TIDMKEFI
RNS Number : 1900A
Kefi Gold and Copper PLC
18 January 2024
18 January 2022
KEFI Gold and Copper plc
("KEFI" or the "Company")
GMCO JV Arrangements in Saudi Arabia Facilitate Rapid Growth and
Provide Funding Solutions
KEFI Gold and Copper Plc (AIM: KEFI), the gold and copper
exploration and development company, which has focused on the
Arabian-Nubian Shield since 2008, is pleased to announce an update
regarding the Company's arrangements in the Kingdom of Saudi
Arabia, where KEFI's minority-owned Gold & Minerals Ltd
("GMCO") joint venture is growing rapidly, whilst in in Ethiopia
KEFI continues its preparations to launch the high-grade Tulu Kapi
Gold Project.
Background
The successful overhaul of the Saudi Arabian minerals sector has
triggered an inrush of investors, miners and explorers. In the view
of the board, the global interest in, and the growth momentum of
the Arabian Nubian Shield, and Saudi Arabia in particular,
surpasses that of any other region globally. KEFI and its partner
ARTAR's foresight to have formed the GMCO joint venture in 2008 has
provided a first mover advantage that has seen GMCO amass over
1,000 square kilometres of ground selected from GMCO's proprietary
database, focusing on some of the most prospective exploration
targets in Saudi Arabia.
This has already led to the discoveries of the Jibal Qutman Gold
Project ("Jibal Qutman") and at Hawiah Copper-Gold Project
("Hawiah") in respect of which GMCO is rapidly advancing
development studies, as well as the identification of additional
satellite deposits currently undergoing further exploration.
Elsewhere across GMCO's portfolio, which includes more targets
selected from GMCO's proprietary database, earlier stage
exploration is also underway which is expected to maintain a
healthy project pipeline targeting a third discovery.
Accordingly, GMCO and its two shareholders are now focused on
how to best position the joint venture for the next stage of its
development within what is now considered by the KEFI directors as
the world's highest-growth country for metals and mining resources,
and already the world-leader for hydrocarbon natural resources.
Some important decisions have been made.
Refinement of JV Arrangements
In order to facilitate maximum growth, KEFI and ARTAR have
agreed to refine their GMCO shareholders agreement and respective
working arrangements. As previously announced, extensive
feasibility study and exploration work has been undertaken in 2023
in Saudia Arabia and is still ongoing. The gross cost of the
programme in 2023 was c.GBP19 million and the Company will provide
updates over the coming weeks and months with respect to the highly
encouraging results that the directors expect to be achieved.
ARTAR funded GBP3.5 million of KEFI's pari passu 2023
contributions and continues to do so as GMCO pushes forward to
define the preferred development scenario over coming months for
its first discovery Jibal Qutman, as well as the resource upgrade
and expansion at its second discovery Hawiah, as well as further
resource expansion and discovery.
Additionally, the partners' respective shareholdings of GMCO are
now being adjusted to the expected 75% ARTAR and 25% KEFI. KEFI
formerly held 27% of GMCO.
These GMCO joint venture refinements continue a longstanding
pattern of refinement and reinforcement of the relationship between
KEFI and ARTAR in order to facilitate GMCO's progress. It also
enables KEFI to allocate its capital principally to the
finance-closing and launch in H1 2024 of its Ethiopian gold project
at Tulu Kapi, whilst ARTAR supports GMCO's continued rapid
progress.
To provide further flexibility for project financing across the
portfolio of Saudi assets, licences for GMCO's exploration and
mining project are being transferred from ARTAR's name directly
into GMCO's. It is envisaged existing and future advanced projects
will subsequently be transferred into separate subsidiaries to
enable further flexibility on specific mining projects.
In addition, attractive development funding scenarios are
available within Saudi Arabia for GMCO to consider, minimising the
equity requirements for mining projects in general. As an
illustration, the Company expects the project financing of GMCO's
mine developments to be available along the following lines:
-- up to 75% of costs (including both feasibility and
development expenditures) potentially being provided as
Shariah-compliant project loans at internationally low rates from
the Saudi Industrial Development Fund; plus
-- the remaining capital requirement of approximately 25% to be
optimised by the GMCO partners who will ordinarily plan to fund it
pari passu, or could potentially consider the range of mezzanine
and equity finance now on offer in Saudi Arabia, if warranted at
the time.
The mining sector in Saudi Arabia is particularly exciting and
the GMCO joint venture is very well positioned for growth and value
creation. Two Saudi Government announcements were made last week
which were relevant for KEFI itself: the prioritisation of creating
a Saudi metals and mining exchange and the offer of a 30-year tax
holiday to companies moving their regional head office to Saudi
Arabia. Both policy initiatives reinforce KEFI's commitment to
Saudi Arabia for the long term and are being considered
seriously.
At this stage, KEFI's beneficial interest in the mineral
resources of GMCO's projects is similar (at 1.1 million gold ounce
equivalent) to its planned c.70% interest in the Ethiopian Tulu
Kapi Gold Project of 1.2 million oz), and KEFI's growth prospects
are strong in both countries.
KEFI's Executive Chairman, Harry Anagnostaras-Adams commented:
"KEFI is very fortunate to be a partner in GMCO. We have an
excellent partnership with majority partner ARTAR and we are
collectively and efficiently advancing our portfolio of mining
assets in a location that is becoming one of the mining industry's
top priorities.
"We have a head start on most parties now entering the Arabian
Nubian Shield in both Saudi Arabia and Ethiopia. The arrangements
announced today will reinforce both GMCO's and KEFI's position
still further.
"KEFI expects to benefit from the ongoing GMCO success in
exploration and development preparations, whilst also launching the
Tulu Kapi project in Ethiopia, which the Company envisages will
lead to a materially higher valuation being ascribed to the
Company.
"Given the sizeable exploration expenditure during 2023, as well
as ongoing drilling and studies, the Company has a substantial
pipeline of results to report, which it will release as appropriate
during the current quarter and beyond."
Webinar
Harry Anagnostaras-Adams, Executive Chairman, will provide a
live presentation via the Investor Meet Company platform today, 18
January 2024, at 2pm GMT.
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
This investor webinar will commence with a presentation which
will also be uploaded to the Company's website and will then move
onto addressing questions as submitted.
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
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe, Florence Chandler
3PPB LLC International (Institutional IR)
Patrick Chidley +1 (917) 991 7701
Paul Durham + 1 (203) 940 2538
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END
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