REG - Kefi Gold and Copper - Capital Raise of up to £10.6 million

KEFI Gold and CopperAnnouncement

02/12/2024 16:45

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RNS Number : 4823O  Kefi Gold and Copper PLC  02 December 2024

NOT FOR PUBLICATION, RELEASE, FORWARDING OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA,
AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE
UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

2 December 2024

KEFI Gold and Copper plc

("KEFI" or the "Company")

Issue of Equity

Capital Raise of up to £10.6 million

Firm placing, conditional placing and conditional subscription to provide
gross cash procceds of up to £5.5 million for KEFI

and

Retail offer through PrimaryBid to raise up to £500,000

and

Issue of equity to extinguish c.£4.6 million of liabilities

 

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, announces a Capital Raise (as
defined below) to fund closing costs and final preparations for project launch
at Tulu Kapi, with full project launch expected in early 2025.

The fundraising package comprises (together, the "Capital Raise"):

i.    a firm placing of 903,193,818 new ordinary shares of 0.1 pence each
in the capital of the Company (the "Ordinary Shares") at a price of 0.55 pence
per Ordinary Share (the "Placing Price"), to raise £4,967,566 (excluding
expenses) (the "Firm Placing"), including approximately £3.1 million in
settlement of existing liabilities, arranged by Tavira Financial Limited
("Tavira" or the "Broker");

ii.    a conditional placing of 315,653,909 new Ordinary Shares at the
Placing Price, subject to the approval of the Company's shareholders (the
"Shareholders") at the Company's general meeting to be held on 2 January 2025
(the "General Meeting"), to raise £1,736,097 (excluding expenses) (the
"Conditional Placing" and, together with the Firm Placing, the "Placing"),
including approximately £0.7 million in settlement of existing liabilities,
also arranged by Tavira;

iii.   a conditional subscription of 472,727,273 Ordinary Shares at the
Placing Price by Safaya Investment In Commercial Enterprises & Management
Co. L.L.C (the "Subscriber"), subject to approval of the Company's
shareholders at the General Meeting, to raise £2,600,000 (excluding expenses)
(the "Conditional Subscription");

iv.  a conditional issue of 144,788,636 new Ordinary Shares at the Placing
Price, subject to approval by the Shareholders at the General Meeting,
pursuant to which certain Directors of the Company and corporate advisers have
elected to receive new Ordinary Shares in lieu of accrued fees of
approximately £800,000 (the "Conditional Remuneration Issue"); and

v.   an offer through PrimaryBid of up to 90,909,091 new Ordinary Shares at
the Placing Price (the "Retail Shares"), to raise up to £500,000 (excluding
expenses) (the "PrimaryBid Offer"). Further details of the PrimaryBid Offer
will be announced shortly after this announcement.

Participants in the Firm Placing, Conditional Placing and Conditional
Remuneration Issue have elected to convert certain outstanding liabilities
payable by KEFI into new ordinary shares in the capital of the Company. A
total of 828,471,733 new shares, will be issued to extinguish £4.6 million of
the Company's outstanding liabilities. Assuming full take up of the PrimaryBid
Offer, KEFI will receive cash of £6.0 million (before expenses) as a result
of the Capital Raise.

The net proceeds of the Capital Raise will cover the incurred and planned
expenditure associated with site and community preparations for the Tulu Kapi
gold project (the "Early Works Programme") and costs related to finalising the
definitive agreements for financial commitments for capital and operating
expenditures aggregating to almost US$1 billion including capital expenditure
$320 million and life-of-mine operating expenditures such as mining services
and power purchases over the life of the project, which are expected to be
finalised during the next month or so to enable launch of major works (the
"Major Works") at the Tulu Kapi gold project (the "Project") as soon as
independent certification confirms final capital budgets and the readiness of
the community and the project site and transport routes.

Participants in the Capital Raise include long-standing UK Shareholders along
with new institutional and other investors from Europe and the Middle East.

Harry Anagnostaras Adams, Executive Chairman of KEFI Gold and Copper
commented:

"KEFI is pleased to have secured this international funding package to
underpin the launch of Major Works at the Tulu Kapi gold project which are
expected to commence in early 2025. We have at the same time provided a
mechanism for existing Shareholders to participate.

"We also expect this capital raise will facilitate the granting of additional
long-targeted licences in Ethiopia, which we believe will be complementary to
operations and the value proposition of Tulu Kapi."

Placing

The Company will raise £4,967,566 (excluding expenses) through the issue of
903,193,818 new Ordinary Shares (the "Firm Placing Shares") at the Placing
Price, and £1,736,097 (excluding expenses) through the issue of 315,653,909
new Ordinary Shares (the "Conditional Placing Shares") at the Placing Price,
subject to the approval of the Shareholders at the General Meeting.

Conditional Subscription

The Company will raise £2,600,000 (excluding expenses) through the issue of
472,727,273 new Ordinary Shares (the "Conditional Subscription Shares") at the
Placing Price, subject to the approval of the Shareholders at the General
Meeting.

Conditional Remuneration Issue

The Company is proposing to issue 144,788,636 new Ordinary Shares to certain
Directors and corporate advisers (the "Conditional Remuneration Shares") in
lieu of accrued fees of approximately £800,000, subject to the approval of
the shareholders at the General Meeting.

Primary Bid Offer

The Directors recognise the importance of providing retail shareholders and
investors an opportunity to participate in the Company's ongoing funding.
Consequently, the Company intends to make the PrimaryBid Offer.

Further details of the PrimaryBid Offer will be announced shortly after this
announcement.

Use of Proceeds

The expected net proceeds of the Capital Raise of approximately £10.1 million
(the "Net Proceeds") will be applied to:

·    completion of project financing and launch of the Company's Tulu Kapi
gold project (the "Project"), including legal and professional fees of KEFI
and its banks, preparation of the community, site and district security
installation and administrative costs of satisfying the remaining conditions
for the project finance package;

·    settling current liabilities and advances to strengthen the Company's
balance sheet ahead of proposed Project development and anticipated issuance
of a number of exploration licence applications in Ethiopia; and

·    general working capital purposes.

The Company expects the Project's Major Works to launch in early 2025
following the signing of detailed definitive documentation and satisfaction of
the outstanding conditions precedent that are typical for a transaction of
this nature.

Placing Agreement and Issue of Warrants

Tavira is acting as broker for the Placing. The Company has appointed Tavira
as its agent pursuant to the terms of a placing agreement executed on or about
today's date (the "Placing Agreement").

The Company has agreed to pay the Broker certain commissions and fees, some of
which will be satisfied through the grant of 68,796,818 warrants over Ordinary
Shares (the "Broker Warrants"). Each Broker Warrant will entitle the Broker to
subscribe for one new Ordinary Share at a price of 0.55 pence per Ordinary
Share, exercisable for a period of three years from the date of Second
Admission.

Conditional Remuneration Issue to Director and PDMR and Advisers for the
settlement of debt and accrued fees

The number of Conditional Remuneration Shares to be issued to Director, person
discharging managerial responsibilities ("PDMR") and their resulting
shareholdings are set out below:

 

 Name                                      Number of existing ordinary shares in KEFI  Number of Conditional Remuneration  Number of Ordinary Shares held on Second Admission  Value of Conditional Remuneration Shares (£)

                                                                                       Shares
 John Leach (Finance Director)             61,978,123                                  45,454,545                          107,432,668                                         250,000
 Eddy Solbrandt (Chief Operating Officer)  82,054,572                                  56,788,636                          138,843,208                                         312,337
 Total Conditional Remuneration Shares     144,032,695                                 102,243,181                         246,275,876                                         562,337

 

The Directors will receive a portion of the Conditional Remuneration Shares
through consultancy companies in which they have a stake.

 

In addition, 42,545,454 Conditional Remuneration Shares, with a total value of
£234,000 will be issued at the Placing Price to certain key advisers to the
Company in consideration for their services to support various value-adding
initiatives for the Project.

 

Related Party Transaction

 

The participation in the Conditional Remuneration Issue by Finance Director
John Leach and Chief Operating Officer Eddy Solbrandt, is being treated as a
related party transaction under AIM Rule 13 of the AIM Rules. Alistair Clark,
Harry Anagnostaras Adams, Addis Alemayehou and Richard Robinson, being the
Directors independent of the Conditional Remuneration Issue, consider after
having consulted with the Company's nominated adviser, SP Angel Corporate
Finance LLP, that the terms of the Conditional Remuneration Issue are fair and
reasonable insofar as the Shareholders are concerned.

Shareholder approval and notice of General Meeting

A circular convening the General Meeting will be circulated in the coming
days. Shareholders will be asked at the General Meeting:

·    to approve the allotment and issue and the disapplication of
pre-emption rights in connection with the issue of:

o  the Conditional Placing Shares;

o  the Conditional Subscription Shares;

o  the Conditional Remuneration Shares; and

o  the Broker Warrants; and

·    to grant the Directors additional authorities to issue shares in the
future (including on a non-pre-emptive basis).

The General Meeting is to be held at 12:00 p.m. (AEDT) on 2 January 2025 at 49
Pennant Avenue, Denistone East 2112, NSW, Australia.

Once published, the circular will be available to download from the Company's
website at www.kefi-goldandcopper.com. It is important that Shareholders lodge
their votes in advance of the General Meeting through submission of their
proxy votes.

Shareholders are reminded that because the Conditional Placing, the
Conditional Subscription and the Conditional Remuneration Issue are
conditional, among other things, on the passing of the share allotment and
disapplication of pre-exemption rights resolutions to be proposed at the
General Meeting, and should the resolutions not be passed, these will not
proceed.

If the resolutions required to approve the Conditional Placing, the
Conditional Subscription and the Conditional Remuneration Issue are not
approved at the General Meeting, the Company will need to seek an increased
amount of additional funding from alternative sources to support its
operations. However, there is no guarantee that such increased amount of
additional funding could be obtained in the requisite time frame or at all. If
the resolutions are not approved at the General Meeting, and no alternative
funding can be raised, the Company's ability to operate as a going concern may
be put at risk.

The Firm Placing Shares, the Conditional Placing Shares, the Conditional
Subscription Shares, the Conditional Remuneration Shares and the Retail Shares
(together, the "New Shares") will rank pari passu in all respects with the
existing Ordinary Shares of the Company.

Admission and Total Voting Rights

Application will be made to the London Stock Exchange for admission of the
Firm Placing Shares and the Retail Shares to trading on AIM and it is expected
that admission will become effective and that dealings in the Firm Placing
Shares and the Retail Shares will commence at 8.00 a.m. on or around 6
December 2024 ("First Admission").

Following First Admission of the Firm Placing Shares and the Retail Shares,
the total issued share capital of the Company will consist of 7,053,192,215
Ordinary Shares each with one voting right. The Company does not hold any
Ordinary Shares in treasury. Therefore, the total number of voting rights in
the Company will be 7,053,192,215 and this figure may be used by Shareholders
as the denominator for the calculations by which they will determine if they
are required to notify their interest in, or a change in their interest in,
the share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.

Application will be made to the London Stock Exchange for admission of the
Conditional Placing Shares, the Conditional Subscription Shares, and the
Conditional Remuneration Shares to trading on AIM and it is expected that
admission will become effective and that dealings in the Conditional Placing
Shares, the Conditional Subscription Shares, the Retail Shares and the
Conditional Remuneration Shares will commence at 8.00 a.m. on or around 3
January 2025 ("Second Admission").

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.  The person responsible for the release of this announcement is Harry
Anagnostaras-Adams (Executive Chairman).

Enquiries

 KEFI Gold and Copper plc
 Harry Anagnostaras-Adams (Executive Chairman)        +357 994 57843
 John Leach (Finance Director)                        +357 992 08130

 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 Chandler

 3PPB LLC International (Institutional IR)            +1 (917) 991 7701

                                                      +1 (203) 940 2538
 Patrick Chidley

 Paul Durham

Further information on KEFI can be viewed at www.kefi-minerals.com
(http://www.kefi-minerals.com/)

 

IMPORTANT NOTICES

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED IN
THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, FORWARDING OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES OF AMERICA (THE "UNITED STATES")), AUSTRALIA, CANADA, THE
REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

No public offering of the securities referred to herein is being made in any
such jurisdiction or elsewhere.

The New Shares have not been, and will not be, registered under the US
Securities Act of 1933, as amended (the "US Securities Act"), or with any
securities regulatory authority or under any securities laws of any state or
other jurisdiction of the United States and may not be offered, sold, resold,
pledged, transferred or delivered, directly or indirectly, in or into the
United States except pursuant to an applicable exemption from, or in a
transaction not subject to, the registration requirements of the US Securities
Act and in compliance with the securities laws of any state or other
jurisdiction of the United States. No public offering of securities is being
made in the United States. The New Shares have not been approved, disapproved
or recommended by the U.S. Securities and Exchange Commission, any state
securities commission in the United States or any other U.S. regulatory
authority, nor have any of the foregoing authorities passed upon or endorsed
the merits of the offering of the New Shares. Subject to certain exceptions,
the securities referred to herein may not be offered or sold in the United
States, Australia, Canada, Japan, New Zealand, the Republic of South Africa or
to, or for the account or benefit of, any national, resident or citizen of the
United States, Australia, Canada, Japan, New Zealand or the Republic of South
Africa.

No public offering of the New Shares is being made in the United States,
United Kingdom or elsewhere. All offers of the New Shares will be made
pursuant to an exemption from the requirement to produce a prospectus under
the Prospectus Regulation (EU) 2017/1129 (as supplemented by Commission
Delegated Regulation (EU) 2019/980 and Commission Delegated Regulation (EU)
2019/979) as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 (the "UK Prospectus Regulation").

No action has been taken by the Company, the Broker or any of their respective
affiliates, or any of its or their respective directors, officers, partners,
employees, advisers or agents (collectively, "Representatives") that would, or
is intended to, permit an offer of the New Shares or possession or
distribution of this announcement or any other publicity material relating to
such New Shares in any jurisdiction where action for that purpose is required.
Persons receiving this announcement are required to inform themselves about
and to observe any restrictions contained in this announcement. The
distribution of this announcement, and the Capital Raise and/or the offer or
sale of the New Shares, may be restricted by law in certain jurisdictions.
Persons (including, without limitation, nominees and trustees) who have a
contractual or other legal obligation to forward a copy of this announcement
should seek appropriate advice before taking any action. Persons distributing
any part of this announcement must satisfy themselves that it is lawful to do
so.

Members of the public are not eligible to take part in the Placing, the
Subscription and the Conditional Remuneration Issue. This announcement is for
information purposes only and is directed only at: (a) persons in Member
States of the European Economic Area ("EEA") who are qualified investors
within the meaning of article 2(e) of the Prospectus Regulation (EU)
2017/1129; (b) in the United Kingdom, qualified investors within the meaning
of Article 2(e) of the UK Prospectus Regulation who are persons who (i) have
professional experience in matters relating to investments falling within the
definition of "investment professionals" in article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the "Order"); or (ii) are persons falling within article 49(2)(a) to (d)
("high net worth companies, unincorporated associations, etc") of the Order;
and (c) persons to whom it may otherwise lawfully be communicated, (all such
persons in (a), (b) and (c) together being referred to as "Relevant Persons").
This announcement must not be acted on or relied on by persons who are not
Relevant Persons. Persons distributing this announcement must satisfy
themselves that it is lawful to do so.

This announcement may contain, and the Company may make, verbal statements
containing "forward-looking statements" with respect to certain of the
Company's plans and its current goals and expectations relating to its future
financial condition, performance, strategic initiatives, objectives and
results. Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "seek", "may", "could", "outlook" or other words of similar
meaning. By their nature, all forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances which are
beyond the control of the Company. As a result, the actual future financial
condition, performance and results of the Company may differ materially from
the plans, goals and expectations set forth in any forward-looking statements.
Any forward-looking statements made in this announcement by or on behalf of
the Company speak only as of the date they are made. These forward-looking
statements reflect the Company's judgment at the date of this announcement and
are not intended to give any assurance as to future results and the Company
cautions that its actual results of operations and financial condition, and
the development of the industry in which it operates, may differ materially
from those made in or suggested by the forward looking statements contained in
this announcement and/or information incorporated by reference into or
referred to in this announcement. The information contained in this
announcement is subject to change without notice and except as required by
applicable law or regulation, the Company expressly disclaims any obligation
or undertaking to publish any updates, supplements or revisions to any
forward-looking statements contained in this announcement to reflect any
changes in the Company's expectations with regard thereto, or any changes in
events, conditions or circumstances on which any such statements are based,
except where required to do so under applicable law.

The New Shares to be issued or sold pursuant to the Capital Raise will not be
admitted to trading on any stock exchange other than AIM.

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