KEFI Gold and Copper plc (AIM: KEFI) shares fell around 40% after the company suspended development activities at its Tulu Kapi Gold Project in Ethiopia following a serious security incident that resulted in multiple fatalities.
The incident occurred on Friday, 4 September 2026 and involved security personnel and members of the local community. KEFI confirmed that one company employee was among those who died.
The company has immediately suspended project development while it works with community representatives, Ethiopian government authorities and security stakeholders to establish the conditions required for work to resume safely.
KEFI said it was too early to determine whether the suspension would affect its timetable for first gold production, currently targeted for mid-2028.
Highlights
- KEFI shares fell around 40% following the announcement.
- A serious security incident at Tulu Kapi resulted in multiple fatalities, including one KEFI employee.
- All project development activities have been suspended immediately.
- KEFI says work will not restart until appropriate measures are in place to provide a safe and secure operating environment.
- Development of Tulu Kapi had been progressing on schedule towards first gold production in mid-2028 before the incident.
- Further drawdown or deployment of project financing will be deferred while the situation is assessed.
- KEFI says it has sufficient capital reserves and committed standby facilities to cover anticipated requirements during the suspension.
- It is currently too early to determine the impact on the project’s development timetable.
- Prior to the suspension, construction of the new access road, electricity connection, equipment procurement and community resettlement were progressing.
- KEFI says it remains committed to developing Tulu Kapi despite the suspension.
Tulu Kapi Development Suspended
Development of Tulu Kapi formally commenced in March 2026 and had remained on schedule before Friday’s incident.
KEFI had been targeting the commencement of gold production during mid-2028, with several major development activities already underway.
Construction of a new access road had begun and was scheduled for completion in December 2026, while the project’s electricity connection was expected to be completed before the end of 2027.
Plant and equipment had also been ordered, with deliveries planned throughout 2027.
Community resettlement and contractor arrangements were meanwhile being implemented in phases to coincide with the planned sequence of earthworks and construction.
Fatal Security Incident
KEFI said Friday’s incident resulted in multiple fatalities involving both security personnel and members of the community.
One of those killed was a company employee.
The company expressed its condolences to everyone affected and said the safety of employees, contractors and surrounding communities remained its highest priority.
Because of the sensitive and ongoing nature of the situation, KEFI said it could not currently provide further details about the incident or the security circumstances surrounding it.
The company is working with the Governments of Ethiopia and the Oromia Region, alongside community and security representatives, on both the immediate response and measures intended to secure the project’s longer-term future.
Financing Drawdowns Deferred
During the suspension, KEFI intends to carefully control expenditure and defer further drawdown or deployment of project financing until the situation has been fully assessed.
Importantly for investors, the company said it has sufficient capital reserves and committed standby facilities to meet its anticipated requirements during the suspension period.
That provides some financial protection while management determines when and under what conditions development can safely restart.
Mid-2028 Production Target Now Uncertain
The immediate question for shareholders is what the suspension means for Tulu Kapi’s development schedule.
KEFI said it is too early to assess whether there will be any impact on the timetable, meaning the existing mid-2028 first-gold target has not formally been withdrawn.
However, with development activities suspended for an unspecified period, investors reacted sharply, sending KEFI shares around 40% lower.
The company reiterated that it remains committed to Tulu Kapi and its long-term development, but made clear that construction will not resume until it is satisfied that appropriate security measures have been established.
Further updates are expected once the situation has been assessed and the company is able to provide additional information safely.
