TIDMKEFI
RNS Number : 4625U
KEFI Minerals plc
12 July 2018
12 July 2018
KEFI Minerals plc
("KEFI" or the "Company")
AGM Statement
KEFI Minerals (AIM: KEFI), the gold exploration and development
company with projects in the Democratic Republic of Ethiopia and
the Kingdom of Saudi Arabia, announces that at today's Annual
General Meeting ("AGM") Harry Anagnostaras-Adams, Executive
Chairman, will make the following statement. In addition, Mr
Anagnostaras-Adams, will give a presentation on the progress of the
Company. The presentation contains no material new information and
will be made available on the Company's website
(www.kefi-minerals.com) later today.
"KEFI was born in December 2006 with an IPO value of only GBP2.5
million - a fledgling explorer of targeted emerging frontiers for
the modern mining industry. Throughout the world this is a long
process, with the typical duration from discovery to production
being in the order of 15 years. We have a great exploration team
and we made good progress, especially in the world class
Arabian-Nubian Shield ("ANS") via our operatorship of a joint
venture there with the large Saudi group ARTAR.
In 2014 the Company seized an opportunity in the fastest growing
country within the ANS, Ethiopia, to speed up its transformation
into a developer and producer by taking control of the Tulu Kapi
Gold Project. Tulu Kapi was a wonderful opportunity to establish
robust cash flow and to support the pursuit of the other exciting
opportunities assembled by our exploration team.
In 2014 and 2015, KEFI overhauled Tulu Kapi's plans and the
Government of Ethiopia granted all permits for development and
production. In 2016 and 2017, KEFI assembled first tier project
contractors and senior operational management and secured the
Government's commitment to partner KEFI as an equity investor in
the project company, Tulu Kapi Gold Mines S.C ("TKGM"). The piece
of the puzzle that eluded us during those past two years of
political instability in Ethiopia was the project debt-based
finance.
Now in 2018 we have all the required consortium members at the
table working hard to close the full project financing this year
and to commence Tulu Kapi's development. Today KEFI stands ready to
develop Tulu Kapi as Ethiopia's first modern gold mine and then
pursue organic growth via KEFI's already-established project
pipeline in Ethiopia and in Saudi Arabia.
The new Ethiopian Government leadership has just this past week
reaffirmed support for the Tulu Kapi development.
Also during the past week, the Ethiopianisation of our project
ownership has taken another step forward with the re-affirmation by
local investors of their intention to subscribe for equity at the
Ethiopian corporate level.
TKGM is a joint venture company between KEFI Minerals Ethiopia
and the Government of Ethiopia. KEFI has assembled for TKGM the
full project funding consortium including contractors, equity and
non-equity capital. In essence, we have taken what was originally a
US$300 million project and arranged all major project development
funding at the project level. The finance plan remains subject to
completion of all formalities in Government processes, due
diligence and documentation.
It is obvious that we work in a geopolitical environment of
rapid change and, whilst this offers abundant opportunity, this has
obviously created challenges for KEFI. We suffered delays over the
past two years in particular, during which both Ethiopia and Saudi
Arabia have underdone substantive political changes. This has cost
us dearly in having to raise capital at disappointingly low share
prices to fund our activities. And whilst we cannot underestimate
the work ahead to close our financings and start development, we
can certainly say that we have assembled a first-class platform to
complete the task, that all consortium members are hard-working and
focused and that both host countries have emerged with new
governments that have demonstrably pro-development leadership.
We are extremely grateful for the patience and support of the
community in Tulu Kapi, the contractors Ausdrill and Lycopodium,
our hard-working small organisation of highly-experienced personnel
and, of course, our shareholders. We run a tight and low-cost
operation and all key people have skin in the game.
KEFI will continue to transition itself appropriately for the
development and production tasks ahead and changes will continue to
flow such as:
-- our recent increase in planned production at Tulu Kapi;
-- the lowering of the planned cost of Tulu Kapi's project finance; and
-- senior management appointments in preparation for Tulu Kapi development.
KEFI's vision is to be a dividend-paying high-growth mining
leader in the ANS. This may sound bold when our market
capitalisation currently sits at only GBP14 million. But let's
remind ourselves how far we have come since the IPO value of GBP2.5
million in 2006 and the acquisition of an unpermitted and
unfinanced Tulu Kapi in 2014.
The operating leverage for shareholders is considered attractive
in that a 10% increase in annual tonnage throughput at Tulu Kapi
increases NPV by c. 50%. Also, a 10% increase in gold price above
the base case of US$1,300/oz increases NPV by c. 50%. The
underlying economic estimates for 100% of Tulu Kapi at US$1,300/oz
are for average net cash flow (after debt repayments and all other
planned commitments) of US$32 million per annum. All-in Sustaining
Costs ("AISC") remain c. US$800/oz and All-in Costs ("AIC") c.
$1,000/oz. And Tulu Kapi's Ore Reserves of 1.0 million ounces and
Mineral Resources of 1.7 million ounces have significant upside
potential.
Business growth potential beyond those NPV-based measures of
value-upside include the underground extensions at Tulu Kapi,
satellite deposits near Tulu Kapi and our Saudi prospects. It would
be difficult to find another platform such as that we have
assembled in one of the world's highest growth, yet under-explored
countries, Ethiopia.
The Government has welcomed KEFI's plans to explore the district
around Tulu Kapi so as to target a longer life to this planned
development. In October 2017, KEFI received confirmation from the
Ethiopian Government that the area proposed to be explored by KEFI
has been set aside with the intention of being granted to KEFI upon
commencement of development of Tulu Kapi. This Exploration Licence
Application ("ELA") covers an area in excess of 1,000 km(2) with
known gold prospects within c. 50km of Tulu Kapi, which is
considered an economic trucking distance to the planned processing
plant.
KEFI is now fortunate to have a c. 3,000 km(2) portfolio of
exploration properties at various stages within the highly
prospective ANS. Within this, KEFI notably has a set of
volcanogenic massive sulphide ("VMS") copper-gold prospects near
Tulu Kapi in Ethiopia and in the Wadi Bidah Mineral District
("WBMD") near the Hawiah prospect in Saudi Arabia. We are currently
undertaking a strategic review of exploration priorities in the
context of the apparent imminent opening of Saudi Arabia to the
mining majors and the opportunities that may create to speed up
progress there also.
We have achieved this progress with a very small team around
whom we will build the full operating team in conjunction with the
project contractors, both of whom have over 20 years of mine
building experience in Africa. We are also well supported by a
number of high calibre, quality specialist advisers also selected
for their pre-eminence in start-ups of this nature.
To all these people and to our other stakeholders, on behalf of
the Board of Directors I would like to sincerely thank you and we
look forward to the next year with great anticipation and
determination On the matter of the Board, one of our founding
Directors, Professor Ian Plimer, resigned in late 2017 to focus on
activities closer to his home in Adelaide. We thank Ian for his
support of the exploration activities that established KEFI and
consider him a great friend. Our Board composition will remain
under review and will be adjusted as KEFI moves forward.
Lastly, today's presentation to shareholders and the questions
and answers will be recorded and uploaded to our website."
Enquiries
KEFI Minerals plc
Harry Anagnostaras-Adams (Executive
Chairman) +357 99457843
John Leach (Finance Director) +357 99208130
SP Angel Corporate Finance LLP (Nominated
Adviser) +44 20 3470 0470
Ewan Leggat, Jeff Keating, Soltan
Tagiev
Brandon Hill Capital Ltd (Joint Broker) +44 20 7936 5200
Oliver Stansfield, Jonathan Evans
Cantor Fitzgerald Europe (Joint Broker)
Keith Dowsing/David Porter/Peter Malovany/ +44 (0)207 894 7000
RFC Ambrian Ltd (Joint Broker) +44 20 3440 6817
Charlie Cryer
IFC Advisory Ltd (Financial PR and
IR) +44 20 3934 6630
Tim Metcalfe, Heather Armstrong
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
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 1,100 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 Minerals in the Kingdom of Saudi Arabia
In 2009, KEFI formed G&M in Saudi Arabia with local Saudi
partner, Abdul Rahman Saad Al Rashid & 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 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, 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 announced 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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