TIDMKEFI
RNS Number : 1320R
Kefi Gold and Copper PLC
03 November 2021
3 November 2021
KEFI Gold and Copper plc
("KEFI" or the "Company")
Tulu Kapi Mining Licence Tenure Confirmed to 2035
KEFI (AIM: KEFI) is pleased to report receipt on 2 November 2021
from the Ethiopian Ministry of Mines ("MoM") of formal confirmation
that the mining licence for the Tulu Kapi Gold project ("Tulu Kapi"
or the "Project"), held by Project company Tulu Kapi Gold Mines
Share Company ("TKGM"), remains in good standing (for expiry per
the terms of issuance in 2035) subject to TKGM's on-going
compliance with the regulations and the MoM's requirement for TKGM
to re-confirm by 31 January 2022 that it has procured the necessary
Project finance. Subject to those conditions and a successful
Project launch, the licence can be renewed by TKGM on expiry in
2035 should the Project prove successful in expanding ore reserves
and mine life.
The Company has confirmed to the MoM its intention to launch key
Project development activities and confirm the identified Project
finance in December 2021. The Company remains focused on production
commissioning in 2023.
We are appreciative of the time and effort given to recent
consultations by the MoM and also by the lead-financiers and
contractors to TKGM, all of whom are supportive and have reiterated
that they intend to proceed subject to normal conditions for
drawdown.
The lead-finance parties have already been collaborating for
over three years preparing the Project for launch, during which
time technical and legal due diligence has been completed and, at
the same time, we have arranged for several important Ethiopian
Government documentary confirmations. These include the endorsement
of historical pre-development expenditures, and the definitive
development commitments regarding electricity-connection and new
additional road access. During this period there have also been
some pre-requisite policy proclamations by the relevant Ethiopian
Government agencies to accommodate normal international mining
project finance conditions, including the permission for bank
accounts in major international financial centres, a project
finance capital ratio of 70/30 debt/equity and permission for
market-based private-sector borrowing costs.
This significant progress to date and the Project's general
state of readiness places Tulu Kapi as the first-mover in modern
Ethiopian large-scale mining. The Company notes that on the evening
of 2 November 2021 the Ethiopian Federal Council of Ministers
declared a nationwide State of Emergency in response to the ongoing
Tigray conflict that has spread to a town on a route approximately
250 kilometres to the national capital Addis Ababa, but is
approximately 1,000 kilometres from Tulu Kapi, which remains a
quiet rural setting. The State of Emergency, which is to take
effect immediately and to last for up to six months, allows the
Government to impose certain security measures, including curfews
and disrupting transport and communications services.
Whilst the geopolitical environment has proved more challenging
than was envisaged at the time of the Company's arrival in Ethiopia
in 2014, the opportunity and potential value from the Project is
larger and more important than it has ever been.
The Company will report further material developments and make
further progress reports as appropriate.
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 and Joint Broker) +44 (0) 20 3470 0470
Jeff Keating, Adam Cowl
Brandon Hill Capital Ltd (Joint Broker) +44 (0) 20 7936 5200
Oliver Stansfield, Jonathan Evans
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 advanced Tulu Kapi Gold Project
development project in Ethiopia, along with its pipeline of other
projects within the highly prospective Arabian-Nubian Shield. KEFI
targets that production at Tulu Kapi generates cash flows for
capital repayments, further exploration and expansion as warranted
and, when appropriate, dividends to shareholders.
KEFI 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, together with assembling the full
funding consortium and set the conditional terms for the
development funding package of c.US$356 million.
Estimates include gold production of c.190,000oz pa. All-in
Sustaining Costs (including operating, sustaining capital and
closure but not including leasing and other financing charges)
remain US$800-900/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 upon
commencement of development, with a view to adding satellite
deposits to development and production plans.
KEFI 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 34%
interest in G&M and is the operating partner.
ARTAR, on behalf of G&M, holds over 16 Exploration Licence
(ELA) applications pending the introduction of the new Mining Law.
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 announced policies to encourage
mineral 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.
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