Share Name Share Symbol Market Type Share ISIN Share Description
Kefi Minerals Plc LSE:KEFI London Ordinary Share GB00BD8GP619 ORD 1.7P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.10p -6.25% 1.50p 1.43p 1.695p 1.50p 1.50p 1.50p 3,069,112 09:36:22
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.0 -5.0 -1.0 - 9.65

KEFI Minerals plc Project Equity Financing Update

08/04/2019 7:00am

UK Regulatory (RNS & others)

Kefi Minerals (LSE:KEFI)
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RNS Number : 3617V

KEFI Minerals plc

08 April 2019

8 April 2019

KEFI Minerals plc

("KEFI" or the "Company")

Project Equity Financing Update

US$11.4 Million Commitments (Ethiopian Birr Equivalent) Received by ANS

KEFI Minerals (AIM: KEFI), the gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, is pleased to provide an update on the project equity financing plans for the Company's Tulu Kapi Gold Project (the "Project").

ANS Mining Share Company S.C ("ANS") has confirmed it has now received its first Project-equity instalment commitments for US$11.4 million (Ethiopian Birr equivalent) from its investors. The amount is higher than the previously anticipated US$9 millon (Ethiopian Birr equivalent). The subscription of this enlarged amount and release of funds into Tulu Kapi Gold Mines S.C ("TKGM") will be in the current quarter upon satisfaction of conditions summarised below.

The remainder of the US$38 million (Ethiopian Birr equivalent) ANS commitment will be subscribed at close of full development funding as previously announced. Following further discussions amongst the stakeholders in the Project it has been mutually agreed that, of the total commitment of US$38 million (Ethiopian Birr equivalent), one third will now be invested via KEFI subsidiary KEFI Minerals Ethiopia Limited ("KME") so that ANS will be KEFI's minority partner in KME which controls TKGM and the exploration areas in the Tulu Kapi district, which are considered prospective for potential satellite and stand-alone deposits. The other two thirds of the ANS investment will be directly into TKGM as previously proposed. Through this revised structure the overall economics of the Project and the value of KEFI's interest in the Project remain unchanged.

The benefits of this optimised approach will include that:

      --   KEFI will have a strong partner at the KME table 
            to consider potential new projects alongside KEFI. 
            We expect Ethiopia's mining sector to become more 
            active on the back of our first-mover initiative, 
      --   That, by virtue of the TKGM partners funding the 
            early stages of the development program before debt-style 
            funding is used, TKGM now targets a longer production 
            ramp-up period and cash/gold-in-ore-stock build-up 
            to over $100 million prior to any commencement of 
            repayments of debt-style finance, 
      --   The implied NPV of KEFI beneficial interest in TKGM's 
            After Debt and After Tax NPV (at a gold price of 
            $1,300/oz, on the open pit only, ignoring the underground 
            deposit and KEFI's other interests) is GBP40 million 
            as at today and GBP66 million at the start of production. 
            The ownership levels will be that KEFI will own c. 
            81% of KME which in turn will hold c. 59% of TKGM 
            and that KEFI's beneficial ownership of TKGM will 
            be c. 45% (both ownership levels in TKGM are net, 
            after adjustment for the Government's 5% free carried 

The conditions precedent for the release of funds from the ANS subscription into TKGM are principally procedural and include:

      a)   Normal operational and documentary confirmations 
            and undertakings requested by ANS, 
      b)   National Bank of Ethiopia approval of terms of the 
            full project finance package, and 
      c)   KEFI's guarantee to ANS that if the project fails 
            to proceed for whatever reason and is restructured 
            in whichever manner decided by KEFI, KEFI will ensure 
            that ANS recovers its 1(st) Instalment investment 
            before KEFI recovers its own investment. 

Once these closing requirements are confirmed to ANS, TKGM expects to receive the initial US$11.4 million (Ethiopian Birr equivalent) subscription. This will place TKGM in the position that all three of its shareholders (KEFI, Government and ANS) are contributing to the equity funds being used to kick off the 2-year development program. KEFI and the Government are already contributing. The local Government has approved the community compensation and TKGM is preparing to trigger the development program in April.

Managing Director Mr Harry Anagnostaras-Adams said, "KEFI feels deeply honoured to have the support of pre-eminent Ethiopian partners, the Government and ANS, an investment vehicle of leading local financial institutions.

This complements our focus on ensuring TKGM is aligned with Ethiopian stakeholders in every possible sense, from community alignment to equity-partnering.

The commitments into ANS are a material development and should provide KEFI Minerals shareholders comfort that the proposed asset-level equity financing strategy is progressing as previously planned. I look forward to updating shareholders upon completion of the documentation aspects in the near term."


      --   KME/TKGM has to date spent approximately US$60 million 
            on the Project over a 14-year period. 
      --   TKGM now has US$58 million committed by its Ethiopian 
            investors: the Ethiopian Government and ANS. 
      --   The Ethipoian Government approved its TKGM budget 
            allocations on 1 March 2019 and has started its spending 
      --   The plan is to commence Project development activities 
            with project equity and, upon trigger of major works 
            in Q4-19 with both project equity and project infrastructure 
            financing of US$160M, through the bond being arranged 
            ACT Captal, as mandated . 
      --   All relevant levels of the Ethiopian Government have 
            advised they are ready to trigger the Project development 
      --   Although there has been zero disruption at Tulu Kapi 
            in 14 years of the activities to date, the Company 
            continues to ensure the highest standards surrounding 
            safety and security are maintained at the site. 
      --   Another example of recent Project activity has been 
            to reduce the number of households relocated and 
            to prepare the new homes and farms for the first-phase 
            movers during April-July 2019, before they are resettled 
            in September-October 2019. 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.


 KEFI Minerals plc 
 Harry Anagnostaras-Adams (Managing Director)    +357 99457843 
 John Leach (Finance Director)                   +357 99208130 
 SP Angel Corporate Finance LLP (Nominated 
  Adviser and Joint Broker)                      +44 20 3470 0470 
 Jeff Keating, Soltan Tagiev 
 Brandon Hill Capital Ltd (Joint Broker)         +44 20 7936 5200 
 Oliver Stansfield, Jonathan Evans 
 SVS Securities Plc (Joint Broker) 
 Tom Curran / Ben Tadd                           +44 (0) 203 700 0078 
 IFC Advisory Ltd (Financial PR and IR)          +44 20 3934 6630 
 Tim Metcalfe, Heather Armstrong 

Notes to Editor

KEFI Minerals plc

KEFI is focused primarily on the advanced Tulu Kapi Gold Project development project in Ethiopia, along with its pipeline of other projects within the highly prospective Arabian-Nubian Shield. KEFI targets that production at Tulu Kapi generates cash flows for capital repayments, further exploration and expansion as warranted and, when appropriate, dividends to shareholders.

KEFI Minerals 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 upon commencement of development, with a view to adding satellite deposits to development and production plans.

KEFI Minerals in the Kingdom of Saudi Arabia

In 2009, KEFI formed Gold and Minerals Ltd ("G&M") in Saudi Arabia with local Saudi partner, Abdul Rahman Saad Al Rashid & Sons Company Limited ("ARTAR"), to explore for gold and associated metals in the Arabian-Nubian Shield. KEFI has a 40% interest in G&M and is the operating partner.

ARTAR, on behalf of G&M, holds over 20 EL applications. ELs are renewable for up to three years and bestow the exclusive right to explore and to obtain a 30-year exploitation (mining) lease within the area.

The Kingdom of Saudi Arabia has announced policies to encourage minerals exploration and development, and KEFI supports this priority by serving as the technical partner within G&M. ARTAR also serves this government policy as the major partner in G&M, which is one of the early movers in the modern resurgence of the Kingdom's minerals sector.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit



(END) Dow Jones Newswires

April 08, 2019 02:00 ET (06:00 GMT)

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