REG - Kefi Gold and Copper - Issue of Equity

KEFI Gold and CopperAnnouncement

04/03/2024 16:45

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RNS Number : 5239F  Kefi Gold and Copper PLC  04 March 2024

4 March 2024

KEFI Gold and Copper plc

("KEFI" or the "Company")

Issue of Equity

 

Firm Placing to raise £4.5 million

Conditional issue of shares for £0.5 million in settlement of liabilities to
Directors and Advisers

Primary Bid Offering

Notice of General Meeting

 

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 a fundraising
package to facilitate full project launch at Tulu Kapi, with project launch
expected to occur in mid-2024.

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

i.    a firm placing of 750,000,000 new ordinary shares of 0.1 pence each
in the capital of the Company ("Ordinary Shares") at a price of 0.6 pence per
Ordinary Share (the "Placing Price") to raise £4.5 million (the "Firm
Placing"), arranged by Tavira Financial Limited ("Tavira" or the "Broker");

ii.    a conditional issue of 83,333,333 Ordinary Shares at the Placing
Price (the "Remuneration Shares"), subject to approval by shareholders,
pursuant to which certain directors and corporate advisers have elected to
receive shares in lieu of accrued fees of approximately £0.5 million (the
"Conditional Remuneration Issue"); and

iii.   an offer through PrimaryBid of new Ordinary Shares at the Placing
Price (the "Retail Shares") (the "PrimaryBid Offer"). Further details of the
PrimaryBid Offer will be announced shortly.

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

"KEFI is pleased to have secured this funding to underpin the launch of the
Tulu Kapi Gold Project by mid-2024. The funding has been carefully designed to
meet the needs of the Tulu Kapi project at the same time as maximising the
opportunity for existing shareholders to participate.

"On a fully diluted basis, post the issuance of the Firm Placing and the
Conditional Remuneration Shares, the estimated NPV (8%) at US$1,862/oz gold
(Standard and Poor's long-term consensus forecast*) of KEFI's planned interest
in Tulu Kapi alone is 2.9 pence per Ordinary Share and the associated
projected IRR is over 60%. This does not include any upside from exploration
at Tulu Kapi or surrounding areas. Nor does it include the value of KEFI's net
interest of 25% in the Saudi joint venture, the aggregate Mineral Resource
Estimate of which is already approaching that of Tulu Kapi, taking into
account KEFI's beneficial interest only.

"We are now entering a highly active period for KEFI in both Ethiopia and
Saudi Arabia and I would like to thank both the existing and new shareholders
in this capital raise for their support and, of course, our partners and
financiers for their support at the project company level."

*Standard and Poor's 16 January 2024 long-term consensus analyst forecast for
gold prices

Firm Placing

The Company will raise £4.5 million through the issue of 750,000,000 new
Ordinary Shares (the "Firm Placing Shares") at a placing price of 0.6 pence
per Ordinary Share.

Application will be made to the London Stock Exchange for admission of the new
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 8 March 2024 ("First Admission").

Primary Bid Offer

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

Further details of the PrimaryBid Offer will be announced shortly.

Conditional Remuneration Issue

The Conditional Remuneration Issue has been arranged by the Company and
requires shareholder approval at a general meeting of the Company, to be held
on 26 March 2024 (the "General Meeting"). Pursuant to the Conditional
Remuneration Issue, certain directors of the Company and corporate advisers
have elected to receive Remuneration Shares in lieu of cash settlement.

The Conditional Remuneration Issue consists of 83,333,333 Conditional
Remuneration Shares to be subscribed at the Placing Price. The Executive
Chairman and Finance Director will receive 50,000,000 Conditional Remuneration
Shares (in aggregate), whilst two corporate advisers are receiving 33,333,333
Remuneration Shares.

A circular containing the notice of General Meeting will be posted to
shareholders in the next week. The Conditional Remuneration Issue is
conditional, inter alia, on First Admission becoming effective, the passing of
the resolutions to be proposed at the General Meeting and the admission of the
Conditional Remuneration Shares to trading on AIM becoming effective at 8.00
a.m. on or around 27 March 2024 ("Second Admission").

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

Use of Proceeds

The expected gross proceeds of the Capital Raise of at least £4.5 million
(the "Gross Proceeds") will be applied to:

·    completion of project financing and launch of the Company's Tulu Kapi
Gold Project (the "Project"), which relate to legal and professional fees,
preparations of the community, site and district security installation and
administrative costs of satisfying the remaining conditions for the project
finance package.  As previously reported, a US$320 million project finance
package (excluding historical investment of US$100 million and the mining
fleet supplied by the mining contractor) has been assembled and is now
progressing through the approval processes of each of the syndicate members.
The Final Umbrella Agreement was signed in April 2023, but the Project had to
wait until the formalisation in October 2023 by the National Bank of Ethiopia
(central bank) of the required exemptions from exchange and capital controls.
That central bank approval triggered syndicate meetings in November and
December 2023 giving the go-ahead to prepare Project launch. Since then,
Eastern and Southern Trade and Development Bank, the lead-bank, has approved
its US$95 million participation. The other members of the syndicate, being the
co-lender, equity risk note investors and the co-shareholder (all major
regional corporations) have activated their approval processes (see KEFI's RNS
dated 13 February 2024 for further information). The Company's principal
co-shareholder in the Project is the Government of Ethiopia and its commitment
was made long ago with capital already being deployed;

·    the extinguishing of certain current liabilities and advances to
strengthen the Company's balance sheet ahead of proposed Project development;
and

·    for general working capital purposes.

The Company expects Project launch in mid-2024 following signing of detailed
definitive documentation. The outstanding conditions precedent are typical for
a transaction of this nature.

Placing Agreement and Issue of Warrants

Tavira acted as broker to the Firm Placing. The Company has appointed the
Broker 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 37,500,000 warrants over KEFI
ordinary shares (the "Broker Warrants") subject to shareholder approval at the
General Meeting. Each Broker Warrant will entitle the Broker to subscribe for
one new KEFI ordinary share at a price of 0.6 pence per share, exercisable for
a period of three years from the date of Second Admission.

In addition, 12,400,000 warrants have been issued to another adviser to the
Company, subject to shareholder approval at the General Meeting, on the same
terms as the Broker Warrants.

Conditional Remuneration Issue for the settlement of debt and accrued
directors' fees

The number of Conditional Remuneration Shares to be issued to each KEFI
Director and their resulting shareholdings are set out below:

 

 Name                                    Number of existing ordinary shares  Number of Conditional Remuneration  Number of Ordinary Shares held on  Value of Conditional Remuneration Shares

                                         in KEFI                             Shares                              Second Admission                   £
 Harry Anagnostaras- Adams¹ (Executive   81,159,883                          33,333,333                          114,493,216                        200,000

 Chairman)
 John Leach (Finance Director)           45,311,457                          16,666,667                          61,978,124                         100,000
 Total Shares issued to Directors        126,471,340                         50,000,000                          176,471,340                        300,000

 

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

¹ Semarang Enterprises Ltd a company of which Harry Anagnostaras-Adams is the
sole director and sole shareholder and the Adams Superannuation Fund hold the
81,159,883 Ordinary Shares.

 

Relevant related party transaction disclosures

 

The participation in the Conditional Remuneration Issue by Executive Chairman
Harry Anagnostaras-Adams and Finance Director John Leach, is being treated as
a related party transaction under AIM Rule 13 of the AIM Rules. Alistair
Clark, Mark Tyler 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
Company's shareholders are concerned.

Notice of General Meeting

A circular convening the General Meeting, to be held on 26 March 2024, will be
circulated shortly. The General Meeting is to be held at 11:00 a.m. (EET)
(9:00 a.m. (GMT)) on 26 March 2024 at 1 Achaion Street, Engomi, Nicosia, 2413,
Cyprus, to consider and, if thought appropriate, pass the resolutions that are
required to issue and allot the Conditional Remuneration Shares and the Broker
Warrants, and also to grant the Directors additional authorities to issue
shares in the future (including on a non-pre-emptive basis).

The General Meeting will be followed by an investor webinar via the Investor
Meet Company platform on 26 March 2024 at 10am GMT during which a presentation
will be given and submitted questions answered. The webinar is open to all
existing and potential shareholders. Questions can be submitted pre-event via
your Investor Meet Company dashboard up until 9am the day before the meeting
or at any time during the live presentation. Investors can sign up to Investor
Meet Company for free and add to meet KEFI via:

https://www.investormeetcompany.com/kefi-gold-and-copper-plc/register-investor
(https://www.investormeetcompany.com/kefi-gold-and-copper-plc/register-investor)

Investors who already follow KEFI on the Investor Meet Company platform will
automatically be invited.

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.

If the resolutions required to approve 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.

Admission to AIM

Application will be made for admission to trading on AIM of 750,000,000 new
Ordinary Shares of the Company pursuant to the Firm Placing and it is expected
that First Admission will take place and that trading will commence on AIM at
8.00 a.m. on or around 8 March 2024.  Subject to the successful completion of
the PrimaryBid Offer, application will also be made for admission to trading
on AIM of the Retail Shares with effect from First Admission.

Conditional on shareholder approval, application will be made for admission of
the Conditional Remuneration Shares to trading on AIM after the General
Meeting and it is expected that Second Admission will become effective and
dealings will commence in the Conditional Remuneration Shares at 8:00 a.m. on
or around 27 March 2024.

The Firm Placing Shares, the Conditional Remuneration Shares and the Retail
Shares will rank pari passu in all respects with the existing ordinary shares
of the Company.

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 (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 Firm Placing Shares and the Conditional Remuneration Shares (together, the
"Firm Placing and Remuneration 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 Firm Placing
and Remuneration 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 Firm Placing and Remuneration 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 Firm Placing and Remuneration Shares is being made
in the United States, United Kingdom or elsewhere. All offers of the Firm
Placing and Remuneration 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 Firm Placing and Remuneration Shares or
possession or distribution of this announcement or any other publicity
material relating to such Firm Placing and Remuneration 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 Firm
Placing and Remuneration 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 Firm Placing 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 Firm Placing and Remuneration Shares and the Retail 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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