REG - Kefi Gold and Copper - Results for the year ended 31 December 2024
06/06/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250606:nRSF7024La&default-theme=true
RNS Number : 7024L Kefi Gold and Copper PLC 06 June 2025
6 June 2025
KEFI Gold and Copper plc
("KEFI" or the "Company")
Results for the year ended 31 December 2024
KEFI (AIM: KEFI), the gold and copper exploration and development company
focused on the Arabian-Nubian Shield, is pleased to announce its audited
financial results for the year ended 31 December 2024.
AGM and Annual Report
The notice convening the Company's Annual General Meeting ("AGM"), which is
currently expected to be held on 17 July 2025 in London, will be sent out in
the week commencing 9 June 2025 and will be available for download on the
Company's website: https://www.kefi-goldandcopper.com
(https://www.kefi-goldandcopper.com) . A further announcement will be made
when the Notice of AGM is published.
The Annual Report and Accounts for the year ended 31 December 2024 is also
available on KEFI's website at https://www.kefi-goldandcopper.com
(https://www.kefi-goldandcopper.com)
Competent Person's Statement
KEFI reports in accordance with the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (the
"JORC Code").
The information in this announcement that relates to exploration results,
Mineral Resources and Ore Reserves is based on information compiled by Mr
Jeffrey Rayner and has been previously announced by the Company. He is
exploration adviser to KEFI, the Company's former Managing Director and a
Member of the Australian Institute of Geoscientists ("AIG"). Mr Rayner is a
geologist with sufficient relevant experience for Group reporting to qualify
as a Competent Person as defined in the JORC Code. Mr Rayner consents to the
inclusion in this report of the matters based on this information in the form
and context in which it appears.
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 2225 6161
John Leach (Finance Director)
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 Staton
3PPB LLC (North American Financial PR)
Patrick Chidley +1 (917) 991 7701
Paul Durham +1-203-940-2538
EXECUTIVE CHAIRMAN'S REPORT
KEFI's key focus over the past year has been to complete the steps required to
bring Tulu Kapi into production in Ethiopia. This process has required
assembling, preserving through in-country challenges, working with, and
occasionally refining the Project Syndicate which is comprised of a number of
stakeholders including community, government, contractors, lenders and equity
providers. We are now very close to completing this process, closing the
c.$320 million project finance package and deploying substantial capital into
developing Tulu Kapi.
On the other side of the Red Sea, our GMCO joint venture is now
well-established as the leading private sector explorer/developer in the
fast-emerging Saudi mining sector and its growth has coincided with the Saudi
Government's widely publicised recent initiatives to welcome international
expertise.
In late 2024, KEFI and our partner ARTAR decided to undertake a strategic
review of GMCO and of KEFI's 15% shareholding in GMCO in light of its next
stage of aggressive growth that included further building the GMCO leadership
team and progressing development of Hawiah and Jibal Qutman. We believe there
is great value in developing these projects and the substantial exploration
potential. Unfortunately, during recent years the cost of raising sufficient
funds via the issue of KEFI equity to maintain its interest was deemed to not
be in the best interest of KEFI shareholders. This was due to the disconnect
between the KEFI's current market capitalisation and the Board's considered
view of the inherent value of KEFI's minority shareholding in GMCO and of
KEFI's majority-owned flagship Tulu Kapi Project. This assessment will be kept
under review as we trigger full launch of Tulu Kapi development and offers for
the GMCO shareholding are evaluated. We are also seeing in international
stock markets an increased capital allocation to the mining sector which, if
it continues, will also potentially lower the cost of capital for KEFI.
The Company has received significant interest in its GMCO shareholding and
GMCO's Saudi portfolio and is continuing discussions prior to finalising with
its Saudi majority partner, ARTAR, the course of action deemed to provide the
greatest value to KEFI.
GMCO continues to progress towards initially mining the oxidised gold portions
of the Jibal Qutman and Hawiah deposits, as well as undertaking exploration
programs over 14 recently granted Exploration Licences ("ELs") and a new 50/50
Joint Venture with Australian major mining group Hancock Prospecting.
Despite the exciting potential of GMCO's assets, KEFI's clear and immediate
priority for its equity capital is to invest in our Ethiopian projects. At a
gold price of $3,000/ounce, Tulu Kapi's net operating cash flow after
royalties and taxes for the first full year of production is estimated at
c.$304 million. This would be more than sufficient cash flow to repay the
planned $240 million debt in the first full year of operation.
Ethiopia - Tulu Kapi (KEFI beneficial interest targeted at circa 80%)
Ethiopia is demonstrating a clear determination to expedite its economic
recovery after the damage of the internal conflicts of 2020-2021 and, once
again, be among the world's top 10 growth countries, as it was for nearly 20
years up to 2017. A key part of the Ethiopian Government's strategy to achieve
this strong growth is for the mining sector to increase from 1% of GDP today
to 10% of GDP ten years from now. During 2025, gold for the first time ranks
as Ethiopia's largest single export sector.
Tulu Kapi is designed to the highest international standards and will generate
significant local and regional benefits. A similar gold project has also
recently been launched in Ethiopia by Canadian company Allied Gold. Local
conglomerate MIDROC operates the +100,000 ounce per year Lega Dembe Gold Mine
and has two less advanced similar-scale projects. Ethiopia's mining sector is
coming alive for gold and other minerals and metals.
There is significant potential to increase Tulu Kapi's current Ore Reserves of
1.05 million ounces of gold and Mineral Resources of 1.7 million ounces.
Tulu Kapi is a high-grade (2.7g/t Resource) and high-recovery (94%
metallurgical recovery) gold project in a quiet rural district, with a
supportive community and no environmental or social legacy issues. Our fiscal
arrangements are reasonable, clear and protected in a bilateral agreement with
Government.
Economic projections for Tulu Kapi based on the open pit mine and an initial
contribution from the underground mine indicate the following returns assuming
a gold price of $3,000/ounce:
· Average EBITDA of $387 million per annum in the first 3 years of
the project (KEFI's now planned c. 80% interest being c.$310 million per
annum) For good order, it should be noted that this ownership calculation is
at the TKGM level and we expect that mining contractor BCM will have the right
to convert into equity at the parent company at future share prices;
· All-in Sustaining Costs ("AISC") of $960/ounce (note that royalty
costs vary with the gold price); and
· All-in Costs ("AIC") of $1,206/ounce.
The assumptions underlying these projections are detailed in the footnotes to
the table on page 23 of this Annual Report.
KEFI's business plan goes beyond the open-pit development and includes our
intention to trigger early underground work to extend the existing underground
Indicated Resource of 220,000 ounces (1.2 million tonnes ("Mt") at 5.7g/t).
The Preliminary Economic Assessment ("PEA") estimates recovering about 200,000
ounces (1.5Mt at 4g/t) underground, supplementing open pit ore for the first
seven years. The deposit is open down plunge with a last drill intercept of
90m at 2.8g/t, containing high-grade zones. KEFI estimates at least
1-million-ounce potential for underground ore.
Excluding the down-plunge potential of the underground, the 'Business Plan
Model' projections show that running the plant at 2.3 million tonnes per annum
results in over seven years of production averaging 164,000 ounces per year,
generating a net cashflow to project shareholders of $1.1 to $1.6 billion at
gold prices of $2,400 to $3,000/ounce over the initially defined life of the
project. It is worth noting that on this basis net operating cash flow in the
first full year of production is estimated at $231 to $304 million, compared
to project finance debt of $240 million.
In Ethiopia, our focus is now on successfully closing the $320 million project
finance package and the full launch of developing Tulu Kapi. Successful
implementation of our plans will result in Tulu Kapi reaching full gold
production in late 2027.
Saudi Arabia - GMCO Overview
GMCO has, since its formation in 2008, focused on discovery of economic
mineralisation in the Kingdom of Saudi Arabia, particularly gold and copper.
GMCO has developed into arguably the most successful explorer in the Kingdom.
Jibal Qutman and Hawiah are enjoying positive regulatory support as we assess
the choices of development plans. Substantial drilling programmes at both
projects over the past year have better defined the known Mineral Resources as
well as discovering nearby deposits. Given the expected expansion in
resources, the ongoing development feasibility studies are focused on
establishing the optimal start-up strategies (Stage 1 development) for both
projects whilst defining the ultimate potential scale (Stage 2 development).
During the past two years, the Saudi Government has been implementing positive
regulatory changes and providing incentives to fast-track the growth of their
mining sectors. This has transformed GMCO's ability to make progress on the
ground. GMCO has been granted more than 14 ELs recently along with being
selected as one of six companies awarded exploration funding subsidies by the
Government. We have also been awarded a strategic minerals belt exploration
licence in joint venture with major Australian group Hancock Prospecting.
Saudi Arabia - Hawiah (15% KEFI Current beneficial interest)
GMCO first focused on the Wadi Bidah Mineral Belt ("WBMB") and Hawiah in
particular, shortly after launching our exploration programs. Regulatory
overhauls allowed us to start drilling in 2019. Three VMS discoveries have
been announced since then - Hawiah plus its discoveries at Al Godeyer and Abu
Salal. We consider it likely that an expanding cluster of VMS deposits will be
identified as we explore the expanded Hawiah Copper-Gold Project. The WBMB has
also recently attracted extensive pegging around GMCO's tenements by the
exploration joint venture of Government-controlled Ma'aden and Ivanhoe
Electric.
GMCO drilling confirmed the Hawiah deposit in 2019 and it now ranks in the:
· top three base metal projects in Saudi Arabia; and
· top 15% VMS projects worldwide.
Our drilling since 2019 has delineated a Mineral Resource Estimate ("MRE") of
36.2Mt at 0.82% copper, 0.85% zinc, 0.64g/t gold and 10.0g/t silver.
Recent exploration has discovered two potential satellite orebodies near the
proposed Hawiah processing plant. The nearby Al Godeyer deposit was discovered
in 2022 and an initial MRE was estimated in 2023. Drilling at Abu Salal,
approximately 50km south of Hawiah, intercepted sulphide mineralisation
containing copper, gold, zinc and silver in multiple horizons in early 2024.
In addition, the granting to GMCO of the Umm Hijlan Exploration Licence ("EL")
in early 2025 has almost doubled the targeted strike length of the Hawiah
mineralised system. Drilling teams have already been mobilised.
Over the coming year, Hawiah development studies will be progressed in
conjunction with drilling programmes to upgrade and expand the GMCO's
copper-gold zinc-silver Mineral Resources in this major VMS district.
The new joint venture between GMCO/ARTAR and Hancock Prospecting will focus on
a the recently granted 910km2 EL over the adjacent Wadi Shwas Mineral Belt
parallel to and geologically analogous with the WBMB.
Saudi Arabia - Jibal Qutman (15% KEFI Current beneficial interest)
The aim is for Jibal Qutman's initial development to be triggered during 2025
focusing on open pit mining the oxide ore and Carbon-In-Leach ("CIL")
processing.
Jibal Qutman is GMCO's first discovery in Saudi Arabia with initial
development studies completed in 2015. Following a long hiatus whilst tenure
security and regulatory reform were sorted out, drilling re-started in 2022.
In early 2025, an increased Jibal Qutman MRE was released of 37.0Mt at 0.76g/t
gold, containing 902,000 ounces of gold, 30.5Mt at 0.76g/t of gold (including
748,000 ounces in the Indicated category).
Systematic exploration is ongoing across the expanded Jibal Qutman tenure to
identify further resource potential and confirm structural controls on
recently identified higher-grade gold mineralisation. Drilling to date has
focused only on an 8km long section of the original Jibal Qutman EL. The full
35km mineralised strike length remains to be tested.
Summary and Conclusion
KEFI's targeted beneficial interest in Tulu Kapi has an NPV at construction
start of $1,069 million or £804 million (see footnotes to the table on page
23 for assumptions and further information). This valuation indicator is
approximately 16 times KEFI's current share market capitalisation of c. £50
million ($66 million). The Directors consider this a conventional industry
measure of potential value once the projects have been successively de-risked.
Going forward, one would normally expect that as milestones are achieved, the
Company's share price should redress the gap between our stock market
capitalisation and the Company's underlying intrinsic value. As we move
forward to production and profit-generation, we will concurrently explore the
pipeline of targets we have cherry-picked since 2008, as well as consider
other opportunities that will take advantage of, and add value to, our
hard-earned, early-mover position in the Arabian Nubian Shield.
We are indeed at an opportune moment, made possible by our team's hard work,
your support and patience as shareholders and now we are seizing the
opportunities presented by the positive turnarounds in our host countries and
the strengthening of metal prices. Together with my fellow Directors, I am
committed to generating returns on investment. Management's personal alignment
with shareholders is illustrated by my having formed and initially funded
Atalaya Mining and consequently its then subsidiary KEFI during 2003-2005 and,
since assuming executive duties at KEFI in 2014, taking much of my
remuneration in shares. Atalaya now has a stock market capitalisation of
c.£600 million which we expect will be surpassed by that of KEFI within a few
years.
By emphasizing joint ventures and project-level development financing, we have
reduced the pressure on KEFI shareholders to provide funding. In fact, at Tulu
Kapi, the development capital is planned at the project or subsidiary level
from regional investors, bankers, contractors, and other syndicate parties.
We have also recently introduced Tier 1 institutional investors to the KEFI
share register, as part of corporate organizational development.
KEFI's directors are deeply appreciative of our personnel's tenacity, as well
as the support the Company receives from our shareholders, in-country
partners, lenders, contractors, host communities and other stakeholders. It is
certainly overdue for all stakeholders to share the success that the Company
has worked for.
We have continued to build our team as we progress into developing Tulu Kapi.
Operational management was installed at project company TKGM, with Simon
Cleghorn as Managing Director and Theron Brand as Finance Director. Our Group
Chief Operating Officer Mr Eddy Solbrandt leads KEFI's development team.
Nearly all personnel are based in Ethiopia whilst Financial control and
Compliance is based in Cyprus overseen by Financial Controller Laki Catsamas.
I welcome Mr Addis Alemayehou who became an independent Non-Executive Director
in July 2024. Addis is based in Ethiopia and is the Chairman of Kazana Group,
a diversified investment firm. He is well known for having launched several
ventures in Ethiopia. His appointment is also part of our ongoing commitment
to maximise local participation in both management and financing at all levels
of our projects. Conversely, KEFI and I have been honoured by the Ethiopian
Government appointing me as Honorary Consul to Cyprus, focused on developing
economic ties between the two countries and starting with a focus on inviting
Cyprus's world-class pharmaceutical industry to establish in Ethiopia.
We will further build the team and systems as KEFI moves towards production
and as we expand our project pipeline, which we are well-positioned to do.
KEFI's Arabian-Nubian Shield platform is second to none.
Harry Anagnostaras-Adams
Executive Chairman
5 June 2025
FINANCE DIRECTOR'S REPORT
During the past year, the primary focus has been on advancing the funding
package and the regulatory and other preparations for the development of Tulu
Kapi as well as moving Jibal Qutman and Hawiah towards development. The
Ethiopian and Saudi Arabian Governments have made changes that have
facilitated and expanded financing options in each country. The Ethiopian
Government has removed various obstacles to financing by providing key
approvals and policy changes. Similarly, the Saudi Government's policies have
attracted significant capital investment into its mineral exploration and
mining sector from both domestic and international investors. That is expected
to also happen in Ethiopia.
Ethiopia has shown support for the Project by making security commitments,
regulatory concessions, and other initiatives to ensure the Project proceeds
according to international standards. The Tulu Kapi funding syndicate consists
of leading banks, contractors of process plants and mining, and other
specialists, all of whom are at advanced stages of their respective approval
processes. KEFI has structured its development funding at the subsidiary level
in both Ethiopia and Saudi Arabia to maximise local stakeholder alignment and
minimise reliance on weak stock markets for financing.
Alliancing Strategy
A notable reason for our solid position in the region is our alliancing
strategy. Our operating alliances are with the following strong organisations:
· Partners:
o in Ethiopia:
§ Federal Government of the Democratic Republic of Ethiopia
§ Oromia Regional Government
o in Saudi Arabia: Abdul Rahman Saad Al Rashid and Sons Company Ltd
("ARTAR")
· Principal contractors:
o for process plants in both Ethiopia and Saudi Arabia: Lycopodium
o for mining in Ethiopia: BCM Group
· Senior project finance lenders:
o For Tulu Kapi:
§ East and Southern African Trade and Development Bank Ltd ("TDB")
§ African Finance Corporation Limited ("AFC")
o For Saudi Arabia:
§ Saudi Industrial Development Fund
· KEFI's public shareholder base:
o KEFI's initial public offering in 2006 was sponsored by Atalaya and
UK-based retail investors. The weakness of the sector, combined with our
in-country challenges, until recently attracted limited and short-lived
Western institutional investor involvement in KEFI;
o the recent improvement in the gold price, combined with the positive
turnaround in host country conditions and KEFI's own solid progress on the
ground, now make it possible to introduce a set of institutional investors to
the KEFI share register - an important requirement for the long-term as we
move into development and production; and
o as a result of our investor relations program, several prominent
investment institutions are now KEFI shareholders including Ruffer Gold Fund,
Konwave Gold Equity Fund, Phoenix Gold Fund, Premier Miton and RAB Capital.
Financing Tulu Kapi Project Development
Tulu Kapi has particularly robust economic metrics, based largely on lack of
overburden, high gold grades and high gold recoveries. As the first
internationally project financed mining project in Ethiopia, it has taken many
years to complete extensive regulatory reform. The patience and support of the
Ethiopian Government is much appreciated.
TKGM is structured as a public-private partnership with Ethiopia's Federal and
Regional Governments.
Current cost estimates (including finance costs and working capital) for the
development of Tulu Kapi are c.$320 million, last updated in late 2022. The
funding offers and commitments are conditional on finalising the cost
estimates at signing of detailed definitive documentation and project launch.
While cost-inflation appears to have decreased within the international gold
industry, pricing will be updated to lock-in fixed-price lump sum contracts
where possible prior to full project launch after which the final finance
arrangements will be refined accordingly.
The $320 million funding package (excludes the mining fleet provided by the
mining contractor and TKGM's historical equity investment of c.$100 million)
is now expected to be sourced from:
· $240 million of debt from TDB and AFC;
· $10 million invested by KEFI as part of its historical investment;
· $45 million of Equity Risk Notes in the form of a bespoke arrangement with
mining contractor BCM Group and as Gold-Linked Preference Shares
("EthioPrefs") for local qualified investors;
· $20 million of Government share investment into TKGM; and
· Fees and costs to be paid for in KEFI shares at closing.
In March 2025, our co-lending-bank AFC received support from all their
respective committees and Boards to proceed. Following Ethiopian Parliamentary
Ratification of AFC's Country Membership in May 2025, co-lender TDB is
updating its formal approvals reflecting the expanded $240 million offering.
The next steps are:
· Updating of all banking details and arrangements for latest approvals and
associated plans;
· Formal receipt of the remaining Government confirmations on various well
understood and already discussed issues;
· Up to the minute certifications of security, community readiness and project
financial model;
· Finalising the US$-linked 'EthioPrefs' to be issued by a newly formed
Ethiopian holding company designed for qualified Ethiopian and, potentially,
other African investors later. Listing of the EthioPrefs on the newly launched
Ethiopian Securities Exchange is expected to also follow at a later date; and
· Finalising arrangements with the BCM Group, the recently appointed mining
contractor, which has confirmed its intention to subscribe to $23 million of a
bespoke Equity Risk Note comprising an equity-risk ranking debt note with
limited rights to convert into KEFI shares at the share market prices
prevailing once operations have commenced.
After approval by all syndicate members, we can then proceed to trigger Major
Works by:
· Signing the definitive documentation between the respective syndicate
counterparties;
· Placing insurances and complete other administrative tasks;
· Drawing down first capital, starting with project equity and then debt months
later;
· Commencing staged resettlement of approximately 350 households near Tulu Kapi;
and
Beginning procurement of plant and mining fleet as well as tendering by local
sub-contractors.
GMCO Ownership and Strategic Review
In order to maintain rapid progress on GMCO's projects in Saudi Arabia, ARTAR
sole-funded GMCO's exploration activities during 2024. KEFI's net share of
this expenditure totalled £3.7 million.
Given the disparity between KEFI's market capitalisation at that time, the
Board's assessment of the intrinsic value of KEFI's minority shareholding in
GMCO, and KEFI's majority-owned flagship Tulu Kapi Project, it was determined
that raising sufficient funds through the issuance of KEFI equity to maintain
our interest in GMCO would not serve the best interests of KEFI shareholders.
Consequently, rather than contributing £6.8million to address the outstanding
exploration liabilities, KEFI elected to reduce its stake in GMCO from 25% to
15%.
While ARTAR has the right to buy-out KEFI at fair market value, and while KEFI
has the right to seek acquirers of its GMCO shareholding, we are examining a
number of scenarios to optimise the future GMCO ownership structure for mutual
benefit and to reciprocate ARTAR's continued support of the joint venture
relationship. This much-appreciated support from ARTAR reflects the strong
partnership relationship and the priority given to production start-up.
GMCO partners KEFI and ARTAR are currently conducting a strategic review. KEFI
has received significant interest in its Saudi portfolio and is discussing
with ARTAR to determine the best course of action to provide the greatest
value to KEFI and the joint venture.
Financing Working Capital for KEFI's Activities to Date
KEFI has funded all activities since it was formed through equity capital
raised at then prevailing share market prices.
Importantly, this strategy has allowed KEFI to avoid imposing debt-repayment
risk on top of the inherent risks associated with exploration, permitting, and
other initial phases of project development, particularly in frontier mining
markets. However, we have occasionally utilised short-term unsecured advances
organised by our Corporate Broker to provide working capital while awaiting
the accomplishment of short-term business goals.
The Directors underscore the challenges of managing working capital within the
context of high-growth and high-risk exploration activities in the Going
Concern Note of the Financial Statements, which shareholders are advised to
review.
Material Accounting Policy
KEFI expenses all investment in GMCO in Saudi Arabia as part of its
conservative accounting approach, but we will review this upon Definitive
Feasibility Studies being approved by the GMCO Board. KEFI's carrying value of
the investment in KEFI Minerals (Ethiopia) Limited ("KME"), which holds the
Company's share of Tulu Kapi is only £31.4 million as at 31 December 2024. It
is important to note KEFI's planned c.80% beneficial interest in the
underlying valuation of Tulu Kapi is c.£804 ($1,069) million based on project
NPV at a gold price of $3,000/ounce and including the initial underground
mine.
John Leach
Finance Director
5 June 2025
Consolidated statement of comprehensive income
Year ended 31 December 2024
Notes Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Revenue - -
Exploration costs - -
Administrative expenses 6 (6,232) (3,441)
Finance transaction costs 8.2 (260) (115)
Share-based payments and warrants-equity settled 17 (35) (159)
Share of loss from jointly controlled entity 19 (3,650) (4,963)
Reversal of Impairment of jointly controlled entity 19 217 453
Operating loss 6 (9,960) (8,225)
Other income/(loss) - -
Gain on Dilution of Joint Venture 19.2 6,813 1,156
Foreign exchange gain 331 173
Finance costs 8.1 (2,410) (1,000)
Loss before tax (5,226) (7,896)
Tax 9 - -
Loss for the year (5,226) (7,896)
Loss attributable to:
-Owners of the parent (5,226) (7,896)
Loss for the period (5,226) (7,896)
Other comprehensive expense:
Exchange differences on translating foreign operations - -
Total comprehensive expense for the year (5,226) (7,896)
Total Comprehensive expense to:
-Owners of the parent (5,226) (7,896)
Basic and diluted loss per share (pence) 10 (0.089) (0.175)
The notes are an integral part of these consolidated financial statements.
Statements of financial position
Year ended 31 December 2024
The Group The The The
Company Group Company
Notes 2024 2024 2023 2023
£'000 £'000 £'000 £'000
ASSETS
Non‑current assets
Property, plant and equipment 11 124 2 100 3
Intangible assets 12 38,392 - 34,716 -
Investment in subsidiaries 13.1&14.2 - 31,402 - 16,253
Investments in jointly controlled entities 13.2 - - - -
Receivables from subsidiaries 14.2 - - - 11,500
38,516 31,404 34,816 27,756
Current assets
Trade and other receivables 14.1 398 107 528 72
Cash and cash equivalents 15 185 120 192 114
583 227 720 186
Total assets 39,099 31,631 35,536 27,942
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital 16 7,047 7,047 4,965 4,965
Deferred Shares 16 23,328 23,328 23,328 23,328
Share premium 16 58,456 58,456 48,922 48,922
Share options reserve 17 1,948 1,948 3,675 3,675
Accumulated losses (60,039) (64,847) (56,483) (61,564)
Attributable to Owners of parent 30,740 25,932 24,407 19,326
Non-Controlling Interest 18 1,905 - 1,709 -
Total equity 32,645 25,932 26,116 19,326
Current liabilities
Trade and other payables 20 5,715 5,174 7,307 6,503
Loans and borrowings 22 739 525 2,113 2,113
Total liabilities 6,454 5,699 9,420 8,616
Total equity and liabilities 39,099 31,631 35,536 27,942
The notes are an integral part of these consolidated financial statements.
The Company has taken advantage of the exemption conferred by section 408 of
Companies Act 2006 from presenting its own statement of comprehensive income.
Loss after taxation amounting to £5.1 million (2023: £9 million) has been
included in the financial statements of the parent company.
On the 5 June 2025, the Board of Directors of KEFI Gold and Copper PLC
authorised these financial statements for issue.
Harry Anagnostaras-Adams
John Edward Leach
Executive Director-
Chairman
Finance Director
Consolidated statement of changes in equity
Year ended 31 December 2024
Attributable to the owners of the Company
Share Deferred Share premium Share Foreign Accum. Owners NCI Total
capital
shares options reserve exch losses Equity
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 3,939 23,328 43,187 3,747 - (48,781) 25,420 1,562 26,982
Loss for the year - - - - - (7,896) (7,896) - (7,896)
Other comprehensive expense - - - - - - - - -
Total Comprehensive expense - - - - - (7,896) (7,896) - (7,896)
Recognition of share-based payments - - - 269 - - 269 - 269
Expired warrants - - - (341) - 341 - - -
Issue of share capital and warrants 1,026 - 6,156 - - - 7,182 - 7,182
Share issue costs - - (421) - - - (421) - (421)
Non-controlling interest - - - - - (147) (147) 147 -
At 31 December 2023 4,965 23,328 48,922 3,675 - (56,483) 24,407 1,709 26,116
Loss for the year - - - - - (5,226) (5,226) - (5,226)
Other comprehensive expense - - - - - - - - -
Total Comprehensive expense - - - - - (5,226) (5,226) - (5,226)
Recognition of share-based payments - - - 139 - - 139 - 139
Expired warrants - - - (1,866) - 1,866 - - -
Issue of share capital 2,082 - 10,208 - - - 12,290 - 12,290
Share issue costs - - (674) - - - (674) - (674)
Non-controlling interest - - - - - (196) (196) 196 -
At 31 December 2024 7,047 23,328 58,456 1,948 - (60,039) 30,740 1,905 32,645
The following describes the nature and purpose of each reserve within owner's
equity:
Reserve Description and purpose
Share capital: (Note 16) Amount subscribed for ordinary share capital at nominal value
Deferred shares: (Note 16) During 2015 the Company's issued ordinary shares of 1p each were sub-divided
into one new ordinary share of 0.1p and one deferred share of 0.9p. The
deferred shares have no voting rights
Share premium: (Note 16) Amount subscribed for share capital in excess of nominal value, net of issue
costs
Share options reserve (Note 17) Reserve for share options and warrants granted but not exercised or lapsed
Foreign exchange reserve Cumulative foreign exchange net gains and losses recognized on consolidation
Accumulated losses Cumulative net gains and losses recognized in the statement of comprehensive
income,
excluding foreign exchange gains within other comprehensive income
NCI (Non-controlling interest): (Note 18) The portion of equity ownership in a subsidiary not attributable to the parent
company
The notes are an integral part of these consolidated financial statements.
Company statement of changes in equity
Year ended 31 December 2024
Share capital Deferred shares Share premium Share Accumulated losses Total
options reserve
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 3,939 23,328 43,187 3,747 (52,929) 21,272
Loss for the year - - - - (8,976) (8,976)
Recognition of share-based payments - - - 269 - 269
Forfeited options - - - - - -
Expired warrants - - - (341) 341 -
Issue of share capital and warrants 1,026 - 6,156 - - 7,182
Share issue costs - - (421) - - (421)
At 31 December 2023 4,965 23,328 48,922 3,675 (61,564) 19,326
Loss for the year - - - - (5,149) (5,149)
Recognition of share-based payments - - - 139 - 139
Forfeited options - - - - - -
Expired warrants - - - (1,866) 1,866 -
Issue of share capital and warrants 2,082 - 10,208 - - 12,290
Share issue costs - - (674) - - (674)
At 31 December 2024 7,047 23,328 58,456 1,948 (64,847) 25,932
The following describes the nature and purpose of each reserve within owner's
equity:
Reserve Description and purpose
Share capital (Note 16) Amount subscribed for ordinary share capital at nominal value
Deferred shares: (Note 16) Under the terms of the restructuring of share capital, ordinary shares were
sub-divided into deferred shares
Share premium: (Note Amount subscribed for share capital in excess of nominal value, net of issue
16) costs
Share options reserve: (Note 17) Reserve for share options and warrants granted but not exercised or lapsed
Accumulated losses Cumulative net gains and losses recognized in the statement of comprehensive
income
The notes are an integral part of these consolidated financial statements.
Consolidated statement of cash flows
Year ended 31 December 2024
Notes Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (5,226) (7,896)
Adjustments for:
Depreciation of property, plant and equipment 11 18 29
Share based payments 17 35 159
Gain on Dilution of Joint Venture 19.1 (6,813) (1,156)
Share of loss from jointly controlled entity 19 3,650 4,963
Reversal of Impairment on jointly controlled entity 19 (217) (453)
Exchange difference (247) (173)
Finance costs 8.1 2,452 1,030
(6,348) (3,497)
Changes in working capital:
(Increase)/ decrease in Trade and other receivables 130 (66)
Increase in Trade and other payables 4,418 1,769
Cash used in operations (1,800) (1,794)
Interest paid 22.1.2 (955) (67)
Net cash used in operating activities (2,755) (1,861)
CASH FLOWS FROM INVESTING ACTIVITIES
Project exploration and evaluation costs 12 (3,989) (2,458)
Acquisition of property plant and equipment 11 (42) (4)
Advances to jointly controlled entity 13.2 - (795)
Net cash used in investing activities (4,031) (3,257)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 16 4,997 2,861
Issue costs 16 (570) (311)
Proceeds from bridge loans 22.1.2 4,724 2,640
Repayment of bridge loans 22.1.2 (2,372) (100)
Net cash from financing activities 6,779 5,090
Net decrease in cash and cash equivalents (7) (28)
Cash and cash equivalents:
At beginning of the year 15 192 220
At end of the year 15 185 192
Cash and cash equivalents in the Consolidated Statement of Financial Position
includes restricted cash of £nil (2023: £nil).
The notes on pages 84 to 116 are an integral part of these consolidated
financial statements.
Company statement of cash flows
Year ended 31 December 2024
Notes Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (5,150) (8,976)
Adjustments for:
Depreciation of property plant equipment 1 -
Share based payments 17 35 159
Gain on Dilution of Joint Venture 19.1 (6,813) (1,156)
Share of loss from jointly controlled entity 19 3,650 4,963
Reversal of Impairment on jointly controlled entity 19 (217) (453)
Exchange difference 226 1,122
(Reversal) / Increase Expected credit loss (486) 70
Finance costs 2,411 1,030
(6,343) (3,241)
Changes in working capital:
Increase in Trade and other receivables (36) (1)
Decrease in Trade and other payables 4,376 2,472
Cash used in operations (2,003) (770)
Interest Paid 22.1.2 (955) (67)
Net cash used in operating activities (2,958) (837)
CASH FLOW FROM INVESTING ACTIVITIES
Investment in subsidiary 13.1 (1,789) (696)
Advances to jointly controlled entity 13.2 - (795)
Loan to subsidiary 14 (1,602) (2,693)
Net cash used in investing activities (3,391) (4,184)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 16 4,997 2,861
Issue costs 16 (570) (311)
Proceeds from bridge loans 22.1.2 4,300 2,640
Repayment of bridge loans 22.1.2 (2,372) (100)
Net cash from financing activities 6,355 5,090
Net increase/(decrease) in cash and cash equivalents 6 69
Cash and cash equivalents:
At beginning of the year 15 114 45
At end of the year 15 120 114
Cash and cash equivalents in the Company Statement of Financial Position
includes restricted cash of £nil (2023:nil).
The notes are an integral part of these consolidated financial statements.
Notes to the consolidated financial statements
Year ended 31 December 2024
1. Incorporation and principal activities
Country of incorporation
KEFI Gold and Copper PLC (the "Company") was incorporated in United Kingdom as
a public limited company on 24 October 2006. Its registered office is at
27/28, Eastcastle Street, London W1W 8DH.The principal place of business is
Cyprus.
Principal activities
The principal activities of the Group are:
· Exploration for mineral deposits of precious and base metals and
other minerals that appear capable of commercial exploitation, including
topographical, geological, geochemical, and geophysical studies and
exploratory drilling.
· Evaluation of mineral deposits determining the technical
feasibility and commercial viability of development, including the
determination of the volume and grade of the deposit, examination of
extraction methods, infrastructure requirements and market and finance
studies.
· Development of mineral deposits and marketing of the metals
produced.
2. Material accounting policies
The principal material accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently
applied throughout both periods presented in these financial statements unless
otherwise stated.
Basis of preparation and consolidation
The Company and the consolidated financial statements have been prepared in
accordance with UK adopted international accounting standards in conformity
with the requirements of the Companies Act 2006. They comprise the accounts of
KEFI Gold and Copper PLC and all its subsidiaries made up to 31 December 2024.
The Company and the consolidated financial statements have been prepared under
the historical cost convention, except for the revaluation of certain
financial instruments.
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements
of subsidiaries have been included in the consolidated financial statements
from the date that control commences until the date that control ceases.
An investor controls an investee if, and only if, it has all of the following:
(a) power over the investee, (b) exposure or rights to variable returns from
its involvement with the investee, and (c) the ability to use its power over
the investee to affect the amount of the investor's returns.".
Transactions eliminated on consolidation
Intra-group balances and transactions, and any income and expenses arising
from intra-group transactions, are eliminated in preparing the consolidated
financial statements.
Going concern
The Company is a holding entity and as such its going concern is dependent on
the Group therefore the going concern assessment for the Company was performed
as part of the Group's assessment.
The Group's going concern assessment requires significant judgment,
particularly regarding the availability and timing of future funding to
develop the Tulu Kapi Gold Project in Ethiopia, to advance the exploration
portfolio in Saudi Arabia, and to meet general working capital requirements.
As part of this assessment, the Directors have considered funds on hand,
current liabilities and planned expenditures covering a period of at least 12
months from the date of approval of these financial statements.
The Group recognises that within the going concern consideration period, it
will need funding both for normal running costs and for other committed costs
which will include its share of the construction and development costs of the
Tulu Kapi mine (Further details on project financing plan are summarised on
page 6 of the Finance Director's Report). As at the date of this report the
Group's current liabilities, exceed the Group's cash balance. Therefore, the
Group is currently actively managing its existing liabilities, and the group
will require further funding before the end of 2025 in order to settle its
current liabilities .
The Group's ability to achieve the requisite level of funding will rely
predominantly upon securing sufficient project financing and the remaining
regulatory approvals for its flagship Tulu Kapi project. Significant progress
has been made over the past year. Definitive agreements for project financing
are nearing completion with contractors, equity investors, and government
entities.
Arrangements with project lenders AFC and TDB for the project loan have
progressed significantly. Credit committee approval has been received from
AFC. In respect of TDB, having previously been granted credit committee
approval in early 2024, it is currently in the process of updating that
approval. This updated approval is outstanding at the date of these financial
statements. Both approvals will be subject to typical conditions for signing
and disbursement. Finalised terms and conditions have been set for the
expanded secured project finance loan package, which has increased from $190
million to $240 million. It should be noted that these approvals remain
subject to standard conditions precedent, including KEFI raising additional
equity.
Efforts to formalize these arrangements and prepare definitive agreements are
continuing.
In 2025, the Company successfully raised gross an additional £12.7 million in
equity capital, using the funds to repay some existing debt and normalise
creditors and for general working capital. Based on the current amount of cash
and existing liabilities, the available funds are insufficient to meet the
Group's obligations during the 12 month period from the date of approval of
these financial statements. This shortfall may be exacerbated by a lack of
normal available financing due to ongoing uncertainty in mineral exploration
markets. To address its financing needs, the Group will pursue various
options, including, but not limited to, debt financing, strategic alliances,
and equity financing.
Accordingly, and as set out above, the Group and Company are reliant on
securing additional funding. This funding is not guaranteed nor within the
complete control of the Directors. As a result this indicates the existence of
a material uncertainty which may cast significant doubt over Group and
Company's ability to continue as a going concern and, therefore, they may be
unable to realise their assets and discharge their liabilities in the normal
course of business. The financial statements therefore do not include the
adjustments that would result if the Group and Company were unable to continue
as a going concern.
Based on historical experience and current ongoing proactive discussions with
stakeholders, the Directors have a reasonable expectation that definitive
binding agreements will be signed. Accordingly, the Directors have a
reasonable expectation that the Group and Company will be able to continue to
raise funds to meet its objectives and obligations.
Functional and presentation currency
The individual financial statements of each Group entity are measured and
presented in the currency of the primary economic environment in which the
entity operates. The consolidated financial statements of the Group and the
statement of financial position and equity of the Company are in British
Pounds ("GBP") which is the functional currency of the Company and the
presentation currency for the consolidated financial statements. Functional
currency is also determined for each of the Company's subsidiaries, and items
included in the financial statements of the subsidiary are measured using that
functional currency. GBP is the functional currency of all subsidiaries.
(1) Foreign currency translation
Foreign currency transactions are translated into the presentational currency
using the exchange rates prevailing at the date of the transactions. Gains and
losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign
currencies are recognized in profit or loss in the statement of comprehensive
income.
(2) Foreign operations
On consolidation, the assets and liabilities of the consolidated entity's
foreign operations are translated at exchange rates prevailing at the
reporting date. Income and expense items are translated at the average
exchange rates for the period unless exchange rates fluctuate significantly in
which case they are recorded at the actual rate. As all subsidiaries use GBP
as their functional currency and the Group's presentation currency is also
GBP, no foreign currency translation differences arise on consolidation.
Revenue recognition
The Group had no sales or revenue during the year ended 31 December 2024
(2023: Nil).
Property plant and equipment
Property plant and equipment are stated at their cost of acquisition at the
date of acquisition, being the fair value of the consideration provided plus
incidental costs directly attributable to the acquisition less depreciation.
Depreciation is calculated using the straight-line method to write off the
cost of each asset to their residual values over their estimated useful life.
The annual depreciation rates used are as follows:
Furniture, fixtures and office equipment 25%
Motor vehicles 25%
Plant and equipment 25%
Intangible Assets
Cost of licenses to mines are capitalised as intangible assets which relate to
projects that are at the pre-development stage. No amortisation charge is
recognised in respect of these intangible assets. Once the Group starts
production these intangible assets relating to the license to mine will be
depreciated over life of mine.
Interest in jointly controlled entities
The group is a party to a joint arrangement when there is a contractual
arrangement that confers joint control over the relevant activities of the
arrangement to the group and at least one other party. Joint control exists
where unanimous consent is required over relevant decisions.
The group classifies its interests in joint arrangements as either:
- Joint ventures: where the group has rights to only the net assets of the
joint arrangement.
- Joint operations: where the group has both the rights to assets and
obligations for the liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group
considers:
- The structure of the joint arrangement.
- The legal form of joint arrangements structured through a separate vehicle.
- The contractual terms of the joint arrangement agreement.
- Any other facts and circumstances (including any other contractual
arrangements).
The Group accounts for its interests in joint ventures using the equity
method. The Group accounts for its interests in joint operations by
recognising its share of assets, liabilities, and expenses in accordance with
its contractually conferred rights and obligations.
Finance costs
Interest expense and other borrowing costs are charged to the statement of
comprehensive income as incurred and is recognised using the effective
interest method.
Tax
The tax payable is based on taxable profit for the period. Taxable profit
differs from net profit as reported in the statement of comprehensive income
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. Tax is payable in the relevant jurisdiction at the rates described
in note 9.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are generally recognized for all
taxable differences and deferred tax assets are recognized to the extent that
taxable profits will be available against which deductible temporary
differences can be utilized. The amount of deferred tax is based on the
expected manner of realisation or settlement of the carrying amounts of assets
and liabilities, using tax rates that have been enacted or substantively
enacted at the reporting date.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off deferred tax assets against deferred tax
liabilities and when the deferred taxes relate to the same fiscal authority.
Investments
Investments in subsidiary companies are stated at cost less provision for
impairment in value, which is recognized as an expense in the period in which
the impairment is identified, in the Company accounts.
Exploration costs
The Group has adopted the provisions of IFRS 6 "Exploration for and Evaluation
of Mineral Resources". The company applies IFRS 6 until the project financing
is secured. Once financing is secured the project moves to the development
stage.
Exploration and evaluation expenditure, including acquisition costs of
licences, in respect of each identifiable area of interest is expensed to the
statement of comprehensive income as incurred, until the point at which
development of a mineral deposit is considered economically viable and the
formal definitive feasibility study is completed. At this point costs incurred
are capitalised under IFRS 6 because these costs are necessary to bring the
resource to commercial production.
Exploration expenditures typically include costs associated with prospecting,
sampling, mapping, diamond drilling and other work involved in searching for
ore. Evaluation expenditures are the costs incurred to establish the technical
and commercial viability of developing mineral deposits identified through
exploration activities. Evaluation expenditures include the cost of directly
attributable employee costs and economic evaluations to determine whether
development of the mineralized material is commercially justified, including
definitive feasibility and final feasibility studies.
Impairment reviews for deferred exploration and evaluation expenditure are
carried out on a project-by-project basis, with each project representing a
potential single cash generating unit. An impairment review is undertaken when
indicators of impairment arise such as: (i) unexpected geological occurrences
that render the resource uneconomic; (ii) title to the asset is compromised;
(iii) variations in mineral prices that render the project uneconomic; (iv)
substantive expenditure on further exploration and evaluation of mineral
resources is neither budgeted nor planned; and (v) the period for which the
Group has the right to explore has expired and is not expected to be renewed.
On commencement of development, Exploration and evaluation expenditure are
reclassified to development assets, following assessment for any impairment.
Development expenditure
Once the Board decides that it intends to develop a project, development
expenditure is capitalized as incurred, but only where it meets criteria for
recognition as an intangible under IAS 38 or a tangible asset under IAS 16 and
then amortized over the estimated useful life of the area according to the
rate of depletion of the economically recoverable reserves or over the
estimated useful life of the mine, if shorter.
Share based compensation benefits
IFRS 2 "Share based Payment" requires the recognition of equity settled
share-based payments at fair value at the date of grant and the recognition of
liabilities for cash settled share based payments at the current fair value at
each statement of financial position date. The total amount expensed is
recognized over the vesting period, which is the period over which performance
conditions are to be satisfied. The fair value is measured using the Black
Scholes pricing model. The inputs used in the model are based on
management's best estimate, including consideration of the effects of
non-transferability, exercise restrictions and behavioural considerations.
Where the Group issues equity instruments to persons other than employees, the
statement of comprehensive income is charged with the fair value of goods and
services received.
Warrants
Warrants issued are recognised at fair value at the date of grant. The charge
is expensed on a straight-line basis over the vesting period. The fair value
is measured using the Trinomial Model. Where warrants are considered to
represent a transaction cost attributable to a share placement, the fair value
is recorded in the warrant reserve and deducted from the share premium.
Financial instruments
Non-derivative financial assets
The Group initially recognises loans and receivables on the date that they are
originated. All other financial assets are recognised initially on the trade
date, which is the date that the Group becomes a party to the contractual
provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all the risks
and rewards of ownership of the financial asset are transferred. Any
interest in such transferred financial assets that is created or retained by
the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset, and the net amount presented in
the statement of financial position when, and only when, the Group has a legal
right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Non-derivative financial assets
The Group classifies its financial assets into one of the categories discussed
below, depending on the purpose for which the asset was acquired.
Amortised cost: These are financial assets where the objective is to hold
these assets in order to collect contractual cash flows and the contractual
cash flows are solely payments of principal and interest. They are initially
recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for impairment. Trade
and other receivables, as well as cash are classified as amortised cost.
Impairment of financial assets: Financial assets at amortised cost consist of
trade receivables, loans, cash and cash equivalents and debt instruments.
Impairment losses are assessed using the forward-looking Expected Credit Loss
(ECL) approach. Trade receivable loss allowances are measured at an amount
equal to lifetime ECL's. Loss allowances are deducted from the gross carrying
amount of the assets
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, and call deposits with
maturities of three months or less from the acquisition date that are subject
to an insignificant risk of changes in their fair value and are used by the
Group in the management of its short-term commitments.
Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated
liabilities on the date that they are originated. All other financial
liabilities are recognised initially on the trade date, which is the date that
the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations
are discharged, cancelled or expire.
The Group classifies non-derivative financial liabilities as other financial
liabilities. Such financial liabilities are recognised initially at fair
value less any directly attributable transaction costs. After initial
recognition, these financial liabilities are measured at amortised cost using
the effective interest method.
Other financial liabilities comprise trade and other payables and borrowings.
New standards and interpretations applied
The following new standards and interpretations became effective on 1 January
2024 and have been adopted by the Group.
Effective period commencing on or after
New Standards, Interpretations and Amendments Adopted
Amendments to IFRS 16 Amendments to IFRS 16: Liability in a Sale and Leaseback 01 January 2024
Amendments IAS 1 Amendments to IAS 1: Classification of liabilities as current or noncurrent 01 January 2024
Amendments IAS 1 Amendments to IAS 1: Non-current Liabilities with Covenants 01 January 2024
Amendments to IAS 7 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments 01 January 2024
Disclosure - Supplier Finance Arrangements (Amendments)
New Standards, Interpretations and Amendments Not Yet Effective Effective period commencing on or after
Amendments to IAS 21 ¹ IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of 01 January 2025
Exchangeability (Amendments)
New IFRS18 ² IFRS 18 Presentation and Disclosure in Financial Statements 01 January 2027
New IFRS19 ² IFRS 19 Subsidiaries without Public Accountability: Disclosure 01 January 2027
¹Not yet endorsed.
These amendments had no impact on the consolidated financial statements of the
Group. The Group intends to use the practical expedients in future periods if
they become applicable.
New standards, amendments and interpretations that are not yet effective and
have not been early adopted.
· Revisions to the Conceptual Framework for Financial Reporting.
The principal material accounting policies adopted are set out above.
There are several standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The Group is currently assessing the impact of these new accounting standards
and amendments.
²IFRS 18 Presentation and Disclosure in Financial Statements, which was
issued by the IASB in April 2024 supersedes IAS 1 and will result in major
consequential amendments to IFRS Accounting Standards including IAS 8 Basis of
Preparation of Financial Statements (renamed from Accounting Policies, Changes
in Accounting Estimates and Errors). Even though IFRS 18 will not have any
effect on the recognition and measurement of items in the consolidated
financial statements, it is expected to have a significant effect on the
presentation and disclosure of certain items. These changes include
categorisation and sub-totals in the statement of profit or loss,
aggregation/disaggregation and labelling of information, and disclosure of
management-defined performance measures.
²The Group does not expect to be eligible to apply IFRS 19.
The Group does not expect any other standards issued by the IASB, but not yet
effective, to have a material impact on the group.
3. Financial risk management
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents
comprise cash at bank and in hand with an original maturity date of less than
three months. To mitigate its inherent exposure to credit risk, the Group
maintains policies to limit the concentration of credit risk and to ensure the
liquidity of available funds. The Group invests its cash and cash equivalents
in rated financial institutions, primarily within the United Kingdom and other
investment-grade countries (rated BBB- or higher by S&P). The Group does
not have a significant concentration of credit risk arising from its holdings
of cash and cash equivalents.
Financial risk factors
The Group is exposed to market risk (interest rate risk and currency risk),
liquidity risk and capital risk management arising from the financial
instruments it holds. The risk management policies employed by the Group to
manage these risks are discussed below:
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group does not consider this risk to be significant.
The Company has borrowings outstanding from its subsidiaries, the ultimate
realisation of which depends on the successful exploration and realization of
the Group's intangible exploration assets. This in turn is subject to the
availability of financing to maintain the ongoing operations of the business.
The Group manages its financial risk to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably.
Market risk - Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates. The Group's operating cash
flows are substantially independent of changes in market interest rates as the
interest rates on cash balances are very low at this time. Borrowings issued
at variable rates expose the Group to cash flow interest rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest rate risk. The
Group's management monitors the interest rate fluctuations on a continuous
basis and acts accordingly.
At the reporting date the interest rate profile of interest-bearing financial
instruments was:
2024 2023
£'000 £'000
Variable rate instruments
Financial assets 185 192
Sensitivity analysis
An increase of 100 basis points in interest rates at 31 December 2024 would
have increased equity and profit or loss by the amounts shown below. This
analysis assumes that all other variables, in particular foreign currency
rates, remain constant. Given current interest rate levels, a decrease of 25
basis points has been considered, with the impact on profit and equity shown
below.
Equity Profit or Loss Equity Profit or Loss
2024 2024 2023 2023
£'000 £'000 £'000 £'000
Variable rate instruments
Financial assets - increase of 100 basis points 2 2 2 2
Financial assets - decrease of 25 basis points (0.5) (0.5) (0.5) (0.5)
Currency risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates. Currency risk arises when
future commercial transactions and recognized assets and liabilities are
denominated in a currency that is not the functional currency of the entity.
The Group is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the Australian Dollar, Euro, Turkish Lira,
US Dollar, CHF, Ethiopian Birr and Saudi Arabian Riyal. Since 1986 the Saudi
Arabian Riyal has been pegged to the US Dollar, it is fixed at USD/SAR 3.75.
The Group's management monitors the exchange rate fluctuations on a continuous
basis and acts accordingly.
The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities at the reporting date are as follows; with the
Saudi Arabian Riyal exposure being included in the USD amounts.
Liabilities Assets Liabilities Assets
2024 2024 2023 2023
£'000 £'000 £'000 £'000
Australian Dollar 102 - 6 -
Euro 400 4 367 18
US Dollar 1,036 2 3,784 34
Ethiopian Birr 736 357 710 524
Sensitivity analysis continued
A 10% strengthening of the British Pound against the following currencies at
31 December 2024 would have increased equity and profit or loss by the amounts
shown in the table below. This analysis assumes that all other variables, in
particular interest rates, remain constant. For a 10% weakening of the British
Pound against the relevant currency, there would be an equal and opposite
impact on the loss and equity.
Equity Profit or Loss Equity Profit or Loss
2024 2024 2023 2023
£'000 £'000 £'000 £'000
Australian Dollar 10 10 1 1
Euro 40 40 35 35
US Dollar 103 103 375 375
Ethiopian Birr 38 38 19 19
Liquidity risk
The Group and Companies raise funds as required based on projected expenditure
for the next 6 months, depending on prevailing factors. Funds are generally
raised on AIM from eligible investors and also from short term providers in
the form of bridging finance. The success of capital raisings depends on
various factors, including investor sentiment in the equities and metals
markets, the broader macroeconomic environment, and other external conditions.
When raising funds, the Group evaluates the relative costs and benefits of
equity versus alternative financing options. Capital is then allocated to
projects based on forecasted expenditure requirement
The carrying amount in the liquidity table below is below the contractual cash
flow in 2023 because these short-term loans include interest payable until the
repayment date. If the loan is not repaid on the repayment date, an additional
interest of 2.5% per week will be incurred.
Carrying Amount Contractual Cash flows Less than 1 year Between 1-5 year More than 5 years
£'000 £'000 £'000 £'000 £'000
The Group
31-Dec-24
Trade and other payables 5,715 5,715 5,715 - -
Loans & Borrowings and Interest 739 739 739 - -
6,454 6,454 6,454 - -
31-Dec-23
Trade and other payables 7,307 7,307 7,307 - -
Loans & Borrowings and Interest 2,113 2,438 2,438 - -
9,420 9,745 9,745 - -
The Company
31-Dec-24
Trade and other payables 5,174 5,174 5,174 - -
Loans & Borrowings and Interest 525 525 525 - -
5,699 5,699 5,699 - -
31-Dec-23
Trade and other payables 6,503 6,503 6,503 - -
Loans & Borrowings and Interest 2,113 2,438 2,438 - -
8,616 8,941 8,941 - -
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern to provide returns for shareholders and
benefit other stakeholders and to maintain an optimal capital structure to
reduce the costs of capital. This is done through the close monitoring of cash
flows.
The capital structure of the Group consists of cash and cash equivalents of
£185,000 (2023: £192,000) and equity attributable to equity of the parent,
comprising issued capital and deferred shares of £30,375,000 (2023:
£28,293,000), other reserves of £60,404,000, (2023: £52,597,000) and
accumulated losses of £60,039,000 (2023: £56,483,000). The Group has no
long-term debt facilities.
Fair value estimation
The Group has certain financial assets and liabilities that are held at fair
value. The fair value hierarchy establishes three levels to classify the
inputs to valuation techniques to measure fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs)
The fair value of trade and other receivables is estimated as the present
value of future cash flows discounted at the market rate of interest at the
reporting date. For receivables and payables with a remaining life of less
than one year, the notional amount is deemed to reflect fair value. All other
receivables and payables are, where material, discounted to determine the fair
value.
Differences arising between the carrying and fair value are considered not
significant and no-adjustment is made in these accounts. The carrying and fair
values of intercompany balances are the same as if they are repayable on
demand. So the amortised cost is approximate to the fair value.
The fair values of the Group's loans and other borrowings are considered equal
to the book value as the effect of discounting on these financial instruments
is not considered to be material.
As at each of December 31, 2023, and December 31, 2024, the levels in the fair
value hierarchy into which the Group's financial assets and liabilities
measured and recognized in the statement of financial position at fair value
are categorized are as follows:
Carrying Amounts Fair Values
2024 2023 2024 2023
Financial assets £'000 £'000 £'000 £'000
Cash and cash equivalents (Note 15) - Level 1 185 192 185 192
Trade and other receivables (Note 14) 398 528 398 528
Financial liabilities
Trade and other payables (Note 20) 5,715 7,307 5,715 7,307
Loans and borrowings (Note 22) 739 2,113 739 2,113
4.Use and revision of accounting estimates and judgements
The preparation of the financial report requires the making of estimations and
assumptions that affect the recognized amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent liabilities. The
estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgments
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
Accounting Judgement:
Going concern
The going concern presumption depends principally on securing funding to
develop the Tulu Kapi gold mining project as an economically viable mineral
deposit, and the availability of subsequent funding to extract the resource,
or alternatively the availability of funding to extend the Company's and
Group's exploration activities (Note 2).
Capitalisation of exploration and evaluation costs
The directors consider that the project in its Licence areas in Saudi Arabia
has not yet met the criteria for capitalization. These criteria include, among
other things, the development of feasibility studies to provide confidence
that mineral deposits identified are economically viable. Capitalized
Exploration & Evaluation costs for the Group's project in Ethiopia have
been recognized on acquisition, and have continued to be capitalised since
that date, in accordance with IFRS 6. The technical feasibility of the project
has been confirmed, and once the financing is secure the related assets will
be reclassified as development costs in line with above.
Shareholding in GMCO
During 2024, the Company further diluted its proportionate share in GMCO by
10% and reduced to 15% which resulted in corresponding increase in ARTAR
shareholding to 85%. There is a clause in JV agreement which states that, if
at any time the shareholding interest falls below 25% due to dilution,
transfer or for any reason, it will trigger a right of the other shareholder
to issue written notice requiring the retiring shareholder to transfer its
entire shareholding interest to the continuing shareholder at fair value. The
Company evaluated and concluded that the clause does not automatically imply
the loss of significant influence. The sale can only take place at date expert
is appointed to determine the fair value of KEFI's holding in GMCO. KEFI's
influence remains based on its current ownership percentage until such time
that the notice is issued, and an expert appointed to determine fair price. As
of December 31, 2024 and at the date of this report KEFI is still a party to
Joint Venture based on ownership interest of 15%. The Company continues to
have significant influence over GMCO at the balance sheet date, supported by
factors including KEFI's continued significant shareholding, representation on
the Board of Directors, active involvement in policy-making processes, and
other relevant considerations.
Although the GMCO legal ownership at the 31 December 2024 remains recorded at
25%, a resolution and public announcement before year end confirm KEFI's
economic ownership at 15%. This reflects the substance over form principle,
the group financial statements report a 15% holding as of 31 December 2024,
aligning with KEFI's actual rights and exposure at the reporting date. The
investment is classified accordingly, with the discrepancy between legal and
economic ownership clearly disclosed for transparency and compliance purposes.
Impairment review of asset carrying values (Note 12)
Determining whether intangible exploration and evaluation assets are impaired
requires an assessment of whether there are any indicators of impairment, by
reference to specific impairment indicators prescribed in IFRS 6 (Note 2).
This requires judgement. This includes the assessment, on a project-by-project
basis, of the likely recovery of the cost of the Group's Intangible
exploration assets in the light of future production opportunities based upon
ongoing geological studies. This also involves the assessment of the period
for which the entity has the right to explore in the specific area, or if it
has expired during the period or will expire soon, if it is not expected to be
renewed. Management has a continued plan to explore. In the Tulu Kapi Gold
Project Information Memorandum dated March 2024 there were no indicators of
impairment. TKGM license developments are reflected in Note 12.
Estimates:
Share based payments.
Equity-settled share awards are recognized as an expense based on their fair
value at date of grant. The fair value of equity settled share options is
estimated using option valuation models, which require inputs such as the
risk-free interest rate, expected dividends, expected volatility and the
expected option life, and is expensed over the vesting period. Some of the
inputs used are not market observable and are based on estimates derived from
available data.
The models utilized are intended to value options traded in active markets.
The share options issued by the Group, however, have several features that
make them incomparable to such traded options. The variables used to measure
the fair value of share-based payments could have a significant impact on that
valuation, and the determination of these variables require a significant
amount of professional judgement.
A minor change in a variable which requires professional judgement, such as
volatility or expected life of an instrument, could have a quantitatively
material impact on the fair value of the share-based payments granted, and
therefore will also result in the recognition of a higher or lower expense in
the Consolidated Statement of Comprehensive Income. Judgement is also
exercised in assessing the number of options subject to non-market vesting
conditions that will vest. These judgments are reflected in note 17.
5. Operating segments
The Group has two operating segments, being that of mineral exploration and
corporate activities. The Group's exploration activities are in the Kingdom
of Saudi Arabia (through the jointly controlled entity) and Ethiopia. Its
corporate costs which include administration and management are based in
Cyprus.
Corporate Ethiopia Saudi Arabia Adjustments Consolidated
£'000 £'000 £'000 £'000 £'000
2023
Corporate costs (3,335) (265) - - (3,600)
Foreign exchange gain/(loss) (1,100) 1,273 - 173
Gain on Dilution of Joint Venture - - 1,156 - 1,156
Net Finance costs (1,115) - - - (1,115)
(Loss)/gain before jointly controlled entity (5,550) 1,008 1,156 - (3,386)
Share of loss from jointly controlled entity - - (4,963) - (4,963)
Reversal of Impairment of jointly controlled entity - - 453 - 453
Loss before tax (5,550) 1,008 (3,354) - (7,896)
Tax - - - - -
Loss for the year (5,550) 1,008 (3,354) - (7,896)
Total Non-Current Assets 16,257 23,155 - (4,596) 34,816
Total assets 24,069 23,680 - (12,213) 35,536
Total liabilities 8,839 12,794 - (12,213) 9,420
Corporate Ethiopia Saudi Arabia Adjustments Consolidated
£'000 £'000 £'000 £'000 £'000
2024
Corporate costs (5,638) (155) - (487) (6,280)
Foreign exchange gain/(loss) (236) 219 - 361 344
Gain on Dilution of Joint Venture - - 6,813 - 6,813
Net Finance costs (2,670) - - - (2,670)
(Loss)/gain before jointly controlled entity (8,544) 64 6,813 (126) (1,793)
Share of loss from jointly controlled entity - - (3,650) - (3,650)
Impairment of jointly controlled entity - - 217 - 217
Loss before tax (8,544) 64 3,380 (126) (5,226)
Tax - - - - -
Loss for the year (8,544) 64 3,380 (126) (5,226)
Total Non-Current Assets 31,403 26,216 - (19,103) 38,516
Total assets 31,631 26,561 - (19,093) 39,099
Total liabilities 5,699 958 - (203) 6,454
6. Expenses by nature 2024 2023
£'000 £'000
Depreciation of property, plant and equipment (Note 11) 18 29
Directors' fees and other benefits (Note 21.1) 1,164 568
Consultants' costs 477 282
Auditors' remuneration 189 170
Legal Costs 1,988 822
Ongoing Listing Costs 330 253
Other expenses 524 589
Financial Project Advisory Costs 890 150
Shareholder Communications 314 295
Travelling Costs 338 283
Total Administrative Expenses 6,232 3,441
Share of losses from jointly controlled entity (Note 5 and Note 19) 3,650 4,963
Reversal of impairment of jointly controlled entity (Note 19) (217) (453)
Share based option benefits to directors (Note 17) - 69
Share based benefits to employees (Note 17) - 42
Share based benefits to key management (Note 17) - 12
Share based benefits to suppliers 35 36
Cost for long term project finance (Note 8) 260 115
Operating loss 9,960 8,225
The Group's stages of operations in Saudi Arabia as at the year-end and as at
the date of approval of these financial statements have not yet met the
criteria for capitalization of exploration costs. The Company only capitalises
direct evaluation and exploration costs for the Tulu Kapi gold project in
Ethiopia.
7. Staff costs 2024 2023
£'000 £'000
Salaries 1,188 1,317
Social insurance costs and other funds 126 159
Costs capitalised as exploration (1,230) (1,361)
Net Staff Costs 84 115
Average number of employees 58 60
Excludes Directors' remuneration and fees which are disclosed in note 21.1. TK
project direct staff costs of £1,230,000 are capitalised in evaluation and
exploration costs and all remaining salary costs are expensed. Most of the
group employees are involved in Tulu Kapi Project in Ethiopia
8. Finance costs and other transaction costs 2024 2023
£'000 £'000
8.1 Total finance costs
Interest on short term loan 2,410 1,000
Total finance costs 2,410 1,000
8.2 Total other transaction costs
Cost for long term project finance 260 115
Total other transaction costs 260 115
The above costs for long term project finance relate to pre-investigation
activities required to fund TK Gold project.
9. Tax
2024 2023
£'000 £'000
Loss before tax (5,226) (7,896)
Tax calculated at the applicable tax rates at 12.5% (653) (987)
Tax effect of non-deductible expenses 1,043 948
Tax effect of tax losses 491 72
Tax effect of items not subject to tax (881) (33)
Charge for the year - -
9. Tax
2024
2023
£'000
£'000
Loss before tax
(5,226)
(7,896)
Tax calculated at the applicable tax rates at 12.5%
(653)
(987)
Tax effect of non-deductible expenses
1,043
948
Tax effect of tax losses
491
72
Tax effect of items not subject to tax
(881)
(33)
Charge for the year
-
-
The Company is resident in Cyprus for tax purposes. A deferred tax asset of
£2,326k (2023: £1,817k) has not been accounted for due to the uncertainty
over future recoverability.
Cyprus
The corporation tax rate is 12.5%. Under certain conditions interest income
may be subject to defence contribution at the rate of 17%. In such cases this
interest will be exempt from corporation tax. In certain cases, dividends
received from abroad may be subject to defence contribution at the rate of
17%. Due to tax losses sustained in the year, no tax liability arises on the
Company. Under current legislation, tax losses may be carried forward and be
set off against taxable income of the five succeeding years. As at 31 December
2024, the balance of tax loss which is available for offset against future
taxable profits amounts to £ 18,446k (2023: £ 14.535k). Generally, loss of
one source of income can be set off against income from other sources in the
same year. Any loss remaining after the set off is carried forward for relief
over the next 5 year period.
Tax Year 2020 2021 2022 2023 2024 Total
£'000 £'000 £'000 £'000 £'000 £'000
Losses carried forward (3,617) (2,292) (4,476) (1,919) (6,305) (18,609)
Ethiopia
KEFI Minerals (Ethiopia) Limited is subject to other direct and indirect taxes
in Ethiopia through its foreign operations. The mining industry in Ethiopia is
relatively undeveloped. As a result, tax regulations relating to mining
enterprises are evolving. There are transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax
determination is uncertain. The Group recognises liabilities for anticipated
tax audit issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts
that were initially recorded, such differences will impact the current and
deferred tax provisions in the period in which such determination is made.
The government of Ethiopia cut the corporate income tax rate for miners to 25%
more than three years ago from 35% and has lowered the precious metals royalty
rate to 7% from 8%. According to the Proclamation, holders of a mining licence
are required to pay royalty on the sales price of the commercial transaction
of the minerals produced. Development expenditure of a licensee or contractor
shall be treated as a business intangible with a useful life of four years. If
a licensee or contractor incurs development expenditure before the
commencement of commercial production shall apply on the basis that the
expenditure was incurred at the time of commencement of commercial production.
The mining license stipulates that every mining company should allocate 5%
free equity shares to the Government of Ethiopia.
United Kingdom
KEFI Minerals (Ethiopia) Limited is resident in United Kingdom for tax
purposes. The corporation tax rate is 19%. In December 2016, KEFI Minerals
(Ethiopia) Limited elected under CTA 2009 section 18A to make exemption
adjustments in respect of the Company's foreign permanent establishment's
amounts in arriving at the Company's taxable total profits for each relevant
accounting period. This is an exemption for UK corporation tax in respect of
the profits of the Ethiopian branch.
10. Loss per share
The calculation of the basic and fully diluted loss per share attributable to
the ordinary equity holders of the parent is based on the following data:
Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Net loss attributable to equity shareholders (5,226) (7,896)
Net loss for basic and diluted loss attributable to equity shareholders (5,226) (7,896)
Weighted average number of ordinary shares for basic loss per share (000's) 5,890,502 4,508,178
Weighted average number of ordinary shares for diluted loss per share (000's) 6,154,936 5,625,409
Loss per share:
Basic loss per share (pence) (0.089) (0.175)
There was no impact on the weighted average number of shares outstanding
during 2024 as all Share Options and Warrants were excluded from the weighted
average dilutive share calculation because their effect would be anti-dilutive
and therefore both basic and diluted earnings per share are the same in 2024.
11. Property, plant and equipment
Motor Vehicles Plant and equipment Furniture, fixtures and office equipment Total
£'000
£'000 £'000
£'000
The Group
Cost
At 1 January 2023 113 125 137 375
Additions - - 4 4
Write-offs - - - -
At 31 December 2023 113 125 141 379
Additions - 33 9 42
Write-offs - - - -
At 31 December 2024 113 158 150 421
Accumulated Depreciation
At 1 January 2023 73 93 84 250
Charge for the year 3 10 16 29
Write offs - -
At 31 December 2023 76 103 100 279
Charge for the year 2 5 11 18
Write offs - -
At 31 December 2024 78 108 111 297
Net Book Value at 31 December 2024 35 50 39 124
Net Book Value at 31 December 2023 37 22 41 100
The above property, plant and equipment is in Ethiopia.
12. Intangible assets
Total exploration and project evaluation cost
£'000
The Group
Cost
At 1 January 2023 31,622
Additions 3,360
At 31 December 2023 34,982
Additions 3,676
At 31 December 2024 38,658
Accumulated Amortization and Impairment
At 1 January 2023 266
At 31 December 2023 266
Impairment Charge for the year -
At 31 December 2024 266
Net Book Value at 31 December 2024 38,392
Net Book Value at 31 December 2023 34,716
Costs can only be capitalised after the entity has obtained legal rights to
explore in a specific area but before extraction has been demonstrated to be
both technically feasible and commercially viable.
The addition of £3.6 million is directly associated with the TKGM gold
exploration project expenditure and is capitalized as intangible exploration
and evaluation cost. Such exploration and evaluation expenditure include
directly attributable internal costs incurred in Ethiopia and services
rendered by external consultants to ensure technical feasibility and
commercial viability of the TKGM project. The value included as Project
Exploration and Evaluation costs in the Statement of Cash Flows is affected by
the net movements between the intangible assets creditors at 31 December 2023
and the value of these at 31 December 2024, hence it does not match with the
Additions to Intangible Assets.
The Company TKGM mining licence is in good standing to 2035 subject to normal
compliance of Ethiopian mining regulations. At the moment final approvals are
subject to the conditions precedent in the hands of Government in respect of
administrative matters and security.
13. Investments
13.1 Investment in subsidiaries
The Company Year Ended Year Ended 31.12.23
31.12.24 £'000
£'000
Cost
At 1 January 16,253 15,557
Additions 640 696
Intercompany loans converted to equity 14,509 -
At 31 December 31,402 16,253
The Company carrying value of KEFI Minerals Ethiopia which holds the
investment in the Tulu Kapi Gold project currently under development is
£31,402,000 as at the 31 December 2024.
13.1 Investment in subsidiaries
Reclassification of Shareholder Loans to Equity
During the financial year ended 31 December 2024, the Company converted
shareholder loans to investment in subsidiaries. The loan, amounting to
£14,509,000, had no fixed repayment terms and was subordinate to all other
debt obligations. This reclassification has resulted in:
· An increase in investment of £14,509,000.
· A corresponding decrease in shareholder loans of £14,509,000.
· No impact on the statement of profit or loss for the year.
During the year, an indicators of impairment review was conducted by the
management under IAS 36, and no indicators were identified.
.
Date of acquisition/ Effective
incorporation Country of incorporation proportion of
Subsidiary companies shares held
Mediterranean Minerals (Bulgaria) EOOD 08/11/2006 Bulgaria 100%-Direct
KEFI Minerals (Ethiopia) Limited 30/12/2013 United Kingdom 100%-Direct
KEFI Minerals Marketing and Sales Cyprus Limited 30/12/2014 Cyprus 100%-Direct
Tulu Kapi Gold Mine Share Company 31/04/2017 Ethiopia 95%-Indirect
Subsidiary companies The following companies have the address of:
Mediterranean Minerals (Bulgaria) EOOD 10 Tsar Osvoboditel Blvd., 3rd floor, Sredets Region, 1000 Sofia, the Republic
of Bulgaria.
KEFI Minerals (Ethiopia) Limited 27/28 Eastcastle Street, London, United Kingdom W1W 8DH.
KEFI Minerals Marketing and Sales Cyprus Limited 2 Kadmou, Wisdom Tower, 1(st) Floor, 1105 Nicosia, Cyprus.
Tulu Kapi Gold Mine Share Company 1(st) Floor, DAMINAROF Building, Bole Sub-City, Kebele 12/13, H.No, New.
The Company owns 100% of Kefi Minerals (Ethiopia) Limited ("KME")
On 8 November 2006, the Company entered into an agreement to acquire from
Atalaya Mining PLC (previously EMED) the whole of the issued share capital of
Mediterranean Minerals (Bulgaria) EOOD, a company incorporated in Bulgaria, in
consideration for the issue of 29,999,998 ordinary shares in the Company.
Mediterranean Minerals (Bulgaria) EOOD owned 100% of the share capital of
Doğu Akdeniz Mineralleri ("Dogu"), a private limited liability Company
incorporated in Turkey, engaging in activities for exploration and developing
of natural resources. Dogu was liquidated in 2020.
KME owns 95% of Tulu Kapi Gold Mine Share Company ("TKGM"), a company
incorporated in Ethiopia which operates the Tulu Kapi project. The Tulu Kapi
Gold Project mining license has been transferred to TKGM. The Government of
Ethiopia is entitled to a 5% free-carried interest ("FCI") in TKGM. This
entitlement is enshrined in the Ethiopian Mining Law and the Ethiopian Mining
Agreement between the Ethiopian Government and KME, as well as the
constitution of the project company and is granted at no cost. The 5% FCI
refers to the equity interest granted by the company holding the mining
license. The Ethiopian Government has also undertaken to invest a further
USD$20,000,000 (Ethiopian Birr Equivalent) in associated project
infrastructure in return for the issue of additional equity on normal
commercial terms ranking pari passu with the shareholding of KME. Such
additional equity is not entitled to a free carry. Upon completion of each
element of the infrastructure and approval by the Company, related additional
equity will be issued. At the date of this report no equity was issued.
The Company owns 100% of KEFI Minerals Marketing and Sales Cyprus ("KMMSC"), a
Company incorporated in Cyprus. The KMMSC was dormant for the year ended 31
December 2024 and 2023. KEFI Minerals Marketing and Sales Cyprus holds the
right to market gold produced from the Tulu Kapi Gold Project. It holds no
other assets. It is planned that KMMSC will act as agent and off-taker for the
onward sale of gold and other products in international markets.
13.2 Investment in jointly controlled entity
Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
The Group
At 1 January - -
(Decrease)/Increase in investment (3,380) 3,354
Gain on Dilution 6,813 1,156
Exchange Difference - -
Share of loss for the year (3,650) (4,963)
Reversal of impairment 217 453
On 31 December - -
The Company
At 1 January - -
(Decrease)/Increase in investment (3,380) 3,354
Gain on Dilution 6,813 1,156
Exchange Difference - -
Impairment Charge for the year (3,433) (4,510)
On 31 December - -
Date of acquisition/ Country of incorporation Effective proportion of shares held
incorporation
Jointly controlled entity
Gold and Minerals Co. Limited (GMCO) 04/08/2010 Saudi Arabia 15%-Direct
The Company owns 15% of GMCO as of 31 December 2024. More information is given
in note 19.1. During the year the Company diluted its holding in GMCO from
26.8% to 15% and this resulted in a gain of
£6,813,000.
14. Trade and other receivables
14.1 Current Trade and other receivables
Year Ended 31.12.24 Year Ended
£'000 31.12.23
£'000
The Group
Prepayments & other receivables 126 124
VAT receivable 272 404
398 528
Year Ended 31.12.24 Year Ended
£'000 31.12.23
£'000
Prepayments 107 72
107 72
14.2 Receivables from subsidiaries
Year Ended 31.12.24 Year Ended
£'000 31.12.23
£'000
The Company
Receivable to KEFI Minerals (Ethiopia) Limited (Note 21.2) ² 5,023 5,107
Receivable to Tulu Kapi Gold Mine Share Company (Note 21.2) ¹ 9,486 6,879
Total Advances to Ethiopian Subsidiaries 14,509 11,986
Expected credit loss (486) (486)
Receivable Classified as Equity during the year (14,509) -
Net Receivable Balance (486) 11,500
Expected credit loss reversal 486 -
Total Receivables from Subsidiaries - 11,500
The Company had loans outstanding from its Ethiopian subsidiaries, the
ultimate realisation of which depends on the successful exploration and
realisation of the Group's intangible exploration assets. operating liquidity
needs.
During the financial year ended 31 December 2024, the Ethiopian subsidiaries
had shareholder loans amounting to £14,509,000 (2023: £11,986,000). These
shareholder loans were recorded as Investments in subsidiaries on 1 July 2024
as the Company converted these loans to equity in the subsidiaries.
¹The Company advanced £2,745,000 (2023: £2,693,000) to the subsidiary Tulu
Kapi gold Mine Share Company during 2024. The Company had a foreign exchange
translation loss of £139,000 (2023: Gain £805,000). During the year,
£9,485,000 of the Tulu Kapi gold Mine Share Company loan was recorded as
Investment in subsidiaries.
²Kefi Minerals (Ethiopia) Limited: during 2024, the Company advanced £5,100
(2023: £Nil) to the subsidiary. The Company had a foreign exchange
translation loss of £90,000 (2023: Gain £317,000) the current year gain was
because of devaluation of the Ethiopian Birr. Within the reporting period,
£5,023,000 of the loan was recorded as Investment in subsidiaries.
Due to Management's reclassification of intercompany loans as equity, the
expected credit loss provision of £486,000 was no longer required and has
been reversed.
The TKGM and KME loans are denominated in Ethiopian Birr. The Company bears
the foreign exchange risk on these loans, and any movements in the Ethiopian
Birr are recorded in the Company's income statement.
15. Cash and cash equivalents
Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
The Group
Cash at bank and in hand unrestricted 185 192
185 192
The Company
Cash at bank and in hand unrestricted 120 114
Cash at bank restricted - -
120 114
16. Share capital
Issued Capital
The articles of association of the Company were amended in 2010 and the
liability of the members of the Company is limited.
Issued and fully paid
Number of shares '000 Share Capital Deferred Share premium Total
Shares
At 1 January 2023 3,939,123 3,939 23,328 43,187 70,454
Share Equity Placement 5 June 2023 785,714 786 - 4,714 5,500
Conditional Share Equity Placement 30 June 2023 98,325 98 - 590 688
Conditional Share Equity Placement 30 June 2023 34,820 35 - 209 244
Conditional Share Equity Placement 3 July 2023 107,143 107 - 643 750
Share issue costs - - - (311) (311)
Broker warrants: issue costs (110) (110)
At 31 December 2023 4,965,125 4,965 23,328 48,922 77,215
Number of shares '000 Share Capital Deferred Share premium Total
Shares
At 1 January 2024 4,965,125 4,965 23,328 48,922 77,215
Share Equity Placement 8 March 2024 832,653 833 - 4,163 4,996
Share Equity Placement 26 March 2024 83,333 83 - 417 500
Share Equity Placement 28 May 2022 177,982 178 - 1,180 1,358
Share Equity Placement 3 Dec 2024 988,496 988 - 4,448 5,436
Share issue costs - - - (570) (570)
Broker warrants: issue costs - - - (104) (104)
At 31 December 2024 7,047,589 7,047 23,328 58,456 88,831
Number of Deferred Shares'000 £'000 £'000
Deferred Shares 1.6p 2024 2023 2024 2023
At 1 January 680,768 680,768 10,892 10,892
Subdivision of ordinary shares to deferred shares - - - -
At 31 December 680,768 680,768 10,892 10,892
Deferred Shares 0.9p 2024 2023 2024 2023
At 1 January 1,381,947 1,381,947 12,436 12,436
Subdivision of ordinary shares to deferred shares - - - -
At 31 December 1,381,947 1,381,947 12,436 12,436
The deferred shares have no voting rights.
2023
On the 5 June 2023 the Company admitted 785,714,285 new ordinary shares of the
Company at a placing price of 0.7 pence per Ordinary Share.
At the AGM on the 30 June 2023, shareholders approved of the issue 133,145,208
new ordinary shares of 0.1p each at a price of 0.7p per share. 34,820,080 of
these shares were placed with retail investors and the balance were issued to
new and/or existing investors.
Furthermore, following the AGM approval, the company also issued 107,142,857
new ordinary shares on July 3, 2023. These shares of 0.1p each, were placed at
a price of 0.7p per share.
2024
During March 2024 the Company raised £5.5 million through the issue of
915,986,055 new ordinary shares of the Company at a placing price of 0.6 pence
per Ordinary Share. These new Ordinary Shares were admitted in two tranches,
832,652,722 on 08 March 2024 and 83,333,333 on 26 March 2024, following
shareholder approval of the conditional placement at a General Meeting of the
Company.
On the 28 May 2024 the Company admitted 177,981,851 new ordinary shares of the
Company at a placing price of 0.76 pence per Ordinary Share. These shares,
with a total value of £1.35 million, were allocated to key advisers as
compensation for their services.
The Company raised £5.5 million through the issue of 988,495,667 new Ordinary
Shares at a placing price of 0.55 pence per Ordinary Share.
Of the total value of £12.3 million raised during the year on issue of new
ordinary shares of the Company, £7.3 million (2023:4.3 million) was non-cash
due to being allocated for the settlement of liabilities (see Note 17.3).
Restructuring of share capital into deferred shares
On the 28 June 2019 at the AGM, shareholders approved that each of the
currently issued ordinary shares of 1.7p ("Old Ordinary Shares") in the
capital of the Company be sub-divided into one new ordinary share of 0.1p
("Existing Ordinary Shares") and one deferred share of 1.6p ("Deferred
Shares"). With effect from 8 July 2019 at 8.00am, each ordinary share in the
Company has a nominal value of 0.1p per share.
The Deferred Shares have no value or voting rights and were not admitted to
trading on the AIM market of the London Stock Exchange plc. No share
certificates were issued in respect of the Deferred Shares.
17. Share Based payments
17.1 Warrants
2023
During July 2023, the Company issued 39,285,714 broker warrants to subscribe
for new ordinary shares of 0.1p each at 0.7p per share to Tavira Securities
Limited pursuant to the Placing Agreement. The warrants expire within three
years of the date of Second Admission.
2024
During the financial year, the Company experienced a significant reduction in
the number of outstanding shareholder warrants. This reduction occurred due to
the expiration of 893,096,865 shareholder warrants that were previously issued
in two tranches:
· 393,096,865 short-term shareholder warrants issued in accordance
with the January 2022 share placement, exercisable at 1.6p per share
· 500,000,000 shareholder warrants authorized in April and May
2022, exercisable at 1.6p per share
In accordance with the terms of issuance, these warrants were subject to the
following conditions:
· Exercise period of two years from the date of Admission
· Exercise contingent upon a "Warrant Trigger Event" (share price
reaching or exceeding 2.4p for five consecutive days)
· Mandatory exercise within 30 days if the Trigger Event occurred
· Automatic expiration at the end of the two-year period if not
exercised
As the Warrant Trigger Event did not occur during the specified period, and
the two-year term has now elapsed, these warrants have expired in accordance
with their terms and conditions. This expiration accounts for the material
reduction in the number of outstanding warrants reported in the current
financial statements compared to the previous reporting period.
During March 2024, the Company issued 37,500,000 broker warrants to Tavira
Securities Limited pursuant to the Placing Agreement. These warrants entitle
the holder to subscribe for new ordinary shares of 0.1p each at an exercise
price of 0.6p per share. The warrants have a three-year term from the date of
Second Admission. The fair value of these warrants was determined using the
Black-Scholes valuation model and allocated against the share premium account
in accordance with IFRS requirements.
In March 2024, the Company issued 12,400,000 Adviser Warrants to an Advisor as
compensation for services provided over the previous 12 months. These warrants
entitle the holder to subscribe for new ordinary shares of 0.1p each at an
exercise price of 0.6p per share. The warrants have a three-year term from the
date of Second Admission. The fair value of these warrants was recognized as
an expense in the income statement in accordance with IFRS 2 'Share-based
Payment'
Details of warrants outstanding as at 31 December 2024:
Grant date Expiry date Exercise price Expected Life Years Number of warrants
000's
18 May 2022 17 May 2025 0.80p 3 years 75,000
03 Jul 2023 02 Jul 2026 0.70p 3 years 39,286
26 Mar 2024 26 Mar 2027 0.60p 3 years 49,900
164,186
Weighted average ex. Price Number of warrants
000's
Outstanding warrants at 1 January 2024 1.51p 1,007,383
- granted 0.60p 49,900
- cancelled/expired/forfeited 1.60p (893,097)
- exercised
Outstanding warrants at 31 December 2024 0.72p 164,186
The estimated fair values of the warrants were calculated using the Black
Scholes option pricing model and Trinomial Model when deemed more appropriate.
The inputs into the model and the results for warrants and options granted
during the year are as follows:
Warrants Options
18-May-22 18-May-22 03-Jul-23 27-Mar-24 17-Mar-21 12-Sep-23
Closing share price at issue date 0.71p 0.71p
0.58p 0.56p 2.05p 0.58p
Exercise price 1.60p 0.80p 0.70p 0.60p 2.55p 0.60p
Expected volatility 81.079% 99.72% 76.76% 75.41% 89% 86.34%
Expected life 2yrs 3yrs 3yrs 3yrs 4yrs 7yrs
Risk free rate 1.459% 1.475% 5.11% 3.91% 0.028% 4.41%
Expected dividend yield Nil Nil Nil Nil Nil Nil
Estimated fair value 0.16p 0.42p 0.28p 0.28p 1.21p 0.45p
Expected volatility was estimated based on the historical underlying
volatility in the price of the Company's shares.
Share options reserve table Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Opening amount 3,675 3,747
Broker Warrants issued costs 104 110
Adviser warrants issue costs 35 -
Share options charges relating to employees (Note 6) - 42
Share options issued to directors and key management (Note 6) - 81
Share options issued to advisor (Note 6) - 36
Forfeited options - -
Exercised warrants - -
Expired warrants (1,663) (178)
Expired options (203) (163)
Closing amount 1,948 3,675
17.2 Share options reserve
Details of share options outstanding as at 31 December 2024:
Grant date Expiry date Exercise price Number of shares 000's
17-Mar-21 16-May-25 2.55p 92,249
12-Sep-23 11-Sep-30 0.60p 8,000
100,249
Weighted average ex. Price Number of shares000's
Outstanding options at 1 January 2023 2.58p 109,849
- granted - -
- forfeited - -
- cancelled/ expired 4.5p (9,600)
Outstanding options at 31 December 2024 2.39p 100,249
The Company has issued share options to directors, employees and advisers to
the Group.
On 17 March 2021, 85,813,848 options were issued to persons who discharge
director and managerial responsibilities ("PDMRs") and a further 18,225,153
options have been granted to other non-board members of the senior management
team. The options have an exercise price of 2.55p, expire after4 years, and
vest in three equal instalments, the first after one year, the second after
two years and the third after three years from the date of grant. Although the
directors approved and announced the issue of 119,747,339 options on the 17
March 2021 to certain directors and senior managers only 104,039,001 options
were eventually issued.
The option agreements contain provisions adjusting the exercise price in
certain circumstances including the allotment of fully paid Ordinary shares by
way of a capitalisation of the Company's reserves, a subdivision or
consolidation of the Ordinary shares, a reduction of share capital and offers
or invitations (whether by way of rights issue or otherwise) to the holders of
Ordinary shares. The estimated fair values of the options were calculated
using the Black Scholes option pricing model. Expected volatility was
estimated based on the historical underlying volatility in the price of the
Company's shares.
For 2024, the impact of share option-based payments is a net charge to income
of £35,000- (2023: £159,000). At 31 December 2024, the equity reserve
recognized for share option-based payments, including warrants, amounted to
£1,948,000 (2023: £3,675,000).
17.3 Share Payments for services rendered and obligations settled.
2023 Year
The Company has settled certain remuneration, bonus, and fee obligations
through the issuance of Ordinary shares during the year. As of June 30, 2023
after shareholder approval, the Company allotted 107,142,857 new ordinary
shares of 0.1 pence each in the capital of the Company at a Placing Price of
0.7 pence per Ordinary Share amounting to £750,000. Additionally, 98,325,128
Ordinary shares were issued to settle amounts owed in fees amounting to
£688,000. In total during the year, the Company settled share-based payment
obligations totalling £1,438,000 through the issuance of 205,467,986 Ordinary
shares.
In May 2023, certain lenders entered into agreements to irrevocably discharge
and fully satisfy the outstanding amounts owed by the company through set-off
arrangements. These lenders participated in the share placement by subscribing
to the company's shares. As a result, the company issued 367,239,714 Ordinary
shares to settle advances amounting to £2,570,000.
2024 Year
During the year the company granted the issuance of 1,192,937,000 new Ordinary
shares which were distributed across the following placements:
March 2024 Share Placement of 461,125,000
After the General Meeting held in March 2024, the Company authorized the
issuance of 461,125,000 new Ordinary shares at a placing price of 0.06 pence
to fulfil financial obligations totalling £2.8 million
May 2024 Share Placement of 177,981,851
The Company has issued 177,981,851 new ordinary shares of 0.1 pence each at a
price of 0.763 pence per Ordinary Share, equivalent to the mid-market closing
price on 20 May 2024. These shares, with a total value of £1.35 million, were
allocated to key advisers as compensation for their services in support of
strategic initiatives that require attention following the commencement of the
Early Works Programme at our Tulu Kapi Gold Project in Ethiopia.
December 2024 Share Placement of 553,830,182
During December, the Company resolved its liabilities and other obligations
amounting to £3.05million by issuing 553.830,182 new Ordinary Shares at a
placing price of 0.55 pence per Ordinary Share.
The total shares set off during 2023 and 2024 for services and obligations was
as follows:
2024 2023
Name Number of Remuneration and Settlement Shares Amount Number of Remuneration and Settlement Shares Amount
'000 £'000 '000 £'000
For services rendered and obligations settled 33,333 26,428
H Anagnostaras-Adams
200 185
J Leach 16,667 100 14,286 100
Other employees and PDMRs - - 137,044 959
Amount to settle other Bonus Obligations 16,667 100 27,710 194
Amount to settle other Obligations 259,259 1,801 44,430 313
Total share-based payments 325,926 249,898
2,201 1,751
Amount to settle loans
Unsecured working capital bridging finance 867,011 367,340
4,970 2,570
1,192,937 617,238
7,171 4,321
The parties above agreed that the amounts subscribed in the share placements
during the year be set-off against the amount due by the Company at the date
of the share placement.
18. Non-Controlling Interest ("NCI")
Year Ended
£'000
As at 1 January 2023 1,562
Acquisitions of NCI -
Impact of 5% free carry on additions to assets during the year 147
Result for the year -
As at 1 January 2024 1,709
Acquisitions of NCI -
Impact of 5% free carry on additions to assets during the year 196
As at 31 December 2024 1,905
During 2018, the Government of Ethiopia received its 5% free carried interest
acquired in the Tulu Kapi Gold Project. The group recognized an increase in
non-controlling interest in the current year of £196,000 and a decrease in
equity attributable to owners of the parent of £196,000.
The NCI of £1,905,000 (2023: £1,709,000) represents the 5% share of the
Group's assets of the TKGM project which are attributable to the Government of
Ethiopia
The Mining Proclamation entitles the Government of Ethiopia (GOE) to 5% free
carried interest in TKGM. The 5% NCI reflects the government interest in the
TKGM gold project. The GOE is not required to pay for the 5% free carry
interest. The GOE can acquire additional interest in the share capital of the
project at market price. The GOE has committed US $20,000,000 to install the
off-site infrastructure in exchange for earning equity in Tulu Kapi Gold Mine
Share Company. The shareholder agreement signed with the GOE in April 2017
states that once the infrastructure elements are properly constructed and
approved by Company the relevant shares will be issued to Ministry of Finance
and Economic Cooperation (MOFEC)
The financial information for Tulu Kapi Gold Mine Project as at 31 December
2024:
Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Amounts attributable to all shareholders
Non-current assets 38,514 34,461
Current assets
280 446
Cash and Cash equivalents
65 78
38,859 34,985
Equity
38,105 34,176
Current liabilities
754 809
38,859 34,985
Result for the year - -
19. Jointly controlled entities
19.1 Joint controlled entity with Artar
Country of incorporation Effective proportion of shares held at 31 December
Company name Date of incorporation
Gold & Minerals Co. Limited 3 August 2010 Saudi Arabia 15%
Gold & Minerals Co. Limited has the following registered address: Olaya
District. 659, King Fahad Road, Riyadh, Kingdom of Saudi Arabia.
The summarised financial information below represents amounts shown in Gold
& Minerals Co Limited financial statements prepared in accordance with
IFRS and assuming they followed the group policy of expensing exploration
costs.
SAR'000 SAR'000 £'000 £'000
Amounts relating to the Jointly Controlled Entity Year Ended Year Ended Year Ended Year Ended
31.12.24 31.12.23 31.12.24 31.12.23
100% 100% 100% 100%
Non-current assets 5,828 5,175 1,238 1,084
Cash and Cash Equivalents 7,170 4,508 1,523 944
Current assets 2,000 3,167 425 663
Total Assets 14,998 12,850 3,186 2,691
Current liabilities (9,831) (7,043) (2,088) (1,475)
Total Liabilities (9,831) (7,043) (2,088) (1,475)
Net Assets 5,167 5,807 1,098 1,216
Share capital 194,016 165,220 41,214 34,597
Capital contributions partners 129,678 80,467 27,547 16,850
Accumulated losses (318,527) (239,880) (67,663) (50,231)
5,167 5,807 1,098 1,216
Exchange rates SAR to GBP
Closing rate 0.2124 0.2094
Income statement SAR'000 SAR'000 £'000 £'000
Loss from continuing operations (78,647) (83,534) (16,707) (15,709)
Other comprehensive expense - - - -
Translation FX Gain from SAR/GBP - - - -
Total comprehensive expense (78,647) (83,534) (16,707) (15,709)
Included in the amount above
Group
Group Share 15.34% (2023: 26.80%) of loss from continuing operations (3,650) (4,963)
Joint venture investment £'000 £'000
Opening Balance - -
Loss for the year (3,650) (4,963)
FX Gain/(Loss) -
Additional Investment (3,380) 3,354
Gain on Dilution 6,813 1,156
Reversal of impairment 217 453
Closing Balance - -
In May 2009, KEFI announced the formation of a new minerals' exploration
jointly controlled entity, Gold & Minerals Co. Limited ("GMCO"), a limited
liability company in Saudi Arabia, with leading Saudi construction and
investment group Abdul Rahman Saad Al-Rashid & Sons Company Limited
("ARTAR"). KEFI is the operating partner with a current 15% shareholding in
GMCO with ARTAR holding the other 85%.
KEFI provides GMCO with technical advice and assistance, including personnel
to manage and supervise all exploration and technical studies. ARTAR provides
administrative advice and assistance to ensure that GMCO remains in compliance
with all governmental and other procedures. GMCO has five Directors, of whom
one is nominated by KEFI. GMCO is treated as a jointly controlled entity and
has been equity accounted. KEFI has reconciled its share in GMCO's losses.
During the current year, all relevant activities of GMCO required the
unanimous consent of its five directors. Under terms of the original GMCO
shareholders agreement, if a shareholder's ownership stake falls below 25%,
the remaining shareholder has the right, but not the obligation, to acquire
the interest at fair value. "Fair value" is determined as an estimate of the
price the transferring party would have received if it had sold all its shares
in GMCO in an arm's length exchange, driven by typical business
considerations.
Amendments to the shareholders' agreement provide flexibility in the event a
shareholder stake falls below the 25% threshold. These amendments included
adjustments to the composition of GMCO's board based on shareholding
percentages and amendment to the process for nominating and appointing the
Managing Director/Chief Executive Officer. In addition, indemnification and
reimbursement clauses were added for parties undertaking sole risk projects,
with guidelines for compensating GMCO for costs incurred in such endeavours,
as well as a framework for continuing projects independently.
GMCO's audited financial statements treat exploration costs as assets and
capitalise them. In contrast, the Company's policy is to record these costs as
expenses until the project moves into the DFS stage (see Note 2). Because of
this difference, when the Company's ownership in GMCO is reduced, it recovers
a portion of those previously expensed exploration costs. A loss of
£3,650,000 was recognized by the Group for the year ended 31 December 2024
(2023: ££4,963,000) representing the Group's share of losses in the year.
As at 31 December 2024 KEFI owed ARTAR an amount of £347,000 (2023:
£3,728,000) - Note 20.1.
Management conducted a review in accordance with International Financial
Reporting Standards to determine whether it still retained significant
influence over GMCO and concluded that this remained the case. GMCO is still a
jointly controlled entity of KEFI, supported by factors including KEFI's
continued significant shareholding, representation on the Board of Directors,
active involvement in policy-making processes, and other relevant
considerations.
As part of its ongoing strategic review, the Group is evaluating its
investment in GMCO and has initiated discussions with potential parties to
replace its position in GMCO. This process is being conducted in collaboration
with major partner ARTAR to ensure the continued development of profitable
mining projects in the Kingdom of Saudi Arabia.
19.2 Gain on Dilution of Joint Venture
During 2024 the Company diluted its interest in the Saudi joint-venture
company GMCO from 26.8% to 15.3% by not contributing its pro rata share of
expenses to GMCO. GMCO is still treated as a jointly controlled entity and has
been equity accounted. This resulted in a gain of £6,813,818 (2023:
£1,155,915) in the Company accounts
On 6 October 2024, an extraordinary general meeting of GMCO shareholders
approved a resolution to increase the company's capital and reduce KEFI Gold
and Copper Plc's ownership in GMCO from 25% to 15%. While the formal
registration of the revised shareholding with the Saudi Ministry of Commerce
was completed on 20 February 2025, KEFI considers the economic substance of
the shareholding reduction effective from October 2024, based on the
shareholders' agreement and market disclosure.
20. Trade and other payables
20.1 Trade and other payables
The Group Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Accruals and other payables 3,809 2,877
Other loans - 100
Payable to jointly controlled entity partner (Note 19.1) 347 3,728
Payable to Key Management and Shareholder (Note 21.3) 1,559 602
5,715 7,307
Other loans are unsecured, interest free and repayable on demand.
20.1 Trade and other payables
The Company Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Accruals and other payables 3,268 2,173
Payable to jointly controlled entity partner (Note 19.1) 347 3,728
Payable to Key Management and Shareholder (Note 21.4) 1,559 602
5,174 6,503
The fair values of trade and other payables due within one year approximate to
their carrying amounts as presented above.
21. Related party transactions
The following transactions were carried out with related parties:
21.1 Compensation of key management personnel
The total remuneration of key management personnel was as follows:
Year Ended Year Ended
31.12.24 31.12.23
£'000 £'000
Short term employee benefits:
¹Directors' consultancy fees 546 532
Directors' other consultancy benefits 265 36
²Key management fees 713 579
Key management other benefits - -
1,524 1,147
Share based payments:
Directors' bonus 353 -
Share option-based benefits to directors (Note 17) - 69
Share option-based benefits other key management personnel (Note 17) - 12
Key management bonus 50 -
403 81
1,927 1,228
¹Directors' fees paid to the Executive Director Chairman and Finance Director
are paid to consultancy companies of which they are beneficiaries. Further
details on Directors' consultancy and other benefits are available on page 62.
In addition to the directors ²Key Management comprises Chief Operating
Officer and the Managing Director Ethiopia.
Share-based benefits
The Company issued 85,813,848 share options to directors and key management
during March 2021. These Options have an exercise price of 2.55p per Ordinary
Share and expire after 4 years and, in normal circumstances, vest in three
equal instalments, the first after one year, the second after two years and
the third after three years from the date of grant.
Previously all options, except those noted in Note 17, expire six years after
grant date and vest in two equal annual instalments, the first upon the
achievement of practical completion of the planned processing plant at the
Tulu Kapi Gold Project and the second upon the achievement of nameplate
capacity for a twelve-month period.
The Company
Name Nature of transactions Relationship 2024 2023
£'000 £'000
KEFI Minerals Marketing and Sales Cyprus Limited Finance Subsidiary - -
Tulu Kapi Gold Mine Share Company¹ Receivable Equity Subsidiary - 5,107
Kefi Minerals (Ethiopia) Limited² Receivable Equity Subsidiary - 6,879
Expected credit loss - (486)
- 11,500
¹The TKGM and KME loans are denominated Birr. The Company bears the foreign
exchange risk on these loans and any movements in the Ethiopian Birr are
recorded in the income statement of the Company.
During the year ended 31 December 2024, the Company recorded certain
receivables as Investments in subsidiaries. Further details on the movement of
these loans are available in Note 14.
As a result of this reclassification, management has determined that expected
credit losses on these borrowings as at 31 December 2024 would be nil (2023:
£486,000). This is because expected credit losses are not required for assets
classified as equity in the Company's financial statements.
The reversal of the previously recognized expected credit loss provision of
£486,000 has been recognized in the statement of profit or loss for the year
ended 31 December 2024.
21.3 Payable to related parties
The Group 2024 2023
£'000 £'000
Name Nature of transactions Relationship
Directors & PDMR Fees for services Key Management and Shareholder 1,559 602
1,559 602
21.4 Payable to related parties
The Company 2024 2023
£'000 £'000
Name Nature of transactions Relationship
Directors & PDMR Fees for services Key Management and Shareholder 1,559 602
1,559 602
22. Loans and Borrowings
22.1.1 Short-Term Working Capital Bridging Finance
Currency Interest Maturity Repayment
Unsecured working capital bridging finance GBP See table On Demand See table below
Bank Loan ETB 20% One Year 18 April 2025
2024
Unsecured working capital bridging finance Balance 1 Jan 2024 Drawdown Amount Transaction Costs Interest Repayment Repayment Year Ended
Shares Cash 31 Dec 2024
£'000 £'000 £'000
£'000 £'000 £'000 £'000
Repayable in cash in less than a year 2,113 4,300 - 2,411 (4,971) (3,328) 525
2,113 4,300 - 2,411 (4,971) (3,328) 525
Bank loan Balance 1 Jan 2024 Drawdown Amount FX Gain Interest Repayment Year Ended
Cash 31 Dec 2024
£'000 £'000 £'000
£'000 £'000 £'000
Repayable in cash in less than a year - 424 (251) 41 - 214
2023
Unsecured working capital bridging finance Balance 1 Jan 2023 Drawdown Amount Transaction Costs Interest Repayment Repayment Year Ended
Shares/Netting Cash 31 Dec 2023
£'000 £'000 £'000 £'000
£'000 £'000 £'000
Repayable in cash in less than a year 1,180 2,640 - 1,030 (2,570) (167) 2,113
1,180 2,640 - 1,030 (2,570) (167) 2,113
The short-term working capital finance is unsecured and ranks below other
loans. Although there was no binding agreement to convert the loans into
shares, the lenders agreed to convert and set off some of the debt into
shares.
Non-cash settlement of short-term working capital finance during the year was
£4,971,000 (2023: £2,570,000).
22.1.2 Reconciliation of liabilities arising from financing activities
2024 Reconciliation Cash Flows
Balance 1 Jan 2024 Inflow (Outflow) FX Gain Finance Costs Shares Balance 31 Dec 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Unsecured working capital bridging finance
Short term loans 2,113 4,724 (3,328) (251) 2,452 (4,971) 739
2,113 4,724 (3,328) (251) 2,452 (4,971) 739
2023 Reconciliation
Balance 1 Jan 2023 Inflow (Outflow) Fair Value Movement Finance Costs Shares/Netting Balance 31 Dec 2023
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Unsecured working capital bridging finance
Short term loans 1,180 2,640 (167) - 1,030 (2,570) 2,113
1,180 2,640 (167) - 1,030 (2,570) 2,113
23. Contingent liabilities
Directors and Key Management Personnel are eligible for a performance-based
short-term incentive plan (STI), which is contingent upon securing credit
approvals from lenders. A detailed explanation is given under remuneration
report.
24. Legal Allegations
The Company is currently involved in a legal case in the United Kingdom
brought by Demissie Asafa Demissie (the "Claimant") for an amount of GBP 5.1
million, relating to alleged financial advisory services. The Company
considers the claim to be spurious and without merit. Furthermore, the amount
claimed is contingent upon the successful closing of the Tulu Kapi Project
finance, which has not yet occurred.
The Company has vigorously defended its position and filed a counterclaim
against the Claimant. Legal counsel has been engaged to represent the
Company's interests. The English High Court of Justice, King's Bench, has
handed down a judgment on 10 January 2025, dismissing all claims against the
Company and awarding in favor of the Company on its counterclaims.
As of the date of approval of these financial statements, the Claimant has
sought to appeal the decision, and the Company is awaiting confirmation from
the UK courts on whether the appeal will be permitted. Given the current
status of the legal proceedings and based on legal counsel's advice, the
Company does not consider a provision necessary at this stage. However, the
matter continues to be monitored closely, and any developments will be
reflected in the financial statements as appropriate.
25. Capital commitments
The Group has the following capital or other commitments as at 31 December
2024 £140,000 (2023: £776,000),
31 Dec 2024 31 Dec 2023
£'000 £'000
Contracted for: Tulu Kapi Project costs 140 776
26. Events after the reporting date
Legal Matter
Please see Note 24 for an update on the legal case brought by Demissie Asafa
Demissie.
Share Placement January 2025
During January 2025, the Company concluded a placement, issuing 933,169,817
new ordinary shares at a price of 0.55 pence per share, generating
£5.1million in proceeds.
Name Number of Subscription Shares Amount
'000 £'000
Cash Placement 658,528 3,622
Current liabilities
For services rendered 144,789 796
Brokerage fees 34,398 189
Loans and borrowings
Unsecured working capital bridging finance 95,455 525
933,170 5,132
Share Placement May 2025
During May 2025, the Company concluded a placement, issuing 1,381,818,172 new
ordinary shares at a price of 0.55 pence per share, generating £7.6 million
in proceeds.
Name Number of Subscription Shares Amount
'000 £'000
Cash Placement 1,090,909 7,000
Current liabilities
For services rendered 290,909 600
1,381,818 7,600
KEFI Gold and Copper is listed on AIM (Code: KEFI)
www.kefi-goldandcopper.com
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SSLFAIEISEDMRecent news on KEFI Gold and Copper
See all newsREG - Kefi Gold and Copper - Notice of AGM and Investor Presentation
AnnouncementREG - Kefi Gold and Copper - Results for the year ended 31 December 2024
AnnouncementREG - Kefi Gold and Copper - Total Voting Rights
AnnouncementREG - AIM - AIM Notice - 28/05/2025
AnnouncementRCS - Kefi Gold and Copper - Institutional participation in recent Placing
Announcement