TIDMKEFI
RNS Number : 8295S
KEFI Minerals plc
22 March 2016
22 March 2016
KEFI Minerals plc
("KEFI" or the "Company")
CONDITIONAL PLACING TO RAISE GBP1.75 MILLION
Highlights
-- Placing raising GBP1.75 million (c. US$2.5 million) gross to
progress Tulu Kapi gold project ("Project")
-- Cornerstone institutional and industry shareholders reinforce support for development plan
KEFI Minerals (AIM: KEFI), the gold exploration and development
company with projects in the Kingdom of Saudi Arabia and the
Federal Democratic Republic of Ethiopia, is pleased to announce
that it has conditionally raised approximately GBP1.75 million
(approximately US$2.5 million), before expenses, through the issue
of 499,359,791 new Ordinary Shares of 0.1p each ("Placing Shares")
at a price of 0.35p per share (the "Placing Price") by way of a
placing through Brandon Hill Capital Limited ("Brandon Hill"),
together with a subscription direct with the Company by Ausdrill
International Pty Limited ("Ausdrill").
The Placing serves to provide working capital pending initial
drawdown of project finance, which is expected to be presented to
shareholders for approval in June 2016. It also demonstrates
commitment by cornerstone investors, complementing the strong
specialist finance syndicate being assembled for the development of
the Project.
The aggregate shareholdings of KEFI's cornerstone shareholders
UK investment group, Odey Asset Management and Australia/African
mining contractor Ausdrill, together with the holding of the Board
of Directors, amounts to approximately 40% ownership of KEFI on a
fully-diluted basis. At the project level, it is anticipated that
the Government of Ethiopia will make a significant investment in
the Ethiopian project company and ARTAR, a prominent local
conglomerate, in the Kingdom of Saudi Arabia holds a significant
stake in the Saudi Arabian project company.
Background to the Placing
The Placing proceeds are budgeted to cover further expenditures
pending initial drawdown of project finance and to cater for
activities across the Company, principally development preparations
for Tulu Kapi in Ethiopia and notably the project financing, but
also refinement of the mining licence application for Jibal Qutman
in Saudi Arabia, exploration activities and corporate costs.
The Placing
The Company has conditionally raised approximately GBP1.75
million (approximately US$2.5 million), before expenses, through
the issue of 499,359,791 new Ordinary Shares at a price of 0.35p
per share by way of placing of 400,153,442 Placing Shares through
Brandon Hill and the subscription of 99,206,349 Placing Shares by
Ausdrill.
The Placing is conditional, amongst other things, on the
admission of the Placing Shares to trading on the AIM Market of the
London Stock Exchange ("Admission") by 8.00 a.m. on 29 March 2016
(or such later time and/or date as Brandon Hill and the Company may
agree, being not later than 8.00 a.m. on 5 April 2016).
Application has been made to the London Stock Exchange and it is
expected that Admission will become effective and that dealings
will commence in the Placing Shares on 29 March 2016.
The Company has given certain customary warranties and
indemnities to Brandon Hill and Ausdrill respectively in relation
to the Placing and other matters relating to the Company and its
affairs. The Company has also granted to Brandon Hill warrants to
subscribe for 24,967,989 Ordinary Shares at the Placing Price
(being equal to 5 per cent of the Placing Shares). Such warrants
will be exercisable for a period of three years following
Admission.
The Placing Shares will be allotted and credited as fully paid
and will rank pari passu in all respects with the existing Ordinary
Shares, including the right to receive all dividends and other
distributions declared, made or paid on or after the date on which
they are issued.
Significant Shareholder Participation
Major shareholder, Odey Asset Management LLP ("Odey"), has
subscribed for 129,833,546 Placing Shares in the Placing. Following
the Placing, Odey will hold 812,987,907 Ordinary Shares,
representing 26 per cent of the Company's enlarged issued share
capital. In addition, significant shareholder, Ausdrill has
subscribed for 99,206,349 Placing Shares in the Placing. Following
Admission, Ausdrill will hold 228,279,349 Ordinary Shares
representing 7.3 per cent of the Company's enlarged issued share
capital.
As Odey currently holds over 10 per cent of the Company's issued
Ordinary Share capital, its participation in the Placing is deemed
to be a related party transaction under the AIM Rules for
Companies. The directors of KEFI consider, having consulted with
its nominated adviser SP Angel Corporate Finance LLP, that the
terms of Odey's participation in the Placing are fair and
reasonable insofar as KEFI's shareholders are concerned.
Total Voting Rights
Following Admission, the total issued share capital of the
Company will consist of 3,120,998,693 Ordinary Shares each with
voting rights. The Company does not hold any Ordinary Shares in
treasury. Therefore, the total number of voting rights in the
Company is 3,120,998,693 and this figure may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company under the FCA's Disclosure and Transparency Rules.
Harry Anagnostaras-Adams, Executive Chairman of KEFI,
commented:
"We are delighted to have such firm support from our cornerstone
investors. The fundraising today puts the Company on a firm
financial footing ahead of the initial draw down of the project
finance.
"The current global gold price has already provided a
significant boost to the project's NPV, which at the price of
US$1,250/oz and using a discount rate of 8% stands at US$155
million post tax. Furthermore, on current estimates, for every
US$100/oz increase in the gold price, there is an increase of US$45
million to the project valuation - highlighting the significant
upside still available to shareholders given a current market
capitalisation of approximately US$16 million post this
financing.
"Accordingly, the Board remains very positive on the outlook for
the Company as we advance towards becoming an operating company by
the end of 2017."
ENQUIRIES
KEFI Minerals plc
Harry Anagnostaras-Adams (Executive
Chairman) +357 99457843
SP Angel Corporate Finance
LLP (Nominated Adviser)
Ewan Leggat, Jeff Keating +44 20 3470 0470
Brandon Hill Capital Ltd (Joint
Broker)
Oliver Stansfield, Alex Walker,
Jonathan Evans +44 20 7936 5200
Beaufort Securities Ltd (Joint
Broker)
Elliot Hance +44 20 7382 8300
Luther Pendragon Ltd (Financial
PR)
Harry Chathli, Claire Norbury,
Oliver Hibberd +44 20 7618 9100
Further information can be viewed on KEFI's website at
www.kefi-minerals.com
NOTES TO EDITOR
KEFI Minerals plc
KEFI is the operator of two advanced gold development projects
within the highly prospective Arabian-Nubian Shield, with an
attributable 1.93Moz (100% of Tulu Kapi's 1.72Moz and 40% of Jibal
Qutman's 0.73Moz) gold Mineral Resources (JORC 2012) plus
significant resource growth potential. KEFI targets that production
at these projects generates cash flows for further exploration and
expansion as warranted, recoupment of development costs and, when
appropriate, dividends to shareholders.
Milestones planned for H1-2016:
-- Formal appointment of development funding syndicate for Tulu Kapi gold project
-- Shareholder approval of finance plan for Tulu Kapi gold project
-- Mining Licence Application for Jibal Qutman gold project in Saudi Arabia
KEFI Minerals in Ethiopia
The Tulu Kapi gold project in Western Ethiopia is being rapidly
progressed towards development, with the Mining Licence granted in
April 2015.
KEFI's Definitive Feasibility Study was then completed and the
Company is now refining contractual terms for project construction
and operation. Latest estimates for annual gold production are c.
100,000 oz pa for a 10-year period and All-in Sustaining Costs
(including operating, sustaining capital and closure) of
approximately US$724/oz to US$752/oz respectively at a gold price
range of US$1,000/oz to US$1,400/oz. Tulu Kapi's Ore Reserve
estimate totals 15.4Mt at 2.12g/t gold, containing 1.05Moz.
All aspects of the Tulu Kapi (open pit) gold project have been
reported in compliance with the JORC Code (2012) and subjected to
reviews by appropriate independent experts. These plans now also
reflect the agreed construction and operating terms with project
contractors and have been independently reviewed by experts
appointed for the project finance syndicate.
A Preliminary Economic Assessment has been published which
indicates the economic attractiveness of developing the underground
deposit adjacent to the Tulu Kapi open pit, after the start-up of
the open pit and after positive cash flows have begun to repay
project debts.
At a gold price of US$1,250/oz, the projected cash flows
indicate a cash build-up in the first three production years of
US$135 million, which would be sufficient to repay all project
debts, fund the development of the underground mine and pay
dividends to shareholders.
KEFI Minerals in the Kingdom of Saudi Arabia
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