KEFI Minerals (AIM: KEFI), the gold exploration and development company with projects in the Kingdom of Saudi Arabia and the Federal Democratic Republic of Ethiopia,has given DirectorsTalk an operational update for the period from 1 July to 30 September 2016.
This update encompasses the activities of KEFI Minerals (Ethiopia) Ltd (“KME”) in Ethiopia and Gold & Minerals Ltd (“G&M”) in Saudi Arabia.
Corporate
— Raised GBP3.8 million (US$5 million) primarily for project finance for the scheduled development activities of the Tulu Kapi Gold Project (“Tulu Kapi” or “Project”), notably resettlement of the Tulu Kapi community and project finance syndication closure costs.
— Confirmed entitlement to ETB72 million (US$3.5 million) VAT refund from the Ethiopian tax authorities.
— The Board of KEFI (the “Board”) is considering a number of financing proposals for the development of Tulu Kapi.
— Strengthened the Board with the appointment of Mr Mark Wellesley-Wood, an experienced African mining operator, as Non-Executive Director.
-- RFC Ambrian appointed as joint broker.
Tulu Kapi Gold Project, Ethiopia
(Wholly-owned by KEFI; Government entitled to 5% free carried interest)
— Community resettlement, livelihood restoration and community development programmes progressed and remain ongoing.
— Tulu Kapi project contract drafting advanced with Ausdrill for mining and Lycopodium for plant.
-- Progressed drafting of shareholders' agreement with the Government of Ethiopia.
— Development Bank of Ethiopia completed its evaluation process and the National Bank of Ethiopia (the central bank) approved the proposed maximum senior debt-gearing.
— Updated the Project timetable with the Government, project contractors and potential finance syndicate and revised the date for start-up of production to mid-2018.
— Received formal Front End Engineering and Design (“FEED”) proposal for US$68 million from Lycopodium under its proposed fixed price Engineering Procurement and Design (“EPC”) contract. This capital item, which is the largest single component of total Tulu Kapi capital expenditure, has increased 4% since the tender twelve months ago, mainly due to currency movements.
— Reviewed other capital estimates with contractors and financial advisers. After also adding contingencies and provisions for non-Tulu Kapi costs, the estimated funding requirement has been increased to c. US$150-160 million, which is fully covered by the financing proposals being considered and remains significantly less than the original c. US$289 million Tulu Kapi capital expenditure estimates of the previous owner of the Project.
Gold & Minerals Ltd Joint Venture, Saudi Arabia
(40%-owned by the Company with KEFI as operator)
Encouraging signs from Government
— New Energy, Industry and Mineral Resources Ministry created, to be headed by Khalid al-Falih, Chairman of state oil company Saudi Aramco.
— Ministry will handle oil and gas extraction, power generation and distribution, mining and industrial development.
— KEFI and its partner ARTAR, through its G&M joint venture, regard this as a positive sign and expect new mining policy to be issued before year-end.
Jibal Qutman
— KEFI’s plans for developing a heap leach gold project at the Jibal Qutman development await the outcomes of the Government policy review.
Hawiah
— Re-commenced fieldwork, focusing on depth-measurement of large buried targets as a prelude to drilling.
Portfolio of Licence Applications
— Upgraded and expanded its portfolio of licence applications to reinforce foundations for longer term growth opportunities.
Webinar
Mr Harry Anagnostaras-Adams, KEFI’s Executive Chairman, will be hosting a live webinar at 4pm BST on Thursday 20(th) October 2016, via:
http://webcasting.brrmedia.co.uk/broadcast/5804a464645b2ebf5620e2e2.
Listeners are encouraged to submit questions by clicking on the link at the foot of the page or by emailing questions@brrmedia.co.uk. The webinar will subsequently be available on the Company’s website at http://www.kefi-minerals.com/news/videos.
