RE: 2nd RNS6 Jan 2020 07:44
Using the proposed bank loan infrastructure financing, at last Friday's gold price of US$1,540/oz, KEFI estimates that the net cash flow over the life of the open pit will be US$443 million after all debt and other obligations. At this current gold price of US$1,540/oz, the Definitive Feasibility Study or DFS-based NPV of the open pit (US$236 million) added to that of the PEA-based NPV of the underground mine (US$87 million), totals to the aggregate Project NPV of US$323 million. On this basis and after taking into account that KEFI has already invested nearly all of its expected contribution to the Project equity, the NPV of KEFI's 45% beneficial interest is US$164 million (approximately £125 million), about eight times the current £16 million market capitalisation of the Company based on today's proposed expanded issued capital.
This does not include further potential upside offered by exploration underground at the Project, where extensions of the 5.6 g/t Indicated Resource remain untested, in the adjacent Tulu Kapi district, where several areas of drill-intercepted pre-resource mineralisation require follow-up and in Saudi Arabia where drilling is currently intercepting massive sulphides in a large Volcanogenic Massive Sulphide occurrence.
We have much to do to reward our shareholders for their confidence, support and patience for which we are deeply grateful and respectful. It gives me more than a little pleasure to be able to hold this Meeting in Sydney my home town and also to pay tribute to the large number of Australian shareholders we inherited from the previous owner of the Tulu Kapi Gold Project, which finally is coming to life after a fifteen year gestation period which cost in the order of US$60 million since its discovery; and doing so at a very exciting time for the gold industry, the country of Ethiopia and for KEFI.
Finally, may I wish everyone a Happy New Year and a Merry Ethiopian Christmas for tomorrow."
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