REG - Kefi Gold and Copper - Corporate Update

KEFI Gold and CopperAnnouncement

08/04/2025 07:00

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RNS Number : 0082E  Kefi Gold and Copper PLC  08 April 2025

8 April 2025

KEFI Gold and Copper plc

 

("KEFI" or the "Company")

 

Corporate Update

 

Significant recent across-the-board progress

 

KEFI (AIM: KEFI), the gold and copper exploration and development company
focused on the Arabian-Nubian Shield, is pleased to provide an update on
recent positive progress.

 

Tulu Kapi Project launch update

 

·    Preparations for full launch of the Tulu Kapi Gold Project are
advancing across all fronts for signing this quarter of the assembled detailed
definitive documentation.

 

·    Property surveys for Phase 1 Resettlement (c.350 properties including
c.130 households) are now being reviewed against strict verification standards
and procedures. The phased compensation and subsequent resettlement will be in
compliance with Ethiopian Law and World Bank IFC Performance Standards.

 

·    Updated tender prices for mining services are being evaluated.

 

·  Construction of initial site facilities is underway, including expanded
water supply and camps for construction and security.

 

·    The focus now is on completing the following this quarter:

·    Government approvals of residual administrative matters, including
AFC membership ratification by the Ethiopian Parliament; and

·    Independent certifications for the project's fixed price construction
contracts, security, community commitments and overall schedule.

 

·    All contractors have been asked to prepare to proceed from the end of
this quarter.

 

·    Operational management being installed at project company Tulu Kapi
Gold Mines S.C. (TKGM), with Simon Cleghorn as Managing Director (former COO
of a major Kazakh mining group) and Theron Brand as Finance Director (former
financial head of Namibian mining groups).

 

Tulu Kapi Project Finance plan progress

 

KEFI continues to optimise the finance syndicate at the subsidiary level, as
follows:

 

US$300 million capital requirement net of capex already spent and of
contractor capital commitments comprising:

 US$240 million:  Debt Capital from secured lenders

 US$60 million:   From either, or a combination of, the following, with any surplus funds to be
                  available for contingency reserves as well as growth opportunities:
                  -    US$-linked 'EthioPrefs' to be issued by a newly-formed Ethiopian
                  holding company designed for qualified Ethiopian and other African investors.
                  Listing of the EthioPrefs on the newly launched Ethiopian Securities Exchange
                  is expected to follow in due course; and

                  -    The sale of a 15% shareholding in the Gold and Minerals Company
                  (GMCO) joint venture in Saudi Arabia held by the Company. Short-listed parties
                  are now due to review the Jibal Qutman Stage 1 development Definitive
                  Feasibility Study ("DFS") with a view to finalising their investment and
                  financing proposals. A key DFS milestone since the latest KEFI RNS for Jibal
                  Qutman (see the Company's announcements on 26 February 2025) was GMCO
                  establishing Jibal Qutman's local water supply. Development plans will now be
                  finalised with GMCO shareholders, financiers and regulatory authorities.

KEFI Founder and Executive Chairman, Harry Anagnostaras-Adams, commented: "The
preparations for full launch of Tulu Kapi Gold Project are advancing across
all fronts for signing this quarter of the assembled detailed definitive
documentation. The economic metrics continue to improve and the stakeholder
support is across-the-board.

 

"Excluding the potential of the underground resources at Tulu Kapi, the
business plan model projections results in over seven years of production,
averaging 167,000 oz per year, generating a net cash flow to project
shareholders of US$1.1-1.6 billion at gold prices of US$2,400-3,000/oz over
the life of the project."

 

 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)  +44 (0) 20 3470 0470
 Jeff Keating, Adam Cowl

 Tavira Financial Limited (UK Lead Broker)           +44 (0) 20 7100 5100
 Oliver Stansfield, Jonathan Evans

 IFC Advisory Ltd (UK Financial PR)                  +44 (0) 20 3934 6630
 Tim Metcalfe, Florence Staton

 3PPB LLC (North American Financial PR)
 Patrick Chidley                                     +1 (917) 991 7701
 Paul Durham                                         +1-203-940-2538

 

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.

 

Background on the Tulu Kapi Project Economic Metrics

 

Tulu Kapi boasts strong economic metrics due to minimal overburden, high
grades, and high recoveries. This project will significantly benefit the
community, region, country, and the Company. Extensive regulatory reforms and
preparations were necessary for Ethiopia's first internationally financed
mining project, requiring patience and support from the Government.

 

Development capital expenditure has been project-financed based on the
open-pit Ore Reserves of 1 million oz (15.4 million tonnes at 2.1 g/t), using
a conservative gold price assumption of US$1,250/oz. The project lenders base
case financial model has assumed that only open pit ore is processed with an
initial output of 2.5 million tonnes per annum and a project average of 2.0
million tonnes per annum. Ore Reserves and mine plans will be refined with
in-fill-grade-control drilling during Tulu Kapi's construction as part of the
'Operational Readiness Program'.

 

KEFI's business plan goes beyond the open-pit development and includes early
underground work to extend the existing underground Indicated Resource of
220,000 oz (1.2 million tonnes at 5.7g/t). The Preliminary Economic Assessment
projects recovering about 200,000 oz (1.5 million tonnes at 4g/t) underground,
supplementing open pit ore for the first seven years. The deposit is open down
plunge with a last drill intercept of 90m at 2.8 g/t, containing high-grade
zones. KEFI estimates over 1 million oz potential for underground ore.

 

Excluding the potential of the underground, the 'Business Plan Model'
projections show that running the plant at 2.4 million tonnes per annum
results in over seven years of production averaging 167,000 oz per year,
generating a net cash flow to project shareholders of US$1.1-1.6 billion at
gold prices of US$2,400-3,000/oz over the life of the project. It is worth
noting that on this basis net operating cash flow in the first full year of
production is estimated at US$231-304 million, compared to project finance
debt of US$240 million.

 

The detailed assumptions underlying the cash flow modelling can be found in
the Project Overview sections of the KEFI website. See
https://www.kefi-goldandcopper.com/files/files/KEFI-Tulu-Kapi-Gold-Project-Overview-March25.pdf
(https://www.kefi-goldandcopper.com/files/files/KEFI-Tulu-Kapi-Gold-Project-Overview-March25.pdf)

 

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