NTVO Nativo Resources Plc

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

30 September 2024

Nativo Resources plc

(Formerly Echo Energy plc)

("Nativo" or the "Company")

Half Year Report for the Six Months Ended 30 June 2024

Nativo Resources plc (LON:NTVO), which has interests in precious metals mining and production in Peru, presents its half year report for the six month period ended 30 June 2024.

Year to date highlights

·      Announced on 1 July 2024 the formation of a 50:50 joint venture in Peru with the founding partners of Boku Resources SAC ("Boku") to participate in gold and silver mining and the cleaning of known tailings deposits containing gold and silver in Peru

o  Boku is initially in the process of establishing formalised artisanal and small mining operations on its 100% held Tesoro Gold Mine and in the medium-term aims to build a material resource base of gold and silver rich tailings for processing

o  Boku is advancing Artisanal Mining on the "Bonanaza" vein. Significant mineralised vein material generated during preparation and appraisal of the stope will form a bulk sample that Boku intends to sell to a commercial processor - this will provide an indication of grade in the stope to be developed. Assuming favourable grades, Boku intends to commence mining the stope in December 2024.  Production will be scaled with development of  additional shafts and new vein exploitation.

·      Announced on 15 July 2024 that Boku had also acquired the Ana Lucia polymetallic concession in the Ancash region of central Peru

·      Announced on 31 July 2024 a placing raising gross proceeds of £418,245

o  In conjunction, the Company announced it had terminated the convertible loan note deed announced on 6 June 2024

·      Andrew Donovan appointed as Non-Executive Director on 26 September 2024

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About Nativo Resources plc (formerly Echo Energy plc)

Following the partial divestment of its assets in Argentina, Nativo entered into a 50:50 joint venture in Peru in July 2024 with an experienced local partner for precious metals (gold/silver) mining and the cleaning of known tailings deposits containing Measured and Indicated resources of gold and silver. Through the JV, known as Boku Resources, Nativo has secured an opportunity to scale operations in Peru producing gold and silver through primary mining and tailings cleaning, owning 50% of the production and resources. Initially, Boku is establishing formalised artisanal and small mining operations on its 100% held Tesoro Gold concession, southern Peru, targeting early cash flow generation in Q4 2024.

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Chairman and Chief Executive Officer's Statement

In June 2023, the Company completed the divestment of its majority share in the Santa Cruz Sur gas portfolio in Argentina. The Company transferred to the buyers the significant in-country creditors whilst greatly reducing the Company's cost base but still retained a 5% working interest in the portfolio and an equity position in the operator InterOil Exploration and Production ASA. Following the divestment, the Board refocussed, seeking opportunities to acquire new assets. This review of the business strategy has culminated in Nativo repositioning itself as a small-scale miner of precious metals in Peru via the formation in July 2024 of a 50:50 joint venture in Peru with experienced local partners, Boku Resources ("Boku"). Peru is one of the world's largest gold producers. An estimated 3.2Moz of gold was produced in 2023 of which artisanal small miners ("ASM") are estimated to have produced 640koz. Boku has a three-fold strategy:

·      Primary mining of gold and silver, initially from the 100%-owned Tesoro Gold Mine

·      Cleaning of known tailings deposits containing gold and silver with up to seven projects having been identified, and the potential to rapidly build a resource inventory

·      Develop gold processing capability at scale

To reflect this transformation, the Company has rebranded as Nativo Resources plc ("Nativo"), a move that was approved at the GM on 28 August 2024.

The Company secured funding post period, in July 2024, to recommence production from the high-grade, Tesoro Gold Mine in the Arequipa region of Peru. Cash flow generated from Tesoro will be used to boost production, establish processing facilities and acquire and develop other similar projects in the region, for example the Ana Lucia polymetallic concession in the Ancash region of central Peru which the Company acquired in July 2024. Initially, Boku will sell vein material to a tolling plant; however, Boku plans in due course to install its own commercial processing facility to process vein material supplied by ASMs in the region on a fixed margin basis as well as its own production, thereby capturing greater value.

Using historical mine records, Nativo has also identified up to seven tailings deposits in central Peru that it believes host significant gold and silver resources. The vintage of these deposits means they do not comply with modern Peruvian mining legislation and present liabilities for their owners; however, with improved technologies and high gold prices, Nativo is investigating the possibility of reprocessing the tailings to recover the precious metals. Through this process, the tailings would be redeposited in accordance with modern environmental standards. The Board considers this approach to be a relatively low risk and low-cost form of exploration from which the Company could potentially build a significant resource inventory that can be brought swiftly into production and at a cost which makes it profitable, providing steady cashflow. Cleaning legacy tailings using modern techniques has been demonstrated to improve recovery rates to over 90% versus the historical 45-50%.

In March 2024, WH Ireland Limited (which subsequently had its Capital Markets Division acquired by Zeus Capital Limited in July 2024) became Nominated Adviser and Corporate Broker to the Company. Post period, in July 2024, the Company appointed Peterhouse Capital Limited as a joint Corporate Broker alongside Zeus.

The Board is excited by the potential to deliver growth for shareholders via the repositioning of the business as a small-scale miner in Peru. The prospect of near-term cash flow generation, initially from Tesoro, should, in due course, create opportunities to begin to address legacy balance sheet issues including loans and borrowings. We would like to thank shareholders for their continued support. Finally, the directors draw attention to the Accounting Policy notes regarding Going Concern, Estimates and the previous audit on pages nine and ten. As noted previously, Nativo's cash position remains tight and cash balances are being managed carefully. The Company is in discussions regarding seeking further funds which will need to be raised in the near term.