REG - Kefi Gold and Copper - Tulu Kapi Major Financing Conditions Precedent Met

KEFI Gold and CopperAnnouncement

19/06/2023 07:00

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RNS Number : 0711D  Kefi Gold and Copper PLC  19 June 2023

19 June 2023

KEFI Gold and Copper plc

("KEFI" or the "Company")

All Major Financing Conditions Precedent Now Met for Tulu Kapi

Strong Support from Ethiopian Government

KEFI Gold and Copper plc (AIM: KEFI), is pleased to report that all
outstanding major financing conditions precedent requiring Ethiopian
government input in relation to the Company's Tulu Kapi Gold Project ("Tulu
Kapi" or the "Project") have now been met.

This significant development enables the Tulu Kapi individual syndicate
members to now proceed to final committee and board reviews and approvals for
the US$390 million Project finance package as set out in the Final Umbrella
Agreement described in the Company's announcement of 27 April 2023.

US$370 million of this package has already been covered by arrangements at the
Project and subsidiary level with first-tier banks, contractors and investors
including the Ethiopian Government itself at both the Federal and the Regional
levels. The final US$20 million of the financing package has also now been
allocated to a specific set of parties, with a view to it being finalised and
structured over the next few months as all the standard procedural conditions
precedent are completed to enable funds flow, in particular the Government's
formalisation of the details of the agreements we have now reached and of the
compensation packages for the individual households being resettled, in
accordance with the strict requirements of the law and World Bank IFC
Performance Standards.

Previously Outstanding Conditions Precedent

KEFI has now resolved all major conditions precedent that were remaining with
the Ethiopian Government for the Project financing. Accordingly, details are
now being checked by advisers to each syndicate member ahead of the signing of
detailed binding definitive documentation in the near term.

The first major condition precedent was for the two banks in the funding
syndicate to receive the same rights and protections in Ethiopia. This was
achieved in March 2023 when Ethiopia granted African Finance Corporation
country membership, a strategic initiative for Ethiopia and for the bank.

The second was the establishment of a permanent security force around Tulu
Kapi to ensure that construction and the Project generally could proceed
unhindered. This was achieved in April 2023 with the triggering of escalated
security in Tulu Kapi's surrounding areas by the relevant Government agencies.

The final material condition precedent was for clarification by the Ethiopian
Central Bank of specific procedures for the Project, agreeing rights to
international bank accounts. This was clarified last week.

These three critical recent breakthroughs in as many months will now be built
into the syndicate's detailed definitive documentation. The boards and
committees of the Government agencies and the Project finance syndicate of
banks, contractors and investors are now being updated on all details so that
they may formally consider final approvals for Project launch.

Further Support from Ethiopian Government

The Ethiopian Government and its agencies have continued to show their support
for the development of Tulu Kapi above and beyond meeting the afore-mentioned
conditions precedent by undertaking several further recent initiatives:

·    The Ethiopian Electricity Production Corporation has procured the
major components for the Project's connection to the main power grid to ensure
compliance with scheduled commissioning of the plant in 2025;

·    The Ethiopian Roads Authority has reaffirmed the delivery schedule
for the new all-weather access road;

·    An MOU has been signed with the Regional Government to increase the
aggregate Government equity investment in the Project, from US$20 million to
US$30 million, as the Government is keen to preserve an equity interest of c.
25% alongside KEFI's c. 75%; and

·    The Minister of Mines has circulated, for stakeholder comment, draft
legislative reforms to encourage exploration and mining in Ethiopia. KEFI is
actively involved in the various industry associations and is assisting where
it can.

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

"Today's announced progress with the Ethiopian central bank is the third
significant breakthrough in as many months. This set of supportive Government
initiatives clears the way for the launch of Tulu Kapi and reinforces the
recent turnaround of the working environment in Ethiopia.

"KEFI has assembled a first-class international project finance syndicate
which is now focused on final definitive documentation for this US$390 million
transaction.

"Our take-off in Ethiopia coincides with that in Saudi Arabia. These are the
two largest jurisdictions in the highly prospective Arabian Nubian Shield.
Both countries are now proactively supportive and these continuing positive
developments help to vindicate our longstanding focus there since 2008 and our
tenacity to have successfully assembled three advanced projects and a
world-class pipeline for future exploration.

"Also, having just effected a capital raising to extinguish all liabilities,
we have cleared the way for us to implement the US$390 million project finance
package for our shovel ready 140,000 oz pa Ethiopian gold project."

 

Enquiries

 KEFI Gold and Copper plc
 Harry Anagnostaras-Adams (Executive Chairman)                         +357 994 57843
 John Leach (Finance Director)                                         +357 992 08130

 SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker)   +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl

 Tavira Financial Limited (Joint 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

Further information can be viewed at https://www.kefi-goldandcopper.com
(https://www.kefi-goldandcopper.com)

 

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