Operating and financial update
KEFI Gold and Copper (AIM: KEFI) is an AIM-listed gold and base metals mineral exploration/development company. KEFI is advancing the Tulu Kapi Gold Project, Ethiopia as well as a portfolio of precious and base metals assets in Saudi Arabia. Tulu Kapi is development-ready and bank funded with an a 1.1moz Reserves (PP), 1.7moz Au Resources (MRE). The Saudi Arabian portfolio has a ~1.7moz Au & >300kt Cu MRE.
- The Company released an operating and financial update on the Tulu Kapi Gold Project in Ethiopia yesterday.
- Operations update:
- Onsite and offsite project workstreams are tracking on or ahead of the development schedule.
- Construction of the 350 replacement houses for the local community commenced.
- Project bulk earthworks to start once the first phase of resettlement is completed.
- Order for SAG mill, the highest cost and longest lead item, placed.
- Power lines (47km) connecting Tulu Kapi to the national grid under construction (government funded).
- Two new access roads connecting the site to the bitumen highway under construction (government funded).
- EPCM contract with Lycopodium finalised.
- Commissioning targeted for late 2027 and full capacity mid-2028.
- Funding update:
- $15m short-term working capital facility replaced with a longer-term source of capital including:
- $10m in equity-ranking royalty with Cyprus-based Mithril Royalties (including Chancery Royalties $20m, total $30m royalty commitments’ terms include 2.4% on first 1moz produced, 1.6% thereafter, payments subordinated to debt, only payable alongside dividends paid to TKGM shareholders)
- $5m in Ethiopian preference shares at the subsidiary level (same terms as the US$6m already agreed)
- The $15m working capital facility will remain available on standby basis offering additional financial flexibility.
- Senior debt drawdown ($240m) is expected in 3Q26.
- $15m short-term working capital facility replaced with a longer-term source of capital including:
Conclusion: The team is progressing with Tulu Kapi development activities including the start of replacement houses construction for resettlement programme, power lines and new access roads construction ongoing and SAG mill order placed. The team added $15m to the outstanding committed liquidity in the form of a royalty ($10m) and additional prefs ($5m). $15m working capital facility remains available for financial flexibility. We adjusted our valuation for additional royalty ($10m) and slightly increased KEFI effective interest (latest 86%, with the balance held by Ethiopian authorities) among main changes. Largely marginal adjustments, with risked NAV and TP little changed at ~$760m and 4.2p (10% DR, 0.75x P/NAV risk multiple, $4,000/oz gold price, ~86% att interest in TK). We reiterate BUY recommendation given cheap market valuation (currently trading at ~0.2x unrisked NAV) and a series of rerating catalysts ahead, including completion of relocation programme, first debt drawdown, start of bulk earthworks, plant commissioning, and maiden production.
*SP Angel act as Nomad and Broker to KEFI Gold and Copper
Analysts
John Meyer –John.Meyer@spangel.co.uk – 0203 470 0490
Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484
Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474
Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476
Sales
Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472
Abigail Wayne –Abigail.Wayne@spangel.co.uk – 0203 470 0534
Rob Rees –Rob.Rees@spangel.co.uk – 0203 470 0535
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
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