Kefi Gold makes significant progress in Ethiopia, Saudi Arabia
By Josh White
Date: Wednesday 22 Mar 2023
(Sharecast News) - Gold and copper explorer and developer Kefi reported significant progress in Saudi Arabia in an update on Wednesday, as well as the agreeing in-principle of the Tulu Kapi Gold finance package of $390m.
The AIM-traded firm said its most advanced project, the Tulu Kapi Gold Project, was now planned to be 70% to 80% owned by Kefi.
IOt said the project finance package of $390m, including a mining fleet of $70m provided by the contractor and $320m provided by debt and equity financiers, was now conditionally in place within the syndicate.
TKGM was now expected to resolve all outstanding issues with the Ethiopian Ministry of Mines, the National Bank of Ethiopia, and the other government ministries and agencies in the coming weeks, so that the syndicate could then proceed to seek all-party formal approvals, including Kefi shareholder approval.
In Saudi Arabia, meanwhile, the board said the focus of the Jibal Qutman feasibility study had moved to the larger CIL-based project, as the current consensus long-term gold price of $1,650 per ounce was now significantly higher.
Kefi said it expected minimal delay in closing finance within Saudi Arabia and starting development so that it can be in production around mid-2025.
It said its Hawiah Copper-Gold Project and other exploration projects were also making significant progress, adding that its beneficial interest in its Saudi projects at various commodity price levels presented an aggregate preliminary estimated net present value similar to that of the Ethiopian project.
That, the board said, highlighted the "enormous opportunity" to add value for shareholders as Kefi de-risked the projects.
"The company's working environment has improved significantly in both Ethiopia and Saudi Arabia," said executive chairman Harry Anagnostaras-Adams.
"Our teams are working intensely with the host governments to launch the first two of our three development projects.
"We start first with Tulu Kapi Gold in Ethiopia, then Jibal Qutman Gold in Saudi Arabia."
Anagnostaras-Adams noted that Kefi's beneficial interest in the aggregate gold production from 2025 was estimated to be in the order of 140,000 ounces.
"At the current gold price of around $2,000 per ounce, KEFI's beneficial interest in the estimated net operating cash flow from Tulu Kapi alone is estimated to be £75m average per annum, and the net present value is estimated at £207m, or respectively 1.8p and 5p per current Kefi share in issue.
"At Tulu Kapi in Ethiopia, the project finance is conditionally in place and, with the government, we are ensuring that all security and administrative arrangements are also in place.
"At Jibal Qutman in Saudi Arabia, whilst we had originally defined a starter project at then-lower gold prices, we are completing a feasibility study on a larger project at today's higher gold prices."
At 1629 GMT, shares in Kefi Gold and Copper were up 6.39% at 0.78p.
Reporting by Josh White for Sharecast.com.
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