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(Alliance News) - KEFI Minerals PLC on Tuesday said it is raising GBP1.9 million through a share placing and the Ethiopian mining ministry has registered its exploration licence application.
Shares in KEFI were down 5.2% at 1.28 pence in London in afternoon trading.
In addition, KEFI's Tulu Kapi gold project project equity subscription agreements have been distributed to its Ethiopian partners. These are expected to be executed and returned by the Ethiopian government and ANS Mining Share Co in December so as to allow their subscriptions for equity in Tulu Kapi Gold Mines Share Co.
Some of the subscription proceeds have already been deployed by the Ethiopian government for use in constructing a new 11 kilometre road from the main highway to the Tulu Kapi project site.
KEFI expects the first tranche of ANS Mining funding of USD9.5 million once the subscription agreements are returned.
Regarding the firm placing, KEFI said it will raise gross proceeds of GBP1.9 million before expenses through the issue of 149.0 million new shares at 1.25 pence each from new and existing shareholders. Brandon Hill Capital Ltd was KEFI's agent.
Participants in the placing will receive, subject to shareholder approval, one share warrant for every two placing shares.
In addition, also subject to shareholder approval, KEFI will issue 99.6 million shares to project contractors and other third parties to settle invoices and debt amounting to GBP1.2 million plus another 49.4 million shares worth GBP617,745 to directors for fees and salaries.
In addition, KEFI confirmed that the Ethiopian Ministry of Mines has registered its application for regional exploration licences over a 1,200 kilometre squared area near Tulu Kapi.
"KEFI has always maintained the Tulu Kapi project is not simply one deposit, but part of a larger mining district. Following this award Ethiopian exploration will restart during 2020 and will be funded by a modest part of the project equity subscriptions," the company said.
Harry Anagnostaras-Adams, executive chair of KEFI, said: "The company is excited to report that it anticipates being in a position to commence project development from January 2020. KEFI has established a powerful public-private partnership platform for the highly prospective Oromia region, which now stands to benefit from modern industrial-scale mining for the first time".
"Documentation relating to the project level subscriptions has been issued to our partners and I look forward to announcing both the return of these subscriptions and the subsequent funds flow in the near term. In the meantime, I am pleased by the support shown by those investors participating in the placing and those parties who have agreed to receive shares as remuneration for their services."
By Anna Farley; annafarley@alliancenews.com
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