13 February 2024
KEFI Gold and Copper
plc
("KEFI"
or the "Company")
Tulu Kapi Gold Project
Update
Ethiopia - All Stakeholders
Step Up Preparations for the US$320 million Tulu Kapi Gold
Project
KEFI (AIM: KEFI), the gold and
copper exploration and development company, is pleased to provide
an update on project launch preparation activities at the
high-grade Tulu Kapi Gold Project ("Tulu Kapi" or the "Project") in
Ethiopia following several days of meetings with senior
representatives of the Tulu Kapi stakeholders at Mining Indaba 2024
in Cape Town, South Africa.
Project Launch Update
As previously reported, the three
critical conditions precedent set by the Project lenders were
formally achieved in October 2023 (see announcement dated 5 October
2023). This led to final credit committee approval by the
lead-lender (see announcement dated 10 January 2024).
The Company can now report that all
the other parties in the funding syndicate, have advised they will
this month go to their respective committees to approve the
proposed transaction.
The Ethiopian Federal Government
also attended and reaffirmed its equity capital investment has been
fully documented, committed and already partly invested.
The contractors in the syndicate
have all reaffirmed their intention and readiness to enter into the
already-drafted definitive documentation to enable full Project
launch in H1 2024 as previously outlined.
The Company is pleased with the
long-standing collaboration with all parties involved and the
current intensification of effort flowing from the Government's key
positive actions towards the end of 2023. The priority is to
continue demonstrating safety whilst we implement the remaining,
mainly administrative, tasks which are expected to be successfully
and swiftly completed. We will provide regular updates.
Community and Physical Preparations
Whilst we await the drawdown of the
US$320 million Project funding, KEFI has started the requisite
low-cost launch-preparations to enable the Project to move forward
safely and efficiently. These include:
·
Personnel being dispatched into the field to brief
the community and carry out required site works;
·
Dismantling the old exploration camp (on the
planned open pit) and installing new communication and staging
bases along our transport route as part of the upgrading of safety
systems; and
·
Works by contractors. including:
o process-plant contractor completing Front End Engineering and
Design;
o mining
contractor establishing its local corporate entity and clearing its
work rosters with the department of labour;
o electricity contractor procuring all (and taken delivery of
most) of the equipment required for connection to the mains grid;
and
o road
contractor completing upgrades to some bridges on existing routes,
as well as the surveys of the new additional all-weather access
road.
Project Financing at the Project and Subsidiary
Level
The long-agreed US$320 million
financing plan (excluding the mining fleet provided by the
contractor and excluding historical expenditures of approximately
US$100 million) has been refined as follows:
·
The debt portion of US$190 million remains from
lead-lender Southern and Eastern Africa Trade and Development Bank
and co-lender Africa Finance Corporation;
·
The US$40 million from share issues by KEFI
subsidiaries remains from the Federal and Regional
Government;
·
The US$70 million Equity Risk Notes remain largely
from local subsidiaries of multinational corporations who have been
given Government permission to invest local currency and be repaid
in hard currency, repayable in cash or equity at KEFI's election as
from year 4 at then market prices;
and
·
Having received the recent clarifications, the
subsidiary-level equity-ranking product-linked funding piece of
US$20 million can now also be finalised. Discussions have already
commenced with well-known industry-specialist financiers. We have
deliberately withheld commitments on this until now, when the rest
of the funding package is clear.
The principal Project contractors
are Lycopodium Limited (process plant design and construction), PW
Mining (mining services), Ethiopian Electric Power Company and
Ethiopian Roads Authority.
Executive Chairman, Harry Anagnostaras-Adams,
commented:
"This multi-party subsidiary-level
financing is now advancing on the back of the Government
commitments finally received in October, triggering the lead-lender
to quickly process its approval in December 2023 and now all other
stakeholders triggering their respective flow-on
processes.
"This ramp-up of activities by all
stakeholders coincides with a take-off of mineral sector activities
in Ethiopia and in our other host country, Saudi Arabia.
"Whilst Tulu Kapi will be the first
internationally financed bankable project development in Ethiopia,
many other projects' exploration and related activities are now
being remobilised in the country, including Allied Gold, SunPeak,
Akobo Gold and privately-owned conglomerate Midroc, which is now
drilling-out its proposed second mine, already being the operator
of the Lege Dembe Mine developed by the Ethiopian Government in the
1980's."
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
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Harry Anagnostaras-Adams (Executive
Chairman)
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+357 99457843
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John Leach (Finance
Director)
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+357 99208130
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SP
Angel Corporate Finance LLP (Nominated Adviser)
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+44 (0) 20 3470 0470
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Jeff Keating, Adam Cowl
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Tavira Securities Limited (Lead Broker)
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+44 (0) 20 7100 5100
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Oliver Stansfield, Jonathan
Evans
|
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IFC
Advisory Ltd (Financial PR and IR)
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+44 (0) 20 3934 6630
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Tim Metcalfe, Florence
Chandler
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3PPB LLC (Institutional IR)
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Patrick Chidley
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+1 (917) 991 7701
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Paul Durham
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+1-203-940-2538
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