Kefi Gold and Copper - Corporate Update

KEFI Gold and Copper

08/04/2025 07:00

RNS Number : 0082E

Kefi Gold and Copper PLC

08 April 2025

 

8 April 2025

KEFI Gold and Copper plc

 

("KEFI" or the "Company")

 

Corporate Update

 

Significant recent across-the-board progress

 

KEFI (AIM: KEFI), the gold and copper exploration and development company focused on the Arabian-Nubian Shield, is pleased to provide an update on recent positive progress.

 

Tulu Kapi Project launch update

 

·    Preparations for full launch of the Tulu Kapi Gold Project are advancing across all fronts for signing this quarter of the assembled detailed definitive documentation.

 

·    Property surveys for Phase 1 Resettlement (c.350 properties including c.130 households) are now being reviewed against strict verification standards and procedures. The phased compensation and subsequent resettlement will be in compliance with Ethiopian Law and World Bank IFC Performance Standards.

 

·    Updated tender prices for mining services are being evaluated.

 

·  Construction of initial site facilities is underway, including expanded water supply and camps for construction and security.

 

·    The focus now is on completing the following this quarter:

·    Government approvals of residual administrative matters, including AFC membership ratification by the Ethiopian Parliament; and

·    Independent certifications for the project's fixed price construction contracts, security, community commitments and overall schedule.

 

·    All contractors have been asked to prepare to proceed from the end of this quarter.

 

·    Operational management being installed at project company Tulu Kapi Gold Mines S.C. (TKGM), with Simon Cleghorn as Managing Director (former COO of a major Kazakh mining group) and Theron Brand as Finance Director (former financial head of Namibian mining groups).

 

Tulu Kapi Project Finance plan progress

 

KEFI continues to optimise the finance syndicate at the subsidiary level, as follows:

 

US$300 million capital requirement net of capex already spent and of contractor capital commitments comprising:

US$240 million:
US$60 million:
Debt Capital from secured lenders
From either, or a combination of, the following, with any surplus funds to be available for contingency reserves as well as growth opportunities:
- US$-linked 'EthioPrefs' to be issued by a newly-formed Ethiopian holding company designed for qualified Ethiopian and other African investors. Listing of the EthioPrefs on the newly launched Ethiopian Securities Exchange is expected to follow in due course; and
- The sale of a 15% shareholding in the Gold and Minerals Company (GMCO) joint venture in Saudi Arabia held by the Company. Short-listed parties are now due to review the Jibal Qutman Stage 1 development Definitive Feasibility Study ("DFS") with a view to finalising their investment and financing proposals. A key DFS milestone since the latest KEFI RNS for Jibal Qutman (see the Company's announcements on 26 February 2025) was GMCO establishing Jibal Qutman's local water supply. Development plans will now be finalised with GMCO shareholders, financiers and regulatory authorities.


KEFI Founder and Executive Chairman, Harry Anagnostaras-Adams, commented: "The preparations for full launch of Tulu Kapi Gold Project are advancing across all fronts for signing this quarter of the assembled detailed definitive documentation. The economic metrics continue to improve and the stakeholder support is across-the-board.

 

"Excluding the potential of the underground resources at Tulu Kapi, the business plan model projections results in over seven years of production, averaging 167,000 oz per year, generating a net cash flow to project shareholders of US$1.1-1.6 billion at gold prices of US$2,400-3,000/oz over the life of the project."

 

KEFI Gold and Copper plc
Harry Anagnostaras-Adams (Executive Chairman)
+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 Financial Limited (UK Lead Broker)
+44 (0) 207100 5100
Oliver Stansfield, Jonathan Evans
IFC Advisory Ltd (UK Financial PR)
+44 (0) 20 3934 6630
Tim Metcalfe, Florence Staton
3PPB LLC (North American Financial PR)
Patrick Chidley
+1 (917) 991 7701
Paul Durham
+1-203-940-2538

 

Notes to Editor

 

KEFI Gold and Copper plc

 

KEFI is focused primarily on the development of the Tulu Kapi Gold Project in Ethiopia and its pipeline of highly prospective exploration projects in the Arabian-Nubian Shield. KEFI targets that production at Tulu Kapi will generate cash flows for capital repayments, further exploration and dividends to shareholders.

 

Background on the Tulu Kapi Project Economic Metrics

 

Tulu Kapi boasts strong economic metrics due to minimal overburden, high grades, and high recoveries. This project will significantly benefit the community, region, country, and the Company. Extensive regulatory reforms and preparations were necessary for Ethiopia's first internationally financed mining project, requiring patience and support from the Government.

 

Development capital expenditure has been project-financed based on the open-pit Ore Reserves of 1 million oz (15.4 million tonnes at 2.1 g/t), using a conservative gold price assumption of US$1,250/oz. The project lenders base case financial model has assumed that only open pit ore is processed with an initial output of 2.5 million tonnes per annum and a project average of 2.0 million tonnes per annum. Ore Reserves and mine plans will be refined with in-fill-grade-control drilling during Tulu Kapi's construction as part of the 'Operational Readiness Program'.

 

KEFI's business plan goes beyond the open-pit development and includes early underground work to extend the existing underground Indicated Resource of 220,000 oz (1.2 million tonnes at 5.7g/t). The Preliminary Economic Assessment projects recovering about 200,000 oz (1.5 million tonnes at 4g/t) underground, supplementing open pit ore for the first seven years. The deposit is open down plunge with a last drill intercept of 90m at 2.8 g/t, containing high-grade zones. KEFI estimates over 1 million oz potential for underground ore.

 

Excluding the potential of the underground, the 'Business Plan Model' projections show that running the plant at 2.4 million tonnes per annum results in over seven years of production averaging 167,000 oz per year, generating a net cash flow to project shareholders of US$1.1-1.6 billion at gold prices of US$2,400-3,000/oz over the life of the project. It is worth noting that on this basis net operating cash flow in the first full year of production is estimated at US$231-304 million, compared to project finance debt of US$240 million.

 

The detailed assumptions underlying the cash flow modelling can be found in the Project Overview sections of the KEFI website. See https://www.kefi-goldandcopper.com/files/files/KEFI-Tulu-Kapi-Gold-Project-Overview-March25.pdf

 

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