REG - Kefi Gold and Copper - Firm and Conditional Placing to raise £8 million

KEFI Gold and CopperAnnouncement

20/04/2022 07:00

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RNS Number : 6715I  Kefi Gold and Copper PLC  20 April 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

20 April 2022

KEFI Gold and Copper plc

("KEFI" or the "Company")

Firm and Conditional Placing to raise £8 million and Issue of Warrants

KEFI Gold and Copper (AIM: KEFI), the gold exploration and development company
with projects in the Federal Democratic Republic of Ethiopia and the Kingdom
of Saudi Arabia, is pleased to announce an oversubscribed fundraising to raise
gross cash proceeds of £8.0 million through a Firm Placing of 550,000,000 new
ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary
Shares") at a price of 0.8 pence per Ordinary Share (the "Placing Price") to
raise £4.4 million (the "Firm Placing") and a Conditional Placing of
450,000,000 new Ordinary Shares at the Placing Price to raise £3.6 million
(the "Conditional Placing") (together, the "Placing"), arranged by Tavira
Securities Limited ("Tavira").

Firm Placing

The Company will raise £4.4 million through the issue of 550,000,000 new
Ordinary Shares (the "Firm Placing Shares") at a placing price of 0.8 pence
per Ordinary Share.

Application has been made to the London Stock Exchange for admission of the
Firm Placing Shares to trade on AIM ("Admission") and it is expected that
Admission will become effective and that dealings in the Firm Placing Shares
will commence at 8.00 a.m. on or around 25 April 2022 ("Admission").

The Placing Price represents a discount of 25% against the ten-day VWAP to 19
April 2022, being the date prior to the release of this announcement.

Conditional Placing

Conditional on shareholder approval at a General Meeting of the Company (the
"General Meeting") to be convened in due course, the Company will raise a
further £3.6 million through the issue of 450,000,000 Ordinary Shares (the
"Conditional Placing Shares", together with the Firm Placing Shares, the
"Placing Shares") at the Placing Price. The Conditional Placing is subject to
the passing of certain resolutions at the General Meeting.

Shareholders are reminded that because the Conditional Placing is conditional,
among other things, on the passing of the resolutions to be proposed at the
General Meeting, should the resolutions not be passed, the Conditional Placing
will not proceed.

Use of Proceeds

The gross Placing proceeds of £8.0 million ("Gross Proceeds") will mainly be
used to fund the following:

·    selected development activities at the Company's Tulu Kapi Gold
Project ("Tulu Kapi") which will continue as authorised by the Ethiopian
Government, particularly with a view to confirming security conditions are
conducive for full project launch and financial close at the end of Q2 2022;

·    commencement of additional exploration works at satellite deposits in
the Tulu Kapi District, Ethiopian Government permitting, in order to implement
longstanding plans designed to expand or extend production and uplift the
community benefits and the economics of the Tulu Kapi development still
further;

·    to contribute the Company's share of exploration at the Hawiah Gold
and Copper Project ("Hawiah"), with a view to increasing the existing
resources of 24.9 million tonnes at 0.90% copper, 0.85% zinc, 0.62 g/t gold
and 9.81 g/t silver. In addition, funds will enable further work at the
adjacent Al Godeyer licence areas following the highly encouraging results as
announced in Q1 2022, which suggested the potential for another discovery
similar to Hawiah; and

·    for general working capital purposes.

Investor Warrants and Warrant Trigger Event

Conditional on shareholder approval at the General Meeting, the Company will
grant one warrant per two Placing Shares at an exercise price of 1.6 pence
("Warrants") exercisable for a period of two years from Admission of the
Conditional Placing Shares.

The Company has elected that the Warrants will become exercisable if, during a
two-year period following the date of Admission, the on-market share closing
price of the Ordinary Shares for five consecutive days reaches or exceeds 2.4
pence (being a 50% premium on the Warrant exercise price) (the "Warrant
Trigger Event").

If the Warrant Trigger Event occurs then:

(i)        the holders of the Warrants must exercise the Warrants
within 30 days from the occurrence of the Warrant Trigger Event; and

(ii)          the Warrants will expire following the end of the
30-day period referenced above if not exercised.

If the Warrant Trigger Event has not occurred within two years following the
date of admission of the Conditional Placing Shares, then the Warrants shall
lapse and will no longer be capable of being exercised.

The Warrants will be issued in certificated form and will not be admitted to
trading on AIM. The Warrants will be transferable in accordance with the terms
of the Warrant instrument to be entered into by the Company. Any Ordinary
Shares issued pursuant to the Warrants will, when issued, be admitted to
trading on AIM.

The Warrants, along with those issued in January 2022, may raise a further
£14.3 million, at the 1.6 pence exercise price, assuming that all investors
exercise their warrants. It is expected that these funds will be sufficient to
fund any necessary KEFI equity capital subscription in its subsidiary Tulu
Kapi Gold Mines Share Company required as part of the broader identified
US$356 million Tulu Kapi development funding syndicate.

These equity funds are in addition to the KEFI equity capital contribution
which had already been conditionally arranged with convertible note investors
and the equity amounts which will have been historically invested prior to
financial close. Details of the composition of the identified funding
syndicate can be found in prior Company announcements and also in the
corporate presentation uploaded to the Company's website on 4 April 2022.

The proposed timing for Tulu Kapi financial close remains the end of Q2 2022
with all being parties to be asked to sign up to the normal binding
commitments and the associated conditions and sequence for disbursement of
funds for a transaction of this nature.

General Meeting

A circular convening the General Meeting to be held during May 2022 will be
circulated shortly. The General Meeting will propose resolutions to
shareholders to grant the board authority to allot the Conditional Placing
Shares on a non-pre-emptive basis, and to grant the Warrants. Once published,
the circular will be available to download from the Company's website at
www.kefi-minerals.com. It is important that shareholders lodge their votes in
advance of the General Meeting through submission of their proxy votes.

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

"The Placing is to reinforce the rapid advancement of our three advanced
projects in Ethiopia and Saudi Arabia. The Placing Shares, combined with the
exercise of the Warrants and those from the placing announced on 21 December
2021, are intended to provide an additional c. £22.3 million (c. US$29
million) of share capital, designed not only to complete the last piece of the
planned Tulu Kapi project financing package of c. US$356 million, but also
build on the ongoing success we are seeing in our exploration programmes in
Saudi Arabia.

"In Ethiopia our subsidiary has historically invested approximately US$70
million in the Tulu Kapi project and we are now at the stage to increase
development and also exploration activities, as allowed by the Government
authorities, to demonstrate both our good faith and to also show that security
is appropriate for full project launch from mid-2022. This is very important
as we have now conditionally lined up all the equity and debt funds required
for full development project financing and the finance syndicate is keen to
work very closely with the Government to ensure security and all regulatory
clearances are in order.

"For our two projects in Saudi Arabia, Hawiah Copper-Gold and Jibal Qutman
Gold, we must contribute our 30% share to the joint venture to ensure that we
accelerate the drilling and development studies on our significant
discoveries.

"At the recently granted Al Godeyer Licence we will look to undertake further
drilling on identified targets which have yielded rock chip grades of up to
1.8% copper and 7.2g/t gold from surface trenching. KEFI remains optimistic
that discoveries here are similar to those reported for the adjacent Hawiah
deposit, which itself remains subject to further extensive exploration in 2022
as the existing resources remain open and additional targets have been
identified.

"At our Jibal Qutman Gold Project, our joint venture is also optimistic of
receiving a Mining Licence this year and this capital raise will ensure the
Company is well positioned to meet its share of preliminary development
planning for the low-cost/quick-to-start heap leach operation.

"We have the opportunity to build substantial value from de-risking and
advancing the three projects. The Company's internal NPV (8% after tax) on the
three projects (at current metal prices as at 18 April 2022) indicates a
combined NPV of 12 pence per share, after dilution from the Placing announced
today. Therefore, we know that there is considerable merit in putting the
capital in the ground and pushing the Company towards its goal of becoming a
mid-tier gold and copper producer."

Placing Agreement

The Company has appointed Tavira (the "Broker") as its agent pursuant to the
terms of a placing agreement executed on 19 April 2022 (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 75,000,000 warrants over KEFI
ordinary shares (the "Broker Warrants"), subject to shareholder approval, at
the General Meeting, in connection with its appointment. Each Broker Warrant
will entitle the Broker to subscribe for one new KEFI ordinary share at a
price of 0.80 pence per share, exercisable for a period of three years from
the date of Admission of the Conditional Placing Shares.

Total Voting Rights

Application has been made to the London Stock Exchange for Admission of the
Firm Placing Shares to trade on AIM and it is expected that Admission will
become effective and that dealings in the Firm Placing Shares will commence at
8.00 a.m. on or around 25 April 2022. Following Admission of the Firm Placing
Shares, the total issued share capital of the Company will consist of
3,489,119,050 Ordinary Shares each with voting rights. The Company does not
hold any Ordinary Shares in treasury. Therefore, the total number of voting
rights in the Company will be 3,489,119,050 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.

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)                         +357 994 57843
 John Leach (Finance Director)                                         +357 992 08130

 SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker)   +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl

 Tavira Securities Limited (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

Further information 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 (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE
OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA (COLLECTIVELY 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 Placing 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 Placing 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 Placing 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 Australia, Canada, Japan, New Zealand, the Republic of South
Africa.

No public offering of the Placing Shares is being made in the United States,
United Kingdom or elsewhere. All offers of the Placing 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, 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 Placing Shares or possession or
distribution of this Announcement or any other publicity material relating to
such Placing 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 Placing and/or
the offer or sale of the Placing 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. 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) otherwise, 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 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 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 Placing Shares to be issued or sold pursuant to the Placing will not be
admitted to trading on any stock exchange other than AIM.

 

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