REG - Kefi Gold and Copper - Significant Progress in Ethiopia

KEFI Gold and CopperAnnouncement

20/10/2022 07:45

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RNS Number : 5375D  Kefi Gold and Copper PLC  20 October 2022

20 October 2022

KEFI Gold and Copper plc

("KEFI" or the "Company")

Significant Progress in Ethiopia

Investor Webinar

KEFI (AIM: KEFI), the gold exploration and development company with projects
in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi
Arabia, is pleased to provide an update on the recent significant progress of
the Company's Tulu Kapi Gold Project ("Tulu Kapi" or the "Project").

Following a thorough review of the Project on the back of updated supplier
pricing, the Company can confirm that Tulu Kapi's estimated capital
requirement (excluding the mining fleet provided by the contractor) has
increased 7% to US$320 million from US$300 million to first production (see
2021 Annual Report page 6). This is a direct result of cost inflation
witnessed across the globe. The Company is pleased to report that several
Project financing syndicate members, party to the Umbrella Agreement and
associated documents (see announcement 30 June 2022), have indicated a
willingness to increase their investment, thereby ensuring that the Project
will be funded under the previously reported financing structure.

 

In addition, the Company is pleased to report that a historically key
condition precedent has now been waived by the relevant syndicate member - in
that it is no longer necessary to await that party's agreement with the
Government on a particular policy matter, because of the significant progress
made and good relationship between parties.

 

Accordingly, the final proposed Project finance plan has now been circulated
for formal sign off by all the syndicate members, who have been kept appraised
throughout the process and continue to express their support. Given the time
taken to successfully resolve this situation between the individual syndicate
member and the Government, the broader syndicate approval of the final finance
plan is now expected mid-November 2022, rather than the previously reported
end of October 2022. In the meantime, we have commenced working on satisfying
the previously reported and normal conditions precedent to full project launch
including key field activities with the community and completing formal
documentation and Government procedures for funds drawdown in the normal
sequence.

 

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

 

"I am pleased to report on the continued progress at Tulu Kapi. The fact that
there have been increases to the ultimate capex figure required to first
production should come as little surprise given the inflationary factors
witnessed across the globe. That certain partners within the financing
syndicate are looking to increase their participation to address this increase
shows the spirit and goodwill within the financing syndicate to close on the
funding.

 

"Tulu Kapi will be Ethiopia's showcase 21(st) century mining project, designed
to the highest international standards for social, environmental and
governance performance. Tulu Kapi will likely be Ethiopia's largest single
export generator and generate direct and indirect employment for 5-10,000
people.

 

"The heightened capital figure of US$320 million includes financing costs,
contingency, cost overrun and working capital provisions, which are not
expected to be fully absorbed by the development of the Tulu Kapi open pit.
Accordingly, subject to senior lenders' approval in due course, some of these
funds are likely to be able to be deployed in developing the Tulu Kapi
underground mine once the open pit has started, ensuring earlier production
from the underground and improved economics from the Project.

 

"The Ethiopian Government and specifically the Ministry of Mines have been
appraised of all these developments and have reaffirmed their continued
support for the full Project launch by the end of 2022, when all conditions
precedent should have been satisfied.  We look forward to making further
announcements in due course."

 

Investor Webinar

The Company will provide a presentation and live webinar via the Investor Meet
Company platform on Wednesday 26 October 2022 at 16.30 London time.

 

The presentation is open to all existing and potential shareholders. Questions
can be submitted at any time during the live presentation.

 

Investors can sign up to Investor Meet Company for free and add to meet KEFI
via:

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

 

The webinar will subsequently be available on the Company's website at:

http://www.kefi-minerals.com/news/webcasts
(http://www.kefi-minerals.com/news/webcasts) .

 

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 99457843
 John Leach (Finance Director)                                        +357 99208130
 SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker)  +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl
 Tavira Securities Limited (Joint Broker)                             +44 (0) 20 7100 5100
 Oliver Stansfield, Jonathan Evans
 WH Ireland Limited (Joint Broker)                                    +44 (0) 20 7220 1666
 Katy Mitchell, Andrew de Andrade
 IFC Advisory Ltd (Financial PR and IR)                               +44 (0) 20 3934 6630
 Tim Metcalfe, Florence Chandler

 

KEFI Gold and Copper plc

 

KEFI is focused primarily on the advancement of its three development projects
in Ethiopia and Saudi Arabia, plus its pipeline of highly prospective
exploration projects in these two large jurisdictions of the under-explored
Arabian-Nubian Shield.

 

KEFI targets that production at Tulu Kapi in Ethiopia and Jibal Qutman in
Saudi Arabia will, between them, generate cash flows for capital repayments,
further organic growth and, ultimately, dividends to shareholders.

 

Both TKGM and G&M are technically guided and supported by KEFI so that
each of these operating joint venture companies as soon as possible builds the
local organisational structure suitable for long term production as well as
exploration and future development opportunities.

 

KEFI Gold and Copper in Ethiopia

 

Ethiopia is currently undergoing a remarkable transformation both politically
and economically.

 

The Tulu Kapi gold project in western Ethiopia is being progressed towards
development, following a grant of a Mining Licence in April 2015. No other
mining project of this scale in Ethiopia has been brought to Tulu Kapi's stage
of advancement during recent years and Tulu Kapi will be the first industrial
scale mine development in Ethiopia in over 30 years. It has taken years of
extensive technical re-design of the project, years of overhaul by the
Ethiopian authorities of financial policies which previously hindered mining
project finance and the patient and cautious traversing by the Company of
recent well-publicised events within the country. The project has imposed many
demands on a regulatory system which the Ethiopian Government continues to
upgrade, determined to build a modern minerals sector. KEFI is honored to play
its part in this process and has assembled a first-tier syndicate of
international industry expert management, contractors, banks and investors.

 

The Company has now refined contractual terms for construction and operation
of the open pit mine. Management has also developed preliminary plans to
develop the underground mine once open-pit production has started and to
produce.

 

All aspects of the Tulu Kapi (open pit) gold project have been reported in
compliance with the JORC Code (2012) and subjected to reviews by appropriate
independent experts. The underground project is defined based on internal
PEA-level analyses which have yet to be subjected to DFS-level investigation
and independent review, which is planned to be carried out during the
construction of the open pit.

 

KEFI remains keen to re-commence its exploration of the additional prospects
it has successfully identified within the Tulu Kapi district exploration area
from within which the mining licence was duly excised as a result of the
successful discovery of the Tulu Kapi deposit. Whilst most historical drilling
was naturally of the Tulu Kapi deposit, there was significant work done on
many further prospects which await follow-up.

 

Whilst awaiting regulatory permission to re-activate the Company's Ethiopian
exploration, which is critical for long term planning for all stakeholders in
the community as well as the Company, the exploration focus has been
successfully switched to Saudi Arabia.

 

KEFI Gold and Copper in the Kingdom of Saudi Arabia

 

In 2009, KEFI formed Gold & Minerals Limited ("G&M") in Saudi Arabia
with local Saudi partner, ARTAR, to explore for gold and associated metals in
the Arabian-Nubian Shield. KEFI has a c. 30% interest in G&M.

 

ARTAR, on behalf of G&M, and G&M directly held over 16 Exploration
Licence (EL) applications pending the introduction of the new Mining Law.
These new regulations have recently been proclaimed and G&M has had ten
new licences issued in the past twelve months - more licence grants than in
the previous 14 years and all highly prospective and strategically important
for G&M, ELs are renewable for up to five years and bestow the exclusive
right to explore and to obtain a 30-year exploitation (mining) licence within
the area.

 

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

 

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