REG - Kefi Gold and Copper - AGM Statement

KEFI Gold and CopperAnnouncement

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RNS Number : 3862R  Kefi Gold and Copper PLC  17 July 2025

17 July 2025

KEFI Gold and Copper plc

("KEFI" or the "Company")

AGM Statement

 

KEFI Gold and Copper plc (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 2025 Annual General
Meeting ("AGM") today at 10.00 a.m. BST in the UK. At the AGM, Harry
Anagnostaras-Adams, Executive Chairman of the Company, will make the following
statement:

"It is with a great sense of pride that I can today report the excellent
position we have now attained for our Company, particularly in Ethiopia, and
also in Saudi Arabia.

Our longstanding shareholders will, with hindsight, recall that in Ethiopia we
lost years of anticipated progress between 2016 and 2022 emanating from local
political unrest and, in the Kingdom of Saudi Arabia, we lost an even longer
period for progress due to local regulatory overhauls of the mining sector.
Whilst we never diminished our efforts and positive drive forward, our
"turnaround year" in both of our host countries proved to be 2022 and we have
since relentlessly forged ahead to prepare full project launch shortly in
Ethiopia.

In Ethiopia the national state of emergency was lifted early 2022 and by
mid-2022 the Tulu Kapi Gold Project syndicate formally agreed to recommence
preparations for launch of development subject to three principal conditions
precedent along with the normal procedural requirements for mining project
finance. At the time, we spelt out that we needed the installation of security
protection of the highest standard, designation as strategic project in
respect of exchange controls and Parliamentary Ratification of Country
Membership for both (not just one) of our principal banks.

We achieved the third and last of these principal condition precedent in May
2025 and I am pleased to report that we have now already built the initial
camps for security and construction and this week advised stakeholders that
community compensation payments are being triggered this month, with payment
of compensation for Phase 1 of the Resettlement Action Plan. This is being
funded from KEFI's existing cash resources following the Company's recent
capital raise and the Company will be reimbursed from the drawdown of the
broader Project funding package. This is a very significant milestone for the
community in particular and it reflects our confidence that the remaining
normal procedural conditions precedent will be satisfied as a result of the
well-advanced effort by the various counterparties.

On the Ethiopian Tulu Kapi project financing front, the full package of
updated finance and other documentation is in circulation for the multi-party
approvals, and we are well-advanced in updating and certifying development
budgets and schedules, last done in 2023, to be incorporated into detailed
definitive documentation for execution and full project launch. The
tentatively updated running estimate is that we require c. $420 million (2023
c. $400 million) of development capital (including the mining fleet) to be met
by contractor-funding as to c. $110 million (2023 c. $100 million), bank debt
$240 million (2023 $190 million) and further equity risk capital c. $70
million (2023 c. $110 million).  The further equity risk capital has been
reduced from $110 million to $70 million (primarily due to the increased bank
debt figure of $240 million) and its structuring adjusted around Ethiopian
regulatory reforms and market conditions. The investor source now comprises
local Ethiopian institutions subscribing to EthioPrefs to be issued by the new
Ethiopian holding company and international private equity groups looking to
invest in the Ethiopian subsidiary/ies and perhaps also the Saudi
subsidiary/ies. These funding sources for the equity risk capital are at the
project level and is expected to be repaid from the significant cashflow
generated by Tulu Kapi. It should be noted that the EthioPrefs are not
convertible into ordinary equity either in the subsidiary or the parent
company. Their special features which make them attractive to Ethiopian
sophisticated investors is the opportunity to invest Ethiopian BIRR in
exchange for a USD denominated security for both principal and interest plus
the gold price upside aligned with the upside realised by TKGM.

Another notable development is the recent entry into our share register of
global public investment institutions via our share placings, including Ruffer
Gold, Konwave/Gold 2000 and Phoenix Precious Metals. These institutions'
participation strengthens our capital structure.  We also have been granted
permission to inform shareholders that Premier Miton and RAB Capital also
participated in the recent capital raise.

These are very exciting times for our Company as we move towards the full
development of Tulu Kapi, with increasing numbers of boots on the ground.
Successful implementation of our plans will result in Tulu Kapi commissioning
gold production in late 2027. At a gold price of $3,000/ounce, Tulu Kapi's net
operating cash flow after royalties and taxes for the first full year of
production is estimated at c.$300 million. Such a result from the first full
year of production in 2028 would allow the Board to then consider prepaying
much of the planned $240 million Tulu Kapi Project debt, declaring a special
dividend and also supporting our large project development pipeline.

With respect to growth scenarios, we see the development of the Tulu Kapi
Underground Mine and the expansion of the plant as readily available
opportunities to quickly lift KEFI's beneficial interest in gold production to
over 150,000 oz pa.

Today, KEFI's other most advanced project opportunities are in Saudi Arabia.
In late 2024, we announced a six-month strategic review of our joint venture
company, Gold and Minerals Limited (GMCO), and KEFI's shareholding in
it. Since then, GMCO has published a 20% expansion of mineral resources to
the gold equivalent of 3.8 million ounces, and has more than doubled its
exploration acreage to over 2,200 sq km. This includes a new 900+ sq km
mineralised belt secured through a joint venture with Australian major Hancock
Prospecting.

The pipeline of projects being prepared for development starts with Stage 1 of
the Jibal Qutman Gold project, which is focused on oxide ore and comprising
open pit mining and CIL processing. This initial GMCO development is targeted
to transform GMCO into a self-funding Saudi explorer. Together with our
partner ARTAR, we continue to nurture relationships with the mining finance
specialists for optimising project development finance in due course,
analogous to the approach successfully taken by KEFI in Ethiopia.
 Accordingly, Stage I at Jibal Qutman would likely require equity
participation from KEFI of only £2-3 million, which at present is targeted to
be funded from Tulu Kapi Project financing refunds due to KEFI.

Looking beyond GMCO's first project in Saudi Arabia, what follows is Stage 2
of Jibal Qutman Gold and Stages 1 and 2 of Hawiah copper and Gold.

At KEFI's current GMCO beneficial interest of 15% these existing Saudi
advanced development projects would have the effect of lifting KEFI's
aggregate production to over. 200,000 oz gold equivalent - spread over three
projects in two countries. All three advanced projects, Tulu Kapi, Jibal
Qutman and Hawiah have significant expansion potential and multitudes of
lessons being learnt for potential application to the exploration pipeline.

During our Strategic Review of GMCO, we received expressions of interest in
acquiring KEFI's GMCO shareholding. A number of these parties have also
confirmed their interest in providing future development funding for KEFI
projects generally, in both Saudi Arabia and Ethiopia. We will maintain these
discussions as we continually optimise our cost of capital and seek out the
best approach to take the fullest possible advantage of our early mover
position in the Arabian Nubian Shield. Our focus is on maximising the
long-term return to shareholders whilst serving our other stakeholders,
including partners, banks, PE Groups, contractors, local investors and of
course our host communities and Goveernments.

Regardless of the final details of the project funding packages, the vast
majority of development finance can already be seen as having been structured
at subsidiary levels. This is what we have always focused on. The prize for
KEFI shareholders is the theoretical value of KEFI's development projects on a
per share basis. This measure already stands at circa 8 pence per existing
KEFI share on issue, based on existing Reserves and Resources, NPV 5% at
$3000/oz for Tulu Kapi Gold Mine and US$100/oz Resource at Jibal Qutman and
Hawah.

We are at an opportune moment with much reduced reliance on other parties'
decisions and a far greater capacity to be masters of our own destiny within a
less challenging working environment. Getting to this point and what is about
to happen will have been made possible by our team's hard work and your
support and patience as shareholders.  This is the moment to push forward,
seizing the opportunities presented by the positive turnarounds in our host
countries and the strengthening of metal prices and I look forward to continue
reporting on our further progress in the coming weeks and months."

 

Enquiries

 

 KEFI Gold and Copper plc
 Harry Anagnostaras-Adams (Executive Chairman)       +357 2225 6161
 John Leach (Finance Director)
 SP Angel Corporate Finance LLP (Nominated Adviser)  +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl
 Tavira Financial 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 Staton
 3PPB LLC (North American Institutional IR)
 Patrick Chidley                                     +1 (917) 991 7701
 Paul Durham                                         +1-203-940-2538

 

Further information can be viewed at https://www.kefi-goldandcopper.com
(https://www.kefi-goldandcopper.com/)

 

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