REG - Kefi Gold and Copper - Tulu Kapi Project Update & Rescheduling of Webinar

KEFI Gold and CopperAnnouncement

04/02/2022 07:00

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RNS Number : 6628A  Kefi Gold and Copper PLC  04 February 2022

 

4 February 2022

KEFI Gold and Copper plc

("KEFI" or the "Company")

Tulu Kapi Gold Project Update and Rescheduling of Investor Webinar

KEFI (AIM: KEFI), the gold and copper exploration and development company with
projects in the Federal Democratic Republic of Ethiopia and the Kingdom of
Saudi Arabia, is pleased to provide an update in respect of the Company's Tulu
Kapi Gold Project (the "Project" or "Tulu Kapi"), part of the KEFI-operated
Ethiopia joint-venture Tulu Kapi Gold Mines Share Company ("TKGM").

Project Update

·    Ethiopia's civil war abated at the end of Q4-2021 and its State of
Emergency is being lifted

·    Security conditions at the Tulu Kapi site, district and transport
routes are improving

·    The Project finance syndicate remains in place to launch the Project
as soon as normal conditions that govern the execution of such a project and
its financing are satisfied

·    TKGM is in extensive consultations with the Ethiopian Ministry of
Mines (the "Ministry"), to provide the assurances being sought to minimise
further project delays. Meetings have now been scheduled for next week,
including high-level meetings on 7 February 2022

·    Operationally our activities continue:

o  this month's Project priorities include reviewing detailed resettlement
plans for the affected households with the newly-appointed local government
administration and to complete all outstanding documentation with the Ministry
and other Government agencies; and

o  in the following few months to finalise documentation for execution
whilst, on the ground, finish preparing the new lands for resettling
households.

·    All parties are acting in good faith to prepare to implement the
Project launch. Progress is intended to be quick but will rely on the
continued improvement of security and completion of all documentation and
other standard confirmations, such as insurance, to the satisfaction of the
Ministry and other authorities, the senior lenders and other syndicate
members.

Investor Webinar

In light of the unavailability of certain members of the Company's senior
management team next week, due to official meetings due to take place in
Ethiopia, the Company is postponing the Investor Webinar on the Investor Meet
Company platform, which had been scheduled for 7 February 2022. The Company
apologises for any inconvenience and will reschedule as soon as possible.

KEFI Executive Chairman, Harry Anagnostaras-Adams, commented:

"We are proud to be continuing to work tirelessly on the ground in Ethiopia,
alongside the Tulu Kapi community and the Ethiopian Government to progress the
Project. This work has continued throughout the recent challenges, which are
now rapidly abating, and we anticipate making further progress in the coming
weeks.

"KEFI have exciting projects in both Ethiopia and Saudi Arabia and the
minerals sector is taking off in both countries. We have lots of milestones to
achieve in 2022 to further de-risk our projects and hopefully to start closing
the valuation gap between the stock market price and the underlying
fundamentals."

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

Enquiries

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

 

Notes to Editor

KEFI Gold and Copper plc

KEFI is focused primarily on the development of the Tulu Kapi Gold Project in
Ethiopia and its pipeline of highly prospective exploration projects in the
Arabian-Nubian Shield. KEFI targets that production at Tulu Kapi will generate
cash flows for capital repayments, further exploration and dividends to
shareholders.

The following tabular summary presents KEFI's updated estimated share of the
project NPV's :

                              Tulu Kapi                Hawiah        Jibal Qutman  Total         Issued        Pence Per
                              NPV                      NPV           NPV           NPV           Shares        Share
 Net Present Value for KEFI
     30/06/2020               £114m                    0             0             £114m         1,867m        6
     31/12/2020               £164m                    £90m          0             £244m         1,876m        13
     30/06/2021               £205m                    £74m          0             £279m         2,159m        13
     31/12/2021               £191m                    £128m         £29m          £348m         2,939m        12
 Footnotes:
 Assumed exchange rate was rate US$1.35:£1.00
 31 December 2021 Metal Prices:
 Gold Price is US$1,830/oz
 Copper Price is: US$9,750/t
 Zinc Price is US$3,590/t
 Silver Price is US$23/oz

 Explanatory Notes:
 * NPV is derived by KEFI using independently created financial models of net
 cash flows after tax
 and debt service, using a discount rate of 8%;
 * Tulu Kapi open pit model is based on the Definitive Feasibility Study
 ("DFS") as updated for any
 refinements during project contracting and in-country experience;
 * Tulu Kapi underground mine model is based on the internal Preliminary
 Economic Assessment ("PEA");
 * Hawiah assumes preliminary mine modelling for open pit and underground
 because the MRE has only recently been updated. Also includes preliminary debt
 leverage;
 * Jibal Qutman model is based on the internal PEA, debt-leverage applied.

 

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.

The Company has now refined contractual terms for project construction and
operation. Estimates include open pit gold production of c. 140,000oz pa for a
7-year period. All-in Sustaining Costs (including operating, sustaining
capital and closure but not including leasing and other financing charges)
remain c. US$800/oz. Tulu Kapi's Ore Reserve estimate totals 15.4Mt at 2.1g/t
gold, containing 1.1Moz.

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.

A Preliminary Economic Assessment has been published that indicates the
economic attractiveness of mining the underground deposit adjacent to the Tulu
Kapi open pit, after the start-up of the open pit and after positive cash
flows have begun to repay project debts. An area of over 1,000 square
kilometres adjacent to Tulu Kapi has been reserved for exploration by KEFI's
wholly-owned Ethiopian subsidiaries upon commencement of development by TKGM,
with a view to adding satellite deposits to development and production plans.

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 31.2% interest in G&M and is the
operating partner.

ARTAR, on behalf of G&M, and G&M directly hold over 16 Exploration
Licence (EL) applications pending the introduction of the new Mining Law.
These new regulations have recently been proclaimed and G&M now holds 3
EL's.  ELs are renewable for up to three 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 in 2022.

 

 

 

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