Invictus Energy faces financial crisis amid fears ...

Invictus Energy faces financial crisis amid fears about company's survival

Nyashadzashe Ndoro- Chief Reporter

Invictus Energy Ltd, an Australian-based oil and gas exploration company focused on Zimbabwe's Cabora Bassa Basin, has reported a half-year net loss of US$3,318,765 for the period ending December 31, 2024, and is now seeking additional funding through debt or equity issues to support its growth strategy and navigate the uncertainty surrounding its "going concern" status.

This figure, however, represents a slight improvement compared to the US$4,149,060 loss recorded in the same period last year.

The report highlights that the company's primary focus remains on the exploration and appraisal of the Cabora Bassa Project. Operational activities during the period included defining high-potential prospects, narrowing focus to the Musuma prospect for future drilling, and securing an extension of the exploration license for Special Grant 4571, which contains the Mukuyu prospect.

The Victoria Falls Stock Exchange listed company also reported significant cash outflows from operating and investing activities, totaling US$7,572,715. To bolster its financial position, the company completed a strategic capital raise in Zimbabwe, issuing 185,564,536 ordinary shares and raising US$18,760,200.

A key point of concern highlighted in the report is the company's "going concern" status. The directors acknowledged a "material uncertainty" regarding the company's ability to continue as a going concern due to the ongoing operational activities and related cash expenditures.

The directors, however, expressed confidence in the company's ability to secure further funding through debt or equity issues, citing the attractiveness of their exploration and development assets.

"The Directors have prepared an estimated cash flow forecast for the period to 31 March 2026 to determine if the Company may require additional funding during this period. The Group intends to continue with its operating activities at the Cabora Bassa Project and will incur related cash expenditure. This results in a material. uncertainty that may cast a significant doubt about the Company's ability to continue as a going concern, and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business," the company stated.

"The Directors have made an assessment on whether it is reasonable to assume that the Company will be able to continue its normal operations based on the following factors and judgements:

"The Directors are of the opinion that the Group's exploration and development assets will attract further capital investment when required; and

"The Directors expect the Group to be successful in securing additional funding through debt or equity issues, when and if required.

"Should the Company not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The half-year financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern."

The company also disclosed related party transactions, including payments to entities related to non-executive directors for services provided. Additionally, 35,000,000 unlisted options were issued to directors as share-based payments.

The independent auditor's review report, conducted by BDO Audit Pty Ltd, stated that they were not aware of any matters that would suggest the half-year financial report did not comply with relevant regulations. The auditors, however, drew attention to the material uncertainty related to the company's growing concern status.