REG - Kefi Gold and Copper - Tulu Kapi Gold Project Update

KEFI Gold and CopperAnnouncement

13/02/2024 07:00

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RNS Number : 8864C  Kefi Gold and Copper PLC  13 February 2024

13 February 2024

KEFI Gold and Copper plc

("KEFI" or the "Company")

Tulu Kapi Gold Project Update

Ethiopia - All Stakeholders Step Up Preparations for the US$320 million Tulu
Kapi Gold Project

KEFI (AIM: KEFI), the gold and copper exploration and development company, is
pleased to provide an update on project launch preparation activities at the
high-grade Tulu Kapi Gold Project ("Tulu Kapi" or the "Project") in Ethiopia
following several days of meetings with senior representatives of the Tulu
Kapi stakeholders at Mining Indaba 2024 in Cape Town, South Africa.

Project Launch Update

As previously reported, the three critical conditions precedent set by the
Project lenders were formally achieved in October 2023 (see announcement dated
5 October 2023). This led to final credit committee approval by the
lead-lender (see announcement dated 10 January 2024).

The Company can now report that all the other parties in the funding
syndicate, have advised they will this month go to their respective committees
to approve the proposed transaction.

The Ethiopian Federal Government also attended and reaffirmed its equity
capital investment has been fully documented, committed and already partly
invested.

The contractors in the syndicate have all reaffirmed their intention and
readiness to enter into the already-drafted definitive documentation to enable
full Project launch in H1 2024 as previously outlined.

The Company is pleased with the long-standing collaboration with all parties
involved and the current intensification of effort flowing from the
Government's key positive actions towards the end of 2023. The priority is to
continue demonstrating safety whilst we implement the remaining, mainly
administrative, tasks which are expected to be successfully and swiftly
completed. We will provide regular updates.

Community and Physical Preparations

Whilst we await the drawdown of the US$320 million Project funding, KEFI has
started the requisite low-cost launch-preparations to enable the Project to
move forward safely and efficiently. These include:

·    Personnel being dispatched into the field to brief the community and
carry out required site works;

·    Dismantling the old exploration camp (on the planned open pit) and
installing new communication and staging bases along our transport route as
part of the upgrading of safety systems; and

·    Works by contractors. including:

o process-plant contractor completing Front End Engineering and Design;

o mining contractor establishing its local corporate entity and clearing its
work rosters with the department of labour;

o electricity contractor procuring all (and taken delivery of most) of the
equipment required for connection to the mains grid; and

o road contractor completing upgrades to some bridges on existing routes, as
well as the surveys of the new additional all-weather access road.

Project Financing at the Project and Subsidiary Level

The long-agreed US$320 million financing plan (excluding the mining fleet
provided by the contractor and excluding historical expenditures of
approximately US$100 million) has been refined as follows:

·    The debt portion of US$190 million remains from lead-lender Southern
and Eastern Africa Trade and Development Bank and co-lender Africa Finance
Corporation;

·    The US$40 million from share issues by KEFI subsidiaries remains from
the Federal and Regional Government;

·    The US$70 million Equity Risk Notes remain largely from local
subsidiaries of multinational corporations who have been given Government
permission to invest local currency and be repaid in hard currency, repayable
in cash or equity at KEFI's election as from year 4 at then market prices; and

·    Having received the recent clarifications, the subsidiary-level
equity-ranking product-linked funding piece of US$20 million can now also be
finalised. Discussions have already commenced with well-known
industry-specialist financiers. We have deliberately withheld commitments on
this until now, when the rest of the funding package is clear.

The principal Project contractors are Lycopodium Limited (process plant design
and construction), PW Mining (mining services), Ethiopian Electric Power
Company and Ethiopian Roads Authority.

Executive Chairman, Harry Anagnostaras-Adams, commented:

"This multi-party subsidiary-level financing is now advancing on the back of
the Government commitments finally received in October, triggering the
lead-lender to quickly process its approval in December 2023 and now all other
stakeholders triggering their respective flow-on processes.

"This ramp-up of activities by all stakeholders coincides with a take-off of
mineral sector activities in Ethiopia and in our other host country, Saudi
Arabia.

"Whilst Tulu Kapi will be the first internationally financed bankable project
development in Ethiopia, many other projects' exploration and related
activities are now being remobilised in the country, including Allied Gold,
SunPeak, Akobo Gold and privately-owned conglomerate Midroc, which is now
drilling-out its proposed second mine, already being the operator of the Lege
Dembe Mine developed by the Ethiopian Government in the 1980's."

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)  +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl

 Tavira Securities Limited (Lead Broker)             +44 (0) 20 7100 5100
 Oliver Stansfield, Jonathan Evans

 IFC Advisory Ltd (Financial PR and IR)              +44 (0) 20 3934 6630
 Tim Metcalfe, Florence Chandler

 3PPB LLC (Institutional IR)
 Patrick Chidley                                     +1 (917) 991 7701
 Paul Durham                                         +1-203-940-2538

 

 

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