acquired subsidiary. Consequently, the current year

covers a 18 month period, whereas the prior year is a 12 month period and so is not

entirely comparable year on year.

The preparation of financial statements in conformity with IFRS’s 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 information are disclosed in Note 3.

CARACAL GOLD PLC

a) Going concern

The consolidated financial statements have been prepared on a going concern basis. The

Group’s assets are not currently generating substantial revenues and therefore an

operating loss has been reported. An operating loss is expected in the 12 months

subsequent to the date of these financial statements. As a result, the Group will need to