25th October 2018

Britannia’s Gold Limited: Progress Statement

Shareholders will recall that we delayed our intended salvage programme to take advantage of lower salvage vessel charter rates that were expected to prevail in Quarter 4 this year. There has been greater delay than planned and I will seek to explain the latter below whilst giving details of our revised plans.

We were pleased in early October to finally secure a remarkably advantageous charter contract on a suitable vessel. BGL was guaranteed a 38 operational day charter with the vessel owner accepting all weather and systems failure risk; for information, an operational day is defined as one where BGL would have been able to operate fully for no less than 20 hours in any 24-hour period.

With this vessel, BGL intended to commence the salvage programme in mid October but when delivered, the salvage tooling on board was not fit for purpose, requiring a great deal of maintenance and modification. Working with James Fisher and the owner’s crew, BGL personnel were able (at owner’s expense) to address all shortcomings so the company could take advantage of this extremely economic charter. However, just prior to setting sail the vessel failed its annual statutory Dynamic Positioning tests, a completely unexpected systems failure and one where any remedy could have taken a very long time to identify. As a result, James Fisher, BGL’s agents for the charter, sensibly cancelled on grounds of safety.

Faced with the need to secure another vessel at comparable cost and with little time to do so, James Fisher has utilised all its considerable resources and we have been successful in agreeing a charter for arguably one of the best equipped ships on the market. This vessel is currently moving from its home base to embarkation port where it will be mobilised in less than 48 hours and we expect to be on the target site on Monday 29th October into a clearing weather window. BGL has secured a 40-day charter and although it is now bearing the weather risk, forecasts are favourable until early December.

BGL’s salvage operational plan revolves around 10-day cycles and we will report to shareholders on the same basis.