Member Info for NickE

Re. Stebo's valuation of 60p - I guess it was a bit tongue in cheek as you have to allow for AISC, tax, royalties, financing, time value of money and risk. Only a fraction of in-ground value turns into profit, and it’s spread over many years.

On the flip side, Mibb's “1.5 x year 1 revenue” view is too low - you don’t value a mine on one year’s turnover when it could be producing strong cash flows for 10 years or more.

An NPV of life-of-mine cash flows strikes a fair balance. At $3k gold, $1k AISC, 3M oz resource and 80% KEFI ownership, the fully de-risked NPV 5% discount works out in the 20–25p/share range. The market will only move toward that as financing, construction and production are progressively de-risked . Don't think we can factor in 3M oz either just yet but all we can say is on funding sign-off and the formal start of major works the share price will be considerably higher than where we are now.

Hopefully a "resource potential of more than 2 million ounces of gold Askari is targeting a resource potential of more than 2 million ounces of gold, based on the high-grade mineralisation already identified" coming Kefi's way, or should I say being restored back to Kefi.

"The proximity to the Tulu Kapi Mine, owned by Kefi Gold & Copper (LSE: KEFI), also adds strategic value, as it provides access to infrastructure and mining services in a region with established mining operations." Of course Kefi would readily share mining services with a Company who attempted to run off with Kefi's licenses!

I think Kefi has always been confident of the return or ownership confirmation of the over-pegged licenses post funding completion and probably the latest developments have brought it to the fore.

It's worth noting that the 8p/share figure Harry Adams in the AGM statement is a conservative, risk-adjusted NPV. It factors in current reserves (not full 3M oz), partial value from Saudi assets, and real-world execution risk.

The full NPV at 5% discount using 3M oz and $3,000 gold is just over 21p per share, but that assumes everything goes perfectly. So HAA is using 8p as a credible conservative where the market might value KEFI as funding completes and development progresses. Probably the same valuation basis as institutions will use.

I listened to the bearcast after reading the posts on here expecting a stream of abuse against Kefi and HAA but TW's not down on Kefi and barely mentions Harry. In fact he is "more and more confident" that funding will be achieved and that he will be able to sell for "multiples of the share price" and the shares are "extremely cheap."

He wouldn't bet the house that the exact timing for funding as stated in the presentation will be hit but is more and more confident and almost certain it will happen.

He doesn't like the corporate governance or the bonus but he's bullish rather than bearish on investor returns as his comment that the share price will be "multiples of the current price" post funding highlights.

MF2027 - it's not just speculation, as it's taken from the presentation. "PE Funds into subsidiary/ies: $25M min — Several PE Groups focusing on either Ethiopian subsidiaries or Saudi subsidiary or both."

Yes, Rob, it keeps Kefi's options open for a future sale and so much better than a fire sale of the Saudi assets. It also makes Kefi as a whole more attractive for a future takeover which I think is quite likely post funding.

"PE Funds into subsidiary/ies: $25M min — Several PE Groups focusing on either Ethiopian subsidiaries or Saudi subsidiary or both."

Rob, yes I think that is the Saudi update and it looks like it's almost certainly being kept and funded at subsidiary level (nothing needed from the plc) with pay back from production so the 15% stake is retained. I'm pleased with that outcome if they couldn't sell it for the upper end valuations.

Great research and points Rob. Market cap of Askari Minerals is just£1.6m and listed in Australia. I'd like to think HAA actually initiated this with a view to a takeover at a small premium using (as you suggest) the Ethioprefs but would that be crediting him with too much foresight. Post funding and anticipated share price re-rating, I don't think anyone would mind a small placing to acquire these assets unless of course HAA is certain the over-pegged licenses will be returned without cost (including legal costs) or extended delay.

It took a while to work out how to use the green box filter but it does make the threads a much easier read. 25 posts on this page and 11 green boxed 'contributions.' I'm all for considered balanced posts discussing the merits and otherwise but the negative posts are generally bitter and childish pantomime stuff. I'd recommend all holders filter this white noise rather than engage.

Interesting post on advfn. To put it in context, it's acknowledged as a 'rumour' and the poster has a long history of posting without any evidence of ramping etc. Personally I don't see it happening prior to funding sign off and any offer would have to come with a premium on top of the inevitable post funding completion re-rating. There are a few general articles reporting that Chinese companies are looking to buy up mineral companies on order to supply the significant internal demand.

"Heard some interesting intel from a pal who is close to the markets - the whispers are that a very large Chinese company are in the data room (and have been for some time ) initially looking at Saudi but have now turned attention to the whole company.

I would say if they have been looking at both TK and Saudi and they look at the current market cap of the company they would be eyeing some sort of deal or takeover.

Just my own thoughts but could they find better value ???

Although this is only market gossip i do actually see some merit in a very opportunistic T/O coming here."

Some good balanced points MU2017 - you mention "The presentation has only been made available on the morning of the webinar, and unfortunately the question submission window is now closed. That’s frustrating, especially when we now have enough substance to ask deeper, more specific questions."

Questions can also be submitted once the webinar starts.

The key point for me is that if Kefi believe the $10m the Company will receive from reimbursed costs to the plc plus existing funds are insufficient to avoid placings at current share price levels then they should sell the Saudi assets.

The caveat is that if they believe they can get the share price to 2p plus before any funds are needed to pay the $5m needed for the Saudi development contribution then I am sure most investors wouldn't object to an additional 50m to 100m shares given the potential upside.

I'd rather see Saudi sold than Kefi opting to dilute the stake further to cover the $5m. It's difficult to make an informed conclusion without knowing what sorts of offers have come in (if any) but a low ball $30m to $50m would mean an end to future placings and allow for new licences to be developed in Ethiopia.

In terms of expanding TK resources I see the presentation states that this is covered by reimbursed costs from existing expenditure on TK. That;s a positive signal. They are also looking at subsidiary funding with discussions under NDA to 'optimise funding further'. It looks like they are focusing that any funding from plc level or raises is avoided and that's important unless it is at much higher share price levels..

Al in all it looks like a fair bit of newsflow is in the pipeline on all fronts.

Some useful info in there. Pleased to see a clear and concise presentaton :

$10m to be reimbursed.

$5m outflow in cash or shares to consultants

• Exploration Pipeline

• We will expand and progress this gold and critical minerals pipeline as warranted by early field results

• Target to be financed by refunds due from Tulu Kapi project finance

I've gone for a more conservative NPV than Stebo using a gold price of $2,800, 7 years production and a discount to NPV of 20% but there is is still enormous upside. Appreciate that production is likely to be significantly more than 7 years, gold price could be much higher and there is also the underground resource to add. I've included .5p for Saudi assets. It just highlights the opportunity even using ultra cautious variables.

NPV Discounted 20%:

Revenue = Gold price × production × 7 years

Deduct:

AISC: $1,000/oz

Taxes and royalties: 25%

Capex/finance costs: assumed repaid within year 1

Converts to GBP

KEFI's 80% stake only

Estimates based on the above

Post-funding secured 2.5p – 4.5p

Construction + Saudi clarity (sale or other development) 5p – 7.5p

Production at $2,800 gold 7p – 12p+

Gold @ $5,000+ 15p – 25p possible

My view is that the potential for a takeover post funding is high at around 5p, especially if the gold price continues its climb.

At some stage the juniors will come into play and the likes of Kefi with a fully funded projected in a country that is looking increasing appealing is going to be reasonably high on the list of attractive acquisitions.

Follow up question:

Presumably it's partly in ARTAR's interest to pay a decent fair value if they want the 15% as it assigns a high value for their remaining 85% stake?

ChatGPT said:

Exactly! If ARTAR wants to acquire KEFI’s 15% stake, paying a fair price benefits them in multiple ways:

Boosts the Valuation of Their Own 85% – If ARTAR secures KEFI’s stake at a strong valuation, it sets a benchmark for the entire GMCO project. A higher valuation benefits ARTAR if they later seek investors, partners, or financing.

Prevents a Lowball Precedent – If KEFI accepts a deeply discounted price, it could devalue ARTAR’s remaining stake. Potential future investors might use the low sale price as a reference, making it harder for ARTAR to raise capital at a premium.

Maintains a Competitive Bidding Process – Since KEFI has multiple interested parties, ARTAR must match the highest bid. If ARTAR lowballs and another bidder offers more, KEFI could just sell to the highest bidder instead.

Strengthens Saudi Mining’s Investment Appeal – The Saudi government has been actively promoting mining as a strategic sector under Vision 2030. A strong valuation helps demonstrate that Saudi mining assets attract competitive, global investment.

Conclusion

If ARTAR really wants the 15% stake, they are financially motivated to ensure KEFI gets a decent price—because a low price would hurt their own asset value. This further supports the argument that KEFI will likely get a fair deal, not a deep discount.

I asked ChatGPT to crunch some numbers. I didn't realise how potentially valuable the copper resource is:

With gold at $2,984/oz, KEFI's 15% stake in GMCO can be valued under different scenarios (low, medium, and high).

Resource Estimates (KEFI’s 15% share)

Based on recent updates:

Gold: 15% of (902,000 + 745,000) oz = 247,000 oz

Copper: 15% of 297,000 tonnes = 44,550 tonnes

Zinc: 15% of 310,000 tonnes = 46,500 tonnes

Silver: 15% of 11.6M oz = 1.74M oz

Valuation Scenarios

Assuming different pricing and discount rates:

1️⃣ Low Case (~$150M)

Gold: 247,000 oz @ $150/oz → $37M

Copper: 44,550 tonnes @ $1,500/t → $67M

Zinc: 46,500 tonnes @ $700/t → $32M

Silver: 1.74M oz @ $5/oz → $9M

➡️ Total: ~$145M-$160M

2️⃣ Medium Case (~$300M)

Gold: 247,000 oz @ $300/oz → $74M

Copper: 44,550 tonnes @ $2,500/t → $111M

Zinc: 46,500 tonnes @ $1,000/t → $47M

Silver: 1.74M oz @ $10/oz → $17M

➡️ Total: ~$280M-$320M

3️⃣ High Case (~$500M)

Gold: 247,000 oz @ $500/oz → $124M

Copper: 44,550 tonnes @ $3,500/t → $156M

Zinc: 46,500 tonnes @ $1,500/t → $70M

Silver: 1.74M oz @ $15/oz → $26M

➡️ Total: ~$450M-$500M

Takeaways

The low end (~$150M) represents a fire-sale price with deep discounts.

The mid-range (~$300M) aligns with reasonable market discounts.

The high end (~$500M) assumes favorable negotiations and strong buyer interest.

Given KEFI's statement about shortlisting parties, do you think they will aim for the middle-to-upper range ($300M-$500M) rather than a bargain sale?

You said:

What if the gold was valued at $80 an ounce although I assume that is unrealistic

ChatGPT said:

If gold were valued at $80/oz, the valuation would look like this:

Gold Valuation at $80/oz

Gold: 247,000 oz × $80/oz = $19.8M

Copper: 44,550 tonnes @ $1,500/t = $67M (low-end price)

Zinc: 46,500 tonnes @ $700/t = $32M (low-end price)

Silver: 1.74M oz @ $5/oz = $9M (low-end price)

➡️ Total: ~$125M

Why This is Unrealistic

$80/oz is far below any reasonable industry standard. Even in lowball asset sales, gold in the ground is usually valued at $150-$300/oz.

KEFI’s gold assets are in Saudi Arabia, a mining-friendly country with government backing. This should help maintain stronger valuations.

ARTAR must pay fair value—they can match bids but not lowball the price.

50% completion of alternative access road, initial construction site being built, increased water supply being installed, first community compensation paid = it’s going ahead. Very useful that these things are being done whilst the more bureaucratic procedures take their course.

I can see the construction of the mine being the smoothest part of the journey to production and, ultimately, the fundamental question is whether Tulu Kapi is on course for a full year of production in 2027 as envisaged? It looks very much like it is.

All the Govt expenditure and works above confirms the serious intent. Not surprising given Tulu Kapi will be the largest source of export revenue for the Govt once producing.

Ethiopia is three hours ahead not behind UK time. Hopefully will be ratified soon and the project is a priority for the Govt generally aside from their 10% stake so it will come and the sooner the better.

Interesting bit at the end of the interview where HAA mentions that Saudi wants to become the largest supplier of EV's but has not battery metals. Ethiopia does and Kefi has pegged some areas (Konso I assume) and spoken with sovereign wealth funds in both countries with a view to potential supply. A 'fledgling' initiative as HAA puts it . Tulu Kapi will obviously lead the way but looks like there will be plenty of other initiatives with costs likely covered by partnerships post the sale of the Saudi assets.

https://www.brrmedia.co.uk/broadcasts/67a0de7dda34b6c1a6f602ad/kefi-minerals-video-update-from-cape-town-2025/

Very timely gold price rise and it can only help get an optimum price for the Saudi assets.

The other factor on why it's timely is that the banks will require a hedge of up to 30% when finance is signed off and major works commence. It's usually mandatory and almost certainly it would be hedged via forward sales so there would be no upfront cost to Kefi.

The gold price could be around $3,000 by the time that hedge is put in place. 30% would be ideal in my view and still allow for most of the upside if gold goes to some of the off the scale prices some commentators are predicting in the coming couple of years.

Also, at some stage the gold price will impact on the junior mining sector, a bull run is well over due. Almost certainly the majors will rise first but the juniors will follow. Whether it's just a rising gold price factor or a move away from crypto and tech stocks - time will tell on that.

Lastly, once finance is sorted Kefi will be under the radar with the bouyant gold price . The sale of the Saudi assets will already have put Kefi in focus but, for sure, some significant players will also be looking at Tulu Kapi with interest. It would have to take a more than decent bid to secure Kefi post finance sign off as that is the stage when the fun starts for shareholders.

Just four highly material reasons why those that say the gold price is irrelevant until Tulu Kapi starts production are wide of the mark by a country mile.

I think Bill Brown likes to do a detailed update rather than several bits of news. Obviously he has no choice if a material contract emerges. I'd like the Company be a bit more active on the PR front (an Investor Meet presentation and Q&A for example) as there is a bit of vacuum on where things are heading with Structural Heart & Vascular. That said, it's not a bad thing for the board to be so driven on cost cutting as it strives to move into consistent profitability as quickly as possible.

Eventually there should be a significant re-rate for the benefit of the patient and, if it doesn't happen before, then it will play 'catch up' to fair value once a move to profitability is achieved - that's if the Company stays independent until then.

I sent in most of those questions and I am pleased with the replies. I particularly liked the answer to the following:

Q Can Harry confirm that in the event Saudi assets are sold for the valuation or more in the presentation ($80 an ounce) that, indeed, the Company does not anticipate any further placings before Tulu Kapi is operational with the proviso that it may keep that option open of the share price starts to reflect the NPV to a greater extent?

Kefi (HAA) replied : A: That is the intention.

--------

I envisage that they plan to sell the saudi assets but are leaving the option open for partnerships etc is probably a negotiating position - i.e we're only going to sell if we get top dollar. That said, no doubt a partnership or other approach will involve some cash and absolve Kefi of the requirement to fund further exploration.

In terms of cash going forward I think some of the money Kefi has already spent on TK minor works could be due to be reimbursed to the plc once funding is over the line. Kefi have confirmed they have tried to accelerate things where possible prior to formal funding flowing in.