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Sorry guys, I missed that Kefi Gold and Copper probably never got the exploration license for the 1'100km2. Meanwhile, Tulu Kapi is now practically surrounded by the "Chinese". It is also useless to blame the government of Ethiopia for the delays (civil war, administrative inadequacies). And it is a fact that China is more flexible than western democracies when it comes to investing in third world countries when it comes to ESG standards.
The hints from @cracker 10 and @theaviator in the advfn forum are almost certainly correct. Thank you for the research work.
So I really believe that the Minister of Mines' announcement that TKGM will automatically revoke its mining license for Tulu Kapi as of July 8, 2022 is real. This means Kefi resp. TKGM has until July 7, 2022 to deposit the required $80m with the Ethiopian central bank.
Therefore, we have to take a closer look at the financing. Decisive is pdf page 7 of the annual report:
https://www.kefi-minerals.com/files/announcements/kefi-annual-report-2021-website.pdf
After that, the funding of Tulu Kapi in the amount of $356m is planned as follows:
56m$ mining fleet by the mining contractor
$140m senior project debt,
$38m Government and Local Investors directly into TKGM
122m$ KEFI-funded component, separate and in addition to historical investment
$356m Total TKGM
Now it's about the $122m, which Kefi has to provide directly.
This total is broken down as follows:
60m$ Subordinated non-convertible, offtake-linked debt
15m$ Subordinated debt convertible
$20m Subordinated convertible
27 Recent issues of KEFI shares and the exercise of the attached warrants
$122m Total Provided by KEFI
The first question now arises: How could the $80m be composed?
I'm assuming it's the following items:
60m$ Subordinated non-convertible, offtake-linked debt
15m$ Subordinated debt convertible into KEFI shares at VWAP in 3 years
5m$ resp. £4.1m ex latest capital increase at £0.8m gross of £8m.
80m$ Total
The second question arises: When could the $80m be available?
If everything goes as planned, the umbrella agreement should be in place by the end of June 2022 - which brings us to the 3rd and all-important question:
Was the security audit resp. the independent security report ensuring the security of the mine site, camp and access routes accepted by all members of the consortium?
The government of Ethiopia is responsible for ensuring security. But if just one member of the consortium is of the opinion that the security is not sufficient for an investment in the millions, then: game over. We still remember the ANS Mining theater in 2019 when ANS Mining requested a Security Audit audit. Was pure delaying tactics, since the first-class aperitif club did NOT have the millions of dollars. Because the Chinese would then probably be more flexible: 1 reinforced infantry battalion (drones) with 1000 (civilian) security forces would be enough - whether military or civilian, I said ye
Conclusion:
Now the moment of truth has definitely arrived. HAA MUST deliver:
1. Independent Safety Report
2. Signature of the umbrella agreement by all partners in the consortium by the end of June 2022
3. Receipt of 80m$ by 7 July 2022 at the Central Bank of Ethiopia (75m subortinated Debt, 5m$ Equity Kefi).
I can't seriously assess the probability; but I will write to Kefi Gold an Copper later today and ask about the safety report, whether it has now been accepted by all members of the consortium and if not, by when the approval can be expected.
Seriously a twitter feed of a press conference in Amharic that’s inaudilbe and a screen capture of an article that might well be totally unreliable probably from a source that has been misleading in the past in previous articles that also said kefi was going to lose their licence then it did not happen.
Agree the company has to do more than answer a Q and A and reply to a tipsters email and actually lay out what the state of play is and the company often sucks in informing shareholders of what is going on but give me break.
As for the security situation company can do nothing about that its in the government hands but after the attack the other day government likely to flood the whole area with troops short term, medium term beef up the troop levels medium term and longer term get into talks with the rebels. The incident was so shocking and got so much publicity locally and at a national and international level government will not be able politically drag its feet so will massively improve security in the area.
I understand your point of view very well @Robjm66. Regarding the credibility of the Twitter thread and the difficult-to-hear statement in Amharic: It's a question of comprehensibility.
For me it is (very) understandable, according to which TKGM must have deposited 80m$ with the Ethiopian National Bank by July 7th, 2022. That is also very possible - as I judge the financing construct.
I assume the Umbrella Agreement is a legal obligation to fund Tulu Kapi. The two African banks are likely to be the most cautious with $140m for the processing plant. It is therefore logical for me that the "risk capital" (subordinated debt 75m$ plus equity Kefi 5m$) must first be paid into the Ethiopian central bank. When the money comes in, the government also has assurance that the mine will be built effectively. The whole thing follows the logic step by step.
Regarding the performance of IR: I rate the performance of Kefi as good. The problem now is that any official statement in an RNS can instantly affect the stock price. Q&A is more harmless. We are now talking about almost 2 weeks: And then it should be clear. I have my greatest doubts that the Ethiopian government will give HAA and Kefi another chance. Because the Chinese are at the door. All the uncertainty is reflected in the share price. Because I am convinced that the assets in Saudi Arabia Hawiah and Jibal Qutman alone are worth much more than the current market capitalization.
Regarding the security situation: I am convinced that the Ethiopian government can guarantee security. The question simply arises as to whether ALL members of the consortium see it that way.
PS: I remain invested - if only because of KSA.
PPS: I sent an email to Kefi.
This BB is now officially a comedy show devoid of humour.
Embarrassed for you.. I’m out.
Urai5 Guess I and everyone else is just exhausted by how long this has gone on. Mood not helped by the derisory share price which does not even reflect a fraction of the Saudi prospects.
Members of the consortium might want more guarantees of security but makes sense for the Ethiopians to play ball as need western investment as well as Chinese into their country and they will improve security anyway in the region otherwise it would be very politically damaging to their government.
Guys start with the profiles of urai5.
https://www.lse.co.uk/profiles/urai5/?page=2
https://www.fanabc.com/english/ethiopia-world-bank-sign-80m-grants-agreement/
http://www.mom.gov.et/index.php/revoked-licenses-2/
The $80m deposit is the latest, NO Where was mentioned till MVA9999 raised this and where is he ?
Urai is a long term holder posts mainly on the German wallstreet online kefi board. Ethiopia has gotten several Grants more recently than that. The list on revoked licensee is probably irrelevant really as well out of date.
https://www.garoweonline.com/en/world/africa/world-bank-to-provide-war-torn-ethiopia-with-715-million
My proposition, we are close to the agreement. Correct me if i am wrong, we have a AGM on 28thJun'22, let it all wash then.
The Annual General Meeting of KEFI Gold and Copper plc to be held on 30 June 2022, at 10.00 a.m. (BST).
https://www.kefi-minerals.com/files/announcements/kefi-agm-notice-of-meeting-and-proxy-form-6june22.pdf
I understand the current frustration of disappointed shareholders very well; I belong too. But the fallback layer with assets in KSA Hawiah and Jibal Qutman has been the main reason I remain invested.
Now again to the financing and the corresponding evidence. The last month's update says the following:
"- Sign the funding ‘Umbrella Agreement’ during June 2022 to demonstrate the full funding commitment, in particular to the Ministry
- Evidence of the full funding capacity of each syndicate member to the Ministry"
And so it is understandable and plausible for me that the risk capital (subordinated debt and equity) has to be deposited at the Ethiopian central bank. Because the Mines Ministry defines the rules of the game. A "promise to pay" is probably sufficient for the African banks with the $140m loan.
Not only do we shareholders have no more patience - the Ministry of Mines also wants to see facts now - specifically capital.
PS Please excuse me, as not every term is likely to be translated correctly. I write in German and have the text translated by the online translator.
"I have my greatest doubts that the Ethiopian government will give HAA and Kefi another chance. Because the Chinese are at the door. "
I'm sure that going back to square zero by switching to the Chinese who have nothing done or organised in the relevant area is sure to get the EG what it wants more quickly. EG might, however, have noted recent articles about several needy countries suddenly discovering they've perhaps ended up in a Chinese debt-trap, and pondering whether that's really a good idea here.
As I understand it, many of the cancelled licences are for companies that have done nothing or next to nothing with them, not even limited exploration.
If several hundred serious companies had effectively had assets seized that they'd invested in, surely there would be more noise and legal action.
"... he Chinese who have nothing done or organised in the relevant area" I'd be surprised if, for instance, said Chinese would have any rights to see let alone use the detailed survey results and mine planning documents produced so far.
Yes @chasf, I thought about that too. The core value of a developer is the mine plan. But Tulu Kapi is open pit with very simple metallurgy. And don't forget: According to my information, the processing plant will be built in China.
In my opinion, it really is the very last chance for HAA and Kefi to bring Tulu Kapi into production. The Umbrella Agreement must be signed by all members of the consortium by the end of June. Then we should also (finally) know the following:
1. Who exactly are the Mining Financiers ($60m) and Ethiopian Subsidiaries of International Groups ($35m) and Ethiopian Private Investor ($9m).
2. And what are the exact contract clauses for financing Tulu Kapi. And there could effectively be the 80m$ paid into an account of the Ethiopian central bank.
"1. Who exactly are the Mining Financiers ($60m) and Ethiopian Subsidiaries of International Groups ($35m) and Ethiopian Private Investor ($9m)."
All i am looking at 2.4p PS, after the umbrella agreement, i don't care $80m or the above.
HAA and KEFI were suppose to close to clearing this hurdle in Sep-21; just before the security incident. Why has it taken 6 months after state of emergency lifted in Q4 2021? No one can complain that KEFI and HAA didn't have enough time. IMO all responsibility both good and bad is of HAA and KEFI BOD.
Poor show, leaving everything to last min..
Lets see where we end by end of next week.. interesting few sessions coming up!
GL
If HAA gets it sorted by 30-jun-22 and no major drama.. all well and good. But if he fails to get the umbrella agreement signed by 30-jun-22, he must go. There is no 2 ways about it. GL
@urai5, I can see you are genuinely trying to make sense of all this but there's much you are missing out simply because the real information is not publicly available and a few continue to suppress anything leaking out even on this platform. Unfortunate.
"Why has it taken 6 months after state of emergency lifted in Q4 2021?" I imagine it's a little disturbing to have consortium members of staff kidnapped
Chasf - Kefi and HAA had more than 6 months to clear this mess. This is the last saga. If you look back, HAA had been working on this for the last 5 years - anyone decent would have sorted this out along time ago. HAA started taking this seriously when MoM threatened to seize the licence.
Yes we had various issues along the way, but HAA had more than enough time.
Let’s hope for the best.
GL
@urai5, I can see you are genuinely trying to make sense of all this but there's much you are missing out simply because the real information is not publicly available and a few continue to suppress anything leaking out even on this platform. Unfortunate.
Here is the reply email I received at 10:17 CEST (copy/paste):
Hi urai
We note your concerns and appreciate your feedback.
Your questions and others recently received are being collated and will be answered during our AGM webcast (details to be provided closer to 30 June).
Kind regards,
Roger
---------------------------------------------
My assessment:
It was clear that no details could be communicated NOW. Every word would probably be wrong resp. stock price relevant and therefore very critical. The AGM is on Thursday, June 30th, 2022. I assume that statements will be made there - positive or negative. Because the ominous July 7, 2022 is only a week later. The moment of truth for Kefi Gold and Copper and HAA has definitely come. I am convinced that there would be no more chance for HAA in Ethiopia - Tulu Kapi is "virtually surrounded" by the Chinese. But don't forget: Saudi assets in the Arabia-Nubian Shield with Hawiah and Jibal Qutman are worth more than the current (low) market capitalization.
urai5