REG - Kefi Gold and Copper - Co-Lenders’ Boards and Committees Approve Project

KEFI Gold and CopperAnnouncement

18/03/2025 07:00

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RNS Number : 9990A  Kefi Gold and Copper PLC  18 March 2025

18 March 2025

KEFI Gold and Copper plc

 

("KEFI" or the "Company")

 

Co-Lenders' Boards and Committees Approve Project

Community Supports Resettlement Plans

 

KEFI (AIM: KEFI) the gold and copper exploration and development company
focused on the Arabian-Nubian Shield,is delighted to report that following the
recent confirmation of credit committee approvals (see RNS announcement 11
March 2025), the Company has now been advised that both banks have also
processed Board approvals for the Tulu Kapi project.

 

Therefore, both of our co-lending-banks have now received support from all
their respective committees and Boards to proceed. This is subject to formal
updates of prior approvals and to all documentation reflecting the expanded
$240 million offering, and the satisfaction of standard conditions previously
reported for a transaction of this nature (see below).

 

Equally important, on the ground, we can now report that the community is
supporting and agreeing to the resettlement plans and compensation surveys, as
explained by Government authorities for individual households within the large
mining licence area. This follows our earlier report on settling the first
compensation sum for the initial construction camp area.

 

All other preparations are on track.

 

KEFI Founder and Executive Chairman, Harry Anagnostaras-Adams, commented,
"After a decade of preparing Tulu Kapi and overcoming various external
challenges, we're pleased to have secured Tier 1 support from the Government,
industry specialists, and financial institutions to initiate development. This
comes at a time when gold prices are at record highs, with projections
indicating net cash flow surpassing the total project finance debt of $240
million in the first year alone.

 

"Of course, the support of the Tulu Kapi community is by far the most
important foundation for our Project. Their continued support is very pleasing
to witness. The community will have an important role to play in establishing
Tulu Kapi as a 21(st) century-standard gold mine and one of Ethiopia's
flagship developments."

 

 

 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) 20 7100 5100
 Oliver Stansfield, Jonathan Evans

 IFC Advisory Ltd (UK Financial PR)                  +44 (0) 20 3934 6630
 Tim Metcalfe, Florence Chandler

 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 Project Economic Metrics:

 

Tulu Kapi has particularly robust economic metrics, based largely on lack of
overburden, high grades and high recoveries. It will be a huge boost for the
community, region, country and, of course, the Company. It has been a long
time in the making, necessitating extensive regulatory reform and completion
of other sensitive behind the scenes preparations for this first
internationally project financed mining project in Ethiopia. It has taken much
patience and support from the Government.

 

Development capex has been "banked" (project-financed) against the open-pit 1m
oz Ore Reserves (15.4Mt at 2.1 g/t, with pit shells, mine plans and reserves
derived using a now overly conservative gold price assumption of $1,250/oz).
The project lenders' base case financial model also assumes only the open pit
ore is processed at average 2Mtpa from mine output starting at 2.5Mtpa. 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 what is today "bankable". It involves early
underground development underneath the planned open pit to establish
underground drilling platforms to extend the existing 220K oz of Indicated
Resource (1.2Mt at 5.7g/t), as the deposit is open down plunge with the last
drill intercept being 90m at 2.8 g/t, within which there are several
high-grade mineable zones. KEFI's long-standing estimate is for potential
+1Moz underground ore. KEFI's Preliminary Economic Assessment reflects that it
will introduce initial underground production and recover approximately 200Koz
(1.5Mt at 4g/t), from already reported Indicated Resource, after mine
dilution. This will supplement the open pit ore during the first 7 production
years and, by running the plant at 2.4Mtpa, the Business Plan Model shows +7
years of production at an average of 167Koz pa generating estimated net cash
flow to shareholders over that period of $1.1-1.6 billion, i.e. after all cash
outflows and at gold prices of $2,400-3,000/oz (representing S&P Global
average consensus forecasts and current spot). On the same basis, Production
Year 1 net operating cash flow is estimated at $231-304 million. This compares
with project finance debt of $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
(https://www.kefi-goldandcopper.com/files/files/KEFI-Tulu-Kapi-Gold-Project-Overview-March25.pdf)

 

Remaining Steps to Full Project Funding Sign Off

 

Having now received credit committee and Board clearances from the co-lending
banks, the next steps are:

 ·           Updating of all banking details and arrangements for latest approvals and
             associated plans;
 ·           Receipt of the remaining Government confirmations on various well understood
             and already discussed issues, including Parliamentary Ratification that both
             of our banks have the same Country Membership protections in Ethiopia - this
             has been done for one bank and for the other it is in advanced process after
             having been approved at Ministerial level;
 ·           Last-minute certifications of security, community readiness and the project
             financial model; and
 ·           Formal signing of detailed definitive documentation reflecting all the above

 

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