TIDMKEFI
RNS Number : 8217H
KEFI Minerals plc
05 August 2019
5 August 2019
KEFI Minerals plc
("KEFI" or the "Company")
Convertible Loan Facility and Operational Update
KEFI Minerals (AIM: KEFI), the gold exploration and development
company with projects in the Federal Democratic Republic of
Ethiopia and the Kingdom of Saudi Arabia, is pleased to announce a
restructuring of its working capital convertible loan facility (the
"Loan Facility"), as announced on 28 November 2018, together with
entering into a new working capital loan facility (the "New Loan
Facility") in order to provide greater flexibility to the Company
by removing the existing security charges over assets and extending
the loan maturity dates.
The primary changes to the Loan Facility and details of the New
Loan Facility are as follows:
-- GBP900,000 has been drawn to date from the existing GBP4
million Loan Facility, of which GBP450,000 has been repaid, leaving
GBP3.1 million available to be drawn down. This remaining GBP3.1
million has been replaced in part by a new GBP1.5 million facility,
the New Loan Facility;
-- The Loan Facility has been provided by a long-standing
shareholder who holds under 3% of the Company;
-- The New Loan Facility can be drawn at the Company's
discretion at a rate of GBP500,000 per month in GBP250,000 tranches
and, if drawn, it is repayable in cash within two years;
-- Once any amount drawn under the New Loan Facility is repaid,
the Company will be able to draw from the remaining GBP1.6 million
of the Loan Facility, if required; and
-- The Loan Facility no longer has any security attached and is
now provided on an unsecured basis. The New Loan Facility has been
provided on an unsecured basis. This co-ordinated action has
released all of KEFI's security encumbrances, other than minor cash
security deposits, to allow maximum flexibility for structuring the
financing of the Company's Tulu Kapi Gold Project (the "Project"),
which potentially could include a larger initial Project equity
investment by Ethiopian private sector investor, ANS Mining Share
Company, the details of which will be concluded in due course.
-- The cost of these changes in security and related
arrangements include GBP207,500 to be paid by the issuance of
8,500,000 new KEFI ordinary shares of 0.1p each ("Ordinary Shares")
at 2 pence per share together with a cash consideration of
GBP37,500. Application has been made to the London Stock Exchange
for the 8,500,000 New Ordinary Shares to be admitted to trading on
AIM, with admission ("Admission") expected to occur on 8 August
2019.
Operational Update
-- Ethiopia - Tulu Kapi Gold Project development:
Significant progress on the ground continues at the Company's
Tulu Kapi Gold Project in Ethiopia.
The Government administration has been expanded at local level
to support Tulu Kapi and high-level committees have been formed to
expedite the development of the sector, with the Project as
first-mover. Government work programmes continue in the Tulu Kapi
district for the road and power connections.
Recent Project site developments include 300 currently
unemployed local people being recruited to start preparing new
lands and home sites for the community to be resettled.
Additionally, the Company's independent experts have been mobilised
to update their assessments of security and community readiness as
outlined in the Company's announcement on 28 June 2019.
-- Saudi Arabia - Drilling to Start at Hawiah Licence of large copper-gold target:
As announced on 21 June 2019 exploration is underway at the
Company's Hawiah Exploration Licence in Saudi Arabia. As
foreshadowed, trenching and geophysics programmes are being wrapped
up to prepare scout drilling. An initial 2,500 metre diamond
drilling programme is planned to commence in September 2019.
Commenting KEFI Chairman, Mr Harry Anagnostaras-Adams, said, "I
am pleased that we have restructured our working capital facilities
in order to provide the Company with the maximum flexibility as we
move towards full development of our flagship Tulu Kapi Gold
Project. I would like to thank the providers and other stakeholders
for their complementary support and I look forward to providing
regular updates as we make the anticipated significant progress
with the Project in the coming months.
"It is a fortuitous coincidence that Tulu Kapi development looks
to kick off at the same time as exploration comes to life in Saudi
Arabia on a large copper-gold target."
Further details on the New Loan Facility
The aggregate principal amount of the New Loan Facility is
GBP1.5 million. There is no coupon attaching to the New Loan
Facility and its term is 24 months after which any drawn amounts
are repayable in cash in an amount of 105% of the principal amount
plus a fee of 10% of the principal amount being repaid.
A first tranche of GBP250,000 is payable by the provider upon
signing, and any subsequent tranches drawn down by the Company will
be of GBP250,000 and paid two to three weeks after the previous
tranche, subject to mutual consent, with the provider's consent not
to be unreasonably withheld.
The New Loan Facility is convertible into new KEFI Ordinary
Shares at the election of the provider. The conversion price is
calculated at the lower of 90% of the lowest volume weighted
average share price of a KEFI Ordinary Share as shown on the London
Stock Exchange for the three trading days immediately preceding the
notice of conversion from the provider, or 2p per KEFI Ordinary
Share. The New Loan Facility can otherwise be redeemed at any time
by the Company in cash in an amount of 105% of the principal amount
plus a fee of 10% of the principal amount being repaid.
In addition to the aforementioned arrangement fee of GBP37,500
in cash, the provider is being issued with warrants to subscribe
for 13,000,000 new Ordinary Shares in the Company at an exercise
price of 2.5p per share for a period of 3 years.
Total Voting Rights
Following Admission of the New Ordinary Shares, the total issued
share capital of the Company will consist of 689,267,504 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 will be 689,267,504 and this figure may be
used by Shareholders 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.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries
KEFI Minerals plc
Harry Anagnostaras-Adams (Managing Director) +357 99457843
John Leach (Finance Director) +357 99208130
SP Angel Corporate Finance LLP (Nominated
Adviser and Joint Broker) +44 (0) 20 3470 0470
Jeff Keating, Soltan Tagiev
Brandon Hill Capital Ltd (Joint Broker) +44 (0) 20 7936 5200
Oliver Stansfield, Jonathan Evans
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe, Heather Armstrong
Notes to Editor
KEFI Minerals plc
KEFI is focused primarily on the advanced Tulu Kapi Gold Project
development project in Ethiopia, along with its pipeline of other
projects within the highly prospective Arabian-Nubian Shield. KEFI
targets that production at Tulu Kapi generates cash flows for
capital repayments, further exploration and expansion as warranted
and, when appropriate, dividends to shareholders.
KEFI Minerals in Ethiopia
Ethiopia is currently undergoing a remarkable transformation
both politically and economically.
The Tulu Kapi gold project in western Ethiopia is being
progressed towards development, following a grant of a Mining
Licence in April 2015.
The Company has now refined contractual terms for project
construction and operation. Estimates include open pit gold
production of c. 140,000oz pa for a seven-year period. All-in
Sustaining Costs (including operating, sustaining capital and
closure but not including leasing and other financing charges)
remain c. US$800/oz. Tulu Kapi's Ore Reserve estimate totals 15.4Mt
at 2.1g/t gold, containing 1.1Moz.
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.
A Preliminary Economic Assessment has been published that
indicates the economic attractiveness of mining 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. An area of over 1,000 square kilometres adjacent to
Tulu Kapi has been reserved for exploration by KEFI upon
commencement of development, with a view to adding satellite
deposits to development and production plans.
KEFI Minerals in the Kingdom of Saudi Arabia
In 2009, KEFI formed G&M in Saudi Arabia with local Saudi
partner, ARTAR, to explore for gold and associated metals in the
Arabian-Nubian Shield. KEFI has a 40% interest in G&M and is
the operating partner.
ARTAR, on behalf of G&M, holds over 20 EL applications. ELs
are renewable for up to three years and bestow the exclusive right
to explore and to obtain a 30-year exploitation (mining) lease
within the area.
The Kingdom of Saudi Arabia has announced policies to encourage
minerals exploration and development, and KEFI Minerals supports
this priority by serving as the technical partner within G&M.
ARTAR also serves this government policy as the major partner in
G&M, which is one of the early movers in the modern resurgence
of the Kingdom's minerals sector.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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