RE: Oct it is then !!3 Oct 2024 15:06
From a Telegram post by Moneylender, NO DATES ;
Kefi Gold & Copper (KEFI) has announced its first half of 2024 results, including emphasising that it remains on track with its flagship Tulu Kapi gold project in Ethiopia and “to finalise second bank credit approval, sign the definitive detailed financing agreements, drawdown the equity funding and then launch Major Works - all targeted within Q4” . We suggest that means significant upside potential from a current 0.60p offer price, below £37 million market cap, before even considering continuing Saudi Arabia joint venture progress.
It adds that it is currently advancing well ‘Early Works’ at Tulu Kapi, benefitting from a supportive environment including the local community and governmental including the deployment of extensive security forces and that “the project management team in Ethiopia has been expanded with Early Works” . The half-year results show, after a net £2.3 million of new equity, gross cash £0.8 million higher to £1 million, receivables £0.6 million higher to £1.2 million and liabilities £2.6 million higher to £12 million. However, with the Tulu Kapi project financing package now possibly only a matter of weeks away from finalisation and the company having shown ability to also access “working capital bridging finance”-debt, the balance sheet position doesn’t alarm us. That also seems to be the case with its prospective lenders – with it now also stated that “the co lender's credit approval… now includes a discussion in respect increasing the financing amounts on offer” .
We understand that is reflective of increased lender confidence, including considering current gold prices, and would further reduce the project equity financing. Having previously reiterated that, whilst a company-stated estimated Net Present Value of the Tulu Kapi project of around $650 million is highly aggressive, even highly cautiously it would still be many multiples of the current valuation levels, and there then also currently two Saudi Arabia joint venture project feasibility studies being worked on and further exploration, we continue to consider there are the near-term catalysts for a 1.5p+ share price here.
With delivery of the targeted upcoming quarter Tulu Kapi project financing package and launch of project development “Major Works” likely to spark the shares considering the project value potential (we suggest a 5p and potentially much more still share price) and lengthy timeframe to get here, a writer here continues to hold and we suggest the shares are still currently a Strong Buy
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