REG - Kefi Gold and Copper - Rapid Progress Continues in Saudi Arabia

KEFI Gold and CopperAnnouncement

28/02/2022 07:00

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RNS Number : 9432C  Kefi Gold and Copper PLC  28 February 2022

 

28 February 2022

KEFI Gold and Copper plc

("KEFI" or the "Company")

Rapid Progress Continues in Saudi Arabia

KEFI (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 that exploration and development studies
at the KEFI-operated Gold & Minerals Limited ("G&M") Hawiah
Copper-Gold Project ("Hawiah") and the contiguous Al Godeyer Exploration
Licences ("Al Godeyer") in Saudi Arabia continue to make rapid progress. The
development in due course of G&M's rapidly growing projects is intended to
be funded as to c.25% by the G&M shareholders (KEFI 30% and ARTAR 70%) and
c.75% by project debt-funding. G&M's projects look likely to be developed
following construction of the Company's Tulu Kapi Gold Project in Ethiopia,
the full launch of which is targeted by mid-2022.

Hawiah

Exploration drilling and trenching at Hawiah has continued following the
substantial diamond drilling programmes completed during 2021 and the upgraded
Hawiah Mineral Resource Estimate ("MRE") announced on 6 January 2022.
Current work streams are focussed on providing data for the Hawiah Preliminary
Feasibility Study ("PFS") and include:

·    A 3,700m reverse-circulation ("RC") drilling programme which
commenced in late January 2022 aimed at upgrading and expanding the oxide
portion of the Hawiah MRE to an Indicated Resource category for open pit mine
planning;

·    A now completed, targeted trenching programme across the Camp and
Crossroad Lodes, which enabled the collection of bulk samples of the oxide
material which have been dispatched for analysis;

·   Further metallurgical test work on the sulphide mineralisation to
determine the preferred flowsheets to recover the copper concentrates and zinc
concentrates, as well as the gold and silver;

·      A recently commenced 1,800m geotechnical diamond drilling ("DD")
programme; and

·      A 1,350m hydrogeological drilling and pump testing programme
which is scheduled to start in early March.

Al Godeyer

The two Al Godeyer Exploration Licences ("EL") granted in December 2021 are
located immediately west of the Hawiah EL and contains historically recognised
and newly identified gossans that crop-out over a 2km strike (see the appended
Figure 1 accessible via
http://www.rns-pdf.londonstockexchange.com/rns/9432C_1-2022-2-27.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/9432C_1-2022-2-27.pdf) ).
These are considered to be the weathered surface expression of a Volcanic
Massive Sulphide ("VMS") deposit, a direct geological analogue of the Hawiah
deposit. Initial exploration has focussed on establishing continuity of the
main gossans and work in the first two months includes:

·      Mapping and rock chip sampling; which has returned gold grades of
up to 7.2g/t and copper up to 1.8% within the gossan;

·      Completion of the field data collection for the Self-Potential
("SP") geophysical survey;

·      Systematic trenching across the mapped gossans with 13 of the
planned 28 trenches completed and dispatched for analysis; and

·      Planning for the Q2 2022 scout diamond drilling programme.

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

"Our 2022 projects in Saudi Arabia took off two months ago, with the reporting
of a significantly expanded and upgraded Mineral Resource Estimate at Hawiah,
the granting of the Al Godeyer Exploration Licences and the informal
indications from the Saudi Arabian Ministry of Mineral Resources that our
Jibal Qutman Gold Project will have its mining licence application processed
this year.

"Our field teams have immediately responded and are focussed on achieving our
key 2022 objectives in Saudi Arabia of completing the Hawiah Copper-Gold
Project PFS, updating Jibal Qutman's development plans and rapidly hitting the
ground at Al Godeyer, where early results indicate significant VMS potential,
similar to the copper-gold deposits at Hawiah. Success at Al Godeyer would
potentially add substantial value to the development of the Hawiah project.

"VMS deposits typically form in clusters and Al Godeyer is only one of the
many VMS prospects in the G&M pipeline of exploration targets."

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 (Managing Director)        +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 Securities Limited (Lead Broker)             +44 (0) 20 7100 5100
 Oliver Stansfield, Jonathan Evans
 WH Ireland Limited (Joint Broker)                   +44 (0) 20 7220 1666
 Katy Mitchell, Andrew de Andrade
 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 non-financial matters based on this
information in the form and context in which it appears.

The upgraded Hawiah Mineral Resource was announced on 6 January 2022. 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 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.

The following tabular summary presents KEFI's updated estimated share of the
project NPV's :

                                 Tulu Kapi                   Hawiah        Jibal Qutman  Total         Issued        Pence Per
                                 NPV                         NPV           NPV           NPV           Shares        Share
 Net Present Value for KEFI
     30/06/2020                  £114m                       0             0             £114m         1,867m        6
     31/12/2020                  £164m                       £80m          0             £244m         2,137m        11
     30/06/2021                  £205m                       £74m          0             £279m         2,153m        13
     31/12/2021                  £191m                       £128m         £29m          £348m         2,939m        12
 Footnotes:
 Assumed exchange rate was rate US$1.35:£1.00
 31 December 2021 Metal Prices:
 Gold Price is US$1,830/oz
 Copper Price is: US$9,750/t
 Zinc Price is US$3,590/t
 Silver Price is US$23/oz

 Explanatory Notes:
 * NPV is derived by KEFI using independently created financial models of net
 cash flows after tax
 and debt service, using a discount rate of 8%;
 * Tulu Kapi open pit model is based on the Definitive Feasibility Study
 ("DFS") as updated for any
 refinements during project contracting and in-country experience;
 * Tulu Kapi underground mine model is based on the internal Preliminary
 Economic Assessment ("PEA");
 * Hawiah assumes preliminary mine modelling for open pit and underground
 because the MRE has only recently been updated. Also includes preliminary debt
 leverage;
 * Jibal Qutman model is based on the internal PEA, preliminary debt-leverage
 applied.

 

KEFI Gold and Copper 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. Estimates include open pit gold production of c. 140,000oz pa for a
7-year period. All-in Sustaining Costs (including operating, sustaining
capital and closure but not including leasing and other financing charges)
remain c. US$800/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's
wholly-owned Ethiopian subsidiaries upon commencement of development by TKGM,
with a view to adding satellite deposits to development and production plans.

KEFI Gold and Copper 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 30% interest in G&M and is the
operating partner.

ARTAR, on behalf of G&M, and G&M directly hold over 16 Exploration
Licence (EL) applications pending the introduction of the new Mining Law.
These new regulations have recently been proclaimed and G&M now holds 3
EL's.  ELs are renewable for up to three years and bestow the exclusive right
to explore and to obtain a 30-year exploitation (mining) licence within the
area.

In addition, G&M has a Mining Licence Application over the Jibal Qutman
Gold Project which recent informal indications by the authorities provide some
confidence that the licence will be granted in 2022.

 

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