Kefi reports further licensing progress in Saudi Arabia

Ethiopia and Saudi Arabia-focussed gold and copper explorer and developer Kefi announced positive licensing progress on the Jibal Qutman project on Wednesday, as well as the award of two further exploration licences through its Gold and Minerals (G&M) joint venture in Saudi Arabia.

The AIM-traded firm owns 30% of G&M, with the remaining 70% held by its partner Abdul Rahman Saad Al Rashid and Sons (Artar).

It said G&M had received the expected formal notification from the Saudi Arabian Ministry of Industry and Mineral Resources that land access issues, which halted the mine development application in 2016, were now resolved.

That would clear the way for the re-issue of exploration licences as a precursor to the granting of the Jibal Qutman mining licence.

Exploration programmes and environmental baseline studies, as well as geotechnical and metallurgical drilling for the final development planning, would start once the licences were issued.

Given the “considerably stronger” gold price outlook now prevailing compared to 2015, the Jibal Qutman definitive feasibility study was being adjusted to focus on recovering more than 500,000 ounces of gold, rather than the originally-envisaged 200,000 ounces.

The board said the study remained on track for completion at the end of the fourth quarter of 2022, with environmental permits targeted for the first quarter of 2023, leading to a mining licence application resubmission early next year.

Project financing for Jibal Qutman was expected to be sourced and implemented within Saudi Arabia, which Kefi said had “well-developed” international capital markets with a mandate to invest in the country's mineral resources.

As a result, development commitments were expected to proceed in an “expedited fashion” on the granting of the mining licence.

Additionally, and as expected, G&M's exploration areas were being expanded in Saudi Arabia, where the newly-overhauled regulatory regime was said to be speeding up progress.

Two further exploration licences had now been awarded to G&M on an initial five-year term, bringing the total number of exploration licences issued to seven, covering a total area of 462 square kilometres.

The two new licences are Abu Salal South and Jadib Al Qahtanah, with Abu Salal South hosting volcanic massive sulphide (VMS) mineralisation, located 50 kilometres south of the firm’s discovery at Hawiah, within the same Wadi Bidah Metallogenic geological belt.

G&M geologists had already identified gossan outcropping discontinuously for two kilometres, with grades of up to four grams of gold per tonne.

The Jadib Al Qahtanah licence, meanwhile, is situated around 45 kilometres east of the Mahad Ad Dahab mine - the principal historic Saudi gold and silver mine in the Central Arabian Shield.

Mineralisation presented as quartz vein hosted gold within a diorite body, with gold grades from crush dumps of up to 52 grams per tonne.

“We are extremely excited to announce the positive conclusion of the land access issue which has delayed the development of the Jibal Qutman project since 2016,” said executive chairman Harry Anagnostaras-Adams.

“The company is very grateful for the support of the Ministry of Industry and Mineral Resources in these matters, who have gone to great lengths to secure this ground on behalf of the company.

“This news, coupled with the Kefi Saudi Arabia team's early recommencement of studies in the first quarter this year, paves the way for the fast-tracking of the project.”

Anagnostaras-Adams said that, with modern finance regulations already in place in-country along with “strong” Saudi capital markets, the company could now realistically target bringing the mine into production in the second half of 2024, around the same time it expected to start production at Tulu Kapi in Ethiopia.

“We are also pleased with the granting of the new exploration licences.

“The Abu Salal South licence reinforces our position near our Hawiah discovery in the Wadi Bidah Metallogenic Belt which we believe will host multiple copper-zinc-gold mines.

“And the Jadib Al Qahtanah licence expands our portfolio across the Kingdom into another area that has already demonstrated great potential for gold mining, hosting Saudi Arabia's principal historic gold and silver mine.”

At 1510 BST, shares in Kefi Gold and Copper were up 2.93% at 0.6p.

Reporting by Josh White at Sharecast.com.