TIDMKEFI
RNS Number : 7893D
KEFI Minerals plc
02 May 2017
2 May 2017
KEFI Minerals plc
("KEFI" or the "Company")
UPDATE ON LEGAL PROCEEDINGS
Court ruling reduces KEFI's potential liability from US$12M to
US$600K
Acceptance from Federal Supreme Court to hear KEFI's case for
further reductions
KEFI Minerals (AIM: KEFI), the gold exploration and development
company with projects in the Kingdom of Saudi Arabia and the
Federal Democratic Republic of Ethiopia, is pleased to provide an
update on legal proceedings regarding an inherited claim for
damages (the "Claim") and particularly that a ruling by the Federal
Supreme Court of Ethiopia (the "Court") has drastically reduced
KEFI's potential legacy liabilities.
As previously announced and reported in the Company's statutory
accounts, a claim for damages of US$12,000,000 (approximately
ETB240 million) had been lodged against KEFI in 2014. The claim was
based on the impact of exploration field activities conducted
between 1998 and 2006, a period which pre-dated KEFI's involvement
in the Tulu Kapi project. These exploration activities comprised
the construction of drill pads and access tracks. No objections had
been made until 2014 when certain parties from outside the Tulu
Kapi district raised this matter and initiated court action. Those
parties have since been removed by the Court rulings from the list
of plaintiffs.
The Oromia Regional Supreme Court rejected 95% of these claims
as having no basis in fact or law and reduced KEFI's potential
liability to US$600,000. Moreover, KEFI has appealed to the Federal
Supreme Court with regards to the remaining US$600,000 on the basis
that it remains firmly of the belief, on legal advice and as
previously reported, that it has no contingent or actual liability,
having already settled any obligations when the matter was
originally closed by both the regulators and the land occupiers.
The Federal Supreme Court has officially admitted KEFI's appeal
after due review, and the case is expected to be heard within the
next two years.
KEFI's Executive Chairman, Mr Harry Anagnostaras-Adams,
said:
"It is pleasing that the legacy issues we inherited on
acquisition of Tulu Kapi are being dealt with as one would expect.
This applied to the inherited Reverse VAT tax liability KEFI had
paid and has now begun to be reimbursed - and is now also
applicable to the inherited exposure to any rehabilitation
liabilities, which are also being laid to rest satisfactorily."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
ENQUIRIES
KEFI Minerals plc
Harry Anagnostaras-Adams (Executive
Chairman) +357 99457843
John Leach (Finance Director) +357 99208130
SP Angel Corporate Finance
LLP (Nominated Adviser)
Ewan Leggat, Jeff Keating,
Soltan Tagiev +44 20 3470 0470
Brandon Hill Capital Ltd (Joint
Broker)
Oliver Stansfield, Alex Walker,
Jonathan Evans +44 20 7936 5200
RFC Ambrian Ltd (Joint Broker)
Jonathan Williams
Beaufort Securities Ltd (Joint
Broker) +44 20 3440 6817
Elliot Hance +44 20 7382 8300
Luther Pendragon Ltd (Financial
PR)
Harry Chathli, Claire Norbury,
Ana Ribeiro +44 20 7618 9100
Further information can be viewed on www.kefi-minerals.com
NOTES TO EDITOR
KEFI Minerals plc
KEFI is the operator of two advanced gold development projects
within the highly prospective Arabian-Nubian Shield, with an
attributable 1.93Moz (100% of Tulu Kapi's 1.72Moz and 40% of Jibal
Qutman's 0.73Moz) gold Mineral Resources (JORC 2012) plus
significant resource growth potential. KEFI targets that production
at these projects generates cash flows for further exploration and
expansion as warranted, recoupment of development costs and, when
appropriate, dividends to shareholders.
KEFI Minerals in Ethiopia
The Tulu Kapi gold project in western Ethiopia is being
progressed towards development, following a grant of a Mining
Licence in April 2015.
Following completion of KEFI's Definitive Feasibility Study for
Tulu Kapi, the Company is now refining contractual terms for
project construction and operation. Latest estimates for annual
gold production are c. 100,000oz pa for a 10-year period and All-in
Sustaining Costs (including operating, sustaining capital and
closure but not including leasing and other financing charges) of
<US$800/oz. Tulu Kapi's Ore Reserve estimate totals 15.4Mt at
2.12g/t gold, containing 1.05Moz. The first eight production years
of the open pit are estimated to yield an average of 115,000oz
pa.
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. These plans now also
reflect the agreed construction and operating terms with project
contractors, and have been independently reviewed by experts
appointed for the project finance syndicate.
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.
The projected cash flows indicate that the net cash build-up
(after servicing financing) in the first three production years is
US$31 million to US$216 million within the 5 year gold price range
of US$1,050/oz to US$1,750/oz.
KEFI Minerals in the Kingdom of Saudi Arabia
In 2009, KEFI formed G&M in Saudi Arabia with local Saudi
partner, Abdul Rahman Saad AlRashid & Sons Company Limited
("ARTAR"), to explore for gold and associated metals in the
Arabian-Nubian Shield. KEFI has a 40% interest in G&M and is
the operating partner. To date, G&M has conducted preliminary
regional reconnaissance and has had five exploration licences
("ELs") granted, including Jibal Qutman and the more recently
granted Hawiah EL that contains over 6km strike length of
outcropping gossans developed on altered and mineralised rocks with
all the hallmarks of a copper-gold-zinc VHMS deposit.
At Jibal Qutman, G&M's flagship project, Mineral Resources
are estimated to total 28.4Mt at 0.80g/t gold for 733,045 contained
ounces. The shallow oxide portion of this resource is being
evaluated as a low capital expenditure heap-leach mine
development.
ARTAR, on behalf of G&M, holds over 20 EL applications. ELs
are renewable for up to three years and bestow the exclusive right
to explore and to obtain a 30-year exploitation (mining) lease
within the area. The Kingdom of Saudi Arabia has instituted, and is
further overhauling, policies to encourage minerals exploration and
development, and KEFI Minerals supports this priority by serving as
the technical partner within G&M. ARTAR also serves this
government policy as the major partner in G&M, which is one of
the early movers in the modern resurgence of the Kingdom's minerals
sector.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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