# KEFI Gold and Copper firm and conditional placing to raise £8 million

- Link: https://www.directorstalkinterviews.com/kefi-gold-and-copper-firm-and-conditional-placing-to-raise-8-million/4121061440
- Published: 2022-04-20T07:11:11+01:00
- Author: Giles

**KEFI Gold and Copper plc** ([LON: KEFI](https://www.directorstalkinterviews.com/company/kefi-gold-and-copper/kefi.l)),
the gold exploration and development company with projects in the Federal Democratic
Republic of Ethiopia and the Kingdom of Saudi Arabia, has announced an oversubscribed
fundraising to raise gross cash proceeds of £8.0 million through a Firm Placing 
of 550,000,000 new ordinary shares of 0.1 pence each in the capital of the Company
at a price of 0.8 pence per Ordinary Share to raise £4.4 million and a Conditional
Placing of 450,000,000 new Ordinary Shares at the Placing Price to raise £3.6 million,
arranged by Tavira Securities Limited.

**Firm Placing**

The Company will raise £4.4 million through the issue of 550,000,000 new Ordinary
Shares at a placing price of 0.8 pence per Ordinary Share.

Application has been made to the London Stock Exchange for admission of the Firm
Placing Shares to trade on AIM and it is expected that Admission will become effective
and that dealings in the Firm Placing Shares will commence at 8.00 a.m. on or around
25 April 2022.

The Placing Price represents a discount of 25% against the ten-day VWAP to 19 April
2022, being the date prior to the release of this announcement.

**Conditional Placing**

Conditional on shareholder approval at a General Meeting of the Company to be convened
in due course, the Company will raise a further £3.6 million through the issue of
450,000,000 Ordinary Shares at the Placing Price. The Conditional Placing is subject
to the passing of certain resolutions at the General Meeting.  

Shareholders are reminded that because the Conditional Placing is conditional, among
other things, on the passing of the resolutions to be proposed at the General Meeting,
should the resolutions not be passed, the Conditional Placing will not proceed.

**Use of Proceeds**

The gross Placing proceeds of £8.0 million will mainly be used to fund the following:

·    selected development activities at the Company’s Tulu Kapi Gold Project which
will continue as authorised by the Ethiopian Government, particularly with a view
to confirming security conditions are conducive for full project launch and financial
close at the end of Q2 2022;

·    commencement of additional exploration works at satellite deposits in the Tulu
Kapi District, Ethiopian Government permitting, in order to implement longstanding
plans designed to expand or extend production and uplift the community benefits 
and the economics of the Tulu Kapi development still further;

·    to contribute the Company’s share of exploration at the Hawiah Gold and Copper
Project (“Hawiah”), with a view to increasing the existing resources of 24.9 million
tonnes at 0.90% copper, 0.85% zinc, 0.62 g/t gold and 9.81 g/t silver. In addition,
funds will enable further work at the adjacent Al Godeyer licence areas following
the highly encouraging results as announced in Q1 2022, which suggested the potential
for another discovery similar to Hawiah; and

·    for general working capital purposes.

**Investor Warrants and Warrant Trigger Event**

Conditional on shareholder approval at the General Meeting, the Company will grant
one warrant per two Placing Shares at an exercise price of 1.6 pence exercisable
for a period of two years from Admission of the Conditional Placing Shares.

The Company has elected that the Warrants will become exercisable if, during a two-
year period following the date of Admission, the on-market share closing price of
the Ordinary Shares for five consecutive days reaches or exceeds 2.4 pence (being
a 50% premium on the Warrant exercise price).

If the Warrant Trigger Event occurs then:

(i)        the holders of the Warrants must exercise the Warrants within 30 days
from the occurrence of the Warrant Trigger Event; and

(ii)          the Warrants will expire following the end of the 30-day period referenced
above if not exercised.

If the Warrant Trigger Event has not occurred within two years following the date
of admission of the Conditional Placing Shares, then the Warrants shall lapse and
will no longer be capable of being exercised.

The Warrants will be issued in certificated form and will not be admitted to trading
on AIM. The Warrants will be transferable in accordance with the terms of the Warrant
instrument to be entered into by the Company. Any Ordinary Shares issued pursuant
to the Warrants will, when issued, be admitted to trading on AIM. 

The Warrants, along with those issued in January 2022, may raise a further £14.3
million, at the 1.6 pence exercise price, assuming that all investors exercise their
warrants. It is expected that these funds will be sufficient to fund any necessary
KEFI equity capital subscription in its subsidiary Tulu Kapi Gold Mines Share Company
required as part of the broader identified US$356 million Tulu Kapi development 
funding syndicate.

These equity funds are in addition to the KEFI equity capital contribution which
had already been conditionally arranged with convertible note investors and the 
equity amounts which will have been historically invested prior to financial close.
Details of the composition of the identified funding syndicate can be found in prior
Company announcements and also in the corporate presentation uploaded to the Company’s
website on 4 April 2022.

The proposed timing for Tulu Kapi financial close remains the end of Q2 2022 with
all being parties to be asked to sign up to the normal binding commitments and the
associated conditions and sequence for disbursement of funds for a transaction of
this nature.

**General Meeting**

A circular convening the General Meeting to be held during May 2022 will be circulated
shortly. The General Meeting will propose resolutions to shareholders to grant the
board authority to allot the Conditional Placing Shares on a non-pre-emptive basis,
and to grant the Warrants. Once published, the circular will be available to download
from the Company’s website at www.kefi-minerals.com. It is important that shareholders
lodge their votes in advance of the General Meeting through submission of their 
proxy votes.

> **Harry Anagnostaras Adams, Chairman of KEFI Gold and Copper commented:**
> “The Placing is to reinforce the rapid advancement of our three advanced projects
> in Ethiopia and Saudi Arabia. The Placing Shares, combined with the exercise of
> the Warrants and those from the placing announced on 21 December 2021, are intended
> to provide an additional c. £22.3 million (c. US$29 million) of share capital,
> designed not only to complete the last piece of the planned Tulu Kapi project 
> financing package of c. US$356 million, but also build on the ongoing success 
> we are seeing in our exploration programmes in Saudi Arabia.
> “In Ethiopia our subsidiary has historically invested approximately US$70 million
> in the Tulu Kapi project and we are now at the stage to increase development and
> also exploration activities, as allowed by the Government authorities, to demonstrate
> both our good faith and to also show that security is appropriate for full project
> launch from mid-2022. This is very important as we have now conditionally lined
> up all the equity and debt funds required for full development project financing
> and the finance syndicate is keen to work very closely with the Government to 
> ensure security and all regulatory clearances are in order.
> “For our two projects in Saudi Arabia, Hawiah Copper-Gold and Jibal Qutman Gold,
> we must contribute our 30% share to the joint venture to ensure that we accelerate
> the drilling and development studies on our significant discoveries.  
> “At the recently granted Al Godeyer Licence we will look to undertake further 
> drilling on identified targets which have yielded rock chip grades of up to 1.8%
> copper and 7.2g/t gold from surface trenching. KEFI remains optimistic that discoveries
> here are similar to those reported for the adjacent Hawiah deposit, which itself
> remains subject to further extensive exploration in 2022 as the existing resources
> remain open and additional targets have been identified.
> “At our Jibal Qutman Gold Project, our joint venture is also optimistic of receiving
> a Mining Licence this year and this capital raise will ensure the Company is well
> positioned to meet its share of preliminary development planning for the low-cost/
> quick-to-start heap leach operation.
> “We have the opportunity to build substantial value from de-risking and advancing
> the three projects. The Company’s internal NPV (8% after tax) on the three projects(
> at current metal prices as at 18 April 2022) indicates a combined NPV of 12 pence
> per share, after dilution from the Placing announced today. Therefore, we know
> that there is considerable merit in putting the capital in the ground and pushing
> the Company towards its goal of becoming a mid-tier gold and copper producer.”

**Placing Agreement**

The Company has appointed Tavira as its agent pursuant to the terms of a placing
agreement executed on 19 April 2022.

The Company has agreed to pay the Broker certain commissions and fees, some of which
will be satisfied through the grant of 75,000,000 warrants over KEFI ordinary shares(
the “Broker Warrants”), subject to shareholder approval, at the General Meeting,
in connection with its appointment. Each Broker Warrant will entitle the Broker 
to subscribe for one new KEFI ordinary share at a price of 0.80 pence per share,
exercisable for a period of three years from the date of Admission of the Conditional
Placing Shares.

**Total Voting Rights**

Application has been made to the London Stock Exchange for Admission of the Firm
Placing Shares to trade on AIM and it is expected that Admission will become effective
and that dealings in the Firm Placing Shares will commence at 8.00 a.m. on or around
25 April 2022. Following Admission of the Firm Placing Shares, the total issued 
share capital of the Company will consist of 3,489,119,050 Ordinary Shares each 
with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore,
the total number of voting rights in the Company will be 3,489,119,050 and this 
figure may be used by shareholders as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a change
in their interest in, the share capital of the Company under the FCA’s Disclosure
Guidance and Transparency Rules.

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue
of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance
with the Company’s obligations under Article 17 of MAR.

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