TIDMKEFI
RNS Number : 5375D
Kefi Gold and Copper PLC
20 October 2022
20 October 2022
KEFI Gold and Copper plc
("KEFI" or the "Company")
Significant Progress in Ethiopia
Investor Webinar
KEFI (AIM: KEFI), the gold exploration and development company
with projects in the Federal Democratic Republic of Ethiopia and
the Kingdom of Saudi Arabia, is pleased to provide an update on the
recent significant progress of the Company's Tulu Kapi Gold Project
("Tulu Kapi" or the "Project").
Following a thorough review of the Project on the back of
updated supplier pricing, the Company can confirm that Tulu Kapi's
estimated capital requirement (excluding the mining fleet provided
by the contractor) has increased 7% to US$320 million from US$300
million to first production (see 2021 Annual Report page 6). This
is a direct result of cost inflation witnessed across the globe.
The Company is pleased to report that several Project financing
syndicate members, party to the Umbrella Agreement and associated
documents (see announcement 30 June 2022), have indicated a
willingness to increase their investment, thereby ensuring that the
Project will be funded under the previously reported financing
structure.
In addition, the Company is pleased to report that a
historically key condition precedent has now been waived by the
relevant syndicate member - in that it is no longer necessary to
await that party's agreement with the Government on a particular
policy matter, because of the significant progress made and good
relationship between parties.
Accordingly, the final proposed Project finance plan has now
been circulated for formal sign off by all the syndicate members,
who have been kept appraised throughout the process and continue to
express their support. Given the time taken to successfully resolve
this situation between the individual syndicate member and the
Government, the broader syndicate approval of the final finance
plan is now expected mid-November 2022, rather than the previously
reported end of October 2022. In the meantime, we have commenced
working on satisfying the previously reported and normal conditions
precedent to full project launch including key field activities
with the community and completing formal documentation and
Government procedures for funds drawdown in the normal
sequence.
Harry Anagnostaras-Adams, Executive Chairman of KEFI Gold and
Copper, commented:
"I am pleased to report on the continued progress at Tulu Kapi.
The fact that there have been increases to the ultimate capex
figure required to first production should come as little surprise
given the inflationary factors witnessed across the globe. That
certain partners within the financing syndicate are looking to
increase their participation to address this increase shows the
spirit and goodwill within the financing syndicate to close on the
funding.
"Tulu Kapi will be Ethiopia's showcase 21(st) century mining
project, designed to the highest international standards for
social, environmental and governance performance. Tulu Kapi will
likely be Ethiopia's largest single export generator and generate
direct and indirect employment for 5-10,000 people.
"The heightened capital figure of US$320 million includes
financing costs, contingency, cost overrun and working capital
provisions, which are not expected to be fully absorbed by the
development of the Tulu Kapi open pit. Accordingly, subject to
senior lenders' approval in due course, some of these funds are
likely to be able to be deployed in developing the Tulu Kapi
underground mine once the open pit has started, ensuring earlier
production from the underground and improved economics from the
Project.
"The Ethiopian Government and specifically the Ministry of Mines
have been appraised of all these developments and have reaffirmed
their continued support for the full Project launch by the end of
2022, when all conditions precedent should have been satisfied. We
look forward to making further announcements in due course."
Investor Webinar
The Company will provide a presentation and live webinar via the
Investor Meet Company platform on Wednesday 26 October 2022 at
16.30 London time.
The presentation is open to all existing and potential
shareholders. Questions can be submitted at any time during the
live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet KEFI via:
https://www.investormeetcompany.com/kefi-gold-and-copper-plc/register-investor
The webinar will subsequently be available on the Company's
website at:
http://www.kefi-minerals.com/news/webcasts .
Market Abuse Regulation (MAR) Disclosure
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.
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
Tavira Securities Limited (Joint 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
KEFI Gold and Copper plc
KEFI is focused primarily on the advancement of its three
development projects in Ethiopia and Saudi Arabia, plus its
pipeline of highly prospective exploration projects in these two
large jurisdictions of the under-explored Arabian-Nubian
Shield.
KEFI targets that production at Tulu Kapi in Ethiopia and Jibal
Qutman in Saudi Arabia will, between them, generate cash flows for
capital repayments, further organic growth and, ultimately,
dividends to shareholders.
Both TKGM and G&M are technically guided and supported by
KEFI so that each of these operating joint venture companies as
soon as possible builds the local organisational structure suitable
for long term production as well as exploration and future
development opportunities.
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. No other mining project of this scale in
Ethiopia has been brought to Tulu Kapi's stage of advancement
during recent years and Tulu Kapi will be the first industrial
scale mine development in Ethiopia in over 30 years. It has taken
years of extensive technical re-design of the project, years of
overhaul by the Ethiopian authorities of financial policies which
previously hindered mining project finance and the patient and
cautious traversing by the Company of recent well-publicised events
within the country. The project has imposed many demands on a
regulatory system which the Ethiopian Government continues to
upgrade, determined to build a modern minerals sector. KEFI is
honored to play its part in this process and has assembled a
first-tier syndicate of international industry expert management,
contractors, banks and investors.
The Company has now refined contractual terms for construction
and operation of the open pit mine. Management has also developed
preliminary plans to develop the underground mine once open-pit
production has started and to produce.
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. The underground project
is defined based on internal PEA-level analyses which have yet to
be subjected to DFS-level investigation and independent review,
which is planned to be carried out during the construction of the
open pit.
KEFI remains keen to re-commence its exploration of the
additional prospects it has successfully identified within the Tulu
Kapi district exploration area from within which the mining licence
was duly excised as a result of the successful discovery of the
Tulu Kapi deposit. Whilst most historical drilling was naturally of
the Tulu Kapi deposit, there was significant work done on many
further prospects which await follow-up.
Whilst awaiting regulatory permission to re-activate the
Company's Ethiopian exploration, which is critical for long term
planning for all stakeholders in the community as well as the
Company, the exploration focus has been successfully switched to
Saudi Arabia.
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 c.
30% interest in G&M.
ARTAR, on behalf of G&M, and G&M directly held over 16
Exploration Licence (EL) applications pending the introduction of
the new Mining Law. These new regulations have recently been
proclaimed and G&M has had ten new licences issued in the past
twelve months - more licence grants than in the previous 14 years
and all highly prospective and strategically important for G&M,
ELs are renewable for up to five 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 shortly.
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