Kefi Minerals to raise £5.62m to develop Ethiopian gold project

The AIM-listed company is to raise £600,000 from a share placing of 10.69m shares of 0.33p to be sold at 5.61p each, a subscription by certain directors, employees and a supplier of the company for 7.13m shares to raise £400,000 and a subscription by Lanstead Capital, an institutional investor, of 82.35m shares to raise £4.62m.

The proceeds will be used to fund the company's expenditure for 2017, including finalisation of financing arrangements and the triggering of development at the Tulu Kapi gold project in Ethiopia , as well as additional exploration work in the country and Saudi Arabia.

Of the proceeds from the Lanstead subscription, £693,000, or 15%, will be retained by the company and the £3.92m balance will be pledged by the company according to the sharing agreement to receive back those proceeds on a pro-rata monthly basis over 18 months, subject to adjustment upwards or downwards each month depending on the company's share price.

Executive chairman Harry Anagnostaras-Adams said: "We have continued to advance the Tulu Kapi gold project in Ethiopia and are now at a pivotal stage of the company's development. The proceeds of the fundraising will underpin the activities for the whole of 2017 as we look to start development of this quality project during the year.”

Shares in Kefi Minerals were down 10.26% to 0.350p at 1013 GMT.