Kefi Gold reports positive progress ahead of key industry forum

The AIM-traded firm said major works had started on the Tulu Kapi project, including government-funded construction of a main access road to the site - a critical step that it said would de-risk the development schedule.

Project financing had also advanced, with the debt facility increasing to $240m from $190m.

Of the $180m equity requirement, about $30m was being finalised with Middle Eastern and sectoral investors.

The Ethiopian government and private investors had committed $20m for a 10% stake in Tulu Kapi Gold Mines SC and up to $30m through gold-linked preference shares, aligned with the launch of the Ethiopian Stock Exchange, expected by the end of January.

Kefi also said that the strategic review of its 15% stake in the GMCO joint venture in Saudi Arabia was focussed on the staged development of the Jibal Qutman Gold and Hawiah Copper-Gold projects and discussions on potential transactions with third parties.

The company previously reported valuations for the projects, including a 2023 pre-feasibility study for the Hawiah project with a net present value of $301m at an 8% discount rate, and a post-tax internal rate of return of 75%.

Kefi said it had revised its estimated potential value for shareholders to 11.1p per share from the 10.5p reported in November.

That increase reflected currency movements and a preliminary valuation of its 15% interest in GMCO, assigning $80 per ounce of gold-equivalent resources.

The board said the valuation assumed a 5% discount rate and a gold price of $2,600 per ounce.

“It is now timely to focus on key alliances for KEFI's aggressive growth ambitions,” said executive chairman Harry Anagnostaras-Adams.

“We will shortly launch broader Major Works at our Ethiopian Tulu Kapi project, a high-grade and high-recovery gold project larger than any Saudi gold project today.

“We will also commence exploration at tantalum/lithium and copper/nickel/cobalt targets in well-known Ethiopian zones of mineralisation for these critical materials, following the award of the Konso Project in December.”

Anagnostaras-Adams said that at the same time, there was “significant interest” in the company’s 15%-owned GMCO joint venture in Saudi Arabia, currently under strategic review.

“”e look forward to further discussions during the Future Minerals Forum in Riyadh next week.

“In short, we have a number of highly attractive opportunities before us and we are focused on the full launch of Tulu Kapi Gold Project, as well as finalising our other priority projects and alliances for the next stage.”

At 1347 GMT, shares in Kefi Gold and Copper were up 1.26% at 0.48p.

Reporting by Josh White for Sharecast.com.