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Post dilution update by Hot Stock Rockets
KEFI Minerals* (LSE:KEFI) “is pleased to advise… the subscription agreement into the project company, Tulu Kapi Gold Mines Share Company was duly executed by ANS Mining Share Company on Sunday 5 January… The existing TKGM shareholders, KEFI and the Ethiopian Government, have also approved the issue of TKGM shares to ANS Mining”. A further step towards a “first modern mine development in Ethiopia”…
That is with the agreement including a first tranche of funding from ANS Mining of $9.5 million (Ethiopian Birr equivalent) this month to “commence phase one of the community resettlement, trigger debt implementation and detail the final procurement and contractual arrangements with the principal project contractors… The proposed project and financing timetable… is for the first six months of development to be funded by way of equity investment at the TKGM level by the project partners, beginning in January 2020, with full finance close and bank loan drawdown planned for mid-2020”.
There remains clear risk there – and indeed the funds now due this month are still “following the completion of certain procedural matters”. However, KEFI emphasises at current $1,540/oz gold and with it having already invested nearly all of its expected contribution to the project equity, the Net Present Value of its interest based on a definitive feasibility study view of the open pit and underground mine preliminary economic assessment is circa £125 million – that also not including potential exploration upside both in Ethiopia and in Saudi Arabia.
The shares have responded higher, to a current 1.6p – capitalising the company at sub £21 million. We continue to look for the gap between the noted values to close as mine development progress is made and to view the potential reward versus the risk as attractive – with currently even a 7p share price a more than 25% discount to the even above-stated NPV, our stance presently certainly remains buy.
DVH
Previously funds were to be released in JAN
Now we have meeting in the middle of FEB with two week lead in time that is apparently a necessary part of the 'procedural matters', but not previously mentioned
For me this reads as a delay with the meeting designed to resolve
Hopefully the meeting will achieve this
Sorry if this has already been posted
That is with the agreement including a first tranche of funding from ANS Mining of $9.5 million (Ethiopian Birr equivalent) this month to “commence phase one of the community resettlement, trigger debt implementation and detail the final procurement and contractual arrangements with the principal project contractors… The proposed project and financing timetable… is for the first six months of development to be funded by way of equity investment at the TKGM level by the project partners, beginning in January 2020, with full finance close and bank loan drawdown planned for mid-2020”.
There remains clear risk there – and indeed the funds now due this month are still “following the completion of certain procedural matters”. However, KEFI emphasises at current $1,540/oz gold and with it having already invested nearly all of its expected contribution to the project equity, the Net Present Value of its interest based on a definitive feasibility study view of the open pit and underground mine preliminary economic assessment is circa £125 million – that also not including potential exploration upside both in Ethiopia and in Saudi Arabia.
The shares have responded higher, to a current 1.6p – capitalising the company at sub £21 million. We continue to look for the gap between the noted values to close as mine development progress is made and to view the potential reward versus the risk as attractive – with currently even a 7p share price a more than 25% discount to the even above-stated NPV, our stance presently certainly remains buy.
How long have you known the banks selected for the Tulu Kapi debt? Why switch horses now from bonds to bank?
We have known one of the banks for two years and the other was introduced by our Ethiopian partners. We only recently received their joint terms sheet. Both the bond deal and the bank deal require some serious spending for implementation and it is not in KEFI’s interests to spend on both when one was a clear winner.
Posted 04 December 2019
Lots of discussion on here regarding share price, but while we're waiting for the next RNS I thought it might be fun to chat dividends
I've seen the research note suggesting a 1p dividend in 2021, but based on the latest company presentation (oct) this now looks likely to be pushed back to 2022 earliest?