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Part two

KEFI, incorporated in 2006, began as an exploration company on the Arabian-Nubian Shield, with an initial public offering of 2.5 million euros on the Alternative Investment Market (AIM) of the London Stock Exchange. With two development-stage projects in Saudi Arabia (Hawiah and Jibal Qutman), over 93pc of the company's ownership stake is now in public hands.

The acquisition of Nyota Minerals Ltd, an Australian firm, for 5.2 million pounds sterling in 2014 marked a significant moment for KEFI. The acquisition gave them access to a concession estimated to contain nearly one million ounces of gold, equivalent to 30,000Kg. To date, KEFI has invested over 80 million dollars in pre-development in the country. More recently, an agreement was signed to increase the regional government's total equity to 30 million dollars.

A final financial commitment of 20 million dollars will go toward compensating hundreds of households due to be resettled in the project area, 28Km east of Ayra-Gulliso town in the Oromia Regional State. Company management stated that the process "will take up to three months so that there is no accusation of railroading the community."

Upon reaching full capacity, the Tulu Kapi Gold Mining project could be a game-changer for Ethiopia's mining industry. It is poised to become the largest industrial mining initiative in the country, producing up to 5,670Kg of gold annually from its open-pit and underground operations, expected to go full throttle by 2025. The country's other industrial-scale gold mining project, MIDROC Lega Dembi, has averaged about 4,000Kg in its most productive years, despite Ethiopia only producing 2,850Kg this year.

According to the Extractive Industries Transparency Initiative (EITI), a global standard for monitoring oil, gas, and mineral resources across 57 countries, Ethiopia's gold reserves are estimated at 200tns. Recent regulatory changes by the central bank have seen royalty fees for gold supplied by artisans rise to a record 55pc for every five kilograms. These royalty fees have brought in a significant 281.8 million Br in the first nine months of the fiscal year.

Industry experts emphasize the complexity and risk associated with mining projects.

Wondemagegn Gebreselassie, a seasoned expert in the mining sector, stated that economic, political, and geological factors that are difficult to predict could heavily influence the trajectory of mining projects. Many companies distribute risk among stakeholders in the industry to mitigate potential fallbacks.

"Mere proof of a deposit does not guarantee successful excavation," Gebresellasie told Fortune. "After years of exploration, reserves might be found in a spot that is inconvenient for immediate exploitation. It's looking for material buried underground, after all."

HtTps://addisfortune.news/authorities-open-doors-for-kefis-390m-gold-mine-amid-sweeping-regulatory-changes/

Authorities Open Doors for KEFI's $390m Gold Mine Amid Sweeping Regulatory Changes

KEFI Gold & Copper Plc, the London-based mining and exploration company, has received the green light to open an offshore account as it edges closer to commencing its ambitious 390 million dollars gold mining project in the Wellega Zone of the Oromia Regional State.

Offshore accounts are banking with a financial institution that is different from the jurisdictions where companies are incorporated. They simplify managing financial commitments across multiple countries and regions, enabling account holders to make or receive regular international payments and transfers.

This milestone follows a successful deal with regulators at the National Bank of Ethiopia (NBE), who cleared the way for the Tulu Kapi Gold Mining project's offshore account setup and a debt-to-equity convertibility scheme.

"Recognising the strategic importance of Public-Private-Partnership projects, we are enabling the opening of an offshore account," said Fikadu Digafe, the central bank's vice governor.

This development comes as Ethiopia becomes the 40th member of the African Finance Corporation (AFC), a move designed to reduce the cost of debt financing and mobilise global capital. The AFC, a significant creditor in the Tulu Kapi project, is joined by the Eastern and Southern African Trade & Development banks to provide 190 million dollar in debt financing.

Initially formalized in April 2015, the Tulu Kapi Mining contract offered KEFI a 20-year mining concession and a five percent free-carry interest to the government. However, the project suffered a setback following a two-year suspension when four staff members were abducted. Officials of the Ministry of Mines cited the ongoing security crisis in the region as the main reason for not imposing administrative actions on the Company, even in light of the extended exploration period and schedule adjustments.

"They would have been producing by now if there was peace," Tsehay Mulugeta, head of legal affairs at the Ministry, regretfully acknowledged.

Mining officials disclosed that permanent security has been deployed near Tulu Kapi gold mining project.

The mining sector in Ethiopia has undergone significant legal changes, such as eliminating the special small-scale mining classification deemed environmentally hazardous. These changes, coupled with limits on the quantity of gold submitted to the central bank, signal a more stringent regulatory environment for miners.

However, according to the Company's June annual report, new policies issued by federal agencies have "removed various obstacles to financing." Harry Anagnostaras-Adams, KEFI's executive chairman, expressed his gratitude to the restructured administration at the Ministry for its dedication to the mining sector.

Think you just have to dig through his replies for the relevant bits add them to what we already know sometimes to fully understand what is going on Fantasy.

Of course there will always be those that just want the kefi to fail anyway for whatever motive.

htTps://roughlydaily.com/2019/01/01/it-is-not-enough-that-i-succeed-others-must-fail/

Its funny people banging the table demanding answers from Harry then when he gives them he should just shut up. I did notice when I started a thread for people to copy questions that they were going to ask harry here there was not a single reply.

Fantasy you have to get past Harry being Harry he will waffle go of in tangents and repeat himself if I had posted the whole webinar word for word you would be looking at twenty posts.

As for share price recovering ordinary shareholders here probably have more idea harry was just trying to answer it as best he could. It’s a bit random anyway as random events could boost it, say gold price suddenly spiking on the BRICSs nations undermining the dollar, Taiwan conflict, banking crises, anyone here like to predict the precise time those events might happen?

As for kefi SP related boosts, sign off from boards in the consortium, favourable feedback from the Ethiopians maybe something from the mining mister, good JQ results, a perception that the recent SP slide was over done, news on Ethiopian or local company investment over the five percent, maybe national government investment after money from the IMF, interest sparks after JV get new big licence area there are plenty of potential boosts but unless you have a crystal ball or some kind of genius you are going to find it hard to pinpoint a precise date and how big a boost.

As for the five percent concerns are just over done, mining through Harrys reply

but we have people at the table who want it who are not in the public domain (not known to us)

and in the stock market

we will raise it if we need to

The last five percent could come in from warrants

or we raise it down in the subsidiary fine

He missed out one of the consortium partners could take it up or National government

All that’s why he said it was easy as it should be easy.

Https://www.youtube.com/watch?v=N2QRsQH4V-4 webinar now on you tube.

clearly gold and minerals (the kefi artar joint venture) would be an absolute natural to be one of the first candidates for a saudi listing of a pre production company there are only two mining companies listed in saudi both of them in production. clearly gold and mineral because of its stature and its position in the country would be a good candidate but that has not be resolved by the joint venture.

kefi is a different matter is not a saudi focused company it’s a arabian nubian shield company. so we are still working through with the various exchanges to get our best choices.so the concept of looking at other exchanges to complement aim is something we do do but we are not preoccupied with it. it is also fair to say the saudi market has exploded with interest with this sector we will do something in saudi but its partly a joint venture decision partly our decision the most important thing is to get the show on the road on these projects not spend on a stock exchange listing but we are working through it there will be an answer but it is not today's priority.

(harry closing comments)

from our point of view all i can say is i thank my colleagues and listing to all this (maybe let them talk next time) but also i take to heart the criticisms that we have been over optimistic in the past, i accept we did not predict the trails and tribulations we would be put through in either country's. all i can really say is doing what we do in frontier markets make the caveats published very important to read. it is real risk management not just **** covering compliance statement.

i feel blessed with the loyalty and support we get internally from teams of people on the ground.

i am very proud of them and that is what builds a company and we are building a company a serious company in a very prospective part of the world that the whole world is waking up to finally and we are in a leadership position. so finally we are starting to be doing the real work so we are excited and exhilarated. we have lots of challenges lots of hurdles to jump but nothing compared to what we have done in my opinion.

those of you that have lasted the distance i greatly appreciate your patience (ditto) those of you that did not realize it was so tough and so risky i respect your opinions also. its very important to understand the upsides and the downsides to these situations and i can only say we live and understand it…we could do a better job of communicating at times but we do our best and thank you (shareholders) for all your support, thank you.

Can you explain anymore the five million legal claim stated in the annual accounts?

(Harry) Anywhere in the world when gold is mentioned and a mining project is about to take off with claims and objections and demands all sorts of things its not exactly something new that has happened in Ethiopia form various quarters and one of those quarters has ended up in litigation. it happens everywhere.

There was mention of and EGM to allow shareholders to vote on various parts of the financing in June when is this expected?

(Harry) when we foreshadowed that we expected to have to raise a hell of a lot of capital from the stock market but now it does not look like it will be necessary (!!!).

Why have you only accepted discounted shares and not shown your faith in kefi prospects by buying shares?

(Harry) to say I claim faith in kefi prospects is a little bit below the belt. I have spent most of the last ten years in Ethiopia. The executives and myself are not in the business of trading the shares. the fact that I have accepted shares as payment is showing my faith in the company.

Following the Hawiah RNS following your first PFS estimates please can you tell us who did this work also how the are going to process the oxide and transitional ore it is not made clear and it should be?

(Harry) not what your are referring to talking about an independent party unless you are talking about the MRE which was MSA.. please send to the info line what you are referring to. The question about metallurgical testing its early days Hawaih DFS is not expected to be completed till the end of next year The present testing has lead to the results which we have reported. It does not look like it will be anything exotic it look like it will be a fairly conventional concentrator approach to first the copper and then the Zinc.

Are you able to disclose the timeline for the all weather road construction?

(Harry) the all weather road construction is..referring to… there is a bituman high way out from the capital out to south Sudan and at the moment you turn off near a place called Gimbi we do not need a new road to get to the site and get gear to the site we want a new road for efficiency convenience and safety. So its not a critical part it will be done between wet seasons.

(Harry)

Its being considered and we are talking with different stock exchanges in different jurisdictions. The thing that observers notice and we noticed was part of the surge of interest in Saudi Arabia in this sector…was also to do with the capital markets being opened up for this sector. The government has made various broad sweeping statements that they want to do that. So we have been discussing it there (in and with the Saudis) the merits of a listing in Saudi Arabia and its fair to say the authorities are still getting their own heads around it. They know what the want to do but have not thought through all the how to do it stuff.

Are you aware of contractors recently been paid in shares so that there is such heavy selling unless someone knows something that shareholders are not aware of?

(Harry) We did not pay any contractors in shares it was only senior executives that have been paid in shares rather than calling for cash from the company so we have been putting our money where our mouth is.

How many employees are on gardening leave waiting on TK certainty pleas explain how all this works and is kefi still actively recruiting?

(Harry) there is no one involved with the company that is not working flat out.

With each step forward of the financing process there seem to be other steps that appear that need to be completed not highlighted originally in hindsight were predictions of timelines over optimistic?

(Harry) with the benefit of hindsight yes. We failed to predict the turmoil in the country yes.

Are you now hopeful that TK development capital can be funded at project level only sp if the warrants get exercised they can be used for general running costs and for Jibal Qutman financing?

(Harry) yes.

With the numbers involved with resettlement is it realistic this will be achieved before construction that is due to start in October?

(Harry) we are not proposing or expecting to do all of it in one go we are breaking it down into phases and those phases are around clearing the areas as when needed. will be done in phases throughout construction).

Do we still hold the exploration rights for the areas around TK?

(Harry) Technically not yet confirmed, orally and morally promised to us but we have to tie it up with confirmations of tenure before we release funds (areas were promised to Kefi on launch of TK. On a practical level would the Ethiopians support anything the ex mining minster was up to and stuff up the perception of their mining industry worldwide)

Please can you tell us the monetary cost of the drilling that triggered the 3.2 percent in the Saudi joint venture and is it the true minimum that share that kefi can reduce to is twenty five percent then we face being kicked out of the agreement?

(Harry) I will start with the last bit first we do not get kicked out of anything we get bought out at fair value. The question was how much money was spent on drilling cost I think we spent around nine million pounds if nine million pounds for someone that holds twenty seven percent that means that seventy three percent is the Pari-Passu equivalent of that and then you could deduce then how much money then was not contributed that led to that dilution.

You stated that TK project is now flying how much is down to the replacement of the previous minister of mines?

(harry) Its been important as clearly the previous minster was not as aligned as the he should have been with us and the new minster is the government is completely aligned now and I think the evidence is there..

Q and A sectoin

I am obviously wondering what it takes for kefi shares to take off?

(Harry) I would say it is unusual for metal prices to be buoyant while the mining index to be so weak (at the same time) We are I think more or less financed so we are away we might have work to do but we are away. What happens in the stock market there is a good chance that the cycle will turn (metal and mining sector).

If you could tell us how the team has changed and how it is changing?

(Harry) We have been changing the team out from planning and permitting to hands on drivers of developments and operations a handful of leaders in both countries. Things will keep changing as the company moves into development and production.

What if the shareholders do not keep funding the take up in Saudi Arabia?

(Harry) the challenge for kefi is to keep up with a wonderful take off.. if you paint the worst picture it would trigger a take out at fair value and we would walk away after being paid out for our interest under the arrangement of the joint venture

Is the twenty million dollars mentioned in a previous Q and A..?

(Harry) The questioner is homing on the finishing off jobs we have got now (to do) chairman's statement this morning and the slide show. Over the next few months as we work through these things so one can see them happen. We are what I would call the home stretch of signing off and going forward.

The hardest stuff has been done this is an exploration company that is changing into a development company it has arranged 95 percent of the finance for development and its going to be the last piece when we close it. I cannot promise you how exactly how it will be structured but we have people at the table who want it who are not in the public domain (not known to us) and in the stock market and we will raise it if we need to I cannot promise we wont but its less than five percent of the total package.

The last five percent could come in from warrants and its not needed fine or we raise it done in the subsidiary fine we use it for other purposes. the Ethiopian business community is very very supportive.

The news the other day of the central bank granting exemptions for the first time for international banking is hot news in Ethiopia investment community of Ethiopia .. In fact I was staggered the other day that the total finance package for TK in Ethiopia that we raised is bigger than than the total fund raisings on Aim stock market in the last twelve months. it is an easy job to do. Easy to compared to the first ninety five percent.

Q. As the company will be very busy could the company provide a weekly or fortnightly update on what has been achieved to keep the shareholders aware of all steps forward.

(Harry) Materiel news we have to report I can only report as news occurs so to speak.

Part two

(Current project status 2023 plans for TK gold slide) we have just cleared what we regard as the three critical hurdles with the government for the money to flow..(African bank organisation) go far beyond just this negotiation. Required parliament and (the) corporate (was pretty major for Ethiopia to join one of the big banks that is funding TK think it kind of went over the heads of most shareholders).

Secondly we needed to keep our word that we would treat this zone as a red zone area from a security point of view, even though its not a red zone area all of the time its usually green or amber but we gave our word as we would treat its as a red zone area to protect people property and capital.

The last one (hurdle) was capital control.. That allows us to submit submissions to final board approval that’s now happening (see slide to see where kefi is at and what left to do). That leads on to getting on the ground and opening up the household discussions (resettlement) and briefings updates and resolution of their compensation.

Country backing us to get going because it’s a critically important project (to Ethiopia). So the milestones are that we are into final credit and board approval processes and we have our hands full mobilizing into the field and all kinds of other things to trigger the funds draw down early in the fourth quarter if everything goes to according to plan.

(Project status and 2023 plans Saudi Arabia slide) over in the KSA we have these less advanced projects they are still jumping around in concept definition on how to set them out. We are still finessing the projects but its clear to us that the metal in the ground and the scale of the projects and their expected growth is such that we will be developing them

End of presentation section next Q and A

Had to cut this down as it was 16 pages but think i have the gist of everything.

part one

Start of webinar) slide of TK on screen (my comments in brackets will try to highlight the important titbits will cut most of the fat to focus on the highlgths other wise would be very long)

(Harry) good morning.. We have had the AGM formal meeting there are still a number of people in the room from that meeting. All the resolutions were passed .

We are having multiple meeting because everyone is here but I will just introduce you to… That’s the Non executives of the board. Also in the room you cannot see them are the executive directors John leech, Eddie Solbrant. We also have other friends and people in the audience including from Ethiopia and Cyprus (Ethiopia) and the head office financial team is here as well.

(Presentation. Slide one) that's TK (History lesson)…then Arabian Nubian shield slide. We have made three discoveries and we are amongst the leaders in both Saudi and Ethiopia. Now looking at the names there that the tide has turned Barrick, Newmont and Ivanhoe. The regularity regime of both countries and the political support of both countries towards supporting mining has radically changed to support mining in the latest 18 months.

(Moving into production slide)A fairly classic Australian style open pit underground CIL gold project.

(Nubian shield slide) Over in Saudi Arabia less advanced projects that are coming on we are confident that they will come to fruition.

(NPV slide) One can spend a whole evening debating the relevance of NPV show to calculate it and discount rates and whatever.We are not saying that the company should be valued at the (total) NPV today what we are saying it is one measuring stick that show where you are heading if you completely de risk and get into production.

(consortium structure slide)

So what we do is finance at the project or subsidiary level by very highly (complicated but) understood international practices that have never been done before in Ethiopia and being applied for the first time in Saudi. At the same time as upheaval in the country we had to negotiate a whole range of things with the government in order from that to go forward. As a result of which we the capital we have assembled for TK will deploy subject to documentation with the fine print reflecting what we have agreed with the government…

The reality is we could not start the project till it was safe to do so and till the regulations permitted it in the way that the syndicate demanded.

(kefi cash flows to debt vs Equity at gold price slide) because of TK grade in particular..its basically showing cash flow to debt servicing at different gold prices compared with the cash flow (required to debt service). It’s a very healthy coverage (cash flow easily covers the debt see slide). We are relying on finance at the project level that why we are making sure adequate cash flow.

The 20 million was talked about in response to one of the questions i assume you missed the webinar . I have just finished the transcript just now but too long to just post up her so i will cut it down a bit then post it.

Working on a proper transcript but will not have it finished till after market closed personally a lot happier than I was pre webinar and Harry did try to answer the questions.

Well it was one of Harrys it is what it presentations but what it is that things are steadily getting done and goals reached. Sorry if that disappoints the usual suspects.

Five minutes to webinar.

Tayaramecanici the year and beyond refers to what the company direction will be in the next year so includes TK JQ Hawiah and Jibal Qutman where we should get an update in the next couple of weeks.

Just inaccurate to say nothing is expected this year and that's not what the company is saying.

Sign the definitive documentation between the respective syndicate counterparties, which has already been drafted

Once everybody signs up the rest is just the normal process and most of the back and forth would have been around getting the drafting right.

https://www.***************************/kefi-gold-and-copper-a-profound-change-over-the-18-months/4121123049

in april 2023 we signed the final umbrella agreement, which formally enjoined the principal project contractors to the launch plan. we also proceeded to satisfy all three major conditions precedent for the project financing in june 2023, which were reliant on policy initiatives from the ethiopian authorities

· we are now working concurrently through finance closing launch procedures by having activated the following:

o formal confirmations of the details of regulatory changes made for us,

o submissions for final board and committee approval by all within the syndicate

· we can then proceed to:

o launch final preparations of the community for project launch

o sign the definitive documentation between the respective syndicate counterparties, which has already been drafted

o place insurances and complete other administrative tasks

o draw down first capital, starting with project equity and then debt months later

tulu kapi is one of kefi’s three advanced projects, the other two being jibal qutman gold (“jibal qutman”) and hawiah copper-gold (“hawiah”) in saudi arabia, conducted via the 27%-owned gold and minerals limited (“gmco”) operating company.

we have just announced a pre-feasibility study and associated studies at hawiah, which has offered an encouraging initial project npv of us$301 million. these results are preliminary and warrant refinement on all fronts, including resource upgrade, metallurgical testing, mine planning and process flow-sheet finalization. significant upside remains as we expand the resource,

at jibal qutman we will shortly be reporting results on our recent 13,000m drilling programme, which has been designed to increase both resource and resource classification. this will provide significant input into optimizing the development concept so that we may finalise the definitive feasibility study.

the npv to kefi of the three advanced projects is estimated at £318 million (calculated as set out above for tulu kapi) which is c. 10 times the company’s current share market capitalisation. this is admittedly just one basis for estimate of intrinsic valuation as the projects are firmed up and implemented. however, it is a meaningful indicator that there is plenty of scope for share price rerating as the projects progress and de-risk.

Https://foreignpolicy.com/2023/06/29/ethiopia-tigray-war-human-rights-violations-designation-biden-us-government/

The Biden administration has quietly informed Congress that as far as it is concerned, Ethiopia is no longer engaging in a “pattern of gross violations of human rights,” lifting a legal designation that will pave the way to resume the dispatch of U.S. and international economic aid to the East African country, according to an internal U.S. Treasury Department notification and officials familiar with the matter.

With the Biden administration’s new notification that gross human rights violations are no longer occurring in Ethiopia, Washington can begin turning back on the taps of direct U.S. economic assistance to Addis Ababa and also unblock major International Monetary Fund (IMF) programs to help Ethiopia’s shaky economy by potentially covering gaps in government funding and reworking its ballooning government debt.

https://www.reuters.com/world/ethiopia-asks-join-brics-bloc-emerging-economies-2023-06-29/

June 29 (Reuters) - Ethiopia, one of Africa's fastest-growing economies, has asked to join the BRICS bloc of emerging markets, the foreign ministry said on Thursday.

htTps://www.zerohedge.com/news/2023-06-28/why-we-could-easily-see-5000-gold

htTps://www.zerohedge.com/commodities/another-top-miner-predicts-copper-super-cycle-amid-supply-shortage-fears-trigger-energy