Q and A

KEFI Minerals is committed to providing full and transparent disclosure of its activities, primarily via releases to AIM's company announcement platform. KEFI also holds a live webinar shortly after the release of the Company's Quarterly Operations Report during which shareholders's questions are answered (and recordings are available on KEFI's website).

KEFI often receives follow-up questions as well as questions regarding how market developments may impact the Company. Under AIM rules, KEFI Minerals cannot be party to selective disclosure of information to individual investors. Whilst some conversations are about material already in the public domain, it is a Company policy to be cautious about one-to-one conversation with individual shareholders.

In order to make answers to these questions broadly available, KEFI has set up this Q&A page to post answers to questions which are deemed likely to be of general interest. If you choose to post these answers on a bulletin board, we ask you to publish the Q&A verbatim on the bulletin board and cite this page as the source.

Please email your questions to info@kefi-minerals.com.

How many road routes to Tulu Kapi and how long a drive are they?

A. The highway from Addis gets one to various turnoffs which all range from 1 to 2 hours from Tulu Kapi. Then there are a handful of routes on gravel roads, which take 1 to 2 hours each. The shortest route will eventually be that which is built as a new access road and it will then take about 30 minutes to reach Tulu Kapi from the highway.

Posted 25 October 2021
Please provide an indication of the order that things need to happen for the project to now close financing as it has become so complicated with the pause and security situation.

A: It has always been the requirement for security to be confirmed as being in order before launch, as it would for any project. The facts will, in due course, speak for themselves as will the normal sequence of follow through: (a) agreeing security arrangements for Project launch (b) reiterating that Project finance is ready when normal conditions precedent are satisfied (c) independent confirmations (d) financial close/signing. The first three steps already in train, so that point (d) may proceed.

Posted 20 October 2021
Various questions

Q: If the Kefi team has such long running relationships with all levels of the Ethiopian stakeholders, how could you get caught out by this at the very last minute, just ahead of the Finance group meeting up to review and supposedly approve the new mine Finance package?

A: Escalated physical traffic and investigations as part of launch preparations flushed out expectations by parties other than the community itself. It needs to be dealt with now and the financiers would expect us to deal with all of its aspects ahead of launch.

Q: Having read and listened to Harry outline that early initial work is progressing to get the TKGM site ready for the mine construction. From what we can see, it looks like activities are yet to begin, when is this actually going to start?

A: As regards physical construction-style activities on the ground: we have completed refurbishment of the exploration camp for accommodating initial construction workers; the new host lands about 50 kms from Tulu Kapi at a place called Aba Sena have been substantially cleared, road cut in and initial batch of starter homes delivered; electrical connection program over 50% expended in that fabricated equipment has been received in country; surveys for civil engineering partly completed; new access road to Tulu Kapi surveyed in but not started; old existing access roads and bridges into Tulu Kapi need their annual maintenance plus some further upgrading when the wet season has ended shortly.

Q: What changes can KEFI now make to get the Tulu Kapi Project Finance back on track and the deal done within a reasonable period (current conflict permitting, 6 months)?

A: KEFI and the finance syndicate know what is required to ensure the Project is ready and it will be independently checked before we launch. There is a detailed action plan not dissimilar to analogous projects we have all been involved with.

Q: Is Saudi Arabia’s Hawiah’s Project all still on track and are you able to push this through in order to avoid this getting delayed beyond the end of December?

A: All seems to be on track for this quarter’s milestones.

Q: Assuming that the published Hawiah numbers are roughly correct, have you already lined up the £17m that Kefi will need to cover as its contribution? If not, do you have a plan in place to have this £17m ready and approved by the end of this year, in line with the PFS & MRE documents being completed? 

A: The PEA published in 2020 estimated $222M for development. The latest guidance is that development is targeted for 2024-2025. Once we confirm that the Saudi Industrial development Fund or similar project financier lends 75%, KEFI would put up c. $19M equity to avoid dilution of its share. That is the choice to be made 3 years from now and finance costs optimised accordingly.

Q: Assuming that you will be able to line up the required $19m for the Hawiah mine in 2024-2025, are you clear on the next steps required to get both the mine and the finance package approved by both the Saudi authorities and ARTAR?

A: KEFI knows what is normal internationally and what has been the pattern in Saudi Arabia. The Saudi authorities have recently overhauled their regulations to become more transparent, predictable and internationally conventional.  So…yes.

Q: Assuming that you are clear on the steps required to get everything approved in Hawiah, do you have a plan and are you working towards having the required meetings, etc. with the Saudi teams during January/Q1 to get everything approved and the mine build process kicked off as early in the year as possible?

A: The process in Hawiah remains to complete the PFS and lodge the Mining Licence Application in 2022, complete the Definitive Feasibility Study and financing in 2023 and start construction on the back of Tulu Kapi coming into production at that time. There is a solid team on the ground doing all this.

Q: In recent updates, it was mentioned that there are 16+ other exploration licences within Saudi Arabia that are owned by the local joint venture company. Do you now have both a work plan and provisional budget in place that will lead to all of these sites being drilled, analysed and the results compiled into MRE and PFS documents within a 1-3 year period? If so, what is the high level plan to get all of this done?

A: We indeed have many applications but few licences get awarded at any one time. Today we have one licence. Upon the award of a licence, we progress early field work fast to progress it or chop it down to its core or potentially drop it. Surviving licences then have to justify further investment or be farmed out or dropped. This is the normal exploration cycle. To outline this per licence in the public domain is not the company’s best interests.

Q: Having listened to the status of the proposed Jibal Qutman gold mine, you really should have a plan agreed with ARTAR to get this situation resolved within a set timeline and be working together towards getting this done. Do you have an agreed plan and deadline agreed to get this completed and if so what is it?  

A: We have for a long time downplayed Jibal Qutman because it is stuck in a regulatory quagmire. We work to a plan agreed with our partner and are working with the authorities on it.

Q: Based on the recent dive in the share price, obviously the company doing a (discounted?) share placement based financing round would be hugely dilutive and incredibly unpopular with the existing shareholder base. Please can you confirm that the current loan as well as any associated credit facilities can be extended in terms of repayment until sometime during Q1/Q2 of next year?

A: We always have and continue to use these bridging facilities to optimise the timing/pricing of capital-raisings from the viewpoint of minimising dilution. We have lined up almost all Tulu Kapi +$350M project finance at the project level, which is because Directors are determined to minimise public shareholder dilution.

Q: What are you now going to do to get the Kefi share price back up to around the 2-3p level again asap?

A: Achieve a safe Tulu Kapi launch and the planned Hawiah milestones.

Q: Do you have adequate management depth in place to cope with the obviously challenging environment and what is looming with the Projects?

A: The executive committee members have all the requisite experience to oversee and new management are being introduced on the front line as we achieve each milestone.

Posted 07 October 2021
Please can you clarify the pause of the Tulu Kapi project? Is it the security concern or about the demand from the local?

A: These and other similar questions have been received from concerned shareholders. We understand that our announcement lacked detailed explanation. The Company’s statement was advised and intentional and we will provide details in due course.

Posted 30 September 2021
Warning letters from Ethiopian Government?

Q: Can you confirm or deny that in July this year or anytime in 2021 you have been given a final warning either verbally or written stating the Tulu Kapi finance deal must now be completed by 31 October 2021? Or that the Ethiopian Government can seek or impose penalties and/or remove  Kefi Mineral Licence and If the deadline was to be crossed could Kefi be in breach of contract? 

A: As reported in the appropriate regulatory form:

- The mining licence was awarded 2015 for 20 years, renewable and is in good standing.

- The company was, prior to 2020, granted extensions due to the official states of emergency until the end of 2020.

- Before the end of 2020 and during 2021 the company duly informed the Ministry of the updated schedule and of its requirements for the project to proceed in the context of matters in the hands of Government in particular.

- In mid-May there were media reports of warning letters but that was the first we had heard of it.

- In late May the Ministry warned of “administrative consequences” if we had not prepared financing by end-June.

- Before end-June we submitted to the authorities the finance plan and set out all requirements for closing, which are mostly in the hands of Government.

- Last week the Ministry confirming that end-October is approved and we responded this week setting out all requirements for closing, emphasising that speed of the essence and that most matters are now in the hands of Government.

Please note that the Company is obliged to report material formal communications.

Posted 02 September 2021
Why does the % TKGM that KEFI expects to own change from time to time?

The various factors that we need to balance are as follows:

  1. we provide guidance as we progress, rather than to say nothing until it is done;
  2. raising the bulk of $356 million with minimal equity dilution by forming a syndicate of a dozen parties means there are moving parts pending closing; and
  3. the recent instability in Ethiopia meant that certain locally-owned parties were able to commit faster than a foreign-owned investor and also better support social licencing.


Posted 23 August 2021
Would you please provide some insight into recent media reporting on Ethiopia?

Q: We are seeing daily press reports about Ethiopia, about Tigray and about the banking system. I am sure the Company has much better insight than most. So would the company please comment about the situation, the main issues as it sees them and the impact on KEFI and its project Tulu Kapi?

A: There are many issues swirling around and we do not claim to be political analysts. But we volunteer a few comments because much of the media coverage is quite shallow and even hysterical. And obviously some of it, in effect, similar to sponsored PR. We hope our few comments assist shareholders to see better understand current events in Ethiopia:

Tigray conflict:

  • There is the Federal Government and there the Regions, of which Tigray is one Region with about 5% of Ethiopia’s population
  • There is the military and also various arms of the various police forces
  • The communications fed through the media are often “posturing via the media”
  • The attack last November on the Federal military base in Tigray Region obviously unleashed a series of actions and reactions which everyone we deal with wants to end
  • Our prognosis is that the tensions will abate soon, for a number of important reasons, mostly to do with Ethiopians of all backgrounds wanting it to
  • Be that as it may, KEFI and TKGM are apolitical, operate far away from the conflict areas and focus first and foremost on our local communities and honouring our commitments to Ethiopia

The banking system:

  • Is profitable
  • Is being restricted by the central bank in certain areas of lending which have been providing funds for activities which were deemed against the interests of the country
  • Ethiopia’s risk-reward rating for mining investment:
    • The potential reward is that huge mineral potential remains largely untapped, with Tulu Kapi being the first major development for decades
    • The risk is that the economy is somehow suspended or side-tracked by conflict. This has clearly happened in Tigray but the rest of the country is pushing forward

Media’s role:

  • Ethiopia plays a high-profile and important role internationally. Addis Ababa is the headquarters of the African Union and has been a top 10 growth country for nearly 20 years, which will continue
  • All the international media are in Addis Ababa, along with over 100 embassies and most NGO’s
  • Much of the media coverage is understandably quite shallow and repetitive. And obviously some of it effectively sponsored PR
  • It has started to better understand, but balanced and deeper understanding takes time to filter through to distant publications that get their feed 2nd or 3rd hand
Posted 16 August 2021
Will the National Bank of Ethiopia’s decision to effectively freeze all asset backed lending ‘in country’ impact the upcoming financial close of TKGM in any way?

A: No. Local banks play no role in the project financing.

We understand that this temporary restriction (whilst some other regulations are sorted) is to choke transactions which involve, say, unencumbered real estate in Addis Ababa, being borrowed against for the funds to be used illicitly.

Posted 16 August 2021
Article in Ethiopia’s Fortune Magazine

Q: There was an article in Ethiopia’s Fortune Magazine on the weekend which reported that the Tulu Kapi finance is closing but that the Chairman declined to name all the financiers. Why not name the financiers? And there were also several factual mistakes made in the article.

A: It is considered best to focus on the task at hand and avoid distractions with media or others simply not involved in the project.  All material information gets reported via the regulatory channels when appropriate to do so.

Posted 09 August 2021
Remuneration of KEFI directors?

Q: There is confusion about the remuneration of the directors. Is it or is it not all reported in the Annual Report? What is the basis for setting remuneration? And is it still the case that the Executive Chairman has invested more than he has received as remuneration?

A: It is all reported in the annual report. The basis is by reference to industry comparables and targeting median remuneration for the role. And lastly, yes, for the first half of his tenure since 2006 the Chairman was paid nothing. And since then he has invested more than he has received.

Posted 02 July 2021
Questions regarding Hawiah activities and KEFI's Annual Report

Q: What is happening on the ground in Hawiah?

A: We are expanding and upgrading the maiden resource estimate published nine months ago. Since the end of Ramadan, we switched from 2 rigs on day shift to 3 rigs drilling 24/7.

Q: How much has been spent historically at Tulu Kapi?

A: About $70 million, some funded by KEFI and some by our predecessors. All of it recognised as historical spending on the project for regulatory purposes in Ethiopia. KEFI’s accounts show a lot less because of the project acquisition and expensing accounting policies as set out in the Annual Report.

Q: How much of the indicative finance plan summarised in the Finance Director's Report of the Annual report is from local investors?

A: About $70 million, $45 million from local companies advancing birr-denominated subordinated loans to KEFI Minerals Ethiopia, $25 million from the Government and other for birr-denominated share subscriptions into TKGM.

Q: Please elaborate on the pressure on the company from the Ministry in Ethiopia, when did the Government issue a warning letter and what is the upshot?

A: We submitted the final development and production plan in early May, there was some media commentary attributed to a departmental officer in mid-May and more again in June. We received a warning letter to push us along at the end of May to which we have responded both formally and informally. The plan remains that which we submitted formally in early May (and which is summarised in the Annual Report) and we are proceeding as fast as possible.

Posted 10 June 2021
Various questions regarding new mining contractor for Tulu Kapi

Q. Why did you replace Ausdrill?

A: Ausdrill has gone through an organizational overhaul. Whilst still a great company and good friends, it was no longer the most appropriate contractor for what we had always required - a conventional schedule of rates arrangement whereby payments by TKGM for the mining fleet and its operational personnel are tied to operational performance.

Q. How long will it take Corica to get up to speed?

A: Corica are already ahead of what Ausdrill was in readiness. We ran this tender over the past nine months and wrapped it up now as we head into finance closing.

Q. We cannot learn about Corica as easily as we could about Ausdrill. Can you help shed light on them?

A: Corica is a private company but well known to the gold miners of Africa, operating on about 15 sites for many leading gold producers.

Posted 06 June 2021
Ethiopian media commentary on Tulu Kapi

Q: May we please immediately have your view on the article in Saturday’s Ethiopia Reporter which states “companies including... Tulu Kapi gold mine... are among the firms to which the Ministry will send a final warning letter in a few days”. Is the Ministry saying you are moving too slowly, which is rather odd given the clear roadmap you have circulated, not to mention the May window which allows Ethiopian entities to put up money and take a stake.

Is this nonsense, sabre rattling or a rogue government official? – please explain.

A: We note some media commentary in Ethiopia regarding a Mines Ministry briefing at which reference was made to the cancellation of licences of 27 mining and exploration companies and which included a verbal reference by a ministry official to an intention to issue warning letters to 3 other companies including Tulu Kapi Gold Mines.

Neither KEFI Gold and Copper PLC nor its subsidiaries KEFI Minerals (Ethiopia) Limited and Tulu Kapi Gold Mines S.C (“TKGM”) nor any of their associate companies have had such an intended letter flagged to them formally or informally.

We have an especially close working relationship with the Government, who are a shareholder in TKGM at both the Federal and Oromia Regional levels.

Only last week we had formal Meetings of TKGM Shareholders, Board of Directors and Project Task Force (comprising senior representatives of TKGM and all involved Government agencies) which agreed the tasks and timetable for development to commence.

It was agreed by all that, in this time of heightened anxiety around arguably the most important democratic elections in Ethiopia’s history (which are scheduled for the end of next month), it remains most important for our joint focus to remain on reinforcing collaborative efforts to complete our preparations for Project launch.

KEFI and TKGM are particularly grateful at the Government’s huge efforts for our jointly-owned Project and its undertakings to complete its requisite final preparations for development to commence. Notwithstanding the obvious distraction of election time, it was agreed to upscale security around the project, endorse our historical Project expenditure, confirm our exploration licences and confirm the construction schedule for the offsite infrastructure (roads and electricity connection). We should all acknowledge and appreciate the huge effort required from such busy Government agencies.

We are all extremely busy closing the financing and development preparations in accordance with recent guidance to shareholders. We consider it a privilege to have the opportunity to play a small part in the overwhelmingly positive transformation that is occurring in Ethiopia. And we are extremely proud that our joint KEFI-Government-owned Project remains scheduled to launch shortly and make a large contribution to regional development around Tulu Kapi and to contribute over US$250 million per annum to export revenues.

KEFI remains focused on completing preparations for full Project launch as soon as possible after the Company’s Annual General Meeting at the end of June.

Posted 16 May 2021
Institutional ownership of KEFI?

Q: How many institutions are on the share register. how many others have been and gone, and why did they leave?

A: KEFI has a handful of institutional investors but the only one holding over 3% is RAB Capital. Standard Life and Odey were shareholders some years ago but Standard Life closed its junior resources portfolio on departure of its portfolio manager and Odey sold out of most junior resource companies on departure of its portfolio manager.

Posted 16 May 2021
Questions regarding Tulu Kapi

Q. Harry stated that KEFI was spending circa a million pounds a month currently on all fronts, I remember a few months back it was stated that TKGM was going to reimburse kefi for a percentage of the costs incurred when the new money came in. Is this still the case or have plans changed?

A. It is correct that KEFI is refunded some pre-drawdown costs incurred on behalf of TKGM.

Q. Harry also told Tom Winnifrith that the banks will be signing before the end of this month, did he mean April or May?

A. As regards the bank approval process, we await formal committee approval.

Posted 01 May 2021
Various questions regarding history and strategy of KEFI

Q: I have followed KEFI since the Company's IPO and have a long view of the company. I would like to understand the strategy by reviewing some of the turning point decisions and would appreciate your explanations about the following questions:

1. Why did EMED spin-off KEFI ?

A: EMED and its shareholders at that time were focused on developing the Rio Tinto Mine in Spain whilst KEFI was set up to prospect in frontier markets.

2. Why did EMED’s management team get overhauled just before permits were granted in 2013?

A: it was the right moment to install experienced Spanish management.'3. Why did KEFI’s management team get overhauled in 2014 just after it acquired the Tulu Kapi Project?

A: KEFI switched from a prospecting focus to a development focus.

4. What relationships exists between EMED (now Atalaya) and KEFI?

A: We are friends, e.g. the Chairman recently assisted Atalaya in its prosecution of the troublemakers who had interfered with the Spanish permitting process.

5. KEFI is now at another key turning point. What is the vision for KEFI and how will its management look in a few years?

A: KEFI will be operating several mines and growing its resource-base for local joint ventures with powerful partners and financial sponsors at the project levels. As we move through into production, strong in-country management will be built up further and KEFI’s senior management will be more focused on oversight, control and growth strategy rather than hands-on front line start-up management as it has been to date.

6. How do you see the current price cycle playing out?

A: We are in an up-cycle for gold and copper which may be stronger than most due to reasons well publicized by many analysts.

Posted 15 March 2021
How is COVID impacting KEFI people getting their work done?

Australian and Ethiopian life is almost normal other than travel restrictions.

We lock down people, sites and offices from time-to-time and have cumbersome travel arrangements. But we have stepped up delegation to KEFI personnel and work is can be progressed around the clock by our people being in different time zones.

Posted 18 February 2021
Commitment of Tulu Kapi consortium?

Q. In KEFI's recent Quarterly Update webinar, Harry Anagnostaras-Adams reacted very angrily to my question "Has the consortium for financing Tulu Kapi made a binding declaration of intent to the Ethiopian government?"

I can partially understand his response but my intention was to find out how far the promised (private) investments are binding on the government and whether they can simply be extended for another year. The real risk for us private small investors is that if the financing does not come by the end of March, then the share price will be much lower.

A: Please accept that the Chairman’s answer was not one of anger, but we trying to state clearly that the declaration of intent by the consortium was certainly sincere though not, at law, a legal commitment.


Posted 05 February 2021
Quarterly report and other questions

Q: Will the company issue a quarterly report this month?
A: Yes, the company’s disclosure policy is to issue quarterly updates followed by “question and answer” webinars for shareholders and investment analysts. 

Q: When can the company report that financings have no outstanding conditions or caveats?
A: It is normal in all project financing transactions that this can only be done after all conditions precedents are met and financings are drawn down as, until then, there remains something to be done or confirmed.  
Q: Why did Standard Life and Odey sell KEFI shares some years ago?
A: Standard Life closed its junior mining fund and Odey liquidated many investments across its portfolio for reasons which were well publicised. Other institutions have replaced them on the KEFI register. 

Q: With hindsight , was it good for KEFI to have worked with  the Swiss Bond Arranger, Lanstead and ANS?
A: Management works hard for KEFI’s progress to continue despite a turbulent working environment in our frontier markets. The opportunities and upside is worth it in our judgement. The company has in recent years withstood three states of emergency in Ethiopia, a global pandemic and the Tigrayan insurrection. During that time, the financing consortium has continued to be refined by management in the best interests of the project and our shareholders. The consortium is stronger than ever and it works diligently towards start-up as reported in recent shareholder updates.

Posted 14 January 2021
Why do you not post photos of ministerial and financiers visits to the website?

A: For security reasons, such site-focused public relations is currently done after the event.

Posted 12 December 2020
Participation by retail investors in KEFI equity raisings

Q: I noticed from the November Presentation some new info on slide 12 (TKGM):

‘"he KEFI Group component would be expected to be sourced in a number of ways which comprise: Local Investors and Mining Financiers equity subscription to KEFI subsidiaries KEFI Ethiopia and KEFI Marketing plus raising by KEFI Minerals PLC in the form of the Placing in November 2020, Loan Facilities on Offer and a Rights Issue at the time of settlement by all consortium members. These commitment remain non-binding."

Do you have any details on the "Rights Issue"?

Premature to say. The only point being made now is that we wish to provide for shareholder participation when all parties and deals are signed up and approved.

Q. Why did KEFI not offer retail investors the opportunity to participate in the recent placing, as many other companies are now doing through PrimaryBid?

We have taken advice which recommends that PrimaryBid can only be considered as a supplement, not a substitute, for a placing. That is becausePrimaryBid needs to be announced upfront, without assuring an outcome. When that is not a concern from the viewpoint of protecting shareholders’ interests, then PrimaryBid is a good option to consider. 

On a separate but related note, when a placing is at or near market, it should theoretically be less of an issue for shareholders who want to buy shares, as they can indeed just buy shares in the market.

Posted 19 November 2020
Conflict in Tigray Region?

Q: Given the conflict situation in the Tigray region of Ethiopia, will you be providing an update to investors in the coming days?

A: The Company’s activities continue uninterrupted by conflict in the Tigray region which is more than 1,000km from Tulu Kapi. All TKGM directors and management in Ethiopia work uninterrupted on the project, closely with the Government, community and the financing consortium. Any material consequence for KEFI would be reported. The company hopes the conflicts in the Tigray region are quickly resolved to avoid further loss of life and any further risk.

Posted 09 November 2020
Photos of current activities in Ethiopia

Q: Why don t you publish photos of everything happening on the ground with off-site infrastructure and the community? Shareholders want to see!

A: It is company policy not to publish current photos for security reasons, until we have advanced further along the process and have thousands of local people employed directly and indirectly. It is simply a safety first attitude.

Posted 30 September 2020
Various queries

Q: Harry, I hope all is well with you. Are you still in Oz at present or are you now able to move around the world again?

A: The team is starting to move around internationally again but on a tightly restricted basis, including myself.

Q: I noticed an article on the BBC website this morning commenting on problems within another region of Ethiopia. Is this feeding into our project at all in terms of funding or timings?

A: The Ethiopian political transformation triggered in 2018 unleashed wide-ranging political changes which have been overwhelmingly positive for the country, our sector and our particular project. There are media reports weekly about one region or another. The Ethiopian political transformation also unleashed instabilities. This will be our reality on the ground for the foreseeable future , as indeed will be the impacts and disruptions caused by COVID. Accordingly the KEFI team has continually refined project plans, policies, procedures and actions. The high-level aspects have been reported in regulatory shareholder updates… such as increased security, adjusted procedures around COVID and replacement of previous financiers and service providers with other less vulnerable. We have also reported wherever timing changes arose and would do so again if that became the case.

Q: I noted from a couple of recent interviews and presentations that the funding piece is moving along well. Should we expect the senior debt and project equity pieces to be announced and / or closed at the same time, suggested to be October, or will they run independent in closing to one another?

A: The foreshadowed sequence is for:

- September to be for finalisation of project level equity or offtake-linked subordinated debt with those parties and with the banks providing the senior debt; and

- October to be for confirmation by the Government and the equity/debt providers of all details at regulatory and board-levels so we can mobilise funds and people. 

The completion of any material step is announceable when it does not compromise commercial negotiations (ie compromise shareholders’ interests) and when the relevaant counterparties confirm. 

Posted 07 September 2020
Hawiah Discovery - Credit to Jeff Rayner?

Q. Good to see the initial Hawiah Resource shaping up to be larger than expected. As a long-term KEFI shareholder, does credit go to Jeff Rayner for pegging the Hawiah EL?

A. Yes, Jeff is one of those special geologists who is a mine finder. He recognised the potential of Hawiah during KEFI's early reconnaissance of Saudi Arabia and G&M is still benefiting from the team he put in place six years ago.

Posted 17 July 2020
Is start-up of new Ethiopian hydro plant necessary for Tulu Kapi?

Q. I have noted that it just so happens that the hydroelectric plant is due to come into operation in 2022. Is it not the case that commencement of the construction of the TK mine last year would have been a waste of time and funders would have been nervous with no certainty over the principal source of power for the mine though I believe that back-up generators are costed into the budget?

A: TKGM has preferential power supply status in Ethiopia regardless of the start-up timing of the Grand Renaissance Dam hydro scheme, which is the largest in Africa and has the capacity to electrify most of the country’s population.

Posted 13 July 2020
Have you considered approaching African Export-Import (Afrexim) Bank for funding?

A. We agree that Afrexim Bank is a relevant bank for Ethiopia and KEFI. We know them as do our banks, who coincidentally were named in today's RNS because certain notable closing procedures have been triggered.

Posted 19 June 2020
Please clarify the restrictions in Ethiopia due to the current State of Emergency

In early April, the Ethiopian Government declared a 5-month COVID-19 State of Emergency and imposed restrictions designed around Ethiopian society. The health statistics indicate that COVID has so far not had a heavy health impact but the economy has suffered in many respects. These matters are widely reported in the Ethiopian media.

Posted 21 May 2020
Is one to assume that ANS have been removed from the TK funding process?

No. We expect ANS to proceed. They are sincere friends and deeply involved. These are unusual times and COVID-19 is wreaking havoc globally and we naturally need to protect the project with alternatives.

Posted 14 May 2020
Is the Tulu Kapi financial closing in October 2020 dependent on the Ethiopian elections happening prior to the closing date?

The Ethiopian Govt announced in March the postponement of the August election due COVID-19. The Tulu Kapi Gold Mines Consortium is preoccupied with health and safety and not with election politics. Some mine development projects in other countries have been suspended due to COVID-19. But be that as it may, the scheduled closing of project finance in October 2020 is based on the consortium’s judgement that the project will proceed without further delay. Our management, banks and contractors are familiar with projects internationally and are well-placed to proceed if health and safety are kept under control as has been the case to date and as the prognosis appears today.

Posted 12 May 2020
Various questions following up £3.7 million placings

Q: Why do the placing so close to project equity is coming in?

The fact that project equity has not come in yet means that KEFI had to protect its working capital position.

Q: Why such a discount on the share price for the share placing?

It was a conventional institutional pricing at c.12.5% discount on the VWAP for the 3 days before the placing started its book-build.

Q: What does the placing do to the valuation upside for KEFI shares?

The mid-range NPV for Tulu Kapi (assuming $1,600/oz gold price), as set out in the RNS of 11 May shows £138M for KEFI which is 7.6p per post-placing issued share. This ignores the Saudi assets and exploration potential. 

Q: Why have you not released a Q1-20 Quarterly Report?

The Quarterly Report will be released within a week and the shareholder webinar will follow.

Posted 11 May 2020
Current impact of COVID-19 on Ethiopia?

Q: How is COVID 19 in Ethiopia at present? Having searched Google it would appear that their cases are relatively low but are the previously described precautions still firmly in place on the ground?

A: In Ethiopia, about 2 million people have been surveyed door-to-door revealing about 40 suspected cases but none proved positive.  In all, Ethiopia has had 3 deaths from 133 confirmed cases from 19,000 people tested. All restrictions remain in place.

Q: Given the perceived containment of the virus from the below statistics, are businesses and governments still working or is all attention focused on COVID containment?

A: Social isolation rules are strict and pervasive, not too dissimilar to the UK. The intensity of precautionary measures reflect the recognition of a less developed health and social welfare system. Most of the population really need to work.

Posted 04 May 2020
Various questions regarding KEFI's shareholder communications

Q: What was the purpose of the Company’s webinar on 6 March:

Quarterly webinars have been conducted for some years. They are not a regulatory requirement and aim to provide colour on what is already reported.

Q: Can the company get more active on social media and twitter in particular?

We encourage suggestions for improvement. Please note that we prohibit participation by personnel on social media and we do not generally post pictures of personnel and activities for security reasons. 

Q: Why don’t you give hard deadlines for each Project milestone or procedure?

We are trail blazing in new jurisdictions for mining and obviously do not control the Government who are doing many things for the first time.

Q: There was a lot of share speculation and trading recently. That applies extra responsibility on KEFI to report promptly, do you not agree?

Continuous disclosure obligations apply to anything that is material regardless of share trading volumes.

Please note that there is no regulatory obligation to have a Q&A information line as we have on the KEFI website, nor for quarterly reports. At the same time we kindly point out that it is not appropriate to answer every question received.

Q: How many shareholders does KEFI have and how do shareholders vote?

We currently have 1,080 registered shareholders, some of whom are nominees for many more underlying beneficial owners. 

Voting procedures are in accordance with the Articles of Association, administered by MSP Secretaries and reported around the Shareholder Meetings, the next of which is scheduled for June this year.

The voting at the last 8 Shareholder Meetings has been “Against” as to between 0.04% and 2.6% of votes. The remainder have been “For”, “At Chairman’s Discretion” or “Abstained”, typically in that order.

Posted 08 April 2020
Various questions regarding KEFI's projects in Saudi Arabia

Q: When is any definite decision likely to be made in Saudi regarding Hawiah mine construction?

We started drilling at Hawiah in September 2019 and target a maiden resource mid-2020.

Q: What is the likely timeline from this point to first pour at Hawiah?

A fast track outcome could be 2 years to start development plus 2 years construction, compared with the global average closer to 15 years.

In the meantime, we would progress maiden resource, Preliminary Economic Assessment, resource expansion, reserve reporting, feasibility studies, permits, finance. These are capable of being more rapid for Hawiah in Saudi Arabia compared with Tulu Kapi in Ethiopia.

Q: What is the upside at Hawiah?

The resource (similar style to nearby Al Masane mine) is likely to keep growing because it remains open at depth plus there is the oxidised zone to consider and the stockwork zone (looking for something like nearby Jabal Sayid copper mine) which has not been located yet.

Q: What are the plans for Jibal Qutman?

Jibal Qutman is stuck in the local regulatory overhaul. Its potential value seems perhaps overtaken by Hawiah.

Q: What’s Hawiah worth?

  • - we have made what appears a significant discovery at Hawiah but don’t yet know how big it is or what it might be worth
  • - we have drill-confirmed that the structure is straightforward with 45 drillholes over 4km laterally but at this stage drilled only down to about 250m depth
  • - the in-situ value of metal content is already greater than Tulu Kapi and the structure is open at depth
  • - we need to get many more assays in to be sure of grade and the distribution thereof


So it is too early to do NPV’s. but we expect to report a maiden resource mid-year and trigger and independent preliminary economic assessment.

Posted 06 April 2020
Various questions regarding KEFI's Tulu Kapi project in Ethiopia

Q: How much in pounds sterling is KEFI final equity subscription into the project? Will it be raised by a further issue of KEFI shares?

As set out in the 2018 Annual Report and in other announcements the finance plan is for KEFI puts $10M or £7M more into TKGM sourced from cash, working capital facilities, mezzanine financing possibilities and refunds on project finance closings. We will utilise the best available combination of options to provide this money at the appropriate time.

Government Politics and Regulation

Q: What impact will the outcome of the Ethiopian elections have on the project and the loan commitments by African banks?

The outcome is not a matter of concern because the election result is widely anticipated.  The banks merely need to see law and order in the lead-up to and the immediate aftermath.

Q: What happens if there is a change of government after the Ethiopian elections? Are our agreements with the government robust enough to continue with a new PM, or will there be a new negotiation process to go through?

Agreements stand regardless of who is a PM or Minister etc. And the project will be no less important to the country and region than it is today. It will still be largest single export generator in a country which has a trade imbalance and a hard currency deficit

Project Debt

Q: Having had a choice and in an apparently improving lending environment, KEFI decided against a bond. Will KEFI have more control, will there be a strict timetable and will there be built-in penalties for delays in payment of the capex funding?

It was wise to replace the bond deal with a bank deal. The pandemic has reinforced that.  The terms of the project finance are conventional. Once one has satisfied closing conditions, the lenders must provide the requisite funds.

Q: Is the bank loan agreed and in place?

The terms are agreed and have been through their committees. Full finance close means final approvals by their boards, and those of TKGM and the contractors. In the meantime, we have preparations such as engineering, IFC compliance on social and environmental and establishing bank accounts in the international financial centres, which is also a first for Ethiopia.

Q: What happens between now and full financial close?

  1. Project contract final pricing reconfirmations with all the fabricators.
  2. Community resettlement preparations to hand over compensation to over 2,000 people on the mining licence area and many more affected by project in the surrounding district.
  3. Banks final credit approvals and their reporting requirements.


Project Level Equity Funding

Q: Are you confident that the closing of local project equity will occur?

  • Yes, that is $58M from the combination of our Government and private partner, ANS
  • The Government has already closed and is spending its $20M
  • The Government is helping wherever it can because TKGM has suffered from some extraneous factors largely affected by the Governmen


Q: Does ANS have the money and what fallbacks are there?

ANS is a special purpose investment company founded by the five directors for an investment by 15 institutions and corporates. ANS signed a subscription agreement and approved all our RNS’s. If any individual ANS investor fails to close in any particular moment when all its conditions precedent for processes, documents, etc are satisfied, then other local investors are expected to cover them. The Government now works closely with ANS to ensure the public private partnership works for this high priority project.

Q: Can we expect all these time-consuming procedures before every tranche with ANS?

The first step is always hardest.

Posted 03 April 2020
What has been the impact of COVID-19 on Ethiopia, Saudi Arabia and KEFI's activities?

Q: What is the Impact of COVID-19 on Ethiopia and Saudi Arabia?

The table below summarises the COVID-19 data for Ethiopia and Saudi Arabia as at 2 April 2020 (source: World Health Organization (‘WHO’) Situation Report 68).


Confirmed Cases


Transmission classification

Ethiopia, population c. 100 million



Imported cases only

Saudi Arabia, population c. 30 million



Local transmission

Ethiopia has a population of c. 100 million and, to enforce physical distancing, has closed its land borders and schools, emphasised working from home, prohibited large public gatherings and enforced compulsory 14-day isolation for new flight-passenger arrivals into the country. To date there have been no confirmed cases of COVID-19 at Tulu Kapi and the surrounding area. In late March, Ethiopian Government announcements included (1) the Federal Government announcing that the August Ethiopian elections have been postponed and a new date will be set in September in light of the situation with COVID-19, and (2)  the Regional Government announcing the lifting of telecommunications restrictions in our area in light of security improvement and the need to now develop the mining projects.

Saudi Arabia has a population of c. 30 million and has closed its borders to international flights, suspended the annual pilgrimage to Mecca and Medina and imposed other physical distancing protocols. As with Tulu Kapi, there have been no confirmed cases of COVID-19 at Hawiah and KEFI’s other Saudi Arabian assets.

Q: Has COVID-19 affected KEFI’s Operations?

KEFI took all the required and some additional steps to adjust its modus operandi. The responses include the following, all aspects now being planned within the constraints of virus management protocols:

  1. Personnel generally: those who can work from home do so. Physical distancing and the recommended hygiene practices are strictly applied.
  2. Offices: offices in Cyprus, Addis Ababa and Ghimbi: operate with rostered attendance.
  3. Tulu Kapi site: security and community liaison personnel continue to operate, to protect drill core and maintain community engagement on resettlement and project opportunities for the +2000 people affected on the mining licence area and the many more people around it.
  4. Hawiah site: security and drilling personnel continue to operate. A second drilling rig was mobilised about a month ago.
  5. Contractors: programmes are continuing as planned within those organisations’ virus response procedures. Almost all contractor activity is currently office based, with the exception of road-building crews mobilising to the Tulu Kapi district during April 2020.


Q: Has COVID-19 affected KEFI’s schedules?

The Company remains (a) focused on preparations and finance milestones leading to major site activities starting for the Company’s Tulu Kapi Gold Project from October 2020, (b) on track to deliver a maiden JORC resource on the Hawiah Project in Saudi Arabia by mid-2020.

Q: A couple of reports on the internet suggest that Ethiopia has placed restrictions akin to the UK now. Have government departments been shut down as a result of these measures?

Federal civil servants reliant on public transport have been told to work from home. Those using private transport continue to operate from their offices as required.

Q: Who is on the ground in Ethiopia and Saudi Arabia? And how much time do Harry and senior management spend in Ethiopia in particular and is that enough to get this over the line for financing?

In-Country personnel: Most personnel are local people at Tulu Kapi plus Addis Ababa in Ethiopia and Hawiah plus Riyadh in Saudi Arabia. Expatriate personnel in Ethiopia include the Managing Director of TKGM and Heads of Project Development and of Safety, Security, Social and Environment.

KEFI Corporate Office:  the small team is based in Cyprus for financial control and compliance.

Roaming Personnel: The Board and Senior Management each have decades of experience at developing and financing mining projects and work from wherever they need to be for KEFI. For instance, the Executive Chairman has spent most of his time in Ethiopia for some years. 

Posted 03 April 2020
Update on Coronavirus in Ethiopia?

A. Ethiopia has reported its first handful of cases and has instituted tight social distancing restrictions for an initial 15 days.

KEFI/TKGM has sent expatriate staff home unless on project-critical duties. They continue to work remotely.

Posted 17 March 2020
Coronavirus in Ethiopia?

Q. Whilst the situation is fast moving with regards to Coronavirus around the world, Africa appears at present not to be impacted as greatly as other continents. Have the Ethiopian's put in place any special measures at present (ie virtual lockdowns like Italy)?

A. No one has been yet been reported as being infected with the Coranavirus in Ethiopia. All incoming passengers are screened and quarantine sites have been established, in preparation.

Posted 12 March 2020
Quarterly webinar follow-up questions

Q: Can you confirm that you still expect ANS to pay their first installment shortly - when all paperwork completed, not waiting until after the election in September?

A: Yes.

Q: How many people does TKGM now employ and will some/all their wages come from the ANS payment in future?

A: TKGM employs about 30 personnel today and will grow to about 1,000 within 12 months. nearly all personnel are now and will remain local staff and the rest will be expatriate specialists in various disciplines. All TKGM-related costs, including also payments to contractors, banking and management services provided by KEFI are charged to TKGM and yes they will be paid for TKGM when project equity comes in.

Q:While I am extremely disappointed that my questions duly submitted to BRR were not asked and answered, I was also concerned about how unwell Harry sounded. Has he had a check-up lately? I hope he has some good mates around him in Ethiopia.

A: There were scores of questions and the webinar organiser put them to the Chairman. Answering all of them would have taken several times the one hour allocated. We will look at all of them and assemble a package of Q&A for the website, to cover as much as reasonably possible.

Thank you for asking about the Chairman’s health. He is fine.

Q: I’ve just listened to the Webinar/Quarterly Update, Saturday morning here in Oz. I’m personally okay with where we are at the moment and how you presented the update. It’s a stressful time, so thanks. 

The chat rooms are full of people chasing an unrealistic fast buck it seems, and in some respects I would be very pleased if the shareholder demographic now changed to lose opinionated/noisy short term ‘traders' and gain longer term ‘investors' with a mature outlook and understanding of the opportunity. I think we can expect a stomach churning few weeks as the stakeholder mix changes frankly.

I can see that a “co-terminus” full close across both debt & equity (Q3/4) would make a lot of sense, and provide some shared comfort across the main stakeholder parties.

Equally, I also think that if ANS were positioned to make the initial equity investment ($9.5M) prior to full close, then this would put us right back on course and set the scene for a hugely positive end to 2020, and a 2021 to get stuck into from the get go.

For me, it's about going forward and turning uncertainty into certainty.. progressively.   Markets hate the former and love the latter… so anything we/you can get nailed down before Q3 would help hugely with sentiment and price as 'full close' becomes a focusing reality.

Well, it a thumbs up from me to the team Harry. I just hope we can nail something down with ANS over March/April to calm the nerves. I think this would also help greatly as a precursor to any further capital raise/dilution.

A: All noted. We repeated your full question because it also begs the question (to the Investor Relations team) whether the company should do these webinars if participants would rather receive less details and only material news, which of course must be via an RNS. Obviously the regulators listen to such webinars to ensure no breach of reporting or other protocols, as do some partners, contractors and government employees.

As regards ANS putting in its first cash, all three TKGM partners working to ensure the launch of on-site programs start shortly so that full finance close occurs asap after the September election.  All project equity to come in on time as part of this launch plan.

Posted 08 March 2020
Timing of ANS Funding?

Q: From the webinar that has just finished, it is easy to interpret that ANS will not provide any tranche of funding until September.

A: That is not the message. The closing could not have already occurred but will occur shortly. The US$9.5M (equivalent in Ethiopian Birr) is to be received from ANS during the period before full close.

Posted 07 March 2020
Article in Addis Fortune News

Q: I have come across a news article from the Addis Fortune News website which details ANS's involvement in the Tulu Kapi project.

The article is fairly positive but the journalist has provided the below comment, which suggests that ANS don't have the capital to hand for the project and need to sell shares within their vehicle to be able to make payment:

"To raise capital, the executives of ANS Mining are planning to start selling shares, according to Hailemelekot Teklegeorgis, a founding member of ANS Mining, which hopes to sell one billion Birr worth of shares with a par value of one million Birr starting this coming September."

Are you able to confirm whether this share sale from ANS is a secondary issue once they have injected their capital into the project or whether this is a primary issue? As mentioned within this article, they are intending to sell shares until September which would make the receipt of funds to TK be delayed if they are selling as a primary issue.

A: Not an accurate comment and a bit garbled  We have been advised that ANS’ subscription is arranged. Arrangements are proceeding for the closing of the first subscription funds from ANS to TKGM of US$9.5 million (Ethiopian Birr equivalent) in accordance with standard local procedures. As announced, the total ANS commitment is US$38 million with the first US$9.5 million (Ethiopian Birr equivalent) being unconditional and subsequent amounts in accordance with the conditions previously outlined. 

Posted 05 March 2020
Any feedback from General Meeting?

Q: Is there any feedback from the TKGM all parties GM Friday 14 February 2020 regarding the ANS and their subscription?

A: Please note that TKGM as a private Ethiopian company does not report publicly, i.e. TKGM reports only to its direct shareholders. KEFI then naturally will issue an RNS to its shareholders about the TKGM GM late Friday at the first opportunity. Please also note that if there had been a change of plan an RNS would have issued earlier than the due date for the GM.

Posted 16 February 2020
Why are you holding the General Meeting on 6 January 2020 in Australia?

There are several reasons why the Directors decided to hold this General Meeting in Australia. We have frequent meetings with shareholders in the UK but KEFI also has many shareholders in Australia and Cyprus who appreciate having the occasional meeting in those countries. More directors had already planned to be in Sydney than any other city on that day - so it is the least cost venue. Finally, voting by proxy is unaffected by the location of the meeting.

Posted 02 January 2020
What the Tulu Kapi farmers/landowners doing at this time for their livelihoods?

Primarily on-going subsistence farming with the main crop being coffee which is being harvested.

Posted 18 December 2019
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
How long has the development schedule been 24 months? And how flexible is the sequencing within the 24 months?

It has always been about 24 months to full production and is comprised of many subsidiary schedules, each of which has its own critical path and its own flexibilities. Mining only needs a quarter of the 24 months, bulk earthworks a bit more, plant assembly about half of it, community about a quarter of it and so on. The development team and contractors have done this many times.

Posted 28 November 2019
When is first gold pour scheduled?

Commissioning of the processing plant in mid-2021, first gold pour in H2 2021 and full gold production by the end of 2021.

Posted 26 November 2019
What is the process for settlement by ANS Mining in TKGM in Ethiopia?

Following receipt of this confirmation from the Ethiopian Government on 7 November that it had resolved its internal administrative arrangements, the partners of the Project subsidiary, Tulu Kapi Gold Mines Share Company (“TKGM”), were in a position to proceed to:

  1. review these administrative changes;
  2. update the shareholder documentation accordingly for TKGM;
  3. distribute the revised documents to the partners’ compliance teams and boards as the case may be;
  4. sign final documentation relating to the shareholders’ agreement; and
  5. trigger subscription procedures for the Project equity capital. 


Those processes are in train and in Ethiopia typically take between one and two weeks each, as was stated in the shareholder webinar at the end of October.

This being a public-private partnership and an innovative first-mover project may easily cause delays but we have seen none so far. We are about half way through these steps and certainly KEFI would announce if there is any material change.

Posted 18 November 2019
A question following the Q3 webinar, which was excellent: When did you realise the government had an internal administrative problem?

We were told it was fixed 3 weeks ago then it resurrected itself last week.

Posted 31 October 2019
As it currently stands KEFI will only have 45% minority control of Tulu Kapi. With gold at $1500, are there other investors out there that could step in and replace the funding provided by the Ethiopians?

The Tulu Kapi financing plan includes the following elements, notable in the context of the various points and questions made in the question:

- KEFI’s partners inject $58 million into TKGM for a beneficial interest (direct plus indirect) of 55%, which implies a valuation of KEFI’s 45% of
  c.$47 million.  The NPV’s of TKGM as reported are higher.

- KEFI has control by owning 80% of KME which owns 56% of TKGM

- KEFI has announced that, along with its partners, the government and the contractors, it met last month and confirmed to trigger the project       development this month of October.

- KEFI will issue more updates as appropriate and will issue a Quarterly Update this month also.

Posted 08 October 2019
Have all reports required from KEFI for the closing of the ANS investment been completed? And when is closing and project trigger expected?

In regards to all the reports, yes.

And closing is expected by the end of October as reported in KEFI's announcement dated 4 September 2019 and Interim Results released on 23 September 2019.

Posted 01 October 2019
What is ANS Mining Share Company id number?

ANS Mining is not part of the KEFI Group and is a private Ethiopian company formed specifically for the investment into TKGM alongside KEFI and the Government.

The KEFI announcement dated 25 January 2019 sets out the identity of the founding directors and shareholders of ANS Mining such as Ato Zafu (Chairman of United Bank) and Ato Hailemelekot (Chairman of Addis International Bank).

Posted 29 September 2019
Can you help me reconcile the TKGM equity and debt summary in the 2019 Interim Results with previous funding plans?

Nothing has changed from the Sources and Application of Funds tabulated on page 9 of KEFI's 2018 Annual Report which was simply summarised in the TKGM summary on page 2 of the 2019 Interim Results (released 23 September 2019).

Posted 23 September 2019
What is production profile for Tulu Kapi? I don’t mean what is bankable, but you are planning to do?

First full production year 160K oz from open pit and start the underground mine in or about third year of production to lift it towards 200K oz pa.

Posted 10 September 2019
Various questions regarding the new working capital arrangements

Q. Does Sanderson still hold security?

A. As set out in the announcement, Sanderson has undertaken to release security.

Q. Will the new working capital lender hold security?

A. The new working capital lender is unsecured.

Q. Will ANS Mining hold security?

A. ANS Mining will hold the security.

Q. Why did you part-replace Sanderson with the new lender?

A. To use the security cover for best effect, to allow greater flexibility with deals in Ethiopia and to spread our funding sources,

Q.One of KEFI’s shareholders and supporters suggested in a public podcast that you could have done a better deal with another particular lender. Can you comment?

A. We did compare alternative offerings and picked the deal that worked best for KEFI. We do not comment publicly beyond that.

Q. Why do you not just make a placing and avoid these working capital lenders?

A. It’s a choice based on the Board’s assessment of likely milestones in the short term and the lowest cost of capital in that light.

Q. How do you feel seeing the share price reaction?

A. Disappointed for the shareholders who sold.

Posted 09 August 2019
Convertible Loan Facility Queries

Q: Is it correct that an arrangement fee was paid to a new lender in shares which can be sold by them to effectively fund their loan to KEFI?

A: No. The only fee paid to new lender was cash fee of £37,500. The re-arrangement fee paid in shares was to the existing lender to drop all security held.

 Q: Is it correct that you did not compare competitive finance terms?

A: No.

Posted 08 August 2019
Why is the independent security report taking about 2 months to complete if it is simply updating previous assessments?

The political and security situation in Ethiopia has changed since KEFI, Ausdrill and Lycopodium jointly sponsored an independent assessment a few years ago. The changes since then are at national, regional, district and local community levels. The independent assessor addresses all levels and has started at the national level and works through to the local via a one week visit. This is not a desk-top exercise and any company has to apply a safety first policy and, whilst we understand the situation and have in place the requisite plans, the consortium understandably needs an update to the independent assessment. This would not have been required just now except that, as reported in our recent announcements, incidents in June sparked immediate remedial actions. The country is attracting foreign investment and industry is indeed mobilising into Ethiopia but all will follow a safety-first protocol and that is especially important for a first-mover. We highlight that this is a project sited in a remote region of the country and the administrative and security apparatus needs to be installed for us specifically, and up-front, unlike a project sited in a major metropolis.

Posted 10 July 2019
Is Harry Anagnostaras-Adams prepared to share how sees his legacy at Atalaya?

Atalaya Mining is a company that he founded and is proud of, having led its clean-up for development over some eight years. He founded the company in 2004 at today’s equivalent of about 8p and stepped down for Spanish management to be appointed when the stock was at about the same price as today - about more than 20 times the foundation price. Harry Anagnostaras-Adams added that he thinks the Atalaya team is excellent.

Posted 06 July 2019
What is corporate travel policy?

Economy unless a long-haul flight, in which case business.

Posted 06 July 2019
Why is Tulu Kapi so valuable if it Nyota failed?

KEFI was invited in by Nyota’s shareholders to overhaul a plan that had clearly been fast-tracked to catch a high-gold price market environment, when gold was ran up to US$1,900/oz. With hindsight, the mine design by Nyota based on the assumption of $1,500/oz gold was wrong.

KEFI expanded the resource from 1.1M oz to 1.7M oz with extra drilling and a lot of trenching for the first time which exposed the main ore lodes to be mined. We then lifted the reserve head grade from 1.8g/t to 2.1g/t. This was via a refined mining method to recover reserves of 1M oz at a higher grade per tonne of ore. So the project plan mines and processes less ore tonnes at a higher grade, i.e. providing a higher-margin per tonne. We designed the mine around a gold price of $1,098/oz. All-in-Sustaining Cost is now c.US$800/oz not c.US$1000/oz.

And the numbers are not just DFS-level based on independent experts for the owner (as done for Nyota) but were tweaked  a few times to reflect the realities of the tenders from appropriate contractors who actually have to deliver operationally against the numbers and then again also for the independent review completed for lenders, who add their own layer of conservatism.

Posted 05 July 2019
Many thanks for the update this morning. Has a realistic timescale been provided for the updated reports required as per this morning’s update?

Yes, but rather than be publicly accountable for the review processes of each consortium member, it is safest to say that as long as that process is behind us by some time in September, the timetable will not suffer. That should give plenty of time given what we see on the ground and we expect quicker.

Posted 28 June 2019
I read that KEFI had an armed burglary. Was anyone hurt and what was stolen?

On 26 May 2019, there was a burglary by six armed men at the Tulu Kapi exploration camp. There was a scuffle but no serious injuries. Armed security response was activated per current procedures and the culprits fleed. The items stolen or damaged had minor value. Whilst armed security forces were discouraged by the community when low-key exploration and planning was the focus, increased security is now welcome and will be maintained and built-up as we move forward. 

Posted 03 June 2019
What is the development timetable for Tulu Kapi?

The start date has moved a few times in the past flowing from various Government actions.

KEFI made representations to the Prime Ministry and some aspects of the development have started based on the positive instructions issued by the Prime Minister at the end of February. We have reasonable grounds for confidence that full development program can be underway shortly.

As we stand, the various work streams target commissioning from late 2020, first gold April 2021 and full production in mid-2021 which has been the case for some time. Preservation of this schedule has required many refinements as well as collaboration between KEFI and the principal project contractors.

Posted 01 May 2019
Is the Ethiopian Government deliberately slowing us up?

A: No, we believe that all Government levels and agencies are indeed fast-tracking as far as they are concerned in a country that has a plethora of transformative initiatives on the go.

The only remaining Government consents we require to start the full development program are:

(a) central bank board approval of project finance terms that have been agreed informally with KEFI; and

(b) regional government to confirm we may proceed to allocate money, new lands and houses to the community in accordance with principles and calculations already set out.

We have access to all the relevant officers and do not detect anyone being deliberately slow, but are not in a position to judge the time efficiency as compared with central banks and regional governments in other places.

Posted 30 April 2019
Please explain why KEFI ‎agreed to grant protection to ANS if full project finance does not close?

A: Since ‎KEFI and ANS first reached agreement six months ago, we have been awaiting Government consents to be finalised as well as other project financiers. In light of all parties' desire to proceed, ANS and KEFI agreed for ANS project investment first Instalment of $11.4M  to proceed when central bank approved the core project finance terms and with the protection of ANS referred to in the question. KEFI considers that this a fair quid pro quo for an increased first Instalment from ANS and that KEFI shareholders are well served vis a vis them putting in the $11.4M. 

Posted 30 April 2019
There is a news report that five miners have been shot in Ethiopia. Did this involve our company in any way?

A: No, all we know is that the shootings were in a district where artisanal mining has existed for millenia.

Posted 20 March 2019
Please elaborate further on the Tulu Kapi development schedule with more detailed explanations? How long is the overall schedule, when are the start and end dates, and how does it fit with financing schedules, wet seasons and resettlement schedules?

A: The base-case development schedule remains 24 months to production, with incentives for being quicker and penalties for being slower. It remains focused on targets to be commissioning the mine and processing plant H2-2020. This has taken much finessing of schedules for water management, resettlement management and all the other aspects. And the schedule starts when the Regional Government starts the resettlement processes, in respect of which we are encouraged by what we see on the ground and have reported to shareholders.

Phase 1 of resettlement, detailed engineering and ordering of long-lead time items are to be undertaken during the first six months (Q2/Q3-2019) of the development schedule, which is to be funded by an instalment of project-equity from ANS scheduled for end of March 2019.

The full package of funding would ideally close on the last day of the 2019 wet season. This package provides the funding for the remaining items in the development schedule and enable major works to commence at the beginning of the 2019 dry season. An advantage of waiting to put the bonds in place until major works are able to commence is that more gold should be produced prior to debt repayments commencing than hitherto contemplated.

Regarding questions about the wet season, one planning challenge was the collection of sufficient water in dams to feed the process plant. That aspect has now been refined with water bores now planned to provide processing water when necessary. Another planning challenge has best to undertake activities in and around the wet season so that physical activities are not overly impeded - those schedules have also been refined for all concerned. Western Ethiopia is not monsoonal or cyclone-prone. Construction can keep going, but best to be set up and running before the wet season hits.

Posted 15 March 2019
Various questions following Project Financing Update

Q: When are ANS institutional shareholders due to subscribe their first instalment into ANS and when does that go into TKGM?

A: The first institutional subscription into ANS by the end of March and then the funds go into TKGM.

Q: When is the deadline to move the Tulu Kapi community?

A: The plan is to prepare land and houses between April and June, when the wet season starts. Then the Phase 1 move can happen by the end of the wet season. Many things still continue during the wet season in Ethiopia which is not as restrictive elsewhere in the tropics. 

‎Q: Why did KEFI announce your meeting with Ethiopia's Prime Minister and the next steps by ACT Capital?

A: To keep the market informed because both parties informed us that they planned to make public statements involving KEFI  for their own compliance reasons.

Q: What is happening with the project now and what is likely to happen for the rest of this year if everything proceeds as you expect? 

A: Q1: Mainly Government consents and consortium (KEFI, ANS, MOFEC , Lyco and Ausdrill) meetings to confirm commitment to schedule. Q2: Start of development: mainly  Phase 1 of resettlement and detailed engineering, Q3: Mainly sub-contracting and  long-lead orders. Q4: Commence major works.

Posted 14 March 2019
Where can I find further information on the Tulu Kapi bond arranger ACT Capital?

A: Further information is available on ACT Capital's website at www.act-capital.ch

Posted 13 March 2019
Does the RNS released on 5 March mean the project is now formally signed off, meaning receipt of the ANS cash is now due?

A: It means that the State Minister of Mines for Ethiopia and KEFI’s Managing Director announced in Toronto what the Prime Minister had instructed last Thursday, what has happened since and that all consortium parties remain on track as previously outlined.

Posted 06 March 2019
Various questions regarding placing

Q. Late last year you arranged a loan facility, part of which you stated was to be used for working capital in 2019 (RNS 30 Oct 18).  Shareholders were shocked yesterday to discover you have placed again, which you also state is to be used for working capital. Please explain if the placing has any bearing on the loan facility ie do you still intend to use it etc etc?

A. In November 2018 the Board sought and the shareholders approved limited authorities to make a placing, use a working capital facility and pay service providers in shares. The timing and sizing of these choices needs to be managed to fit best to the arrangements between consortium members. Some of the factors taken into account are commercial in confidence and would not be in shareholders’ interests to discuss publicly. For the sake of illustration, even if all these facilities were assumed to be fully implemented, the diluted NPV/share is clearly many times current share prices.

Q. Would you please explain this in more detail, most people I have spoken to do not understand it:

“Amongst the advantages of these funding arrangements are that they will allow the scheduled activities in the first six months of the Project development schedule to target the reduction in the period between debt-drawdown and first gold production and, consequently, to increase the period between first gold production and first debt-repayment.”

A, By completing certain jobs with equity funds, we drag forward the start of the 24-month development schedule. By drawing debt after equity funds, we push back the end of the grace period before debt-repayment begins.

Q. What was the broad breakdown of groups taking up the placing? Mainly retail, Directors, II’s?

A. Participation by officers would have been disclosed. SVS took the majority of the placing for its retail client funds as part of a plan to deepen our retail penetration over time as the sector and the project improves its prospects. The rest was existing institutional.

Q. On the same day as the placing announcement a large trade of 17m at 1.77p appeared (just under 3%), is this linked in anyway? Do you know anything about the trade?

A. It has not been reported to us.

Posted 24 February 2019
What is the cost of the £4 million loan Facility?
A: It is based on issuing KEFI shares at 2p per share and therefore:
  1. The cost of arranging the Facility is £380k or 9.5% of the Facility amount of £4 million (or 8.3% excluding legal costs). Good insurance to underpin our working capital.  This is 19 million shares @ 2p or 3.4% of the current issued share capital.
  2. If we draw down the £2 million Facility A, the cost increases to £480k or 12.0% (10.8% excluding legal costs).  Still good insurance. This is 24 million shares @ 2p or 4.3% of the current issued share capital. 
  3. If we draw down the full £4 million, the cost increases to £830k or 20.8% (19.5% excluding legal costs) of the Facility. Or equal to 41.5 million shares @ 2p or 7.5% of the current issued share capital. The working capital “insurance” gets more expensive but we only use it if it suits.
  4. Thus, the issued share capital can increase by between 3.4% and 7.5% to cover the Facility fees.  While there is certainly a dilutive effect to this, the shares are being issued at a share price above the market price when the Facility was arranged.  Also, the actual number of shares will be dependent on usage of the Facility by KEFI.  This flexibility to the Facility is important and a key feature that helps to contain costs and dilution.  
  5. If one calculates the aforementioned fee costs according to the market price of shares at the time of the Facility being negotiated, these fees are commensurately less. For instance, at 1.4p instead of 2p the aforementioned full drawdown scenario cost of 20.8% might be deemed to be 14.56%.
Posted 03 December 2018
Did the terms of the loan facility change since being announced on 30 October?

A. No.

Posted 29 November 2018
Questions on Saudi Arabia

Q: Can you confirm if the current situation in Saudi Arabia is likely to have any impact on the relationship with Artar. 

A: KEFI’s relationship with ARTAR is solid and the joint venture plans are reflected in today’s RNS. KEFI was in Riyadh on 28 October and the Government appears to be determined to progress development and the extractive industries in particular.

Q: if Hawiah is the key licence we have been so keen on, why did you not spend more money on it faster and why suspend field work in 2016?

A: Hawiah is a world-class prospect and we indeed went fast until we had to deal with some issues as regards security and community relations. These issues were dealt with in close collaboration with the regulatory authorities.

Posted 03 November 2018
Follow-on questions regarding Secured Loan Facility

Q: Reference the Loan RNS issued yesterday, $9M was supposedly due to be paid to us in August 2018, as previously announced.

A: The $9M (birr-equivalent) was not for release to KEFI in August. And the commitment to ANS from its shareholders has been made by its institutional investors, for $30-38M. Of that total, $9M (birr-equivalent) is to be released to project company TKGM in December in accordance with terms as published.

Q: In the recent BRR webcast, you also gave some guidance in terms of not requiring cash until the $9M is received, or that was certainly how I interpreted it. Yesterday’s loan facility suggests different, which is what I am trying to understand.  In the webcast you said, ‘the cash and working capital arrangements we have will see us past Xmas, the next cab off the rank is the ANS injection…’.  The events of yesterday suggest this was completely inaccurate.

A: The Loan Facility announced this week is for working capital in 2019, so as to put KEFI (parent company) on a solid footing as it triggers development and other planned activities, also with required flexibility regardless of the timing of project company equity and its conversion from Birr into hard currency, which has recently caused delays in Ethiopia. The Loan Facility is there as a facility to be used as and when required.

Q: From yesterday’s RNS, you mention ‘decisions taken by TKGM’ being the reason for starting ‘certain high impact tasks for community resettlement’, therefore does this not mean that access to the $9M is now valid, as it is no longer money sitting in the bank?  T

A: The Loan Facility is to provide flexibility as from January 2019 at the parent company (after shareholder approval and drawdown as required) as well the ANS investment release of equity to TKGM in December per the published plans.

 Q: You also mention additional expenditure on further exploration.  Is it prudent to start this when clearly the company has no cash and is having to finance it when in such desperate state?  Why not wait until after closure, when in theory a much better deal could be had, the company hopefully being a much higher market cap?  I was also under the impression that this exploration was already covered/financed anyway?

A: There will be no material spending on exploration until after closing the TK development funding. Only low-cost planning in the meantime. The Loan Facility provides flexibility to manage working capital during 2019. The TK funding package is a c. $300M funding package. The parent company needs some working capital flexibility before and after the various interconnected drawdowns.

Posted 02 November 2018
Various questions regarding Secured Loan Facility

Q. It is a disappointment that we will suffer yet more dilution despite your recent assurances.

A. We need solid underpinning of working capital at the parent company level to finish the c.$300M financing. The announced Facility as from year-end need not be drawn if cheaper funds are available and any shares issued are at floor price which is premium to market now.  We certainly try to minimise dilution, the biggest aspect of that effort is the raising of development equity and debt at project level.

Q. You state that the need for further funds principally arises as a result of “decisions taken recently” by the TKGM consortium:

  1. You make no mention of any contribution by the minority interest in the consortium: is Kefi’s cash need a reflection of its proportionate contribution to the total funds needed for the acceleration of aspects of the TK project?
  2. In the same sentence, you refer to the exploration of “the now-enlarged area…”. Why does the TKGM consortium take decisions over operations on land not included in the licence granted to the project company and which will be a cost wholly borne by Kefi/KME?  

A. They do not.

Q. If the decision in relation to commencement of exploration operations was not taken by the TKGM board, why is the exploration being commenced before the licences have been granted and, more importantly, before the arranged funding is in place?

A. No real money spent on exploration anywhere until after full funding of TK, just some that we mostly get covered by JV recharges. The reference to some preparatory work for exploration relates to time and tiny-cost/high-impact tasks that allow drilling to start ASAP after TK construction starts.

Q. There may be sound commercial reasons why shareholders should be hit yet again but, if they are not explained, shareholders see only a never-ending sequence of broken pledges over dilution and these broken pledges make it impossible to calculate any form of fair value for the company’s shares.

A. I am sure you realise that I never say there will be no dilution because I cannot do that. Diluted share value is consistently multiples of current share market no matter which analysts uses which measure by just looking at TK NPV.

Posted 01 November 2018
Further questions regarding Secured Loan Facility

Q: When can the Loan Facility announced this week to provide cash?

A: From January onwards, if required and drawndown. In the meantime, we need to obtain shareholder approval and then give 30 notice of drawdown.

Q: Why have such a Loan Facility?

A: KEFI is a company which is developing its first cash producing project. It never has had a cash flow from operations, like exploration and development companies generally. We use cash and working capital facilities pending the project level funding coming in and the start of operating cash flow. And this Loan Facility expands the working capital facilities available to the company.

Q: Does this mean that the company is not confident of ANS releasing its $9 million to the company in December?

A: All remains on track for the ANS releasing its Ethiopian Birr-equivalent of $9 million into TKGM in December. KEFI working capital management also requires flexibility as to access to different currencies in each month. The Loan Facility provides flexibility as and when required.

Q: Can the Loan Facility lead to conversion into shares below 2p per share?

A: No, the floor price is 2p.

Posted 01 November 2018
Please clarify how resettlement works at Tulu Kapi?

We received the Mining Licence in 2015 which included federal approval of resettlement plans overall. It was then over to the regional government and its zonal and local agencies to set the compensation, detailed plans and to implement. ‎They/we sorted out these details during the past two years despite country-wide protests over, in particular, mishandling of displaced communities (not Tulu Kapi but other sites across the country). We suffered very slow progress during that period, on several levels. In 2018 there has been an improvement in the country-wide political atmosphere and Tulu Kapi has been annointed as "ready to trigger" the community move. 

We always highlight that the government calls the shots ‎and the company merely facilitates and supports. But today's meetings on the ground are all about resettlement preparations now and the actual first wave of moves being January-March. 

Posted 20 October 2018
Questions on Q3 Quarterly Update

Q: In the Q3 Quarterly Update you refer to a working capital facility. When can you draw on it?

A: The development funding plan has always included provision for a stockpile finance facility which can be drawn as and when build a stockpile. It is intended to assist with taking some of the fluctuations out of working capital.

Q: The timetable shows drawdown of equity and debt at different times. Why?

A: This is intended to get the ball rolling and keep to commissioning of production in 2020, and give more time for some Government and debt formalities. It also allows us to start the debt-service schedule later, incur less debt-service cost and provide longer for production ramp-up before first debt-service payments are due.

Q: Quarterly Reports are not typical on AIM. Nor are webinars for Q and A’s. Why do them?

A: Quarterly Reports are mandatory on ASX and TSX but not on AIM. They are merely a wrap-up of already published information, for good order.

Also, please note that Q and A’s on the website and via Webinars are also not mandatory. We have consistently received thanks for the openness and prefer to provide widest reach with communications to all shareholders at the same time.

Posted 10 October 2018
Federal approval required to trigger resettlement?

Q. The community resettlement announcement released this morning says local, zonal and regional authorities approve the resettlement commencement date. What about federal approval?

A.  As previously reported, the Federal Government approved the resettlement plan already. Also as previously reported, the setting of dates and implementation of plans are the responsibility of the regional government plus the zonal and local administrations that report to them.

Posted 08 October 2018
Have significant shareholdings in KEFI been appropriately reported?

Q: More than 100% of the company’s shares on issue have turned over in the past 4 months. Are you sure that all significant share purchases have been properly reported?

A: We do not think that most individual shares have turned over, but that certain shares have turned over a few times. Reporting shareholdings over 3% is a regulatory requirement and is the responsibility of the buyer, i.e. KEFI has no way of policing compliance when these individual transactions occur. Having said that, we are not aware of any non-reporting.

Q: Are you worried about someone buying a position that should be disclosed but not doing so? Could this even extend to a build-up of a control position without disclosure and them not complying with the need to make an offer for all shares, as set out in the takeovers code?

A: There are protective measures in the KEFI Articles of Association for the Board, at its considered discretion, to remove the voting rights of any party that does not comply with the principles of the takeovers code, including that they must comply with the rules of transparency of share dealings.

Posted 02 October 2018
Has Lanstead delivered all its cash to KEFI, so that it has fully paid shares and is in the same boat as all other shareholders? Please explain if not.

A: Lanstead are fully paid up as of August 2018.

Posted 01 October 2018
Various questions regarding Project Equity Investment Agreement with ANS

Q: Has the ANS signed a heads of agreement or a final binding agreement?

A: The heads was signed in August and the final binding agreement on Friday last week.

Q: Can the first instalment of the ANS subscription be used to fund or refund KEFI’s G&A?

A: Generally yes, because KEFI’s costs are mostly for project financing or project preparations.

Q: When do funds flow from the ANS deal?

A: Q4-18 upon the stated conditions being met.

Q: How reliable is ANS’s own investor base?

A: The founders of ANS committed the first $3M of $30M up front. All of the rest has turned out to be with financial institutions which are solid and subject to similar rules of conduct on deals as institutions elsewhere. If ANS had had to go to private groups or to the retail clients of the local institutions, as it had originally assumed, it would have had to ask for deposits in escrow.

Posted 01 October 2018
Why did you drop Cantor Fitzgerald as a Joint Broker?

Cantor Fitzgerald shut down its mining research team.

Posted 23 September 2018
Why appoint SP Angel as Joint Broker?

We decided to replace RFC Ambrian with SP Angel.

Posted 22 September 2018
Has Lanstead delivered all its money and therefore all shares fully paid for?


Posted 30 August 2018
When will exploration resume in Ethiopia?

Q. Could you clarify whether Kefi can resume exploration activity in Ethiopia at least once the equity funds start to come through in September or whether it is the case that resumption will have to await issue of the funding bonds?

A. Exploration can resume when construction commences at Tulu Kapi.

Q. With reference to the RNS of 23rd October 2017, is “commencement of development” to be understood as being when the relocation starts or might the government formally grant the licences when the equity contribution from the syndicate is confirmed?

A. The government will formally grant the licences following commencement of Tulu Kapi construction.

Posted 20 August 2018
Questions regarding Tulu Kapi Update RNS of 14 August 2018

Q1. To quote the RNS: 'On the financing front, the planned Project-level equity investment by a local syndicate is the next key milestone and this remains on track' - could you please confirm this ties in with the RNS of June 11th, which stated 'financial settlement from the Ethiopian investment syndicate will take place in two stages, with the first 30% of their investment closing at the end of August 2018' i.e. will the first $9 million USD be received by the end of August?

A1. We expect 1st instalment commitments end-august and settlement to start then and take a few weeks overall, as it is a large number of parties inside this syndicate.

Q2. I have to confess to concerns to statements such as '...now includes the final preparations by the Ethiopian equity investment syndicate' whilst it is of course positive to see 'final preparations', there is no indication as to how long this will take - it would be great if you could allay my concerns by confirming the question above.

A2. This is a syndicate of financial institutions and other investors. they have their own processes to manage and they keep us informed continually. We have met all the main players and all are sincere and working to timetable so far.

Q3. There was no mention in today's RNS of the proposed bond listing which, unless I'm mistaken, needs to happen relatively quickly given the long-proposed draw-down at the end of the wet season. I, perhaps with rose-tinted glasses, saw the absence of any mention of said item as a positive in that news might be imminent on that front. Assuming that I am wrong, could you please state whether or not previous guidance is still valid and the bond listing can (and will) happen before the end of September?

A3.The trigger of first phase of community resettlement can be any time as from October that the Gov't decides. It is the Govt’s responsibility and decision as to best timing. The bond preparations continue with documentation being the focus now. With the project equity now being scheduled first, we can use those funds first to fund community resettlement and similar early works. Debt drawdown can follow when suits us best. The key is to ensure both equity and debt aligning reliably and then drawdown when we need those funds.


Posted 16 August 2018
Various questions regarding the June 2018 Placing

Q: Did major shareholders sell shares at above 2.5p during the days leading up to the placing and bought into the placing at 2.5p?

A: Major shareholders were wall-crossed as part of the placing process and could not have traded during that time. Insiders were in a closed period until the annual results were released. And if such restrictions were not applicable, any such trades would have been reported.

Q: Why did the Ethiopian equity deal get announced a few days prior to the placing rather than well before, or even after?

A: It was announced when it is was done regardless of coincidences.

Q: Why did you not suspend the shares during a placing to avoid any risk of trading in an uninformed market?

A: AIM does not allow suspension just because a placing is being done.

Posted 23 June 2018
Virus warning on KEFI website

Recently code was added to the KEFI Minerals website by an unknown user. This caused a redirect for a visitor's browser to a second website which triggered antivirus warnings.

KEFI Minerals has:
- removed the exploit script and reset the website cache.
- upgraded the website to SSL (secured web address).
- contracted an internet security firm to monitor the site in future.
KEFI Minerals apologises for any inconvenience caused to website visitors.

Posted 21 June 2018
Will KEFI retain a majority interest in Tulu Kapi whatever happens with funding?
Slide 12 of KEFI's May 2018 corporate presentation shows the proposed ownership of Tulu Kapi once funding is in place, with KEFI retaining an effective 52.5% interest in TK. This is based on a new investor purchasing 30% of KEFI Minerals Ethiopia for $30M.
We are determined and confident that KEFI will retain a majority interest in TK. 
It is also worth noting that a condition of the Listed Infrastructure Bonds announced on 8 May 2018, is that KEFI remains the controlling shareholder in TK as the Bond investors also want clarity of accountability and control.
Posted 21 May 2018
What does the resignation of Ethiopia's Prime Minister mean for KEFI?
The Ethiopian Prime Minister recently flagged this possibility as a deliberate move to better empower certain regions within the nation, especially our Western Oromia Region. 
We need to see the details but it sounds good for the region surrounding Tulu Kapi, which is very supportive of our project. But of course we must await the details and the transition to the new PM.
Posted 16 February 2018
Following the RNS this morning, can you confirm that the other syndicate members aren’t stepping in to replace the Oryx element of funding?

Yes. The funding principals and sums raised have not changed. 

The set of advisers and fiduciaries have been simplified after consulting the principals, who remain the same, as does the planned funding.

The net economic picture has improved after all matters reported in Q4 2017 Operational Update have been taken into account.

Posted 18 January 2018
Was your meeting today with the Ethiopian Prime Minister part of the granting process?

The partnership agreement was kicked off with the PM mid-2015 and now we wrap up loose ends (Harry Anagnostaras-Adams).

Posted 12 December 2017
Appreciate the RNS but I must be the only one that does. I’m sure you expected the SP reaction to any further delay and I am disappointed as I’m sure you are that this could not be put to bed before Christmas?

Disappointing and perhaps also some misunderstanding due to minimalist and formal terminology in relation to the bond. Finalising the documentation is a major milestone. In the world of bond issues, a major hurdle is a negotiated deal being agreed and documented (albeit in our case we now need govt clearance, which is being processed). And after that comes the bond listing process which takes about a quarter. It is not the same process as a bank financing. No-one can guarantee an outcome until drawdown, but we are on track and all target gold production commissioning end-19.

Whilst the next quarter is required for bond listing processes, it is also required for preparing the community and contractors ie as soon as government clearances are received.

No-one would want to actually drawdown $140M until we are at the right stage with community and contractors. All aspects are intertwined and reshuffled to be defend commissioning at end of 2019 and ensure a long production period before debt service commences.

Posted 29 November 2017
Can you explain if the attack on a foreign company in Ethiopia is a new worrying development?

We get full briefings on such occurrences but we are not aware of the particular incident you refer to. One of the reasons for the recent State of Emergency (which was lifted some months ago) was community unrest over mistreatment during resettlement processes by parts of the government administration and by some foreign companies. KEFI has never been criticised or attacked.

Posted 15 November 2017
Why do you think the share price does not respond to the analysts’ evaluations and recommendations? Even though all the analysts see major upside even after equity dilution is factored in at whatever (organisational) level it comes in at?

It is not really for the company to try and interpret the market. we just report what needs to be reported and open our doors to analysts so they can form their views. Our strategy is to continue to successfully ensure that we bring in nearly all capital (debt and equity) only after closing of the whole deal is approved by all and the government.

Posted 14 November 2017
Please update us on the resettlement process, especially any facts of events on the ground

I agree that the resettlement processes are important to monitor because of their political sensitivity in the world’s highest growth country which is naturally experiencing a huge wave of industrialisation and urbanisation. It is also important because it will be the first cab off the rank for the project’s physical implementation at Tulu Kapi site as it is at the 100’s of other sites around the country which are dealing with resettlement and lastly it is important because it will set the tone for community relations going forward.

On being asked by the Board to become an executive about 12 months after the Tulu Kapi acquisition, an initial priority was to build and empower what we have since called the social performance team. It has since been our biggest team but the government sets the pace and drives implementation with the community.

With the benefit of hindsight, we can all now see that the Government effectively slowed the whole process down by over 12 months by virtue of the actions around and during the now-expired state of emergency during which it also overhauled its own teams and created an independent agency for this function around the country.

KEFI is working intensely with the community and the relevant government agencies and we go beyond compliance with local laws by also complying with IFC Standards. There is much going on with the resettlement, but as frustrating for shareholders as it may be, it cannot be for KEFI to lead the reporting and publicity as it must respect the Government’s leadership on these matters.
(From Harry Anagnostaras-Adams)

Posted 13 November 2017
Various questions regarding the Infrastructure Finance Bond

Q. Has the Infrastructure Finance Bond SPV been set up and have you a timetable on the Bond issue?

A. We are all working for closing this year and key individual milestones will be reported formally.

Q. Will the Bond offer be open to public and KEFI shareholders?

A. Any qualified parties can bid in the bond offer and the arranger will manage it.

Q. Do you have any comment on the HotStockRockets article 2nd Sept which was fairly categorical about there being zero dilution (“You will remember that Kefi still has a small $24 million funding gap which it will close via offtake agreements and other deals that do not dilute PLC shareholders.”) as opposed to the ADU Presentation (and previous) that stated “Closing the residual funding requirement of c. $24M is expected to at least partly involve an equity issue by KEFI.” I note there has been no retraction by HSR,but also no comment from the KEFI BOD – strange for something so important to shareholders and to the market as a whole.

A. KEFI cannot issue announcements analysing third-party commentaries. We have made it clear that our priorities are to minimise dilution.

Posted 11 September 2017
Can you answer the following questions regarding the Lanstead Sharing Agreement?

Q. Why choose a Sharing Agreement with Lanstead as part of a placing?

The sharing agreement with Lanstead allows KEFI to further benefit from positive share price performance over the next 18 months and the funding helps support KEFI’s activities for 2017. We see a number of positive catalysts for KEFI over the coming months which should be positive for the share price as these are announced.

The £4,620,000 placing with Lanstead was done at the same price as the placing with other investors. KEFI can immediately deploy £693k of the proceeds and the balance of £3,927k has been invested in the sharing agreement which enables KEFI to further benefit from share price appreciation and to receive funding on a regular basis.

Q: Is Lanstead entitled to invest monthly at a fixed discount to the prevailing KEFI share price from month to month?

A: No. Lanstead will be issued and will immediately pay for 82.4 million (post consolidation) shares following shareholder approval at the General Meeting on 27 February. The number of shares issued to Lanstead is fixed and does not change. However, the amount from Lanstead due to KEFI under the sharing agreement is adjustable upwards or downwards at each of the 18 monthly sharing agreement settlements that follow. For example; the approximate amount in any particular month will be 10% more than £218k if the share price is 10% higher than 0.44p (7.48p post consolidation) or 10% less than £218k if the share price is 10% lower than 0.44p (7.48p post consolidation).

Q: Can Lanstead benefit by the share price being lower than 0.44p, rather than going higher than 0.44p?

A: No. Lanstead makes more money the higher the share price appreciates. The value-sharing (with KEFI) on the upside by Lanstead is an incentive to KEFI to perform so that Lanstead can make money.

If the share price over 18 months averages double 0.44p (ie 0.88p or 14.96p post consolidation) KEFI will receive double the headline £4.6m (ie £9.2m instead of £4.6m).

If the share price over 18 months averages half 0.44p (ie 0.22p or 3.74p post consolidation) KEFI will receive half of the headline £4.6m (ie £2.3m instead of £4.6m).

The projected outcome for KEFI is contractually clear and the value of Lanstead’s investment is greater if KEFI’s share price is greater.

It is important to note that Lanstead shares the majority, but not all of the upside in future KEFI share price appreciation. The bottom line is that Lanstead makes more money as the share price rises and does not derive any advantage from a decline in the share price.

Q: Can Lanstead trade its KEFI shares?

A: Firstly, Lanstead has a demonstrated track record of being a longer-term supportive shareholder.

Lanstead is free to buy and sell KEFI shares just like any shareholder, except that it is required to disclose movements of >1% as a significant shareholder. Unlike other shareholders, Lanstead has an uncapped commitment through the sharing agreement to remit amounts each month to KEFI based on the prevailing share price. Therefore one might say that whilst Lanstead may have an incentive to take a profit along the way (like any shareholder) and to cover their downside risk on the investment (just like any shareholder), Lanstead also has an incentive (unlike other shareholders) to maintain a significant ongoing shareholding because of its uncapped exposure on the amounts due to Kefi over the 18 months should KEFI shares appreciate.

Q. Have other companies benefited by having Lanstead as a shareholder with a similar sharing agreement?

A. Yes, based on our enquiries Amur Minerals (AIM), AFC Energy (AIM) and Blackham Resources (ASX) are some recent examples of companies that have benefited by having a Lanstead sharing agreement. Immupharma (AIM) is a current beneficiary.

Posted 10 September 2017
Different figures in January 2017 Beaufort Securities note?

Q. The Beaufort Securities note of 18 January contained figures that differed from those previously released by Kefi.

Beaufort expects a total funding requirement figure of $145m and assumes an increased cost overrun facility of $20m. Are these figures sourced from and endorsed by Kefi?

Beaufort is now suggesting that construction will not commence until this time next year. Is this the current, amended, schedule or are Kefi and its contractors still working to the time schedule previously indicated, which was that construction would be substantially completed by Q1 2018 with production starting in mid-2018? In the news release on 20 December 2016, you stated that you were confident that development would commence this year.

In that news release of 20/12/16, you also state that you are confident “…of being able to announce a co-lender to coincide with the scheduled end of the Ethiopian State of Emergency…”. Can it be inferred that the co-lender is ready to commit subject to the condition precedent that the SoE is lifted, and would be in a position to commit if the SoE is lifted ahead of schedule, or is due diligence expected to take another couple of months?

A. Analysts form their own views after gathering information from a variety of sources. As detailed by Charles in his Beaufort Securities note, he visited Tulu Kapi and met with various people in Ethiopia during November.

KEFI never endorses the details in analyst research and also respects their right to form views which may differ from the Company. Analysts sometimes take a more conservative view on costs or timing than the Company and they are then happy to upgrade their valuations if the Company meets its targets.

Per our guidance, we still target construction to commence this year fully funded with production by the end of next year.

Posted 25 January 2017
Questions regarding Q4 2016 Update

The shares are woefully undervalued provided only that Kefi secures the additional senior debt and provided that the GoE resolves the civil disorders (there was a positive announcement yesterday) but I would be grateful if you might clarify a couple of points?

Q. In previous calculations of the net cash requirement, the capital raised last July (2016) of $5m has been shown as reducing the cash requirement remaining to be raised and there is also the $3m VAT recovery to be taken into account. Is the $20m “equity requirement” mentioned in today’s RNS IN ADDITION TO the $8m just mentioned or is the additional capital to be raised $12m (subject to the corporate cash requirements of PLC).

A. $20m hopefully project level equity. We’ll see.

Q. The cash requirement figure appears to include costs running out to October 2018, some 5 months after scheduled commencement of full production (even longer after scheduled commencement of commissioning of the mine) but those costs should be covered by income generated by sales of metal. Even if there is a delay getting the metal to market, it can be forward sold once produced and those forward sale contracts can be discounted commercially.

A. We have not played those games yet and have deliberately not committed any offtake yet. KEFI has recently appointed Noah’s Rule as gold sales/hedging adviser as we now turn to those subtleties.

Q. If a worst case scenario is being taken (no production before October 2018), then, surely, the contractual retention (the plant construction contract) will not be payable until there is production and that sum, at least, could be considered to be funded by income (and the cash requirement thereby reduced)?

A. That is all factored in.

Posted 21 December 2016
DBE Debt Level Ratios?

Q: I have seen an Ethiopian press release recently with a comment from a member of the DBE providing the below quotes regarding a change of stance on debt levels for international projects:-

"Esayas Bahire, president of DBE, told The Reporter that the gold development project was viable. However, he said the loan process had stuck due to a change in loan policy. “When the company applied for a loan the debt equity ratio was 70-30 percent. But it was changed to 50-50 percent. So KEFI’s loan request is pending,” Esayas said.

Previously, companies were expected to raise 30 percent of the required project financing and would secure 70 percent funding from local banks. But the government now requires foreign investors to come up with 50 percent of the project financing. “Apart from that we do not have doubt on the viability of the project,” the president said."

With the cap ex requirement announced this week at 150 to 160m USD, the above criteria suggests that the debt can only up to 75 or 80m USD where as the presentation on Thursday stated that the debt component will be between 81 and 91m USD.

Are you able to comment any further?

A: The DBE is supportive as its President indicates in his comments and the Ethiopian central bank has advised that the new policy can take into account the equity investment into the project since its inception and that therefore our proposals are compliant.

Posted 24 October 2016
Dilution alternatives?

Q. If the project has the value attributed to it, I argue there are no circumstances where issuing share equity at this crashed share price of say 0.4p is in shareholders interests, if there are alternatives, such as offtake streaming. The issue of say 4bn shares at 0.4p would raise £16m, and streaming 35,555 oz of gold at £450 also raises £16m.

Given the first option gives shareholder dilution of 50% of the future project value and the streaming option involves say 3.6% of forward selling of a 1m+ oz gold project, is streaming clearly and overwhelmingly the best option, and for any pro rated funding to be raised, to preserve current shareholder value, even more so long term shareholders?

A. Gold streaming is certainly one financing avenue we have on the table for Tulu Kapi though its role in the mix (size and terms) is restricted by the senior secured debt.

As Harry said during the webinar, working towards the best outcome for shareholders is always at the forefront of our minds in these volatile markets. And the NPV shows that under all options being worked up, the value-upside for shareholders is a multi-bagger.

Posted 23 October 2016
Question relating to equity placing

Would it be possible to comment on concerns circulating in the PI community that another market placing will be undertaken prior to arrangement of the funding package as detailed in prior RNS releases?

A circular today from Tom Winnifrith (market commentator) suggested that Harry Anagnostaras-Adams had flatly rejected that another placing would be necessary and that the company is fully funded until Tulu Kapi project funding is arranged. Are you able to confirm?

A. Please note that Harry is in the midst of an international non-deal roadshow which is interspersed with his normal work schedule. This is KEFI's first ever institutional roadshow. Of course that is the first since inviting Odey and Standard Life to fund the acquisition of Tulu Kapi some three years ago, which was not really a roadshow at that time, as they both knew the Chairman from EMED Mining where they were large shareholders. I am aware that in this non-deal roadshow we have had over 60 requests for meetings, which illustrates increased interest in the gold sector and in KEFI.

Harry mentioned to me some weeks ago that Tom Winnifrith had passed on the query as to whether ‎we were doing a placing and Harry answered, which I repeat, that this is a non-deal roadshow and that cash and receivables should take KEFI to Q2-17, before which full development funding should be done and dusted.

Posted 03 October 2016
Exploration expenditure following July 2016 placing?

Q: The placing the other day has allotted $600k towards exploration in Saudi Arabia and Ethiopia according to a Beaufort Securities note.

Although the press release mentioned exploration in Ethiopia and Saudi Arabia, It would have been useful if it had been more specific about what form the exploration was going to take and on what EL's.

Are you able to expand on this, specifically in relation to what's being planned for each EL in Ethiopia & Saudi Arabia?

A: We have budgeted to remobilise into the field in both countries after the June to September seasons (the wet in Ethiopia and holy periods in Saudi Arabia).

Most of the emphasis will be on targets proximal to our development assets, Tulu Kapi and Jibal Qutman. The exception is Hawiah which is stand-alone company-maker-scale, multi-metal target where we will also start with some geophysics closing in on some recent interpretative results.

We do not publicly breakdown exploration budgets any further, as they compete for every dollar allocated and continual reviews can swing the focus based on results from month to month.

Posted 02 August 2016
Will KEFI release a Q2 2016 quarterly report?

We decided not provide a quarterly report for the April to June 2016 period as the AGM statement by KEFI's Chairman was released on 30 June. This statement provided a good update on KEFI's progress during Q2 2016

Please note that KEFI's quarterly report is not a regulatory requirement but voluntary disclosure to generally keep shareholders up to date with the Company's progress.
(posted 26 July 2016)

Posted 26 July 2016
Two questions regarding potentially divesting Tulu Kapi to Odey or other parties

Q: Clearly it is still too difficult to agree good enough terms with gold streamers to complete the syndicate given the better gold prices of late. Consequently, has management considered allowing the sale of KME - perhaps even to Odey and Ausdrill as they are the experts in that area - and using the funds raised to really progress the jewels in Saudi Arabia? It would add cash, mitigate future need for dilution and potentially bring about a significant stock re-rating.
(posted April 2016)
A: Thanks for the question but the syndicate formation continues on track.

Q: Odey could raise the funding far easier on the private market and perhaps buy in Kefi's expertise as needed, providing another revenue stream. Haiwah is crying out to be developed and TK is simply stalled in the Market's eyes so the logjam needs unblocking somehow as more dilution here will hand TK to Odey anyway at the present rate!

A: Hawiah is a good exploration target raher than an asset ready for development. And it’s rate of progress has been unaffected by the activities in Ethiopia.

Posted 23 July 2016
Might KEFI's Board of Directors consider demerger of the Company's interest in Kefi Minerals Ethiopia (KME) following full funding of the Tulu Kapi project?

Our current priority is obviously to finance Tulu Kapi and to trigger development of Tulu Kapi. Once this Plan A is implemented, we would naturally consider alternative strategic options from a position of strength. The creation of two public-listed entities out of KEFI has not been seriously considered at this stage of development and at this stage of the cycle.

KEFI's acitivities in Ethiopia and Saudi Arabia are currently conducted swiftly and very cost-effectively by the same exploration and development teams.

Should the Board come to consider it value-adding to decouple our activities within the Arabian Nubian Shield, we would naturally consult our 60% Saudi partners, bankers, brokers and of course shareholders.

Posted 03 April 2016
How is KEFI progressing on various matters?

Q. Oxide upgrade at Jibal Qutman – is this on back burner or due to be officially confirmed soonish?

A. Updating Jibal Qutman's Mineral Resource is not on the backburner, we are currently weaving through local issues.

Q. Will there be any more updates/upgrades to TK potential total resource/reserve before funding is confirmed?

A. Our team has been active on evaluating growth options for Tulu Kapi's gold production rather than working towards releasing updated resources/reserves changes soon.

Q. Is final piece of funding jigsaw still likely to be via a streamer or is it now more likely to be via third party debt for equity in KME (or a combination of the two)?

A. We are still focused on streaming as it fits well structurally within the funding package.

Q. Is funding situation ‘all fine’ as before?

A. Yes. Just a daily management process to speed up whatever aspect is slowest and weave through local issues. Focused on the final selection and structure of syndicate for the best fit to maximise solidity behind the company - through the inevitable opportunities and challenges that come with starting a new mine.

Posted 21 March 2016
Q&A for 121 Mining Investment Conference in Capetown, 8-9 February 2016

Q. Sum up your company for us in a sentence or two.

A. KEFI Minerals is an AIM-listed mining exploration and development company operating in the Arabian-Nubian Shield – principally focused on gold and copper deposits in Ethiopia and Saudi Arabia, with an attributable 1.93Moz Au and significant resource growth potential based on our extensive exploration portfolio. At our key asset, Tulu Kapi in Ethiopia, we’re on track to commence production in 2017.

Q. Tell us a little about you and your team’s background and any career highlights so far.

A. KEFI has a strong team with complementary skillsets. Executive Chairman Harry Anagnostaras-Adams has a background is in business management and finance, with a primary focus on start-ups in resources sector. Since moving from Australia to Europe in 2005 with a team, he launched EMED Mining (now Atalaya), KEFI Minerals and some private ventures which now includes the Cyprus copper venture in which Atalaya retains a 10% free-carried interest. EMED/Atalaya is focused on restarting the old Rio Tinto Copper Mine in Spain and has overhauled plans to international standards, completed an arduous clean-up of inherited litigation and other disputes, re-assembled full project ownership and agreeing the basis for permitting by the Andalucian authorities. Production has just started. In 2014, Harry switched from Non-Executive to Executive Chairman at KEFI, to support the acquisition, and complete overhaul of, Tulu Kapi Gold Project– transforming the project from an unviable venture to one which now has robust economics and is fully permitted, with the development financing syndicate taking shape. KEFI recently announced the securing of first class project contractors African Mining Services and Sedgman, and the Government of Ethiopia as project partner. Preferred banks and product-linked financiers have been selected and formalities commenced.

Jeff Rayner, our Exploration Director, is a geologist with over 27 years’ experience and he’s supported by a team with significant regional experience. Our group operations are headed up by Wayne Nicoletto, who’s also MD for KEFI Minerals Ethiopia, who brings 30 years’ experience as a metallurgist, general manager and country head, primarily heading up the building and operating gold mines in Africa and Mongolia. . John Leach has just stepped down as Finance Director of Atalaya and will now manage the completion of finance syndication process at KEFI. Four of the seven group company directors having been with the business since its foundation. The more recent additions include Ethiopian expert Dr Kebede Belete and His Excellency Mr Norman Ling, former British Ambassador to Ethiopia, Djibouti and the African Union.
It’s also important to note our Saudi partner, ARTAR of the internationally renowned Al Rashid family, with whom we have a joint venture company through which we operate in the country. ARTAR is a significant local entity with strong government connections, which brings tremendous strength to our activities in the country.

Q. What is the focus of your management team in 2016/17? What are the key milestones you are looking to reach over the next year that you think will add value to the business?

A. Our primary goal is progressing our Tulu Kapi gold project on schedule to commence production at the open pit at the end of 2017. In the immediate future, we’re focusing on formalization of the finance syndicate and receiving regulatory approval thereof, which we expect to achieve in Q2 2016. Other key milestones for Tulu Kapi in 2016 include completing the preliminary economic assessment of the underground mine as well as the commencement of mine district exploration for satellite deposits.
In parallel, at our most advanced project in Saudi Arabia, at Jibal Qutman, we’re currently translating the Mining Licence Application in Arabic for submission and processing. This year we expect to expand the Mineral Resources estimate at Jibal Qutman and progress feasibility studies for construction and operating licence applications. We’ll also be exploring the district around Jibal Qutman for satellite deposits. At our other key project in Saudi, our more recently-granted Exploration Licence at Hawiah, we’ll commence drill-testing of gold and base metals targets. We also hope to be awarded additional exploration licences in the country.

Q. What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

A. For any gold miner, the perils of the gold price is a cause for constant vigilance and risk-mitigation. We’ve taken important steps to refine the finance plan to protect the Tulu Kapi project and all its undertakings against fluctuations in gold price. Similarly, in difficult capital markets for junior markets, we’ve been extremely prudent in our approach to financing, assessing multiple options very carefully from the viewpoint of the project syndicate as a whole before announcing and locking in any one party. We’re now finalizing the remaining details of the financing plan to include cost overrun facilities, limited hedging and pre-production finance charges with a view to striking an appropriate balance between risk-mitigation and equity dilution.

Q. Investors like to see that management have “skin in the game”. Tell us briefly about your management team’s investment in the business.

A. The key members of the management team and all of the board hold shares in KEFI, which was recently increased with additional investment made during our recent fundraising. Harry’s family’s holding is about 5%. Significantly, our key shareholder, Odey Asset Management, increased their holding at the end of 2015 from 14% to 26%, which is a tremendous vote of confidence.

Q. In a sentence, what do you think makes your company such a compelling investment?

A. Our stock is extremely good value: the Development & Finance Plan for Tulu Kapi that has been adopted by our preferred syndicate of financiers and contractors gives the asset an NPV at the start of production in 2017 of £123m compared with a current market capitalization for the entire company of less than £10m. This doesn’t take into consideration our pipeline of other significant projects, which makes the stock yet more compelling.

Posted 18 January 2016
Follow-on Questions from Q4 2015 Webinar

Thank you for answering my questions on the Webinar this week.

Q. My first question regarding detailed timing of the finance steps was to try and understand whether Kefi will be announcing interim steps prior to the full drawdown in mid 2017, so my question may have not been clear. Are you able to comment on whether you'll be issuing stage by stage updates?

A.Yes, as commitments made.

Q. Secondly, I forgot to ask a question in relation to the "Preliminary economic assessment of Tulu Kapi underground mine" comment that your latest PR stated as being one of the milestones for this year. So my question is, when do you expect this PEA to be completed?

A. Next two months, as the planning team can be allowed to take a temporary breather from TK and JQ.

Posted 17 January 2016
Can you please summarise the key economic parameters of Tulu Kapi showing changes since the acquisition by KEFI, as referred to in yesterday’s webinar?

The table at this link outlines how KEFI has improved the key Tulu Kapi economic parameters since acquisition in December 2013.

Posted 16 January 2016
Various questions regarding Tulu Kapi

Q. In the RNS of yesterday, the peak funding requirement is stated to be estimated at $120m, reduced back down from $129m, but the table headed “Capital Expenditure” reveals a figure of $139.6m after “cost Overrun”. Please reconcile the figures with explanations.

A. Circa $120M is shown in table as $122.9 and then we show amounts for a cost overrun facility and facility for finance charges during construction, both under negotiation with the syndicate. These numbers will keep refining before drawdown as will gold price hedging and its pricing/structure.

Q. Does the figure of $120m include a provision for exploration at TK? If so, under what heading is the provision included and how much is provided?

A. Yes, in other.

Q. There has been considerable uncertainty, confusion and disappointment over the level of funding required of PLC for the TK project, including the historic VAT liability. Are you now able to give a clear and categorical assurance that NO further funding will have to be raised by PLC to feed the insatiable thirst of that project for cash?

A. VAT part of deal from day 1. And saying TK has an insatiable thirst? Really! In all sincerity, I challenge anyone to complete permitting, full DFS, contracting, and finance syndication for as little as spent by KEFI. Never seen it. I consider this an unfair question on several scores.

Q. In Edison’s note of 11 November 2015, there is mention of a “golden ribbon” of low-grade oxide extending 4km to the west of TK and estimated to contain up to 200k ozs. It is also mentioned that metallurgic tests have been conducted and that a high level of recovery can be expected from rough crushing and heap-leaching. That source of oxide could, I calculate, increase NPV for the project by up to 30%.

A. Our bankers’ NPV’s post-DFS on Ore Reserves in TK open pit would be bigger if we add hypothetical NPV’s on underground resources and satellite deposit targets.

Follow-on Q. Why has there been no mention of it in company reports? If the figures are realisable, could this source of additional production be brought on stream before or simultaneously with production for the mine, now scheduled for the end of 2017?

A. Exploration will determine how/when we tackle.

Follow-on Q. If so, is the cost of drilling of the resource and of providing whatever additional facilities that might be necessary to exploit it covered by the current estimate of peak funding requirement?

A. Exploration included. No hypothetical development yet capable of estimation.

Posted 15 January 2016
What are KEFI's plans following the placing?

Q. Well done on the placing earlier in the week at the level you got it away at. Can you confirm now when the drilling for Hawiah will commence and whether we will have an announcement of the bank debt and streaming deals prior to Xmas for Tulu Kapi?

A. Field teams now being released from Jibal Qutman for the time being. Up to Exploration Manager to schedule Hawiah logistics, community protocols and so on. Having selected contractors in September and confirmed govt recently, we now focus on the banks and streamer. Front runners are clear and selections will be made when best suits KEFI.

Q. It was mentioned in the announcement that drawdown would be in the new year but do you expect terms to be agreed this side of Xmas?

A. Terms already agreed in principle.

Q. Finally, can you confirm if any of the monies raised this week is to begin the community resettlement for Tulu Kapi?

A. ‎Community preparations are in full swing but move will be triggered on first drawdown.

Posted 27 November 2015
Will details of the revised ‘peak cash requirement’ following agreement ...

...of terms with the contractors (and, possibly, the Ethiopian government) be released to the market before the company seeks to raise further equity to bridge the funding gap (if any)?

A. The peak funding requirement will be refined over the coming weeks as negotiations with various parties are progressed. The team is assessing the competitive bids from mining contractors and construction contractors, as well as financiers. KEFI will provide updates on the general status of these negotiations and the estimated impact on peak funding. Given how this ties in with the amount to be raised via equity, it is likely that such an update will be provided prior to an equity raising.

Posted 26 November 2015
Questions to Harry Anagnostaras-Adams regarding Edison Research note

Q: Are you happy with the Edison Research note published 20 August 2015?

A: Edison did not try and value the resources or reserves in the ground or the exploration scenarios and probabilities. They merely project a dividend stream and value that. This is as if to say (my words) “if the dividend stream is worth multiples of today’s share price, then you get all the upside as further cream”.

Q: I guess its saying kefi is valued at 3.9p after issuing an additional 860m shares($10m @0.75p/share), excluding any streamer deal. Or 2.82p worth of dividends?

A: We understand it values the assumed dividend stream only and ignores other values or upsides.

Q: I appreciate any management involvement in this note would have to be cautious/prudent, but 860m shares at 0.75p ?!!! Surely,it’s a reasonable assumption that we can do better than $10m and 0.75p after the finance is finalised?

A: The valuer appears to be assuming a quantum of shares to be issued at a small discount to today’s share price. He is, I suppose, not inclined to speculate on what the share price may or may not be when the financings are done.

Q: Also,they have slaughtered Jibal Qutman by valuing it based on resource and peers in the sector, who've all been trashed and probably have no hope of ever making it to production, with their low valuation per resource oz. They could've at least used Kefi's scoping study numbers?

A: Edison did not try and value the resources in the ground or the exploration scenarios. They merely project a dividend stream and value that. This is as if to say (my words) “if the dividend stream is worth multiples of today’s share price , then you get all the upside as further cream”.

Posted 26 August 2015
How do Tulu Kapi capital costs in the release dated 17 August 2015 tie in with DFS numbers?

Q. Table 13-6 in the DFS shows cost of the process plant including EPCM & Insurance ($10.8m) as $77.5m. In the RNS of 17 August (page 3) you show the cost of the processing at $72.3m excluding EPCM of $10.8m, which is separately itemised. Please clarify the increase of $5.6m.

A. Table 13-6 Total ($77.5m) - EPCM and insurances ($10.8m) + raw water dam and delivery system ($3.8m) + TSF slurry delivery and return system ($1.2m) + environmental management ($0.5m) = processing plant in RNS ($72.3m)

Q. I do not understand the wording immediately below the table of initial capital costs in the RNS of 17/8: “The above the mining pre-strip costs and infrastructure construction costs are inclusive of a targeted US$10 million contribution from the mining contractor”. The mining pre-strip costs are $10.6m and the Infrastructure costs are $17.8m making a total of $28.4m if those are the infrastructure costs to which you refer. Are you saying that you are expecting the mining contractor to contribute $10m to reduce those costs to $18.4m in aggregate or are you saying that the $28.4m is AFTER deducting a $10m contribution from the mining contractor?

A. The latter statement is correct. The in the RNS for mining pre-strip ($10.6m) and infrastructure ($17.8m) on page 3 of the RNS total to $28.4m, which equate to Table 13-2 of the DFS as follows:
• Mining pre-strip ($15.6m) less $5.0m = $10.6m
• Overhead power lines, mine camp and access roads (total to $22.8m) less $5.0m = $17.8m

Q. The site infrastructure costs are included in the cost of the process plant (DFS Table 13-6 $11.2m). The infrastructure costs referred to in the RNS appear to refer to off-site costs. Is that correct?

A. The infrastructure costs in the RNS are the off-site infrastructure costs in Table 13-6 less the raw water and TSF delivery systems detailed in the first answer above and less the $5.0m funding provided by the mining contractor.

I sympathise with your difficulty in reconciling these numbers. The RNS capex table aimed to distil these numbers down to a few line items that could give a broad split of the capex for a wide audience. The tables in the DFS were provided by various consultants who each have their own way of summarising the costs. This can be confusing when rolled up. For example the “site infrastructure” costs in the processing plant capex may be better labelled as “Earthworks and plant indirect costs” per the detailed breakdown in Table 13-7 of the DFS.

Finally, if you want to reconcile the owner mining capex in Table 13-2 of the DFS to the contractor mining capex in the RNS, then have a look at Section 16-5 of the DFS

Posted 21 August 2015
Various questions regarding planned drilling of the Hawiah prospect in Saudi Arabia.

Q. Will you be announcing the start of the Hawiah drilling and the results of the SP survey of the northern part of Hawiah?
A. Yes

Q. Is Hawiah 1 still the target?
A. Yes

Q. And will you release the results of the initial programme of about 18 holes before proceeding with the next phase of exploration?
A. Yes

Q. Are you able to give an indication of how long that initial programme will take through to receipt of lab results?
A. Some months, depends largely on ground conditions and lab turnaround.

Q. Are you able to confirm that Kefi has funding to carry all KSA operations through till after release of the initial drilling programme results?
A. Drilling will take some months and will follow some scheduled drilling at Jibal Qutman, pursuant to priorities.


Posted 27 July 2015
Could the current price of gold impact on the finance required to develop Tulu Kapi?

Gold is serving its age-old function, the reliable last-resort saleable asset when there is a need for liquidity. We note the credit crunch in China in particular.

  •     Once gold has provided liquidity for the cash-starved, its price will return to the “norm” , whatever that is for that moment in time
  •     In the meantime, it is our opinion that gold stocks and other secondary market prices related to gold supply/demand get the ripple effects
  •     We believe that Gold stocks are currently at cyclical lows, and juniors more so than majors
  •     Like everyone else, project financiers get caught up cyclical pressures of capital markets
  •     KEFI has received nothing but praise from the Government, short-listed contractors and financiers for the manner in which we have overhauled Tulu Kapi. This initiative has been accretive for KEFI’s intrinsic fundamental value.

As we have stated previously:

  •     The debt numbers stack up and have always been stress-tested at current gold price levels and lower
  •     The project is robust and has a quick payback because it ranks in the best quartile globally for all-in sustaining costs
  •     The key task is now not to get more debt offers but to get the best financing mix for our shareholders
  •     We need to work through the various choices properly, per the published timetable or targeted milestones. That is happening.
Posted 23 July 2015
What can the company do to alleviate shareholders’ fear of more dilution?

Our business model is quite clear: equity funding is what takes us through to triggering development and , at that stage, maximise within reason the use of contractors’ funding, debt-style finance and project-level equity to get us through to production cash flows. We work very hard to always be transparent. It is mandatory to be transparent as to how the board strives to act in the best interests of shareholders as a whole. That allows every individual shareholder to decide what suits his own different circumstances and different appetite for risk/return. Some investors like to get involved early during grassroots exploration, others during production only, and others at stages in between.

Posted 22 July 2015
Are you talking to the Ethiopian Government about their participation?

Under the Mining Agreement between the Government and KEFI Minerals Ethiopia, the Govt has a 5% free-carry and the right to acquire more on commercial terms but only by mutual agreement.

Posted 22 July 2015