REG - Kefi Gold and Copper - Award of Two Exploration Licences in Saudi Arabia

KEFI Gold and CopperAnnouncement

13/12/2021 07:00

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RNS Number : 3583V  Kefi Gold and Copper PLC  13 December 2021

13 December 2021

KEFI Gold and Copper plc

("KEFI" or the "Company")

Award of Two Additional Exploration Licences in Saudi Arabia

 

KEFI Gold and Copper (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 pleased to announce the issuance
of the Al Godeyer and Al Godeyer East Exploration Licences (the "AG
Licences"), to the KEFI-operated Saudi Arabian joint-venture Gold and Minerals
Limited ("G&M"). The licences are situated 12km south-west of the
Company's Hawiah discovery (see Figure 1 in the attached appendix), which is
expected to shortly upgrade the 2020 Mineral Resource Estimate ("MRE") of
19.3Mt at 1.9% copper equivalent.

 

Highlights

·      Al Godeyer and Al Godeyer East licences granted on an initial
5-year term

·      Exploration work suggests a strike length of more than 2km for
the identified gossan horizon

·      Accelerated Exploration programs targeting a Maiden resource
within 2022

·      Situated adjacent to the Company's significant Hawiah discovery

 

Background

The Company's Hawiah Copper-Gold VMS project ("Hawiah') is now advancing
through the Preliminary Feasibility Study ("PFS") for potential development,
having completed 42,000m of drilling across the project during the 2019-2021
initial exploration phase.  An update to the MRE, in conjunction with SRK
Consulting (UK) Ltd, is nearing completion and is expected to be announced
later in December 2021. This will form the basis for much of the PFS works
including mine and process design.

The granting of the AG Licences is a significant step in G&M's plans for
the development of the wider Hawiah Project area, representing the first of
the satellite targets to be explored. The proximity and shared mineralisation
style should present an excellent opportunity to enhance the Hawiah project
with additional grade and tonnage.

 

Al Godeyer VMS mineralisation

The Al Godeyer area, covered by the AG Licences, was first mapped and trenched
by the French Government Geological Department ("BRGM") in the 1980's, with
mineralisation occurring as outcropping, NW-SE striking gossans over 800m in
length and widths of up to 6m. The gossans are hosted within a
felsic-intermediate volcanic package, consistent with a back-arc
paleo-environmental setting.

Whilst more structurally complex than the nearby Hawiah gossans,
mineralisation presents in a very similar style with strike-continuous and
consistent gold values noted within the core of the gossan and copper
mineralisation as malachite on the flanks. As with Hawiah, the malachite on
the flanks of the gossan is considered likely related to
re-mobilisation/ground water interactions with the copper-rich portions of the
underlying ore body.

In anticipation of the granting of these Exploration Licences, G&M
geologists have already been actively mapping and grab sampling the ground
using the G&M Reconnaissance Licence and have now extended the strike of
the gossanous horizon by approximately 1.2 kilometres to the southeast (see
Figure 2 in the attached appendix).

Early sampling has been very positive with results confirming the work
performed by the BRGM with grades of up to 7.2 g/t Au recorded in the gossans.
Grab samples have consistently returned gold grades akin to the main Hawiah
gossans, and with high copper values related to the secondary malachite.
Highlights of these grab samples are listed below:

 

 Sample ID  Site        Rock Type                    Au g/t  Ag g/t  Cu %  Zn %
 GSR1021    Al Godeyer  Foliated gossan              7.2     0.8     0.1   0.1
 GSR1001    Al Godeyer  Massive gossan               3.6     0.7     0.7   0.2
 GSR1070    Al Godeyer  Massive gossan               3.2     2.7     0.5   0.0
 GSR1015    Al Godeyer  Brecciated gossan            2.5     0.4     0.4   0.0
 GSR999     Al Godeyer  Massive gossan               2.2     0.5     1.8   0.4
 GSR259     Al Godeyer  Massive gossan               2.1     0.1     0.1   0.0
 GSR1055    Al Godeyer  Massive gossan               2.0     0.3     0.1   0.0
 GSR1054    Al Godeyer  Massive gossan               2.0     0.3     0.1   0.1
 GSR1000    Al Godeyer  Massive gossan               2.0     0.0     0.7   0.3
 GSR1056    Al Godeyer  Massive and Foliated gossan  1.9     3.3     0.6   0.1
 GSR1019    Al Godeyer  Massive gossan               1.9     1.1     0.3   0.0
 GSR257     Al Godeyer  Massive gossan               1.8     0.9     0.1   0.0
 GSR1052    Al Godeyer  Massive gossan               1.8     1.8     0.2   0.0
 GSR1072    Al Godeyer  Massive gossan               1.8     0.8     0.2   0.0
 GSR1074    Al Godeyer  Massive gossan               1.7     1.5     0.1   0.0

 

Exploration strategy

Due to the proximity to Hawiah, G&M will proceed with an aggressive
exploration strategy and if drilling is successful, aim to complete a maiden
MRE by Q4 2022. This would allow any delineated material on the AG Licences to
be incorporated into planning for the wider Hawiah project development.

The exploration approach and approximate anticipated timeline is outlined
below:

-       Complete first pass mapping and sampling of SE extension area
(Q4 2021)

-       Trenching to confirm surface continuity of main gossans and SE
extension areas. (Q1 2022)

-       Self-potential geophysics to define the sub-surface continuity
of the SE extension (Q1 2022)

-     Scout Drilling - 1,500m of diamond drill hole (DDH) drilling to
confirm mineralisation style and grades - Q1/Q2 2022

-       Infill drilling for Resource definition - Q2/Q3 2022

-       Mineral Resource Estimation - Q4 2022

 

Harry Anagnostaras-Adams, Executive Chairman of KEFI, commented:

"The Hawiah project already appears to be a robust standalone development
proposition. However, it has always been our opinion that Hawiah is greater
than just one deposit, instead we believe it will prove to be a district of
VMS deposits. G&M have already identified multiple VMS targets in the
surrounding Hawiah area, and today's announcement marks the first step in
expanding a single project at Hawiah into a mining district of complementary
deposits. Shared infrastructure between the projects will leverage the value
of each one and reinforce the overall development strategy.

"These new licences, plus the imminent December Hawiah MRE, reinforce the
established position of KEFI in Saudi Arabia as a leading explorer and
developer. 2022 is set to be a very positive and busy year for the
joint-venture with the expected delivery of the PFS and further resource
growth at Hawiah, as well as the start of additional regional projects.
Furthermore, based on discussions with the regulatory authorities in the
current quarter, we also now anticipate progress of the Jibal Qutman Gold
mining licence, our first discovery in Saudi Arabia with an existing resource
in excess of 700,000 ounces of gold.

"I look forward to providing further updates on both our operations in Saudi
Arabia and also Ethiopia, where the political situation continues to improve
and good progress is being made with respect to finalising the funding for the
launch of the Tulu Kapi project development."

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 (Executive Chairman)                         +357 99457843
 John Leach (Finance Director)                                         +357 99208130
 SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker)   +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl
 Brandon Hill Capital Ltd (Joint Broker)                               +44 (0) 20 7936 5200
 Oliver Stansfield, Jonathan Evans
 IFC Advisory Ltd (Financial PR and IR)                                +44 (0) 20 3934 6630
 Tim Metcalfe, Florence Chandler

 

Competent Person Statement

The information in this announcement that relates to exploration results and
Mineral Resources is based on information compiled by Mr Tomos Bryan,
Exploration Manager for Gold & Minerals Limited. Mr Bryan is a member of
the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr Bryan is a
geologist with sufficient relevant experience for Company reporting to qualify
as a Competent Person as defined in the JORC Code 2012. Mr Bryan consents to
the inclusion in this announcement of the matters based on this information in
the form and context in which it appears.

The Hawiah Mineral Resource was announced on 19 August 2020 and G&M is in
the process of updating the resource statement for 2021. KEFI confirms that it
is not aware of any new information or data that materially affects the
information in the above releases and that all material assumptions and
technical parameters, underpinning the estimates continue to apply and have
not materially changed. KEFI confirms that the form and context in which the
Competent Person's findings are presented have not been materially modified
from the original market announcements.

Notes to Editor

KEFI Gold and Copper plc

KEFI is focused primarily on the advanced Tulu Kapi Gold Project development
project in Ethiopia, along with its pipeline of other projects within the
highly prospective Arabian-Nubian Shield. KEFI targets that production at Tulu
Kapi generates cash flows for capital repayments, further exploration and
expansion as warranted and, when appropriate, dividends to shareholders.

KEFI in Ethiopia

Ethiopia is currently undergoing a remarkable transformation both politically
and economically.

The Tulu Kapi gold project in western Ethiopia is being progressed towards
development, following a grant of a Mining Licence in April 2015.

The Company has now refined contractual terms for project construction and
operation, together with assembling the full funding consortium and set the
conditional terms for the development funding package of c.US$356 million.

Estimates include gold production of c.190,000oz pa. All-in Sustaining Costs
(including operating, sustaining capital and closure but not including leasing
and other financing charges) remain US$800-900/oz. Tulu Kapi's Ore Reserve
estimate totals 15.4Mt at 2.1g/t gold, containing 1.1Moz.

All aspects of the Tulu Kapi (open pit) gold project have been reported in
compliance with the JORC Code (2012) and subjected to reviews by appropriate
independent experts.

A Preliminary Economic Assessment has been published that indicates the
economic attractiveness of mining the underground deposit adjacent to the Tulu
Kapi open pit, after the start-up of the open pit and after positive cash
flows have begun to repay project debts. An area of over 1,000 square
kilometres adjacent to Tulu Kapi has been reserved for exploration by KEFI
upon commencement of development, with a view to adding satellite deposits to
development and production plans.

KEFI in the Kingdom of Saudi Arabia

In 2009, KEFI formed Gold & Minerals Limited ("G&M") in Saudi Arabia
with local Saudi partner, ARTAR, to explore for gold and associated metals in
the Arabian-Nubian Shield. KEFI has a c. 31% interest in G&M.

ARTAR, on behalf of G&M, holds over 21 Exploration Licence ("EL")
applications currently subject to approval from the various ministries as
required under the new Mining Law. Els are renewable for up to fifteen years
and bestow the exclusive right to explore and to obtain a 30-year exploitation
(mining) lease within the area.

The Kingdom of Saudi Arabia has announced policies to encourage mineral
exploration and development, and KEFI Minerals supports this priority by
serving as the technical partner within G&M. ARTAR also serves this
government policy as the major partner in G&M, which is one of the early
movers in the modern resurgence of the Kingdom's minerals sector.

Appendix 1: Glossary of Technical Terms

 Ag                            Silver
 Arabian-Nubian Shield or ANS  The Arabian-Nubian Shield is a large area of Precambrian rocks in various
                               countries surrounding the Red Sea
 Au                            Gold
 Cu                            Copper
 g/t                           Grams per tonne
 Gossan                        Gossan is intensely oxidised, weathered or decomposed rock, usually the upper
                               and exposed part of an ore deposit or mineral vein
 JORC                          Joint Ore Reserves Committee
 JORC Code 2012                Australasian Code for Reporting of Exploration Results, Mineral Resources and
                               Ore Reserves
 M                             Metre
 Massive sulphide              Rock comprised of more than 40% sulphide minerals
 Mt                            Million tonnes
 MRE                           Mineral Resource Estimate
 oz                            Troy ounce of gold
 PEA                           Preliminary Economic Assessment
 PFS                           Preliminary Feasibility Study
 VMS                           Volcanogenic Massive Sulphide
 Zn                            Zinc

 

Appendix 2: Illustrative Diagrams

 

Appendix 2 is contained in the appended pdf document which can be accessed
via http://www.rns-pdf.londonstockexchange.com/rns/3583V_1-2021-12-12.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3583V_1-2021-12-12.pdf)

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