Kefi Gold & Copper Company Research (KEFI)

Since our note in October, KEFI has provided nine business updates to the market, broken ground at Tulu Kapi and successfully concluded two equity financings (effectively raising £51.5m, or US$68.0m gross). While its March equity financing of £35.8m (gross) was not fully anticipated by the market, it was reported by management to be strongly supported by institutions and was (according to our records) KEFI’s largest since at least 2013 – indicating a good relationship with the broader equity market in London and evident support for the company reducing the potential impact of risks raised in the past month from the Middle East war. More importantly, on the back of today’s overwhelming shareholder approvals at the general meeting, the placing brings funds raised or committed to US$355.0m compared with Tulu Kapi’s financing requirement of US$355.6m (see Exhibit 1), meaning it is now effectively fully funded, with the balance being easily covered by a reported US$50m in additional funding that has been variously offered to KEFI in the form of royalties and preference shares, but not yet accepted. We have also brought our financial model on KEFI up to date.