Catalina Resources : 2023 Annual Report (1.1MB)

Annual Report 2023

Company Number: 05837907

Contents

Corporate Information	2
Review of Operations	3
Directors' Report	9
Independent Auditors Report to the Shareholders of Catalina Resources PLC	12
Group Profit and Loss Account	14
Group Balance Sheet	15
Company Balance Sheet	16
Group Statement of Changes in Equity	17
Group Cash Flows from Operating Activities	18
Notes to the Financial Statements	19
Notice of Meeting	26

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Corporate Information

Company Registration Number (England):	05837907
Registered and UK Office:	Catalina Resources PLC
	6 Stone Close
	Colwall
	Malvern
	Worcestershire
	WR13 6QZ
Telephone:	01684 540791
E-mail:	[e-mail]
Website:	www.catalinaresourcesplc.co.uk
Directors:	Peter S Bridges
	Andrew J Shaw
	Ceri L Phipps
Secretary:	William Hampton
	Woodbury Financial & Corporate Services
	11 Ripple Road
	Droitwich Spa
	Worcestershire
	WR9 8RJ
Independent Auditors:	Kendall Wadley LLP
	Granta Lodge
	71 Graham Road
	Malvern
	Worcestershire
	WR14 2JS
Banker:	Bank of Scotland
	600 Gorgie Road
	Edinburgh
	EH11 3XP

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Figure 1: Location of the Jiguata and Toculla Projects

Review of Operations

Introduction

Catalina Resources PLC ("the Company" or "the Group") is a UK-registered mineral exploration company which, through its wholly owned Chilean subsidiary, Minera Catalina SA, holds the Jiguata and the Toculla concessions ("the Projects") in northern Chile.

The Company has maintained all necessary mineral rights ownership requirements. The concession titles for the Jiguata and Toculla Projects remain in good standing and the Company's long-term objective of finding a suitable joint venture partner or purchaser continues.

Full details on both Projects are available on the Company's website at www.catalinaresourcesplc.co.uk

and are summarised below.

Project Locations

Jiguata lies approximately 150 km east- northeast of the city of Iquique in Region I of Chile. The project is a three-hour drive by 4x4 vehicle from Iquique and lies between 4,600 and 4,700 m (~15,000 feet) above sea level. An asphalt road runs to and through the project area.

The small settlement of Lirima located 7 km southwest of Jiguata is adjacent to the Pampa Lirima geothermal field.

Toculla is located approximately 140 km northeast of Iquique in Region I of Chile. The project is a three-hour drive from Iquique and access is gained along asphalt and well-maintained dirt roads via the village of Camiña, an hour's drive southwest of Toculla. Toculla lies between 3,700 and 4,000 m (~12,500 feet) above sea level.

Figure 1 shows the main infrastructure in the region and the location of both Jiguata and Toculla in relation to the Collahuasi Mining Complex, approximately 120 km to the south of Jiguata.

The Catalina Concessions

Jiguata

The Jiguata Project is covered by Minera Catalina's thirty-four Jiguata E exploration concessions which replace the older Jiguata D concessions and maintain the Project in good standing. The concessions total an area of 10,000 hectares and cover the full extent of the geochemical and geophysical anomalies identified by Catalina's exploration activities.

Toculla

Six new Toculla E exploration concessions similarly replace the old Toculla D concessions, they cover an area of 1,700 hectares and are in good standing.

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Figure 2: Eocene-Oligoceneporphyry copper deposits in Northern Chile

Review of Operations

Geological Setting of the Projects

Jiguata

Two north-south trending Metallogenic Belts host some 30 Copper-Molybdenum porphyry deposits along the Andes of northern Chile (Figure 2) and contain over 220 million tonnes of copper metal. The deposits tend to form clusters spaced approximately 120 kilometres apart along the Belts.

The Collahuasi Mining Complex is one such cluster and is located 120 km south of Jiguata. Collahuasi is the northernmost of the Eocene-Oligocene porphyries discovered to date in Chile, comprising the Quebrada Blanca, Rosario and Ujina mines. Exploration to the north of Collahuasi is rendered progressively more difficult as the rocks of the productive Eocene-Oligocene Belt are obscured by an increasingly thicker cover of younger Miocene volcanics.

In the mid-1990's a 200 km IP/resistivity programme around the known deposits at Collahuasi led to the discovery of the Ujina deposit beneath 170 meters of

Miocene cover rocks.

In November 2018 Anglo American stated that with close to 10 billion tonnes of Reserves & Resources at 0.79% Total Copper, the Collahuasi deposit is one of the "best on the planet". It has consistently ranked within the top 4 copper mines by production globally over the past decade.

At Collahuasi, economic porphyry-style mineralisation is associated with widespread areas of epithermal alteration, including high-sulphidation gold mineralisation locally, and anomalous molybdenum geochemistry. The major mines are surrounded by kilometre-scale geophysical anomalies reflecting the development of a halo of pyritic mineralisation during the processes which emplaced the mineralisation. Most of the mining areas are characterised by faults and mineralised trends with a pronounced NW and SE orientation. This geological environment is similar to that identified by Catalina at Jiguata.

Local Geological Setting of the Jiguata Project The country surrounding Jiguata is almost entirely covered by Miocene (23.03 to 5.3 Mai) volcanic rocks -

a series of ignimbrites and porphyritic dacitic lava flows originating from two Miocene volcanoes, the red triangles in Figure 3.

Figure 3: Satellite image of the Jiguata area

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Review of Operations

Figure 3 is a district-scale satellite image covering the Jiguata Project area. The area covered by the 2014 geophysical survey is outlined in green.

The Jiguata Project area is characterised by areas of extensive hydrothermal alteration exposed where post-Miocene erosion has stripped away the younger rocks exposing older rocks below. On the image the older sequence is generally lighter-coloured; the younger lavas and pyroclastics are darker.

The orange line delineates the surface exposure of an area of the older rocks with widespread hydrothermal alteration which includes:

1. widespread high-leveladvanced-argillic alteration of "steam-heated" origin comprising admixtures of kaolinite-alunite-nativesulphur-opaline silica (cristobalite),
2. more localised alunite-bearingadvanced-argillic alteration of probable hypogene origin exposed in more deeply eroded sectors and showing both structural and minor stratigraphic control, and
3. variably developed argillic-pyritic alteration types.

This alteration sequence is controlled by a prominent NW-SE structural trend in similar geological and structural environments to those developed around the Collahuasi orebodies.

NW-SE structural trends at Jiguata (delineated in blue in Figure 3) control faulting, and geochemical and geophysical anomalies at Jiguata although those do not extend into the overlying ignimbrite and lava flows forming the younger Miocene volcanic sequence described above. This suggests that the deeper erosion through the Miocene volcanics at Jiguata exposes an underlying series of older rocks with characteristics similar to those developed at Collahuasi.

All efforts are now directed towards locating an underlying porphyry-copper target at depth based on a Collahuasi model - particularly the Ujina deposit which is almost completely covered by post- mineralisation volcanics. The similarities between the Jiguata and the Collahuasi areas are striking and compelling.

All efforts are now directed towards locating an underlying porphyry-copper target at depth based on a Collahuasi model - particularly the Ujina deposit which is almost completely covered by post- mineralisation volcanics. The similarities between the Jiguata and the Collahuasi areas are striking and compelling.

The 2014 Geophysical Survey at Jiguata

An IP (Induced Polarity) survey was completed comprising six lines spaced one-kilometre apart and varying in length from 7,600 to 9,600 metres for a total of 53.8-line kilometres. The data can be viewed on the Company's website at www.catalinaresourcesplc.co.uk.

Chargeability Anomalies

Strong chargeability anomalies from 20 - 35 mV/V were discovered along all six lines. These lie at a depth of 100 to 300 m over much of the survey area but locally reach close to the surface, with each line showing relatively continuous, deep, chargeable zones over 5 km wide area.

It is likely that with additional geophysical surveys the chargeability anomaly (blue outline in Figure 4) will measure approximately 7x7 km when fully defined. This suggests that porphyry mineralisation could be extensive at depth beneath the near-surfacepost-mineral cover and steam-heated alteration.

Figure 4: Inverted Chargeability Slice at 4,100 m

Figure 5: Resistivity at 3,900 m elevation

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Review of Operations

Resistivity Anomalies

The main chargeability anomaly displays a complex resistivity response (Figure 5) with a deep conductor, the "Inner Deep Conductor", located to the northeast of the NW Resistive zone. It correlates with an area of high chargeability, lies between the two known outcrops of mineralised porphyry-style veining and is considered prospective for deep porphyry mineralisation.

The "North Conductor", located immediately NE of the circular resistive trend and the strong chargeability anomaly, is also considered prospective for porphyry mineralisation. Strong, deep conductors also occur on the central and northern portions of the two outer lines, 3000N and 8000N, associated with strong chargeability anomalies.

Figure 6: Resistivity at 4,000 m elevation

Figure 7: Chargeability at 4,000 m elevation

Comparison between Jiguata and the mines of the Collahuasi Complex in northern Chile A comparison of the geophysical anomalies at Jiguata and those at Collahuasi reveals:

• Porphyry intrusions at Collahuasi all host large chargeability anomalies covering areas from 4 to 6 km in diameter.
• The Jiguata chargeability anomaly is somewhat bigger than both the Rosario and the Ujina anomalies at 6-7 km in diameter.
• The circular resistivity anomaly at Jiguata is similar in size to the chargeability anomaly at Ujina.
• The intensities of the chargeability and resistivity anomalies at Jiguata are similar to those observed over the Collahuasi deposits.
• At Collahuasi the strongest chargeabilities are typically on the outer portion of the anomalous zone and are often considered to be part of the "pyritic halo" that surrounds some types of copper porphyries. Typically, economic mineralisation is located closer to the centre of such an anomalous zone within the strong chargeability of the pyritic halo.

The dimensions of the Jiguata geophysical anomaly are consistent with the dimensions of other known porphyry deposits in the region. Moreover, strong molybdenum geochemical anomalies and zones with epithermal-style alteration, which occur at surface at Jiguata, are also found associated with the Collahuasi deposits.

Summary

Strong chargeability anomalies discovered at Jiguata cover a large area measuring at least 6-7 km in diameter. Most of the chargeability anomalies commence at a depth of between 100 to 300 m, generally beneath a shallow resistive layer that is attributed to younger (probably Miocene) post-mineral cover or overprinting by steam-heated epithermal alteration.

The strongest and shallowest chargeability anomalies correlate closely to two outcrops with mineralised porphyry-style veining whereas the anomalies associated with known or inferred pyrite-bearing epithermal argillic alteration are weak to moderate by comparison. Consequently, the strong, deep chargeability anomalies at Jiguata may also be associated with porphyry mineralisation.

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Review of Operations

Two RC holes drilled in 1993 are located near the strong chargeability anomalies; however, these are relatively shallow (to 250 m vertical depth) and did not test the main part of the deeper chargeability anomaly or the deeper conductive zones. Both holes encountered anomalous gold and copper and high molybdenum values. High molybdenum values are characteristic of the large porphyries south of Jiguata at the Rosario, Ujina, Quebrada Blanca, and Copaquire deposits.

Consequently Jiguata is considered an excellent target for large-scaleCu-Mo porphyry mineralisation. However, post-mineral cover and over-printing epithermal alteration complicate both the chargeability and resistivity anomalies observed. The interpretation of the geophysical anomalies is therefore more complex and ambiguous than in areas hosting only porphyry mineralisation.

Follow-up detailed geological mapping and geochemical sampling are planned. As the geophysical survey clearly demonstrated that IP reflects the underlying geology, additional surveys with more closely- spaced lines will be completed in order to define the full limits of the underlying porphyry intrusives and their principal parameters. That work will be valuable in defining targets for future scout drilling and in seeking a joint venture partner to assist with the funding of more detailed, later stage exploration.

The Toculla Gold Project

Regional Geological Setting of the Toculla Gold Project

The geological setting of the region around Toculla consists of a series of probable Miocene age ignimbrites and andesitic-rhyolitic lavas (the "younger volcanics"). These cover a series of older volcano- sedimentary which display hydrothermal alteration from an older event that did not affect the younger volcanics.

Catalina's concessions at Toculla include the eastern sector of an extensive area of the older rock sequences exposed in a "window" where the otherwise ubiquitous cover of younger volcanics has been stripped away by erosion.

The darker areas in Figure 8 are indicative of fresh, unaltered younger volcanics; the older volcano- sedimentary rocks are lighter in colour due to extensive hydrothermal alteration.

Figure 8: Structural Control on Hydrothermal Systems near Toculla.

Toculla lies on a large regional-scale,NW-SE-trending structure - the Toculla-Puchuldiza Fault. This fault hosts active hydrothermal systems at Toculla, Uscana, Huancure, Tuja and Puchuldiza and appears to exert a profound control on the geological setting of the Toculla concessions. The gold-bearingPuchuldiza-Tuja geothermal system lies on the fault some 30-40 km to the southeast and hosts a "non- JORC" resource of circa 1 million oz. of gold and other precious metals in sinters, and veins and

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Review of Operations

stockworks developed in phreatic explosion breccias and silicified zones, associated with hot springs and geysers.

A similar geological setting is seen at Toculla which hosts hot and relict cold springs. The Silica Ridge and Trench Hill prospects at Toculla, which lie along the same structure, show similar low-sulphidation characteristics. The anomolous gold-pathfinder geochemistry at the prospects together with the discovery of a large phreatic explosion breccia with sinter terraces and fossil sinter surfaces suggests that Toculla may also be the near-surface expression of a low-sulphidation epithermal precious metal deposit or an epithermal hot spring deposit similar to that developed at Puchuldiza adjacent to the connecting Toculla- Puchuldiza Fault.

Silica Ridge is a large structure and represents the expulsion of very large volumes of silica from an underlying geothermal/epithermal system over a considerable period of time. It would seem likely from observations to date that the main period of silica deposition and its accompanying argillic alteration took place before the extrusion of the younger volcanic cover lavas. Some 500 m to the south, extensive high sulphidation complexes are exposed in the window which display argillic and advanced argillic alteration and are geochemically distinct.

The fact that, at the present day, there are active thermal springs along similar structural trends points towards a possible reactivation of feeders and channels either as a consequence of the younger volcanism or of more recent tectonism along the NW-SE trending strike-slip faulting.

Toculla is under-explored and warrants geological and alteration mapping and detailed sampling in the first phase of the exploration programme to determine whether it is underlain by Puchuldiza-style mineralisation.

Corporate

Conditions in the mining sector of the financial markets during the past twelve months have remained largely unsupportive and so further equity-raising has, again, not been possible.

As reported in previous Annual Reports, Phipps & Company Limited ("Phipps & Co") has subscribed for 5% Convertible Unsecured Loan Stock 2025 ("the Stock") amounting to £460,000 in total (2022 - £425,000).

As of 30 June 2023 the maturity date was extended to 31 March 2025 and the Stock has been redesignated as 5% Convertible Unsecured Loan Stock 2025. Further details are set out in the Directors' Report on page 9.

No other significant fund-raising has taken place either during the year or since the year-end.

Costs continue to be kept to an absolute minimum with all efforts being directed towards maintaining the Group's Chilean assets in good standing pending increased investor interest in the financing of early- stage exploration projects.

In addition to any direct project-specific risks and uncertainties which could, potentially, arise in any of the active prospects discussed above, the Group also faces a number of generic risks which may often be beyond its direct control. Wherever possible, appropriate mechanisms are deployed to eliminate, minimise or mitigate them. These include the following categories:

• susceptibility to political and socio-economic risks
• exploration, development and financing risks
• operational and environmental risks
• risks associated with fluctuations in mineral prices

• joint-ventureand co-investor risks
• dependence on key personnel and infrastructure risks, including old age, infirmity, data security, and
• the potential risks associated with diversification.

P S Bridges

Director

14 November 2023

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Directors' Report

The Directors present their report together with the audited Group financial statements for the year ended 30 June 2023.

Principal activity

The Company is the parent undertaking of a group which is involved in the exploration for and the development of gold, copper and other metals and minerals in Chile, either alone or in joint venture. Details of activities, developments and risks are provided in the review of operations.

Financial results

Details of the results are set out in the Group Profit and Loss Account on page 14. The Directors do not recommend the payment of a dividend.

Share capital

No shares issued during the year.

Convertible Loan Stock

During the year the Company made one further issue of 5% Convertible Unsecured Loan Stock 2024.

As of 30 June 2023 the maturity date was extended to 31 March 2025 and the Stock has been redesignated as 5% Convertible Unsecured Loan Stock 2025.

As at 30 June 2023 interest amounting to £473,574 (represented by a further 315,716 ordinary shares of £1 each at an exercise price of £1.50 per share) had accrued. The interests of the Directors are given in note 6 on page 22.

Annual General Meeting

Notice of the Annual General Meeting can be found on page 26.

Mr A J Shaw, who retires by rotation and being eligible, offers himself for re-election.

It is proposed to re-appoint Kendall Wadley LLP as auditors to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to set their remuneration.

Resolutions 4 and 5: The Company is seeking shareholder approval to renew the authorities of the Directors to issue shares and to dis-applypre-emption rights.

Substantial shareholdings

At 14 November 2023 the Directors were aware of the following substantial interests, apart from their own

beneficial holdings as set out on page 10, in the share capital of the Company:
	Ordinary Shares of £1
Shareholder	Fully paid	%
Phipps & Company Limited (Phipps & Co)*	75,679	10.12%
Soc. de Inversiones Iugetanuma SA	61,636	8.24%
John Drinkwater	51,214	6.85%
Joseph Jordan	45,000	6.02%
Peter Finnegan	25,600	3.42%
Lee Morton	24,363	3.26%
Howard Appleby	23,363	3.12%

• Phipps & Co has subscribed for £460,000 (2022 - £425,000) in 5% Redeemable Convertible Loan Stock 2025 which, including accrued interest to maturity date, may result in the issue of 470,197 (2022 - 423,028) ordinary shares of £1 each at a price of £1.50 per share. Mr C L Phipps has a non-controlling interest in Phipps & Co.

Electronic communications

The majority of shareholders have opted for shareholder communications to be made electronically, (typically, via email or posted on the Company's website). Certain shareholders have opted out as they wish to receive communications in hard copy format.

Going concern

The Directors consider that they have every reasonable expectation that the Group will have adequate resources to continue its operations for the foreseeable future.

As already identified within the review of operations the Board of Directors' are of the opinion that the full realisation of the potential value of the land licences held in Chile and the investment made in the subsidiary operations is dependent upon the success of increased investor interest and successful mineral exploration.

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