EDISON14 Apr 2026 09:22
KEFI Gold and Copper Effectively fully funded Since our note in October, KEFI has provided nine business updates to the market, broken ground at Tulu Kapi and successfully concluded two equity financings (effectively raising £51.5m, or US$68.0m gross). While its March equity financing of £35.8m (gross) was not fully anticipated by the market, it was reported by management to be strongly supported by institutions and was (according to our records) KEFI’s largest since at least 2013 indicating a good relationship with the broader equity market in London and evident support for the company reducing the potential impact of risks raised in the past month from the Middle East war. More importantly, on the back of today’s overwhelming shareholder approvals at the general meeting, the placing brings funds raised or committed to US$355.0m compared with Tulu Kapi’s financing requirement of US$355.6m (see Exhibit 1), meaning it is now effectively fully funded, with the balance being easily covered by a reported US$50m in additional funding that has been variously offered to KEFI in the form of royalties and preference shares, but not yet accepted. We have also brought our financial model on KEFI up to date. Year end Revenue (£m) PBT (£m) EPS (p) DPS (p) P/E (x) Yield (%) 12/23 0.0 (4.6) (0.21) 0.00 N/A N/A 12/24 0.0 (8.9) (0.21) 0.00 N/A N/A 12/25e 0.0 (5.7) (0.07) 0.00 N/A N/A 12/26e 0.0 (10.8) (0.09) 0.00 N/A N/A Note: PBT and EPS are normalised, excluding intangible amortisation and exceptional items. Valuation: 6.40p/share on un-risked EV/NPV basis KEFI recently calculated an updated project NPV5 for Tulu Kapi of c US$1,286m at construction start at a long-term gold price of US$3,000/oz, of which KEFI’s c 86% share is worth US$1,106m pro rata, or £838m (6.11p/share). Jibal Qutman and Hawiah potentially add a further 0.30p/share to this number on the same (un-risked) basis, to take the total to 6.40p/share, to which KEFI’s shares are trading at a 79.4% discount, despite Tulu Kapi’s now being effectively fully funded. Valuation: 6.61p at the current gold price At Edison’s long-term gold price of US$1,866/oz (in real, 2025 US$ terms), we calculate that Tulu Kapi (plus its 13% interest in Saudi Arabian joint venture, GMCO) is capable of generating average annual free cash flows to KEFI of c £121.5m in FY29–32, making average (maximum potential) dividends of 0.31p/share per year possible. Discounting this flow of dividends to present value at a discount rate of 10% per year indicates a valuation for KEFI of 1.25p/share. This is almost exactly what would be expected relative to our prior equivalent valuation of 1.79p/share (including the underground mine) once adjusted for 44.5% more shares in issue (1.79/1.445=1.24). As such, KEFI’s share price may be broadly considered to be discounting current development plans at a long-term gold price of just US$1,866/ oz. This valuation rises to 2.61p/share at a long-term gold price of US$2,500/oz and then by 1p/share f
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