# KEFI Gold and Copper Nears Transformational Milestone with Tulu Kapi – Edison Investment Research

- Link: https://www.directorstalkinterviews.com/kefi-gold-and-copper-nears-transformational-milestone-with-tulu-kapi-edison-investment-research/4121208505
- Published: 2025-07-21T12:52:09+01:00
- Author: Anthony Fox

**KEFI Gold and Copper** ([LON:KEFI](https://www.directorstalkinterviews.com/company/kefi-gold-and-copper/kefi.l))
flagship Tulu Kapi gold project in Ethiopia is now on the cusp of major progress,
with final financing arrangements entering the home stretch. This momentum, detailed
in a 17 July 2025 note by **Edison Investment Research**, reflects not only project-
contractual finalisation but also meaningful groundwork activity and community engagement–
placing KEFI on track for first gold by **late FY27**.

With infrastructure elements such as access roads, construction camps, and water
supply facilities already built, and community compensation payments underway, KEFI
now appears to be past the final obstacles to full-scale construction.

Edison analyst **Lord Ashbourne** captures the sense of impending transition, noting:
**“
With contractual finalisation imminent, KEFI’s shares are at a key inflection point,
with the company now targeting first gold in late FY27.”**

## Advancing the $320 Million Financing Package

In recent months, KEFI has made visible strides in derisking and readying Tulu Kapi.
Importantly, the company has:

 * Appointed **BCM** as its preferred mining contractor
 * Raised **£7.6 million** through a supported equity placement
 * Completed major early works like road access, security camps, and logistics coordination
 * Triggered **community compensation payments**, a vital social milestone

These updates cap a multi-year effort to shore up KEFI’s funding base. The US$320
million project financing mix includes:

 * **US$240 million** in senior secured debt from project finance banks
 * **US$50–60 million** in equity and preference shares from Ethiopian and specialist
   African investors
 * **US$20 million** equity contribution by the Ethiopian government at project 
   level

Field activities are accelerating, supported by the now-ratified Ethiopian Parliamentary
approval for both co-lending banks, the final regulatory hurdle. Upcoming months
will focus on wrapping definitive agreements, issuing contractor notices, and initiating
the drawdown process.

## Full-Year Financial Snapshot

While KEFI remains pre-revenue as typical for development-stage miners, Edison estimates
annualised free cash flow of **£99.4 million** from 2029 to 2034. Despite a wider
pre-tax loss expectation of **£14.6 million in FY2025**, the group is expected to
reach profitability by FY2026 and begin paying dividends from FY30.

Edison maintains a conservative yet upward-sloping valuation, based on Tulu Kapi’s
robust project economics:

 * **NPV5 of US$690 million** at US$2,400/oz gold price, with KEFI’s 80% share worth
   approx. **£412 million**
 * Additional contributions from Saudi projects Hawiah and Jibal Qutman
 * Total risk-adjusted equity valuation: **1.41p/share**, rising to **5.46p/share**
   at current gold prices
 * Potential **66.7% IRR** to investors buying shares at the current level of 0.54p

Ashbourne’s valuation summary underlines KEFI’s leverage to the gold price and approaching
production:
**“At current metals prices, our valuation increases to 5.46p now (plus
a further 0.75p/share for the underground mine) and to 7.33p in FY29, implying an
IRR of 66.7% to buyers of the shares at their current price in sterling terms over
the next 12 years.”**

## Tulu Kapi – A High-Grade, High-Impact Asset

The Tulu Kapi mine is expected to yield around **160,000oz of gold annually** in
its first full year, with room for increased output when potential underground resources
are brought to bear. Over the life of the open-pit mine, average **cash cost is 
forecast at US$953/oz**.

Community engagement also appears strong, with over 360 households (or approximately
1,300 people) supported via a **government-led Resettlement Action Plan**. KEFI 
has allocated **US$24.7 million** towards land compensation and long-term livelihood
development, all coordinated in conjunction with the Oromia Regional Government.

## Upcoming Milestones and Valuation Sensitivities

Key events expected in H2 2025 include:

 * **Completion and signing of definitive project-financing agreements**
 * **Drawdown of equity and initial debt tranches**
 * **Launch of core civil works post-wet-season in Q4 2025**
 * **Steady construction ramp-up toward commissioning in late 2026**

The company’s valuation is highly sensitive to gold prices. Edison notes that at**
US$3,300/oz**, KEFI’s equity value rises to **6.21p/share** (including underground
mine), up from its risk-adjusted base of 1.41p.

## On a Final Note

KEFI Gold and Copper is entering a critical phase in its development journey. Field
mobilisation, community compensation, and updated backer commitments underscore 
real traction after years of structuring and negotiation. Backed by a US$320 million
financing package and robust government support, the Tulu Kapi gold project may 
soon deliver Ethiopia’s next large-scale gold operation. While investor attention
will now naturally focus on execution discipline over the next 18–24 months, KEFI’s
valuation metrics suggest significant upside potential. As Edison’s note highlights,
the company’s fortunes will ultimately hinge on successful deployment rather than
technical feasibility — a position far stronger than in years past.

Share on: