TIDMKEFI
RNS Number : 5091B
Kefi Gold and Copper PLC
14 February 2022
14 February 2022
KEFI Gold and Copper plc
("KEFI" or the "Company")
Tulu Kapi Gold Project Update
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 an update in respect of the Company's Tulu Kapi Gold
Project (the "Project" or "Tulu Kapi"), part of the KEFI-operated
Ethiopia joint-venture Tulu Kapi Gold Mines Share Company
("TKGM").
KEFI subsidiary TKGM has worked intensely with the Ethiopian
Ministry of Mines (the "Ministry") to expedite the Project and the
Ministry has allowed until 8 July 2022 for full Project financing
and launch commitments to be achieved.
H.E Minister Eng., Takele Uma, commented:
"We look forward to monthly progress reports from TKGM and to
getting Tulu Kapi into production. Developing the world class
minerals potential of Ethiopia is one of our country's
priorities."
KEFI Executive Chairman, Harry Anagnostaras-Adams, commented
:
"We thank the Minister for his vision, patience and support. And
we are proud to have the support of the Ethiopian Ministry of
Mines. Our common agenda is to expedite development, production and
economic benefits. I have no doubt that Ethiopia's minerals sector
has an exciting future.
"To have turned the corner in Ethiopia at the same time as our
Saudi venture is taking off makes for a very promising 2022."
Additional Project Updates
Security:
-- the civil war has abated since peaking at the end of December
2021 and the Ethiopian state of emergency has been lifted;
-- intense policing operations are being conducted in the areas
around Tulu Kapi and other mining projects, which reflects the
close collaboration between the authorities and the emerging
minerals sector; and
-- as from this month TKGM will recommence the Project
development activities that were suspended in 2021 as a
precautionary measure due to the security situation. Activities
will include preparation of new host lands for resettling
households and also accommodation for construction personnel. An
appropriate security system is being installed in readiness for
construction and operations.
Launch of the Project requires the following matters to be
completed, which are all in process:
-- external independent security assessment of the Project site,
district and transport routes, over several months of uninterrupted
Project preparation activities. This is expected to be possible
from later this month given the situation on the ground;
-- completing administrative arrangements with the Government
regarding the Tulu Kapi project finance plans. These procedural
matters include: (a) endorsement by the Ministry of the US$70
million which has historically been expended on exploration,
pre-development costs and development; (b) direct agreement between
the Ministry and the senior lenders in respect of their security
over the Tulu Kapi mining licence; (c) confirmation by the Ministry
of the areas in which KEFI subsidiary, KEFI Minerals (Ethiopia)
Limited, has the right to conduct follow-up exploration on its
historical discoveries to supplement the Mineral Resources of Tulu
Kapi; and (d) the Government to confirm the right of both
development banks to operate in Ethiopia as senior lenders under
the same terms;
-- the finance syndicate remains in place and on standby to
finalise documents for signing. Subject to final construction
pricing and document execution, capital requirements have already
been catered for within the syndicate; and
-- development management: the Ethiopia-based planning and
permitting team was recently replaced by the development team in
preparation for Project launch and building of the required
c.1000-strong workforce over the next eighteen months.
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 (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 is focused primarily on the development of the Tulu Kapi
Gold Project in Ethiopia and its pipeline of highly prospective
exploration projects in the Arabian-Nubian Shield. KEFI targets
that production at Tulu Kapi 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 project NPV's :
Pence
Tulu Kapi Hawiah Jibal Qutman Total Issued Per
NPV NPV NPV NPV Shares Share
Net Present Value
for KEFI
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 rate
US$1.35:GBP1.00
31 December 2021 Metal Prices:
Gold Price is US$1,830/oz
Copper Price is:
US$9,750/t
Zinc Price is US$3,590/t
Silver Price is
US$23/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.
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
31.2% 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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