from todays RNS..11 Nov 2019 15:56
The NPV of KEFI's planned 45% beneficial interest in the Project open pit ranges between:
· a "base case NPV" of £41 million (US$52 million) at US$1,300/oz at start of construction this year if it is assumed that KEFI has to parri passu fund the Project equity. If one takes into account that KEFI has already made most of its contribution to Project equity and that its partners will now provide the next Project equity injection, this "KEFI base case NPV" is more appropriately estimated at £57 million (US$74 million) at US$1,300/oz;
· a "current gold price NPV" of £100 million (US$127 million) at US$1,460/oz at start of production in 2021; and
· 5 (KEFI's base case) to 9 times (current gold price) the current market capitalisation of the Company of c.£11 million (US$14 million) following the issuance of these new shares under the Loan Facility.
These NPV calculations based on the Tulu Kapi open pit, assume an 8% after tax discount rate applied to net cash flows after all debt service, taxes, operating and capital requirements. No account is taken of the potential of the Company's other assets, which are as follows:
· the Tulu Kapi underground deposit in which KEFI has identified the as yet untested exploration potential for tripling the current 330,000 ounce underground Mineral Resource to c. 1 million ounces. Average grades to date are within the range 5-6g/t;
· regional exploration assets in Ethiopia; and
· exploration assets in Saudi Arabia, where a drilling programme is currently underway and has thus far yielded encouraging results and the Company expects to provide further updates as results come to hand.
Sign In
Follow the stocks
