TIDMKEFI
Kefi Gold and Copper PLC
15 March 2022
REACH
15 March 2022
KEFI Gold and Copper plc
("KEFI" or the "Company")
KEFI Focused on Three Initial Open Pit Gold Operations
Rescheduled Investor Webinar and Updated Company
Presentation
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
announce that its next Investor Webinar will be held at 3pm London
time on Friday 8 April 2022 via the Investor Meet Company platform,
following the anticipated release of the Company's Q1 2022
Quarterly Operational Update.
The Company also advises that an updated presentation is
available today on the Company's website at
https://www.kefi-goldandcopper.com .
This presentation sets out the Company's position that following
recent positive developments in both Ethiopia and Saudi Arabia, and
the improved gold price outlook, the Company is refining its
development strategy by focusing on sequentially developing three
initial open pit gold (and silver) operations - Tulu Kapi in
Ethiopia, Jibal Qutman in Saudi Arabia, followed by Hawiah in Saudi
Arabia. The initial developments at each project would then planned
to be followed by deeper self-funded developments at all three
projects which, at Hawiah, would also yield copper and zinc.
Tulu Kapi, planned to be c. 70%-owned by KEFI, has a granted
mining licence and is construction-ready for a start-up at the
initial production rate of 140,000 oz per annum of gold. The
current focus is on satisfying the conditions precedent for
completing its project financing in mid-2022. The Company believes
that all capital requirements have been arranged via the indicative
offers and non-binding commitments received.
At Jibal Qutman, planned to be 30%-owned by KEFI, development
planning has been re-activated following indications from the
regulatory authorities that the Mining Licence would be clarified
in 2022. The original 2015 Preliminary Economic Assessment was for
an initial production rate of 35,000 oz pa of gold with capital
requirement of US$39 million, targeted to be project-financed as to
75% by project debt, 70% by partners' equity and the remaining US$3
million by KEFI.
Hawiah, planned to be 30%-owned by KEFI, reported its maiden
Mineral Resource Estimate ("MRE") in 2020 and an increased MRE in
January 2022. It is part-way through a Preliminary Feasibility
Study ("PFS"). It is likely that Hawiah's development would follow
that of Tulu Kapi and Jibal Qutman. Given recent successful
exploration results showing near-surface gold at Hawiah and the
nearby Al Godeyer exploration licences, the PFS is being refocused
onto the possibility of initial open pit gold mining, to be
followed by underground mine development to also recover copper and
zinc. Capital requirements for this 2.2 million oz gold-equivalent
project (Hawiah MRE announced on 4 January 2022 of 24.9 Mt at 0.90%
copper, 0.85% zinc, 0.62 g/t gold and 9.81 g/t silver), are
anticipated to be covered by project-level funding combined with
projected surplus cash flows in due course from Tulu Kapi.
Harry Anagnostaras-Adams, KEFI Executive Chairman, commented:
"It is great to see the recent turnaround in Ethiopia coinciding
with a take-off of our projects in Saudi Arabia. KEFI has turned
onto the front foot in both jurisdictions, after some particularly
frustrating years in both.
"We have focused the development planning teams onto starting
with gold open pits in all three projects, to minimise start-up
timetables and capitalise on what seems a very positive gold price
outlook."
Investor Webinar
The Company will provide a Quarterly Update presentation via the
Investor Meet Company platform at 3.00 pm London time on Friday 8
April 2022.
Investors can register to attend using the following link:
https://www.investormeetcompany.com/kefi-gold-and-copper-plc/register-investor
Questions can be submitted pre-event via your Investor Meet
Company dashboard up until 9 am the day before the meeting, or at
any time during the live presentation. Investors who already follow
KEFI on the Investor Meet Company platform will automatically be
invited.
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
Katy Mitchell, 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 started as a grassroots explorer equity-funded via AIM and
is now the operator of large exploration and development joint
ventures with strong local partners in the Arabian-Nubian Shield,
with most funding being sourced at the project level.
KEFI is focused primarily on the development of its advanced
development projects in both Ethiopia and Saudi Arabia, plus the
expansion of its resource base at these projects and through
exploration of its other prospects in the Arabian-Nubian Shield.
KEFI targets that production at its three development projects,
starting with Tulu Kapi Gold in Ethiopia and adding production from
Jibal Qutman Gold and Hawiah Copper-Gold in Saudi Arabia 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 projects' aggregate NPV's, as at mid-2022:
Pence
Tulu Kapi Hawiah Jibal Qutman Total Issued Per
NPV NPV NPV NPV Shares Share
Net Present Value
for KEFI as 31 December
2021 metal prices
30/06/2020 GBP114m 0 0 GBP114m 1,867m 6
31/12/2020 GBP164m GBP80m 0 GBP244m 2,137m 11
30/06/2021 GBP205m GBP74m 0 GBP279m 2,153m 13
31/12/2021 GBP191m GBP128m GBP29m GBP348m 2,939m 12
Footnotes:
Assumed exchange rate was US$1.35:GBP1.00
JV ownership levels: Ethiopia 45% in 2020 and 70% in 2021;
Saudi 34% in 2020 and 30% in 2021
31 January 2021 Analyst Consensus
31 December 2021 Metal Prices: Long Term Prices
Gold Price is US$1,830/oz Gold Price is US$1,607/oz
Copper Price is: US$9,750/t Copper Price is: US$7,590/t
Zinc Price is US$3,590/t Zinc Price is US$2,442/t
Silver Price is US$23/oz Silver Price is US$21/oz
Explanatory Notes:
* NPV is derived by KEFI using independently created financial
models of net cash flows after tax
and debt service, using a discount rate of 8%;
* Tulu Kapi open pit model is based on the Definitive Feasibility
Study ("DFS") as updated for any
refinements during project contracting and in-country experience;
* Tulu Kapi underground mine model is based on the internal Preliminary
Economic Assessment ("PEA");
* Hawiah assumes preliminary mine modelling for open pit and
underground because the MRE has only recently been updated. Also
includes preliminary debt leverage;
* Jibal Qutman model is based on the internal PEA, preliminary
debt-leverage applied.
Note that aggregate NPV's in mid-2025 using the same underlying
assumptions as above, are estimated to be approximately 80% higher
than those at 2022, reflecting that production will have commenced
at Tulu Kapi, assumed to be imminent at Jibal Qutman and
soon-to-follow at Hawiah. This project sequencing will be refined
as the Saudi development studies progress. The scale of the
projects in value terms to KEFI is highlighted by the table above
as at mid-2022, but of equal importance from a financing viewpoint
is the emphasis of project-level capital funding as well as the
sequencing of their development. These aspects are illustrated in
the tabulation below:
TULU JIBAL
KAPI HAWIAH QUTMAN TOTAL
Current ALL 3
Estimate PROJECTS
US$m US$m US$m US$m
--------- ------- -------- ---------
Assumed Year of Commencing Construction 2022 2025 2024
----------------------------------------- --------- ------- -------- ---------
Total Applications, including
Mine Fleet 356 160 39 555
Less Mine Fleet Provided by
Corica 56 0 0 56
Senior Debt 140 120 29 289
Equity-Risk Capital Requirement 160 40 10 210
--------- ------- -------- ---------
Project Partners' Share Subscriptions
into TKGM/G&M 38 28 7 73
Offtake-Linked Mezzanine Finance 45 0 0 45
Cost Overrun Facility, Part
of Mezzanine Facility 15 0 0 15
TKGM/G&M Share Capital to be
subscribed by KEFI 62 12 3 77
--------- ------- -------- ---------
Funded by Subordinated Convertible
into KEFI Shares at Year 3 market
price 15 0 0 15
Funded by KEFI Shares Issued
at end Year 2 at the then market
price 7 0 0 7
Budgeted internal spare cash
generated 12 12 0 24
KEFI Convertible Note Issued
after signing, at premium to
market in H2-2022 20 0 0 20
KEFI Share Issue after closing
each project financing in 2022,
2024, 2025 8 0 3 11
Note that the Dec 2021 warrants
at 1.6p bring in approximately
US$8m
Residual Requirement 0 0 0 0
--------- ------- -------- ---------
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 30%
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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END
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