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

KEFI Gold and CopperAnnouncement

03/08/2022 07:15

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RNS Number : 6863U  Kefi Gold and Copper PLC  03 August 2022

3 August 2022

KEFI Gold and Copper plc

("KEFI" or the "Company")

Rapid Progress in Saudi Arabia

Formal Notification of Jibal Qutman Land Use Permitted for Mining

Two further exploration licences granted

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 positive licencing progress on the Jibal
Qutman project, plus the award of two further exploration licences through the
Company's Gold and Minerals Limited ("G&M") joint venture in Saudi
Arabia.  G&M is owned 30% by KEFI and 70% by its partner Abdul Rahman
Saad Al Rashid and Sons Ltd ("ARTAR").

Highlights

Jibal Qutman

·    G&M has received the anticipated formal notification from the
Saudi Arabian Ministry of Industry and Mineral Resources ("MIM") that land
access issues which halted the mine development application in 2016 are now
resolved, clearing the way for the re-issuance of exploration licences ("ELs")
as a precursor to the granting of the Jibal Qutman mining licence.

·    Exploration programmes and environmental baseline studies, as well as
geotechnical and metallurgical drilling for the final development planning
("DFS") will commence once the ELs are issued.

·    Given the considerably stronger gold price outlook now prevailing, as
compared with that in 2015 when preliminary development studies were
completed, the Jibal Qutman DFS is being adjusted to focus on recovering over
500,000 oz of gold rather than the originally envisaged 200,000 oz of gold.

·    The DFS remains on-track for completion at the end of Q4 2022, with
environmental permits targeted for Q1 2023, leading to a Mining Licence
Application ("MLA") resubmission in early 2023. Project financing for Jibal
Qutman is expected to be sourced and implemented within Saudi Arabia, which
has well-developed international capital markets with a mandate to invest in
the country's mineral resources. Therefore, development commitments are
expected to proceed in an expedited fashion upon the granting of the mining
licence.

Additional Licences

·    As anticipated, G&M's exploration areas are being expanded in
Saudi Arabia where the newly overhauled regulatory regime is speeding up
progress. Two further exploration licences have now been awarded to G&M on
an initial five-year term, bringing the total number of exploration licence
issued to seven covering a total area of 462km(2).

·    The two new licences are Abu Salal South and Jadib Al Qahtanah:

-      The Abu Salal South EL hosts Volcanic Massive Sulphide ("VMS")
mineralisation and is located 50km south of the Company's discovery at Hawiah,
within the same geological belt, the Wadi Bidah Metallogenic Belt ("WBMB").
G&M geologists have already identified gossan outcropping discontinuously
for 2km with grades of up to 4.0 g/t gold.

-      The Jadib Al Qahtanah EL is situated approximately 45km east of
the Mahad Ad Dahab mine, the principal historic Saudi gold and silver mine, in
the Central Arabian Shield. Mineralisation presents as quartz vein hosted gold
within a diorite body, with gold grades from crush dumps of up to 52 g/t.

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

"We are extremely excited to announce the positive conclusion of the land
access issue which has delayed the development of the Jibal Qutman project
since 2016. The Company is very grateful for the support of the Ministry of
Industry and Mineral Resources in these matters, who have gone to great
lengths to secure this ground on behalf of the Company.

"This news, coupled with the KEFI Saudi Arabia team's early recommencement of
studies in Q1 this year, paves the way for the fast-tracking of the project.
With modern finance regulations already in place in-country along with strong
Saudi capital markets, we can now realistically target bringing the mine into
production in H2-2024, around the same time we expect to start  production at
Tulu Kapi in Ethiopia.

"We are also pleased with the granting of the new exploration licences. The
Abu Salal South EL reinforces our position near our Hawiah discovery in the
Wadi Bidah Metallogenic Belt which we believe will host multiple
copper-zinc-gold mines. And the Jadib Al Qahtanah EL expands our portfolio
across the Kingdom into another area that has already demonstrated great
potential for gold mining, hosting Saudi Arabia's principal historic gold and
silver mine.

"We are delighted that the Company is now positioned as a major explorer and
developer in the Saudi Arabian shield."

 

Background

Jibal Qutman Project Developments

The Company is pleased to report that discussions with the MIM regarding land
access have successfully concluded. The current landowners have agreed to
allow the MIM to start the process of issuing licences and the Company is in
receipt of official notification setting out the process for recommencement of
work on the Jibal Qutman Project.

Stipulations around licencing remain the same as previously announced and
 G&M will need to submit an updated Development Plan and Environmental
and Social Impact Assessment to enable the resubmission of the mining licence
application under the new Saudi Arabian Mining Investment law.

G&M currently has five exploration licence applications within the Jibal
Qutman area and work is now underway to finalise the issuance of an initial
three exploration licences which will enable the above studies and planned
exploration works to commence.

A base of operations has already been established in the nearby city of Bisha
and the exploration team, project team and drilling contractors are lined up
to re-enter the area and commence work. An initial 5,000m diamond drilling
programme has been designed by the G&M team, with input from supporting
consultancy groups, to enable geotechnical and metallurgical testing and
facilitate resource expansion.

Abu Salal South and Jadib al Qahtanah Exploration Licences

Building on the award of the Jabal Hillit and Qunnah Exploration licences,
announced on 12 July 2022, G&M have been granted two further exploration
licences: 'Abu Salal South' and 'Jadib Al Qahtanah'. This increases the number
of G&M's active exploration licences across the Arabian Shield to seven,
covering a total area of 462km(2). The G&M exploration team are already
active on these new sites with mapping and sampling to expand the footprints
of known mineralisation.

Abu Salal South

The Abu Salal South exploration licence is situated approximately 50km south
of the Hawiah deposit, hosted within the same Wadi Bidah Metallogenic Belt
("WBMB") (see Figure 1 in the attached appendix, accessible here

http://www.rns-pdf.londonstockexchange.com/rns/6863U_1-2022-8-2.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6863U_1-2022-8-2.pdf) .

Exploration works are focused on a previously poorly understood gossan horizon
that was subject to limited work by the French Bureau de Recherches
Géologiques et Minières ("BRGM") in the late 1980's. The G&M team have
subsequently identified this gossan as akin to the Hawiah style of VMS
deposit, with similar textural and alteration facies noted at both deposits.

Initial mapping and sampling conducted under the reconnaissance licence has
established several gossan areas that outcrop along a currently discontinuous
strike horizon of 2km.

Gold mineralisation has been confirmed along the strike with grades of up to
4.0 g/t in the gossan. Copper carbonate minerals have also been noted on the
flanks of the horizon, indicating copper mineralisation at depth.

The widest gossan exposure, located at the southern end of the horizon has
returned an interval of 38m at 0.75g/t gold from channel sampling. The team
are now focused on mapping out the extents of this horizon with a mix of
mapping, sampling and self-potential (SP) surveying, which has proved to be
highly effective at the analogous Hawiah and Al Godeyer sites also within the
WBMB. These works will help focus the planned trenching and scout drilling
phases.

Jadib al Qahtanah

The Jadib al Qahtanah exploration licence presents as a grassroots gold target
approximately 45km from the Mahd Ad Dahab mine, Saudi Arabia's principal gold
and silver mine, in the central portion of the Arabian Shield (see Figure 2 in
the attached appendix).

Gold mineralisation within this licence appears to be structurally related,
presenting as quartz veins within a diorite host. Rockchip samples from
ancient crush dumps taken during early G&M reconnaissance visits returned
grades of up to 52g/t gold.

Large flood basalts related to Red Sea rifting, cover a substantial portion of
the exploration licence, and appear to be masking the main area of
mineralisation. These flood basalts, which can be found across the Shield are
known in Arabic as 'Harats'. In the Jadib al Qahtanah licence area these
basalts are relatively thin, ranging from 2m to 20m.

Exploration efforts will start by establishing the structural framework of the
area and strike extents of the mineralised system, focusing on the structure
as it disappears under the Harat, allowing for a targeted geophysics and
drilling programme.

The task of exploring these four new licences in tandem to the Company's
Hawiah and Jibal Qutman projects, has required the establishment of a
dedicated regional exploration team. As well as working the early-stage
projects, this team will continue to assess additional targets across the
country and seek to grow the G&M project portfolio.

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 geology, 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.

 

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