TIDMKEFI
RNS Number : 4024L
Kefi Gold and Copper PLC
05 September 2023
5 September 2023
KEFI Gold and Copper plc
("KEFI" or the "Company")
Ethiopia Operational Update
Tulu Kapi Gold Project Nears Construction Startup
KEFI Gold and Copper Plc (AIM: KEFI), the gold and copper
exploration and development company, has focused on the
Arabian-Nubian Shield since 2008, assembling a pipeline of projects
in the Federal Democratic Republic of Ethiopia and in the Kingdom
of Saudi Arabia. We are pleased to provide this operational update
covering developments in Ethiopia since the release of the
Company's Quarterly Operational Update on 9 August 2023.
The period between now and the end of 2023 is particularly
important for KEFI and regular updates will be announced. This
update encompasses the activities of KEFI, as well as wholly owned
KEFI Minerals (Ethiopia) Ltd ("KME") and majority-owned Tulu Kapi
Gold Mines Share Company ("TKGM") also in Ethiopia . A further
update on the Company's activities in Saudi Arabia is expected to
be announced shortly.
Ethiopia
Tulu Kapi Gold Project
KEFI is focused primarily on developing the advanced Tulu Kapi
Gold Project in Ethiopia. Tulu Kapi has a Probable Ore Reserve of
1.05 million ounces and Mineral Resources totalling 1.7 million
ounces. Average planned gold production at Tulu Kapi is forecast to
be over 140,000 ounces/year at an All-in Sustaining Cost of
approximately US$950/ounce. Almost all the pre-requisites to begin
construction are now in place. We remain focused on final credit
and board approvals for the project financing, ahead of project
launch in Q4 2023, with first production expected by the end of
2025.
Government Facing Agreements
The necessary Ethiopian laws and regulations continue to be
revised in conjunction with the finalisation of the syndicate's
definitive agreements amongst itself and with Government agencies.
This week's activities include:
-- Syndicate lenders meeting with the Company in Addis Ababa
finalising details with the National Bank of Ethiopia ("NBE", being
the Ethiopian central bank) as regards capital controls. A recent
development was the publication of a new NBE Directive on 14 August
2023 in respect of foreign exchange controls, which is now being
combined with TKGM specific project details. The changes within the
Directive are positive for the country and KEFI is incorporating
for its own situation. This is one of the final action points
remaining to completion of the Tulu Kapi financing package. The
meeting will address the specific details and documentation
requirements flowing from these changes with respect to the Tulu
Kapi development;
-- Other project finance syndicate members are meeting with the
Company and the Ethiopian Ministry of Mines ("EMM") in Perth
Australia, addressing the few remaining loose-ends with EMM-facing
agreements. These parties have also been taking part in instructive
mine and processing plant inspections while in Australia. A recent
development was the publication by the EMM of a draft new Mining
Proclamation, which is now being compared with TKGM specific
project details; and
-- Field teams meeting local government in zonal government
centre Ghimbi and municipal government centre Genji, planning the
launch of community programmes.
Technical and Organisational Preparations
-- Independent technical expert to the lenders, Behre Dolbear
International ("BDI") has reported and confirmed TKGM's readiness
for development launch;
-- Elevation of security protection in the district around the
project site and our offices with regular independent monitoring by
security expert Constellis, whose recent report concluded that
TKGM's approach to securing the mining licence area, its other
sites and the routes in and out are sensible, pragmatic and in-line
with security best management practice; and
-- Grade-control drill-planning for 2024 open-pit operational
readiness programmes and resource-extensional drilling-planning for
the 2024-2025 underground mine feasibility study.
Regional Project Financing
-- Historical pre-development expenditure of c.US$90 million was
funded via equity and sourced from stock markets in the UK,
Australia and Canada;
-- Over the past month, details of the US$390 million
development funding have been further refined within the finance
syndicate, all members of which are active in the region and plan
to inject funds at the subsidiary level, as follows:
o Mining services contractor provides US$70 million mining fleet
against TKGM mining services agreement;
o Project finance US$320 million:
-- debt-risk capital (senior and subordinated) represents
approximately 60% (US$190 million of US$320 million) to be injected
at the TKGM level by our co-lenders;
-- equity-risk capital of US$130M to be injected as:
-- US$40 million share capital to local partners in subsidiary companies;
-- US$90 million from major international corporations in the form of Equity Risk Notes ("ERN"):
o Some of the ERN's are non-convertible and repayable in cash
only out of future revenue; and
o Some of the ERN's are potentially convertible into KEFI shares
as from the end of the third year after funds drawdown (at the
higher of the price at funds drawdown and the then market prices
based on VWAP) unless, at KEFI's election, it is repaid in cash
(which is considered feasible given the estimated healthy surplus
cash generation from the Project at or near current long-term
consensus gold price of US$1,850/ounce).
Group Development Sequencing
The critical first step is the Tulu Kapi project finance
closing. With the existing pipeline of advanced projects, the
targeted project sequencing is as follows:
-- Ethiopia:
o 2023: Launch development of Tulu Kapi open-pit in Ethiopia for
first production end-2025;
o 2024: PFS on the Tulu Kapi underground mine for commencement
of development after open pit production has settled down; and
o 2025: DFS on the Tulu Kapi underground mine.
-- Saudi Arabia:
o 2024: complete DFS, permitting, financing and launch of
development at Jibal Qutman Gold in Saudi Arabia; and
o 2025: complete DFS, permitting, financing and launch of
development at Hawiah Copper-Gold in Saudi Arabia.
-- Regional Exploration:
o We have a large pipeline of additional exploration projects,
with 15 recently granted Exploration Licences in Saudi Arabia and
many applications pending in Ethiopia.
Investor Webinar
The quarterly open-forum webinar will be held at 12.00 noon,
London time, on Friday 8 September 2023, via the Investor Meet
Company platform.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet KEFI Gold and Copper plc via:
https://www.investormeetcompany.com/kefi-gold-and-copper-plc/register-investor
Investors who already follow KEFI Gold and Copper plc on the
Investor Meet Company platform will automatically be invited.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
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
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe, Florence Chandler
3PPB LLC International (Institutional IR)
Patrick Chidley +1 (917) 991 7701
Paul Durham + 1 (203) 940 2538
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