Q&A9 Dec 2025 07:48
Follow-up questions to RNS dated 8 December 2025
Q: Do I understand correctly that KEFI has raised and spent about $100 million since its IPO 20 years ago, has a market cap of about $200 million is now raising over $300 million project finance debt and equity to retain 75% of a +$1 billion of net cash flow over the next 7 years assuming $3,000 gold?
A: That is a reasonable synopsis.
Q. Is this actually correct? Each US$10 million tranche is entitled to 3% of the gold produced from TKGM's mining licence until 30,000 oz of gold have been sold under the stream, after which the entitlement steps down to a right to buy 2% of the gold for the life of the mine. This gold is sold to streamers at 20% of prevailing market price.
So if you utilise the full $40 million the counterparty can purchase between 8% and 12% of gold for the life of the mine at 20% of market price?
That is like 12% dilution of the project!
A: The dilution impact is less than a share issue of that scale, but it is indeed dilutive in its own way. This is equity risk capital coming off the bottom of the cash flow after debt service. Therefore it is accordingly more expensive than a stream which ranks at the top of the cash waterfall. At the same time, it improves the IRR for shareholders. Ultimately, it is a matter of striking the best balance across the range of considerations.
Q. Congratulations on the progress made in light of the RNS shared today.
Further to the below, I note that there was no update on the expiry of the fixed lump sum costings. For clarity and to help answer my questions, in the Proactive investor interview dated 22nd October 2025, Kefi's executive chairman gave a thorough update, and stated:
"We triggered the design and construction contractor group called Lycopodium to set up the procurement because it’s a fixed price lump sum plant. And when you trigger them firming up the price you have to go within 60 days, that’s the deal, and that means around the end of November is the deadline... and we’re on a fuse now to launch”.
As I understand, the Lycopodium deadline has since passed. Given that changing costs present a moving target for finance completion, I believe that shareholders might benefit from understanding further clarity on whether:
Lycopodium construction costs remain fully fixed through to 31st of December; and what process would apply if they need to be renewed or re-certified?
A: The fixed costs have been locked in as a result of further negotiation.
Posted 09 December 2025
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