TIDMKEFI
RNS Number : 4481E
Kefi Gold and Copper PLC
30 June 2023
30 June 2023
KEFI Gold and Copper plc
("KEFI" or the "Company")
AGM Statement
KEFI (AIM: KEFI), the gold and copper exploration and
development company with projects in the Federal Democratic
Republic of Ethiopia and the Kingdom of Saudi Arabia, is hosting
its 2023 Annual General Meeting ("AGM") today at 9.00 a.m. BST in
Cyprus. At the AGM, Harry Anagnostaras-Adams, Executive Chairman of
the Company, will make the following statement:
"A profound change has occurred to the Company over the past
eighteen months, due to the improvement in the local working
environment in both Ethiopia (security) and Saudi Arabia
(regulatory). Today we bring shareholders up to date and strive to
convey a picture of where we are heading in the next year and
beyond.
We will start by focusing on Ethiopia and the Tulu Kapi Gold
Project where:
-- In June 2022, we lifted the suspension on the Project and
signed an Initial Umbrella Agreement with the principal project
financiers to launch
-- In April 2023 we signed the Final Umbrella Agreement, which
formally enjoined the principal project contractors to the launch
plan. We also proceeded to satisfy all three major conditions
precedent for the project financing in June 2023, which were
reliant on policy initiatives from the Ethiopian authorities
-- We are now working concurrently through finance closing and
launch procedures by having activated the following:
o Formal confirmations of the details of regulatory changes made
for us,
o Submissions for final board and committee approval by all
within the syndicate
-- We can then proceed to:
o Launch final preparations of the community for Project
launch
o Sign the Definitive Documentation between the respective
syndicate counterparties, which has already been drafted
o Place insurances and complete other administrative tasks
o Draw down first capital, starting with project equity and then
debt months later
We thus follow a clear roadmap and we will report the material
milestones along the way. We have conditionally assembled 95% of
the project funding requirement of US$390 million, with the
remainder also allocated with a specific set of parties and
expected to simultaneously close their binding commitments
alongside the others, for construction start in the fourth quarter
of 2023.
We can now say that we successfully protected the project during
the recent years of turmoil. Our actions on the ground, in the
boardrooms and with the Government preserved and strengthened the
project finance syndicate and allowed us to move forward now with
confidence.
The end-result will be the launch of Ethiopia's first
industrial-scale mining project, designed to be in compliance with
World Bank IFC Performance Standards, creating direct and indirect
employment for 5-10,000 people and having an estimated NPV of
US$243 million for KEFI's projected 74% beneficial interest. This
assumes a gold price of US$1,989/oz, being the spot as at 30 April
2023 and discounting at 8% of net estimated after tax cash flows
for equity. This NPV is expected to see further improvements as we
expand the resources above the base case development scenario.
Tulu Kapi is one of KEFI's three advanced projects, the other
two being Jibal Qutman Gold ("Jibal Qutman") and Hawiah Copper-Gold
("Hawiah") in Saudi Arabia, conducted via the 27%-owned Gold and
Minerals Limited ("GMCO") operating company. Both projects are
GMCO's own discoveries and are enjoying very positive regulatory
support as the preferred development plan is determined.
We have just announced a Pre-Feasibility Study and Associated
Studies at Hawiah, which has offered an encouraging initial project
NPV of US$301 million. These results are preliminary and warrant
refinement on all fronts, including resource upgrade, metallurgical
testing, mine planning and process flow-sheet finalization.
Significant upside remains as we expand the resource, which already
ranks in the top 15% of VMS deposits globally. At Jibal Qutman we
will shortly be reporting results on our recent 13,000m drilling
programme, which has been designed to increase both resource and
resource classification. This will provide significant input into
optimizing the development concept so that we may finalise the
Definitive Feasibility Study.
After many years of frustration, we believe we are now well
placed to charge ahead. I am pleased to report that your Company
has not only maintained its excellent record of safety and of
tenure protection, but we have also drawn together first-tier
partnerships, banking relationships and contractors into
project-finance alliances in each of Ethiopia and Saudi Arabia.
Our operating alliances are with the following strong
organisations:
-- Partners:
o in Ethiopia:
-- Federal Government of the Democratic Republic of Ethiopia
-- Oromia Regional Government
o in Saudi Arabia: Abdul Rahman Saad Al Rashid and Sons Ltd
("ARTAR")
-- Principal contractor:
o for process plants in both Ethiopia and Saudi Arabia:
Lycopodium Ltd ("Lycopodium")
o for mining in Ethiopia: PW Mining
-- Senior project finance lenders:
o For Tulu Kapi:
-- Eastern and Southern African Trade and Development Bank Ltd
("TDB")
-- African Finance Corporation Limited ("AFC")
o For Saudi Arabia:
-- Saudi Industrial Development Fund
KEFI plans minimal reliance on the stock markets for development
funding.
Conclusion
Our host countries have turned markedly better for the minerals
sector and for KEFI. We are preparing to construct Tulu Kapi,
advancing development studies on Jibal Qutman and Hawiah and
conducting reconnaissance over exploration targets in Ethiopia and
Saudi Arabia.
A s stated last year, a long with my fellow Directors, I am very
sensitive to the need to generate returns on investment. It is
frustrating and disappointing that the pandemic and the geopolitics
of both Ethiopia and Saudi Arabia delayed our progress in recent
years. However, as foreshadowed last year, our operating
environment has indeed turned for the better in both countries and
we now progress on all fronts. The NPV to KEFI of the three
advanced projects is estimated at GBP318 million (calculated as set
out above for Tulu Kapi) which is c. 10 times the Company's current
share market capitalisation. This is admittedly just one basis for
estimate of intrinsic valuation as the projects are firmed up and
implemented. However, it is a meaningful indicator that there is
plenty of scope for share price rerating as the projects progress
and de-risk.
The Directors are deeply appreciative of all personnel's
tenacity, steadfast dedication and of the support the Company
receives from shareholders and other stakeholders.
Lastly, I would like to welcome to the Board Dr Alistair Clark,
a pre-eminent authority on environmental, social, and corporate
governance matters. This is an important moment for KEFI to expand
its capacities in that respect, with a large community programme
being launched in Ethiopia."
Enquiries
KEFI Gold and Copper plc
Harry Anagnostaras-Adams (Managing Director) +357 99457843
John Leach (Finance Director) +357 99208130
SP Angel Corporate Finance LLP (Nominated
Adviser) +44 (0) 20 3470 0470
Jeff Keating, Adam Cowl
Tavira Securities Limited (Lead Broker) +44 (0) 20 7100 5100
Oliver Stansfield, Jonathan Evans
WH Ireland Limited (Joint Broker) +44 (0) 20 7220 1666
Katy Mitchell, Andrew de Andrade
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe, Florence Chandler
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END
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