KEFI Gold and Copper plc (LON:KEFI), focussed on the Arabian-Nubian Shield, with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, announces that Gold and Minerals Company Limited (GMCO), its Saudi Arabian joint venture company, has approved the development of Stage 1 of the Jibal Qutman Gold Project (JQ1), subject to the completion of certain outstanding procedural requirements.
GMCO, in which KEFI holds a 13% interest and its long-standing Saudi Arabian partner, industrial conglomerate ARTAR holds the remaining 87%, has approved the approximately US$87 million capital development programme for JQ1, with development expected to commence during Q4 2026. The principal outstanding requirements to start development is the granting of a Mining Licence by the newly appointed Saudi Arabian Minister of Industry and Mineral Resources.
JQ1 is GMCO’s first development within its substantial Saudi Arabian portfolio, which contains aggregate Mineral Resources of approximately 4.0 million ounces of gold equivalent. The portfolio comprises the Jibal Qutman Gold Project and the Hawiah Copper-Gold Project, both of which are expected to be developed in stages.
Highlights
- Development approval: GMCO’s Board has approved the c. US$87 million JQ1 development, subject to completion of the remaining procedural requirements, with commencement targeted for Q4 2026.
- Production: JQ1 is an oxide-ore gold development utilising conventional carbon-in-leach processing, with an estimated seven-year operating period and recovery of approximately 258,000 ounces of gold.
- Attractive project economics: At gold prices of US$3,000–5,000 per ounce, JQ1 is estimated to generate a post-tax net present value (“NPV”) at a 5% discount rate of US$141–275 million and an internal rate of return (“IRR”) of 23–60%.
- Financing: KEFI’s 13% contribution is c.US$10-12 million over 24 months, if all contributed as equity. Based on current discussions, it is expected that approximately 50% of the total capital requirements will be provided on commencement of development with the balance of US$5-6 million to be optimised as to quantum and sourcing after 12 months, having considered the financing alternatives.
- Operating and Financial Platform for Growth: JQ1 is intended to establish the operating and financial platform for subsequent developments at Jibal Qutman and Hawiah, with cash flows from the initial operation expected to underpin future exploration and sequential project developments.
- Significant Saudi Arabian portfolio: GMCO’s aggregate Mineral Resources of approximately 4.0 million ounces of gold equivalent provide the foundation for the series of planned developments, with a longer-term aggregate production target in the order of 350,000 of gold and gold equivalent ounces per annum.
- KEFI’s participation: KEFI retains the flexibility to participate in future equity funding requirements or accept proportionate dilution of its GMCO shareholding.
- GMCO has a stand-alone management and operating structure, with shareholder oversight.
Harry Anagnostaras-Adams, Executive Chairman of KEFI Gold and Copper, commented: “The conditional approval of the development of Jibal Qutman Stage 1 is an important milestone for GMCO and for KEFI’s interests in Saudi Arabia. With the remaining procedural requirements expected to be completed shortly, we look forward to the commencement of development during the fourth quarter of this year.
“Jibal Qutman Stage 1 is an attractive project in its own right, and its wider significance lies in establishing the first producing operation within GMCO’s substantial portfolio of gold and copper assets. We anticipate that the cash flows generated by this initial development will provide an important foundation for funding GMCO’s exploration activities and the progressive development of identified further projects at Jibal Qutman and Hawiah.
“For KEFI, our interest in GMCO provides exposure to a significant and growing Saudi Arabian mining business, alongside our principal development activities in Ethiopia. The joint venture’s stand-alone management structure and our flexibility regarding future funding commitments allow us to participate in this opportunity while maintaining our focus on starting up Tulu Kapi, where we are recommencing a re-set development program following the recent security incident, commencing with community priorities.
“KEFI’s Ethiopian and Saudi development pipeline presents us with a pathway to a beneficial interest in a combined 205,000 oz gold and gold equivalent production.”
Jibal Qutman Stage 1 Development
JQ1 comprises the initial development of the oxide gold resources at Jibal Qutman and is designed as a conventional carbon-in-leach gold operation. Based on the Definitive Feasibility Study, the project has an estimated capital development cost of approximately US$87 million and is expected to recover approximately 258,000 ounces of gold over an initial seven-year operating period.
The estimated economics of JQ1, based on two illustrative gold price scenarios, are summarised below:
| US$3,000/oz gold | US$5,000/oz gold | |
| Capital expenditure (US$m) | 87 | 87 |
| Initial equity funding (US$m) | 44 | 44 |
| Average gold grade (g/t) | 0.5 | 0.5 |
| Gold recovery (%) | 87 | 87 |
| Seven-year operating period | ||
| Gold production (000 oz) | 258 | 258 |
| Revenue (US$m) | 800 | 1,317 |
| Operating costs (US$m) | 623 | 777 |
| EBIT (US$m) | 177 | 540 |
| Tax (US$m) | 38 | 126 |
| Profit after tax (US$m) | 139 | 414 |
| Net cash generated (US$m) | 264 | 627 |
| Payback (years) | 1.9 | 0.9 |
| Breakeven gold price (US$/oz) | 1,871 | 1,871 |
| IRR (%) | 23 | 60 |
| NPV at 5% discount rate (US$m) | 141 | 275 |
These estimates demonstrate the potential for JQ1 to generate attractive returns as a standalone operation, while establishing the infrastructure and operating capability to support GMCO’s broader development strategy.
Development Financing
The proposed financing structure for JQ1 envisages at least half of the initial development capital being provided through equity contributions from GMCO’s shareholders, with the balance to be provided through other financing arrangements. On this basis, the anticipated initial equity contributions would be c. US$38 million from ARTAR, reflecting its 87% interest, and c. US$6 million from KEFI, reflecting its 13% interest.
The financing mix for subsequent rounds of capital injection will be determined in due course. GMCO’s objective is for cash flows generated by JQ1 to fund its ongoing exploration activities and, together with appropriate project financing, progressively support the development of subsequent projects.
Wider Saudi Arabian Development Portfolio
JQ1 is the first stage of a planned series of mine developments across GMCO’s Jibal Qutman and Hawiah projects.
The next anticipated development is Stage 2 of Jibal Qutman, targeting the project’s sulphide gold resources. This is expected to be followed by the initial development of oxide resources at the Hawiah Copper-Gold Project and subsequently by underground mining Hawiah’s sulphide resources.
GMCO’s aggregate Mineral Resources currently total approximately 4.0 million ounces of gold equivalent, approximately twice the scale of the Mineral Resources at KEFI’s Tulu Kapi Gold Project in Ethiopia.
The longer-term development strategy envisages aggregate production from the Saudi Arabian portfolio in the order of 350,000 of gold and gold equivalent ounces per annum. At KEFI’s current 13% interest, this would represent attributable production of approximately 45,000 of gold and gold equivalent ounces per annum, equivalent to approximately 28% of KEFI’s anticipated attributable production from Tulu Kapi.
The development of the Saudi Arabian portfolio therefore represents a significant opportunity for KEFI to diversify its future production and earnings across multiple projects and jurisdictions.
Importantly, GMCO operates through its own management structure, with responsibility for the development and operation of its projects resting with the joint venture rather than KEFI.
Longer-Term Value Potential
The estimated after tax NPV of JQ1, using a 5% discount rate and assumed gold prices of US$3,000–5,000 per ounce, is US$141–275 million.
Beyond JQ1, GMCO’s wider development portfolio includes substantial additional mineral resources, with the subsequent projects expected to offer higher grades and potentially stronger economic returns.
As an illustration of the potential scale of the portfolio, the JQ1 NPV of US$141-275 million for a gold price range of US$3,000-5,000/oz, is based on the recovery of 258,000 oz gold of GMCO’s total 4.0 million ounces gold-equivalent resources in which KEFI holds a 13% beneficial interest.
Mineral Resource Estimate (“MRE”)
As announced on 18 February 2025, the 2025 Hawiah MRE is classified as:
- Indicated – Open Pit – 12.7Mt at 0.85% copper, 0.83% zinc, 0.81g/t gold and 10.8g/t silver
- Indicated – Underground – 17.8Mt at 0.85% copper, 0.91% zinc, 0.56g/t gold and 9.9g/t silver
- Inferred – Open Pit – 0.01Mt at 1.18% copper, 1.14% zinc, 0.65g/t gold and 9.6g/t silver
- Inferred – Underground – 5.7 Mt at 0.69% copper, 0.74% zinc, 0.51g/t gold and 8.4g/t silver
Based on the 2025 MRE, the Hawiah deposit is estimated to contain a total of 297,000 tonnes of copper, 310,000 tonnes of zinc, 745,000 gold ounces and 11.6 million silver ounces.
As announced on 26 February 2025, the 2025 Jibal Qutman MRE is classified as follows:
MRE of 37.0Mt at 0.76g/t gold, containing 902,000 ounces of gold.
This included 30.5Mt at 0.76g/t gold, containing 748,000 ounces in the Indicated category, representing approximately 83% of the total resource. Oxide Resources totals 13.2Mt at 0.75g/t gold, containing 318,000 ounces, providing a strong foundation for near-surface, open-pit development.
Gold Equivalency Calculations
Gold equivalency has been calculated as per the metal values and recoveries used in the most recent Mineral Resource Estimates for the JORC compliant GMCO resources.
The total equivalency includes the Hawiah and Al Godeyer polymetallic VMS deposits and the Jabal Qutman gold project. The factors and equation used in the calculation are provided below. Note that gold equivalency is provided for illustration to allow for comparison between deposits where varying commodities are present and should not be treated as actual. The full MRE statements and JORC Table 1. for the three deposits have been previously announced. An abridged version of these statements is also provided in the appendix below.
As each deposit domain has variable metal recoveries, each has been calculated separately and combined to provide an overall gold equivalent (“AuEq”) total.
Table 1 – Metal values and recoveries used in AuEq calculation
| Metal | Market price | Unit | Recovery (%) |
| Gold (Au) | US$2,300 | oz (troy) | 74.0 |
| Silver (Ag) | US$30 | oz (troy) | 83.0 |
| Copper (Cu) | US$9,350 | Tonne (t) | 90.0 |
| Zinc (Zn) | US$3,300 | Tonne (t) | 90.0 |
| Silver (Ag) VMS Oxide | US$30 | oz (troy) | 15.0 |
| Gold (Au) VMS Oxide | US$2,300 | oz (troy) | 84.0 |
The following equation was used to calculate the equivalency. Note that percentages and grams were normalised as part of the process:
Table 2 – Gold equivalency by deposit
| Deposit | Gold Equivalent (million oz) | AuEq grade |
| Hawiah | 2.9 | 2.51 |
| Al Godeyer | 0.2 | 3.04 |
| Jibal Qutman | 0.9 | 0.76 |
| Total | 4.0 |
Management and Governance
GMCO operates with an independent management structure responsible for progressing its Saudi Arabian exploration and development portfolio.
KEFI maintains representation and oversight through its Executive Chairman, Harry Anagnostaras-Adams, who serves as a director of GMCO, and through representation on GMCO’s Operations Steering Committee. This structure enables KEFI to participate in the development and potential value creation of GMCO’s substantial Saudi Arabian assets without assuming the primary project sponsorship and operating responsibilities associated with its Tulu Kapi Gold Project in Ethiopia.
