Member Info for NickE

A delayed buy of 150,000 listed after close at 13.5 which bodes well but I assume there will be a delayed sell to balance the extensive buying today. Such an appealing risk/reward stock and a firm buy and hold for me. Aside from positive developments with the MTA (assumed with Edwards ) any further signs the Company is moving towards profitability surely deserves a minimum £30m m/cap or 50p valuation.

Well done to TW for finally getting some clarity from HAA on the second bank sign-off from HAA:-

So, no second bank sign off in May - a site visit by the second bank followed by site visits for each of the next three months is part of the process to satisfy them.

HAA told Tom that It has been decided getting it in writing could take two or three more months as it did with the lead bank from the informal positive feedback. But all parties decided to proceed to keep things on track with the lead bank supporting early works. When he says all parties I assume this includes the second bank but with HAA it’s not always clear.

HAA says there is a plan B in the unlikely event the second bank doesn’t sign off. So two or three more months seems to be the timescale projection and it’s now more likely August/Sept for second bank sign off.

It's not HAA's fault that the second bank have been awkward but he has been a bit slippery with communications given he was emphatic in an RNS and elsewhere that the second bank would conclude formal sign-off in May. It was depicted as due diligence done and a mere formality for the credit committee to sign-off following a May site meeting which was misleading.

HAA emphasised in the Investor Meet presentation that Kefi were trying to be as transparent as possible but with regard to the second bank he's been found wanting regarding transparency. So if he wants this claim to be transparent to have validity I'd like him to tell investors his plan B for financing the project in the unlikely event the second bank doesn't come through. I'd also like him to give more detail on the expressions of interest for TK. Does this relate to financing if the second bank doesn't sign off?

I don't think the lead bank would allow the project to commence unless they perceived full financing would come through i.e the second bank loan sign-off. Regardless, HAA mentioned they were being completely transparent and in this instance they haven't as he specifically stated in an RNS, to Tom Winnifrith and elsewhere very emphatically that formal approval would come through in May. It shouldn't have taken TW's persistence to get a clear update that this isn’t the case.

Regardless, I'd say it's reassuring that both the lead bank and the Ethiopian Govt were happy for early works to commence. It seems security is the crux here and my guess is that the second bank want to see the new security measures tested without any incident and if that transpires all will be well and duly signed off before October and hopefully much earlier.

As TW states Kefi is still worth a multiple of the current price if this proceeds as anticipated.

I agree it is a hidden gem. Couldn't agree more that the stocks to look for are those with no funding needs and either in profitability or moving towards profitable status.

With RUA there is the bonus of diversity and four separate businesses with two of the four 'strands' already profitable and a potential licensing deal or even a takeover with the 'partner' (I assume Edwards) as they reference the global Heart Valve company if the MTA Agreement progresses to some kind of commercial outcome.

Edwards has a m/cap of $54 billion so (if they are the partner) I assume they would buy RUA rather than negotiate a licensing deal. I don't know what they would pay but I assume between £50m upwards. That's the blue sky angle but the cash held and the steady move to profitability and prudent preservation of cash makes this an appealing hold.

No doubt it's tested the patience of long-term holders and maybe more patience is needed but it's far from pie in the sky to suggest that the end result could be a share price of around 80p to 100p or circa £50m to £60m m/cap.

Just for clarity the trades at 11.45 were buys.

Interesting phrasing and could relate to advising on a potential farm-in. Harry has already flagged up expressions of interest for TK.

"in consideration for their services to support various value-adding initiatives which now need to be addressed following yesterday's launch of the Early Works Programme at the Company's Tulu Kapi Gold Project in Ethiopia."

Very good bearcast by Tom Winnifrith.

As previously announced, Kefi have received expressions of interests for involvement in Tulu Kapi. TW obviously doesn't know for sure but he was an insider and has good communications with HAA. He reckons there is a high likelihood of a farm in for say 40% of Tulu Kapi for say £60m or higher at some stage this year. That would mean cash of £60m plus a valuation of the remaining 40% of Kefi's stake in TK of another £60m or more. So £120m value prior to production for TK plus Saudi and the cash to accelerate and expand in Saudi without placings. In short, if this happens, as appears highly likely, then there is the prospect of a share price between 2.5p to 3p this year based on cash received and the value of the remaining stake plus Saudi. Obviously this can be impacted by the gold price as well. He also indicated there is likely to be further Saudi news coming reasonably soon as well.

Given the strength in the gold price and the attractiveness of Kefi's assets I could see an early outright bid as well. I don't think HAA would seek or encourage this as he probably wants to see this through to production and as TW points out he is respected in Ethiopia and he may feel some loyalty and responsibility to see this through. The fact is that he might not get the choice if a reasonable bid comes in. Aside from the interest detailed in the RNS about TK interest he's already said in a previous webinar that he is getting plenty of approaches from all sorts of parties at various conferences in Saudi.

TW didn't perceive the departure of the non-exec as a concern. Just a general bearish view regarding cash running out in H1 next year and a perception that the £1m raised was to satisfy auditors for the year. Tom's view has to be taken in the context that he doesn't like blue sky techs that lose money for an extended period - 20 plus years in the case of BIRD so he has a point.

He doesn't believe elevate will succeed but that has to be balanced by the consensus view of video editing experts that BIRD's tech is superior and usually superior technology is acquired. That said, I wish they would get a move on with adding more features to the product and reachi the stage where elevate can go premium.

You'll have to subscribe to TW's site to get the full take on todays RNS but Tom is very bullish on prospects.

He confirmed there was a credit committee meeting last Thursday when everything was signed off bar the formality of credit committee approval which, as the RNS stated, will come this month.

There is a key point in the RNS about external interest in either additional potential JV projects in Ethiopia or in TK itself - i.e farm-in interest. This is why Kefi's increase in equity in the project is so exciting. It allows for a decent chunk to be released via a farm-in and for Kefi still to retain a majority stake.

Tom says a farm-in would "give Kefi “a massive, massive inflow of near-term cash into its balance sheet.” I wonder how much reducing to say 55% would bring in giving a farm-in partner a 25% stake.

It sounds like it would be the end of all future placings. It would fund, accelerate and expand Saudi exploration as well. I think this has been Harry's plan for some time and probably explains why ARTAR have agreed to carry Kefi's exploration costs for the time being in Saudi.

I don't doubt the formal announcement of the second bank sign-off will bring a decent re-rating but a farm-in with a slug of cash on Kefi's balance sheet could bring an even bigger uplift.

Very compelling risk/reward here as it's been flagged up what is going to happen but Kefi has lost a lot of credibility with private investors many of whom have invested at higher levels and are understandably questioning. As TW points out the nomad will have seen all the back and forth correspondence exchanged between the banks and Kefi so the announcement that it will happen this month really does have credence.

Should get more updates on the 15th and 16th May if not the actual awaited May sign-off news .

HAA in London presenting:-

https://www.weare121.com/121mininginvestment-london/kefi-gold-and-copper/

I am confident the sign-off this month will happen as stated in the RNS as the announcement clarifies the reason it's taken this long. It's been the dedicated 24/7 security to the satisfaction of all parties and this, finally, appears to have been achieved. HAA mentions other projects in Ethiopia and the security solution as previously mentioned in a Proactive interview was a specialist military police unit specifically for mining projects in Ethiopia.

“Preparing for a safe construction programme at Tulu Kapi:

· dedicated policing has been formed for permanent presence around Tulu Kapi and the other strategic mining projects, reporting to the Prime Ministry to ensure safe working conditions for the community and any parties brought to site by the Company;

·our arrangement is being formalised and signed off to satisfy all stakeholders of the commitment to safety and international standards by Government and the Project syndicate;… these commitments have allowed the syndicate parties to advance their processes and remain on track for completing final approvals this month, May 2024”

Thanks stringer and good luck to you and all holders.

It is potentially, at long last, looking as if things could come together nicely reasonably soon with the job ads adding weight to the likely timescales of the end of May given by HAA in his Proactive interview. There should be Saudi updates as well.

Here's another job listed and advertised on the 19th April that I don't think was in the list in one of the posts earlier - it's the key job of Project Manager for construction of the mine as well:-

https://ethio-jobs.net.et/vacancy-detail.php?id=3923

Job Purpose

Responsible for in-country activities related to the Tulu Kapi Process Plant, Accommodation Village, supporting infrastructure and dams, including the oversight, and quality assurance of construction activities manage by others on behalf of Tulu Kapi Gold Mine.

Responsibilities and Accountabilities

Responsible for all construction activities on Tulu Kapi site, including the oversight of the construction and construction supervision of the Tulu Kapi Village, Process Plant Area, Main Services Area, Mining Services Area, supporting infrastructure and dams managed by others.

Hi Stringer, a few variables will come into play - including the gold price, volume of trading, stale bulls selling and the remaining warrants. The latter matter might hold it back as a proportion will sell at say 1.8p to 2p to raise funds to exercise 1.6p warrants if Kefi starts to trade around that level. At 2p it would still only be about 30% of an NPV that is artificially low given Saudi assets for some reason have only been valued at a gold price of US$1,650/oz. We know as well that the Saudi resource is set for an increase and plenty of scope for TK uplifts.

Going forward there are other share price drivers - junior miners may well come off a decade of depressed levels and Kefi plans to list on the planned Ethiopia stock market. A Saudi listing would have dictated the price rather than AIM so it is a pity that's not planned just yet. It's more uncertain with the Ethiopian listing but there will be relatively few listed stocks and a fair amount of cash looking to invest so that could bring a pleasant surprise.

In short, it could trade above 2p short-term but there will be headwinds and holders will have to consider whether to take the money, hold for a takeover or re-rating after short-term trading settles at say 3p to 4p or hold even longer term for a potential double-digit share price. I think what we can say is that it will be the most significant news in the Company's history and the share price should reflect that very positively.

Https://www.weare121.com/121mininginvestment-london/kefi-gold-and-copper/

Kefi attending this on the 15th and 16th May Q & A confirms the anticipated timescales flagged up for funding completion.

"Estimated potential Net Operating Cash Flow (1) £137M (c. US$185M) per annum from the 3 development projects"

"KEFI targets becoming a mid-tier producer with 3 projects in production by 2026, at a net production rate of 187Koz gold equivalent (155Koz of gold)"

"What are your key goals for the next 3, 6 and 12 months?

3 Months:

Closing project finance for first development project and, in the meantime, reporting steady progress across all projects.

6 Months:

Starting construction of the first development project and, in the meantime reporting the grant of a second mining licence, the expansion of resources and the scheduled progress on development studies for projects 2 and 3

12 Months:

Scheduled construction progress in Ethiopia, the expansion of resources and the scheduled progress on development studies for projects 2 and 3"

The job ads bode well and HAA couldn't have been clearer that all their internal protocols were indicative of full sign-off by the second bank and associated documents by the end of May. He also said he would issue updates along the way during May before including an update on Saudi. The discount to the £348m NPV should close significantly on finding sign-off. There will be plenty of trading but I suspect the share price will eventually settle close to 2p and a circa £120m m/cap. Kefi is then a potential takeover candidate. HAA hinted at this acknowledging that the African junior mining has consolidated from 24 companies to just 12 currently.

Shorter link rather than the Google search link:-

https://www.africafc.org/news-and-insights/news/ethiopia-becomes-africa-finance-corporations-40th-member-state

This has gone under the radar but it looks like a very positive development in the context of the second bank (Africa Finance Corporation) signing off on the TK funding. AFC states that Ethiopia has become AFC's 40th member state and references "a $300m pipeline of projects ...including mining."

"Addis Ababa, 3rd April 2023 – Africa Finance Corporation, the continent’s leading infrastructure solutions provider, today announces Ethiopia as its 40th member state ....

AFC has already identified a US$300 million pipeline of projects to capture value from Ethiopia’s metal and mineral exports and bring jobs in catalytic sectors including power, renewable energy, logistics, telecommunications and mining, advancing the country’s position as one of Africa's fastest-growing economies.... We are committed to working closely with the Ethiopian government and stakeholders to develop and finance integrated ecosystem projects that support the country’s vision for rapid and sustainable economic growth.”

https://www.google.com/search?q=ethiopia++imf+loan+africa+finance+corporation&sca_esv=6b1c5e95a3d0b06b&ei=9okhZrnPC9SThbIPxcaeoA4&ved=0ahUKEwi5ooOb1MyFAxXUSUEAHUWjB-QQ4dUDCBA&uact=5&oq=ethiopia++imf+loan+africa+finance+corporation&gs_lp=Egxnd3Mtd2l6LXNlcnAaAhgCIi1ldGhpb3BpYSAgaW1mIGxvYW4gYWZyaWNhIGZpbmFuY2UgY29ycG9yYXRpb24yCBAAGIAEGKIEMggQABiABBiiBDIIEAAYgAQYogQyCBAAGIAEGKIESPqjAVCACVjNngFwAHgBkAEAmAHpAaABlCCqAQcyNi4xMC4zuAEDyAEA-AEBmAInoAKJIMICBBAAGEfCAhQQABiABBiRAhimAxioAxiKBRiLA8ICDhAAGIAEGJECGIoFGIsDwgIdEC4YgAQYkQIY0QMY0gMYpgMYxwEYqAMYigUYiwPCAggQABiABBiLA8ICERAuGIAEGKIFGKgDGIsDGJ0DwgIOEC4YgAQYqAMYiwMYnQPCAgsQLhiABBiRAhiKBcICBRAAGIAEwgIaEC4YgAQYkQIYigUYlwUY3AQY3gQY4ATYAQHCAgYQABgWGB7CAgoQABgWGAoYHhgPwgIFECEYoAHCAgUQIRifBcICBxAhGKABGAqYAwCIBgGQBgi6BgYIARABGBSSBwcyNS4xMS4zoAex8AE&sclient=gws-wiz-serp

Https://www.proactiveinvestors.co.uk/companies/news/1045172/kefi-chair-says-stars-are-aligning-with-gold-at-2-400-1045172.html

One of the best interviews Harry has done and full of specific and positive content. Focused on the gold price and junior mining index which was interesting in itself. Highlighted that in 2011 when Gold was at record lows the index was at record highs at 700 now it is at record lows (40) when the gold price is at a record high. As he says it's lagging but inevitably will play catch up and when it pops it will do so significantly.

Updates on TK and Saudi flagged up for this month and next month, expected full docs sign off by end of May for TK (internal processes showing it’s all on track) and confirmation there is now a specialist police force permanently assigned to maintain security for mining projects including TK.

Seems to suggest Saudi resources have been expanded from recent drilling. We’ll hear more this month on that and they are of course getting closer to producing an NPV for the Saudi assets which will be a trigger in itself for a KEfi re-rate.

He made the point that the producers will be throwing off cash and looking for acquisitions. It was clear that he was implying with gold at its current price and trend that Kefi is very much in play. Or more accurately it will be when TK funding is signed off. That comment in this interview ties in with his aside in the Investor Meet presentation where he said he was regularly being approached by people at Saudi conferences making all sorts of offers.

Impressive CV FiveCandles. Due to your modesty, many readers won't know that aside from your business career, you worked as an astronaut and nuclear physicist after an illustrious footballing career with Barcelona. How you managed to translate the complete works of Shakespeare into Swahili during one of your rare weekends off I'll never know.

Moving swiftly on, for what it's worth TW exchanged emails with HAA on Monday evening and, whilst he is not inside, he is completely relaxed about Kefi. He added that if there were any changes to the RNS released on 25th March (extract below) there would have to be an announcement and, as there hasn't been, then everything can be assumed to be on track:-

"I can also advise the Company has received confirmation from the co-lender Africa Finance Corporation ("AFC") that its approval processes are underway and progressing well for its-intended US$95 million investment, which would provide the balance of the required funding for Project launch”

Fivecandles, from posting about an imminent takeover at 3 or 4p it's now down and gloom. For the last two weeks or so you have sounded like someone who had a short-term trade or spread bet and needed a takeover within a two-week timeframe before possible forced closure. Sorry if that's that's the case and you have had to close but the bi-polar posts are transparent.

It is frustrating but I am sure the patient will be rewarded and TK will get funding. As HAA pointed out the banks stayed with the project throughout the civil war and if they did that in the very worst of times they are not going to back out now with relative peace, a liberalising of the economy, prospects of an IMF loan being sorted this month and an increasingly strong gold price. And yes, there is the prospect of a takeover as well but not until TK funding is sorted..

Yes, the second bank is being annoyingly slow. HAA referred in the recent Investor Meet presentation to an agreement with the Ethiopian Govt to provide permanent security around TK even though it is not a red zone. He said they have found a solution to the issue in response to the banks' preferences. He also added he was being "very frank as it is a sensitive topic and you'll hear about it (the revised security arrangements) very soon. " If finalising this development is the reason for the delay, and there is a good chance it is, then approval from the second bank shouldn't be far away and Kefi's share price will start to reflect the NPV more accurately.

HAA mentioned before that normally pre- production companies trade at an average of 44% of NPV. That would put Kef around 3p and a fair bit more once they get the feasibility study done for the Saudi resources and obviously after TK funding is over the line. I don't expect a jump to 3p immediately on funding news but after trading settles down I think it will head there in the coming months and the prospect of a takeover will also drive the price along with the backdrop of the gold price. In short, the patient should be rewarded.

I assume the update HAA flagged up in the RNS release on 19th Feb. as due in the last quarter will be imminent. As he said in the Investor Meet presentation, the Saudi assets will dwarf those of TK.

Ethiopia finally moving towards getting its finances sorted:-

https://www.mofed.gov.et/blog/ethiopia-signs-172-billion-usd-financing-agreements-with-the-world-bank/