KEFI12 Nov 2019 11:26
Just a bit of churn
KEFI (AIM: KEFI), the gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has received notice from its existing working capital providers to convert the remaining outstanding amount of £657,500 under the Loan Note issued on 5 August 2019 into new KEFI ordinary shares of 0.1p each at a price 0.68 pence per share. Accordingly, KEFI has today allotted and issued 102,182,408 new KEFI ordinary shares of 0.1p each ("New Ordinary Shares") to the loan facility provider and this is the final repayment of all amounts outstanding under the Loan Facility. In total the Company has therefore drawn and repaid £2,000,000 under the Loan Facility of £2,250,000. The final £250,000 has today been arranged for delivery to KEFI in accordance with the terms of the Loan Facility, meaning any conversion of this £250,000 will be based off of future prevailing share prices.
Application has been made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM with admission ("Admission") expected to occur on or around 15 November 2019.
The focus for the Company in Ethiopia is now to close the prearranged project equity financing for the Company's Tulu Kapi Gold Project (the "Project") in light of the Ethiopian Government resolving its final administrative arrangements for the Project development, as announced on 7 November 2019. As previously disclosed, its asset level partners are to provide US$58 million of equity in a staged investment into the Project, a proportion of which will subsequently be available at the KEFI Minerals plc level to fund Ethiopian-related corporate and exploration costs. Following clearance from the Government, the Project equity closing processes are now being dealt with and KEFI looks forward to updating the market upon completion. The planned Project equity and subsequent debt closings are intended to have the effect that:
· Project subsidiary Tulu Kapi Gold Mines Share Company ("TKGM") becomes self-reliant for its gold mine development programme during that two-year period; and
· Ethiopian exploration programmes will also have been funded for that period of construction.
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 go
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