KEFI raises £3.0m to advance projects in Saudi Arabia and Ethiopia
Conditional on shareholder approval, the date of which is yet to be confirmed, KEFI Gold and Copper, has also raised a further £0.278m through a subscription for cash by certain existing shareholders including RAB Capital who will continue to hold more than 10% of the Company.
The gold exploration and development firm which holds projects in both Ethiopia and Saudi Arabia said the use of the placing proceeds will also be used to maintain its current 34% participation in Gold & Minerals Limited ("G&M"), the Company's joint venture in Saudi Arabia.
The proceeds will also be used for general working capital for KEFI’s pending funds becoming available from project equity subscriptions in Tulu Kapi Gold Mines Share Company as the Company looks to finalise its funding consortium for the Tulu-Kapi gold project this quarter.
KEFI said its Hawiah copper-gold project in Saudi Arabia ‘continues to gather momentum’ after recommencing drilling following a positive Preliminary Economic Assessment ("PEA").
Shares in KEFI have increased by over 150% since April 2020 to open 5.03% lower to 1.718p this morning following the company’s announcement.
The drilling programme of 13,000m is aiming to expand and upgrade the maiden Mineral Resource Estimate ("MRE") from the current 19.3m tonnes at 0.9% copper, 0.8% zinc, 0.6g/t gold and 10.3g/t silver. Based on results of the initial PEA and assuming similar characteristics to the current MRE, further resources improve the project’s economic case.
The company’s September 2020 statement "Preliminary Economic Assessment Confirms Hawiah as a High Priority Project" reported, inter alia, that a doubling of the resource would increase the Project's estimated after-tax NPV from US$96 million to US$362 million.
Commenting on today’s placing, Harry Anagnostaras-Adams, Executive Chairman of KEFI, said, “The Firm Placing, in what continue to be difficult times globally as a result of the COVID-19 pandemic, provides KEFI with the required funds to further progress its projects.”
He said KEFI believes the placing “is in the best interests of all of our shareholders and the proceeds will enable us to maximise the value of both Tulu Kapi and Hawiah for them.”
He said the funds from the Placing will allow work to commence on the studies required for the completion of a Preliminary Feasibility Study during 2021 at Hawiah, and further exploit the surrounding area, which represents “a separate and potentially even larger-scale target.”
He commented "As regards the Company's flagship Tulu Kapi Gold Project, we have recently assembled the full consortium and set the conditional terms for the independently reviewed development funding package of c.US$221 million for this project in a manner that enables KEFI to increase its beneficial ownership from c.45% to c.65% of the project.”
The planned development at the Tulu Kapi Gold Project expects targeted production to increase from the originally proposed 140,000oz per annum to 190,000 oz per annum.
KEFI said both developments would effectively double its beneficial interest in net annual steady state gold production to c.124,000 oz per annum following the targeted production start-up in Q4 2022.
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