Kefi Gold And Copper Share Discussion Threads

[bosbus] 26/11/2020 12:24

You couldn't blame consortium members for taking their time with due diligence with two heavily armed groups on the rampage. A lot will depend on how the next few days pan out. I can't imagine them finalising anything until Abiy prevails. Let's hope he does.

[goatherd] 26/11/2020 12:21

But the funding is agreed - subject to Due Diligence. Term sheets are agreed. I think it is very unlikely that it will not go ahead by the end of the year.

Of course there might be some slippage - not really a worry.

[divmad] 26/11/2020 10:55

6p, 8p,10p. What does any of it matter if Kefi cannot secure the funding for TK?

[robjm66] 26/11/2020 09:54

Well Topical target price often down to how different people work out the value and different measures they use.

"Taken together, we value KEFI at 6.86p per share assuming the projected 65% interest at Tulu Kapi. Our valuation increases to £172.2m or 8.35p per share should KEFI and its JV partner successfully double the maiden resource at Hawiah as targeted with the current drill campaign. We note that our valuation increases to £214.7m or 10.14p per share when considering the current gold price of US$1,878/oz."

The imponderable bit is what happens to the share price if Hawiah does double in size do not see the market putting much if any value on it at the moment but there is likely to come a stage when the market does wake up and start attributing some value to it.

[topicel] 26/11/2020 09:02

"KEFI now has signed agreements and non-binding terms sheets in place with all consortium members, although the individual agreements remain conditional on completion of due diligence, confirmation of regulatory compliance, internal approvals and the execution of full documentation by each consortium"

When written like this it is so open-ended that anyone thinking that funding is coming in 2020 is probably not understanding Harry has, as usual, over-egged the pudding.

Individual agreements conditional on DD completion can take months in and of itself. As could confirmation of regulatory compliance and internal approvals.

Execution of full documentation by each consortium sounds long-winded.

I find the best thing here is to await the New Year and see what Harry has to say about his latest friends with no money to even show sincerity enough to put down a deposit. A bit like the last lot and their initial $3m.

Of course, it doesn't work like that...

And the target prices go down too!

Topicel

[robjm66] 26/11/2020 08:56

On a relative basis KEFI trades on a significantly lower multiple of attributable resources than the average for African gold explorers and developers.

There are been numerous M&A deals this year in the gold sector suggesting producers see significant value for ounces in the ground. Our selective examples of recent transactions indicate that the implied value for resource ounces is on
average US$155/oz and US$176/oz for reserves. Whilst not all gold ounces are equal, we would expect a significant rerating for KEFI as it advances Tulu Kapi through the development stage.

On 9 June 2020, the Saudi Arabian Cabinet approved the new Saudi Mining Investment Law which aims to boost the country’s largely untapped mineral industry and accelerate foreign investment in the sector as part of efforts to
diversify away from hydrocarbons. The new law will facilitate investor access to financing and exploration activities.
The government also expanded the role of the Saudi Investment Fund to help finance mining projects.

[robjm66] 26/11/2020 08:45

hxxps://www.juniorminingnetwork.com/junior-miner-news/press-releases/1112-tsx-venture/eam/88353-east-africa-advances-discussions-to-develop-harvest-project-ethiopia.html

[robjm66] 26/11/2020 08:11

hxxps://www.kefi-minerals.com/files/files/BHC-KEFI-Initiating-Coverage-24Nov20.pdf


As previously reported 22 October 2020, KEFI has now assembled the full consortium and set the conditional terms for the US$221m funding package for the development of Tulu Kapi. As such, KEFI has entered into two non-binding term sheets for a total of US$40m (minimum) with the Ethiopian division of a global industrial company (“Local Investor”) and with one of the world's leading commodity trading companies (“Mining Financier”). Both organisations have extensive experience in Africa. The project finance structure comprises KEFI’s government partners (both Federal and Regional), leading African Banks, African experienced principal contractors and now the Local Investor plus the Mining Financier. As management has now succeeded in conditional offtake-linked financing, KEFI and its government partners will be able to retain a higher beneficial ownership of the project. This is now expected to be c 65% for KEFI, compared with the previously envisaged 45% ownership. KEFI now has signed agreements and non-binding terms sheets in place with all consortium members, although the individual agreements remain conditional on completion of due diligence, confirmation of regulatory compliance, internal approvals and the execution of full documentation by each consortium
Brandon Hill Capital

[peverill] 26/11/2020 07:34

Where is this money Harry.?????

[topicel] 25/11/2020 22:14

And number three Rich1e, perhaps the biggest catalyst of all, is the potential for some serious QE once Biden is fully into the job and he smooches with both the Senate and the Fed - hence Yellen - which he's supposedly very good at...

The subsequent fire under the gold price of that would be enough to see all gold related stocks rise significantly again. Even Kefi.

There must be a time when everything aligns with Kefi, even with Harry at the helm!

Topicel

[richjj] 25/11/2020 22:11

Thanks Rich1. I am intrigued by the views of people following Kefi on this BB which appear very positive (at times) based on the now promised near term funding injection but with ultimate project backing from the EG . Additionally diversification geographically in Saudi and the two metals in the Kefi armoury ...well I know it’s still a bet but it looks a pretty promising emerging markets opportunity to me ..let’s see .

[rich1e] 25/11/2020 20:02

I’m a newbie too Rich, since the end of May, and already experienced two funding delays and a placing, and so its evident the you can quickly become part of the club.
The share price hit 3p on a hint of funding news last month, if upon full funding closure it ‘only’ manages that level again, then 11p is a 3 bagger. At 5.5p it needs to bag once. Upon funding I can see a couple of ways for a rapid rise in the share price One is for there to be a hint, from one of the funding participants, that funding TK is the start of their interest. The second is for serious money inflows into the sector, such as experienced by Tech and Pharma, to reflect the increased commodity prices.

[richjj] 25/11/2020 19:45

I would think , perhaps naively, that Kefi would not make management statements recently about the state of things re finance and projects unless there was real mileage in their qualified assessments . I acknowledge I’m a newbie compared with some on this board who have had history with Kefi but seems to me it’s worth sticking with these guys as we approach the new year and perhaps beyond.The only real concern I have is the normal country risks when dealing with emerging markets . So hard hat on as that’s my choice I guess.

[belfastboyo] 25/11/2020 19:23

I hope you are correct goatherd I really do...

[goatherd] 25/11/2020 19:07

I think some of the delays have been seeking better deals - and that HAS succeeded in that we now have 60%+ of TK. Changes like that do take a significant amount of negotiations.

Look, we know that term sheets have been agreed for a complete financing. So there is nothing more to be negotiated - provided, of course, that all parties honour their agreements. All parties appear to be of substance, and substantial bodies are more likely to keep to their words. They have probably done deals with each other before, and doubtless will wish to do so again.

The only thing that could spook some is the civil war; but that is far away; nearly other; and all parties understand Africa.

I am now extremely optimistic.

[belfastboyo] 25/11/2020 18:37

I'm with Topical on this. Let's start with in reality no one on this board can possibly know where Kefi is with regard to their ongoing intricate negotiations with the senior banks, new potential equity and off take investors. So what do we know? well the company has said they expect to conclude the financial closure before the end of Q4 2020 (positive). But we also know the company has had a terrible track record for actually delivering to stated timelines before (negative). We know that the recent fundraising will deliver 3m GBP and with zero debt. So we should NOT have to do a major fund raise dilution again at these levels in the next 6 months. We also know that the current share price at 1.6p market cap <35m is a fraction of the potential value here. TKGM alone (not including the 1000km's license areas could be worth 11p-15p per share at full value (65% TKGM share and AU at 1.7k-2k). Ditto we know that our 34% share of Hawiah and JQ could be worth as much if not more potentially (again not including license areas)...so on balance if you are looking at probabilities and potential ROI's then this share offers potentially high probability of funding closure soon (positive) and high ROI IF this occurs (x3, x5) who knows but IF it was sorted I would say a value/mkt cap of 100m/200m would be entirely possible within a short period. Topical is spot on...go look at EUA, GGP & many others who have gone x10 in under 1 year from BIG news....ultimately do your own research and make up your own mind....as a LTI I sure hope the company does finally deliver....but past performance has been very poor it's fair to say...best of luck to all

[goatherd] 25/11/2020 18:18

Chopper,

Thanks for that. I half agree with you. :-)

I think the money WILL be received this year (or, perhaps, the first week of next) - i guesstimate the probability of that at 90%.

I quite agree - the price has no chance of getting to 11p in the next 5 weeks. But I think the idea was that could be the value at the time gold is actually being poured. Personally I suspect that the price might take a few months from then to catch up with the value.

Of course, by then, other factors should also be improving the value, and perhaps even the price; factors such as TK deep being known about, the TK satellites, Hawiah, and perhaps other Saudi prospects.

I will be very content if the price reaches 11p in two years time; even if that is deferred to mid 2023.

[topicel] 25/11/2020 18:17

Shares move in mysterious ways. At the moment we are being dragged down by sellers who were brought on board by promises of TK funding appearing in October (and maybe, like Jaylett, those who have been let down before).

Then we have a serious case of optimism killing all head of steam we had for gold, be it the very welcome market moving Covid vaccines or the not so certain Biden win and how that will develop.

For all the talk of debt/MMT it has all been said before, it just is more zeros this time! If the markets like it, it always seems to work out. So that is weighing heavily on goldies.

But, the history of AIM is littered with massive baggers, many over days, never mind five weeks. So Chopper, if early December we get the RNS that says the conditional term sheets are now binding, and Harry gets a deposit (surely even he would think of that?!) to show goodwill, then we too could multiply like, say, EUA did late last year and into this.

I reckon there was a less than five week period when that 10-bagged? There are plenty of others. So yes, it is a binary bet on the funds and imho Chopper the 11p could well appear before we see 2021.

Topicel

[chopper harris1] 25/11/2020 17:04

goatherd,

Firstly, I do not think that TK funding will materialise THIS year. In fact, I'm beginning to suspect that we are no closer to actually receiving that money in the bank than we were back in February.

Secondly, even if I'm wrong on that score, do you seriously see the share price rising from 1.6p to 11p in the next five weeks?

Very happy to be proved wrong on both counts, though.

[belfastboyo] 25/11/2020 16:53

Assuming the financing moves to full closure & the banks/all parties have formally agreed to fund TKGM fully...I.e all debt, new equity, off take agreements are signed & become legally binding then funds will flow quickly and the mine can start being built, people moved etc. In this event I would expect the market to immediately "price in" this significant development & the share price to radically re rate

[richjj] 25/11/2020 16:45

Thank you.

[belfastboyo] 25/11/2020 16:37

Hi Rich, good question.so a few things worth pointing out. Firstly NPVs are calculated over the life of the mines cash flow. Secondly they are highly sensitive to various key assumptions e.g the future AU price & costs etc. The $1.7k seems very conservative with record Debts/ MMT. If TKGM is worth c11p at 1.7k then it is worth a lot more at 2k or 2.5k & on top the company has Hawiah and JQ worth potentially hundreds millions more NPV.worth b

[goatherd] 25/11/2020 16:30

Chopper - please remove the nutshell and give us your reasoning.

[chopper harris1] 25/11/2020 16:21

No, in a nutshell.