REG - Kefi Gold and Copper - Tulu Kapi Update

KEFI Gold and CopperAnnouncement

11/02/2026 07:00

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RNS Number : 4978S  Kefi Gold and Copper PLC  11 February 2026

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.

11 February 2026

 

KEFI Gold and Copper plc

 

("KEFI" or the "Company")

 

Tulu Kapi Update

 

TKGM enters into US$20 million Equity Ranking Royalty with Chancery Royalty

 

The Project finance package is now covered and Ground Breaking Ceremony this
month

 

KEFI (AIM: KEFI), is pleased to report the signing by subsidiary Tulu Kapi
Gold Mines S.C. ("TKGM") of a US$20 million equity-ranking-royalty with
Chancery Royalty Limited ("Chancery Royalty"). This is a key final part of the
US$340 million financing package for the Company's high-grade/high-recovery
Tulu Kapi Gold Project (the "Project" or "Tulu Kapi"). It has been creatively
structured with Chancery Royalty to be an equity-risk ranking royalty and is
payable alongside distributions made by TKGM to its shareholders.

 

A residual US$30 million of equity-risk capital is also in the process of
being fully signed up this month. This comprises US$10 million of costs to be
incurred during the two-year development programme and settled in KEFI shares
at the then market price when applicable costs fall due during this period,
and the balance of US$20 million as additional equity-risk ranking TKGM gold
royalties issued to two other royalty investors on the same terms as the
Chancery Royalty. That will formally complete the US$340 million Project
finance package in an optimal manner. Therefore the Project finance package is
now effectively covered and the Company is triggering implementation on all
fronts in the field. Field teams and contractors have been mobilised and a
'Ground Breaking Ceremony' organised.

 

As a separate and optional matter, consideration continues to be given to the
raising of capital in excess of the Project development requirements in the
form of Ethiopian BIRR-denominated non-convertible, redeemable preference
shares ("Preference Shares") to be issued by the Company's wholly-owned KME
Holdings Limited ("KME").

 

These figures are summarised as follows:

 

 Project Financing Breakdown                                    Finalised US$m  Pending Finalisation this month US$m

 Bank Loan commitments to TKGM and Guaranteed by KEFI           240
 Ethiopian Government Ordinary Shares in TKGM                   20
 KEFI Equity Placings in 2025 and either spent or being spent   30
 Chancery Royalty Provided to TKGM, minimum investment          20

 Remaining Minimum US$30 million sourced as follows:
 Costs within the Development Budget to be paid in KEFI shares                  10
 Additional Equity-Ranking Royalties for TKGM                                   20
 Total of Funding for Development Budget US$340m                310             30

 Potential Funds in Excess of Development Budget US$340m:
 Redeemable Preference Shares (in Ethiopian BIRR) for KME                       Up to 46

 

Footnotes to Project Financing Breakdown:

 

1.    Features of Equity-Ranking-Gold Royalty:

a.    do not include any entitlement to silver.

b.    payable alongside distributions made by TKGM to its shareholders.

2.    Currency of funds raised:

a.    The Total of Funding for Development Budget US$340 million is in hard
currency.

b.    The tabulated 'Potential Funds in Excess of Development Budget' is
planned to be in the form Ethiopian Birr and represents the opportunity being
offered for local participation.

3.    Purpose of offering participation to Ethiopian investors:

a.    Whilst not relying on these investors for the funding of the
development budget, KEFI has from the outset offered the opportunity for local
participation from both the public and private sectors. This is integral to
KEFI's 'Ethiopianisation' policy to maximise alignment of local stakeholders
in the local business.

b.    The funds raised would be in excess of development requirements and
are earmarked for cost-overrun-reserves, exploration and non-obligatory, but
desirable, high-impact social development projects to be designed with the
authorities.

 

Project Contractual Arrangements

 

Integral with the Project finance arrangements, the following Project
contractual arrangements have been closed, or are proceeding for closing by
the end of February 2026:

 

·    Offsite infrastructure installation agreement (with Government
agencies) - being implemented in the field;

 

·    House construction contractor mobilised to site;

 

·    Lycopodium package of full construction agreements - including its
fixed-price lump sum engineering and procurement contract on the back of the
already-triggered early Lycopodium works. Lycopodium has already been
mobilised and the full documentation for the two-year build is scheduled to be
signed in February 2026; and

 

·    Mining services agreement with BCM including provisions for supply of
the mining fleet, under an industry-conventional schedule of rates arrangement
providing for payments per tonne produced in compliance with the
TKGM-controlled mine plan: a re-tendering has just been closed and the
finalised refined contract has been awarded, without equity participation by
the contractor as was initially contemplated.

 

Community Resettlement

 

The first phase of community resettlement compensation (scheduled within the
development schedule) has already largely been paid and the remaining
settlements are now progressing. All new replacement lands have been confirmed
in the district around the mining licence and the house construction
contractor for replacement housing has been mobilised, as has equipment for
initial bulk earthworks on the mining licence.

 

All these financial and contractual arrangements are subject to lender
approvals and monitoring.

 

Economic Metrics

 

Based on the Project financing being completed as summarised above, key KEFI
economic metrics are estimated as follows for gold prices in the range of
US$3,000-5,000/oz i.e. these metrics take into account all costs, including
debt-servicing and the maximum potential servicing costs of equity-ranking
royalties and Preference Shares, as outlined above:

 

·    Annual production of Tulu Kapi in Ethiopia for the first three years
from 2028 based on the open pit mining plan, complemented with initial
underground production, and with plant throughput tuned up 15%. This is the
'2025 Business Plan' as set out on the KEFI website in March 2025 at:
https://www.kefi-goldandcopper.com/files/files/KEFI-Tulu-Kapi-Gold-Project-Overview-March25.pdf
(https://www.kefi-goldandcopper.com/files/files/KEFI-Tulu-Kapi-Gold-Project-Overview-March25.pdf)
.

 

·    Tulu Kapi All-in Sustaining Costs (AISC) US$1,004 to US$1,144 per oz.

 

·    The break-even cost after servicing all debt is c.US$1,400/oz and a
significant benefit of the successful equity-ranking structuring of the
royalty and Preference Shares is that neither financial instrument has any
entitlement to cash flow other than via the cash flow available for dividend
distribution. Therefore, the minimum break-even cost after servicing all
capital (not just secured debt) has now been held at c.US$1,400/oz. In this
manner, neither the royalty nor the Preference Shares impose any default-risk
of financial leverage upon KEFI's ordinary shareholders (or secured lenders).
On the other hand, the IRR% for ordinary shareholders of TKGM and of KEFI have
been enhanced by the royalty and Preference Shares at any gold price above an
estimated US$1,946/oz.

 

·    Tulu Kapi NPV (5%) for KEFI's planned 83% beneficial interest after
all capital servicing at construction start is US$700 million to US$1.5
billion, and an estimated US$847 million to US$1.9 billion at production
start.

 

·    US$148 million initial preliminary valuation of 13% shareholding in
Saudi Arabian Gold and Minerals SLA ("GMCO"), based on a notional US$300/oz
gold-equivalent 3.8 million oz JORC Resources on the KEFI discoveries. These
are now advancing towards development under parallel Definitive Feasibility
Studies: Jibal Qutman Open Pit Gold on oxide ore only; Hawiah Open Pit Gold on
oxide ore only; Jibal Qutman Open Pit on oxide and sulphide ore; and Hawiah
Copper-Gold-Zinc-Silver from underground mining of sulphide ores with
associated metallurgical concentrating processes. The anticipated development
sequence is in the order listed above, with the first development to be
triggered in 2026 and the last several years later. GMCO has developed its
board and management structure with board-level input from KEFI alongside
independent directors with appropriate experience and the top leadership of
majority shareholder, Saudi conglomerate ARTAR - the holding company for the
family office of Abdulrahman Al Rashid & Sons.

 

·    7 to 17 pence per KEFI share (fully-diluted for warrants, options
issued and options approved to be issued under the KEFI Incentive Options
Plan):

o  7 pence per KEFI share is based on a gold price of US$3,000/oz, the Tulu
Kapi NPV at construction start and the initial preliminary valuation of the
13% of GMCO.

o  17 pence per KEFI share is based on a gold price of US$5,000/oz, the Tulu
Kapi NPV at production start and the initial preliminary valuation of the 13%
of GMCO.

 

KEFI Founder and Executive Chairman, Harry Anagnostaras-Adams, commented:

 

"It is an exciting time to launch Tulu Kapi, one of Africa's highest margin
new gold mine developments. Already bank-backed, Tulu Kapi has been engineered
both physically and financially to be a robust for the long-term - it is
designed to pay all costs and service all debt at an all-in-breakeven-gold
price of c.US$1,400/oz.

 

"In addition, we have successfully raised significant equity capital at the
KEFI subsidiary level in a manner which has minimised ownership dilution for
the shareholders of TKGM and KEFI and has not increased Tulu Kapi's already
low all in breakeven point gold price of just US$1,400/oz.

 

"At US$3,000-5,000/oz gold, average EBITDA for the first 3 years is estimated
at US$345 million to US$683 million per annum, both of which significantly
exceed KEFI's current market capitalisation.

 

"And we will not stop at Tulu Kapi alone. Separate teams are already working
on growth plans, both in Ethiopia and Saudi Arabia. These will also be funded
and managed under appropriate bespoke structures after consultation with
KEFI's partners, financiers and shareholders as required.

 

"The gold sector has taken off very strongly, both Ethiopia and Saudi Arabia
have taken off for mining generally, and now KEFI's development pipeline is
taking off - starting with Tulu Kapi.

 

"This is indeed a serendipitous coincidence of several highly significant
inflection points. This opportunity is well deserved by our hard-working teams
and our patient shareholders, in-country partners - the Governments of
Ethiopia and Ethiopia's Oromia Region, and the Al Rashid family of Saudi
Arabia.

 

"We are especially proud of having been a first mover for 21(st) century
minerals discovery and development in both of the now high-growth
jurisdictions of the under-explored Arabian Nubian Shield, whilst also
successfully applying the disciplines of international project financing and
the highest ESG standards."

 

Chancery Royalty Founder and Managing Director, Jeremy Gray, commented:

"It is my great pleasure to have been given the opportunity to introduce
Chancery Royalty into KEFI's syndicate of world class backers for the
high-grade/high-recovery Tulu Kapi Gold Project. Chancery Royalty is focused
on partnering with groups that boast world class gold projects and Tulu Kapi
is undoubtedly the best undeveloped gold mine in Africa. KEFI has been the
exemplar of long-term commitment and discipline for applying industry best
practice. They have done a great job and we are here to support for the long
term."

 

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 (Lead Broker)              +44 (0) 20 7100 5100
 Oliver Stansfield, Jonathan Evans
 IFC Advisory Ltd (Financial PR and IR)              +44 (0) 20 3934 6632
 Tim Metcalfe, Florence Staton

 

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

 

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