KEFI Gold and Copper plc (LON:KEFI), the gold exploration and development company with projects in the Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has announced its unaudited interim results for the six months ended 30 June 2025.
Highlights
· Significant progress made in the period with the Company’s Tulu Kapi Gold Project and KEFI is on schedule to begin the full development programme in October 2025.
· The final Tulu Kapi budget of US$340 million and its finance plan remain as recently announced, with project debt of US$240 million and equity risk capital planned to be issued almost entirely by KEFI subsidiaries for US$100 million.
· The Boards of both co-lending banks and of the Group companies have approved and are expected to sign the formal commitment of the project loan facilities within the coming week.
· The construction contracts have been finalised for signing upon drawdown of equity.
· KEFI will now focus on providing details to, and entering into formal arrangements with, the equity risk capital investors. Non-binding proposals received for the equity risk capital currently exceed the US$100 million required.
· The detailed financing documentation contains standard conditions such as change of control and conditions precedent for a transaction of this nature, including Government confirmations and approvals, and signing will continue in the appropriate sequence leading up to issuing the notice to proceed to principal contractor Lycopodium.
· In the meantime, works will continue to escalate at site, in particular with the community resettlement, funded by working capital facilities pending the project finance drawdowns of equity and then debt.
· Saudi projects continue to progress with:
o Substantial increases and upgrading of the Mineral Resource Estimates for both the Hawiah deposit and the nearby Al Godeyer deposit.
o Material upgrade to Jibal Qutman Gold Project Mineral Resources.
o GMCO/ARTAR-Hancock winning tender for Al Hajar North Exploration Licence, with licence areas increased from 1,300 km2 to >2,200 km2 for GMCO-led exploration programmes.
The interim results for the Group cover the activities of KEFI Minerals (Ethiopia) Ltd, Tulu Kapi Gold Mines Share Company in Ethiopia, and Gold & Minerals Ltd in Saudi Arabia.
The Tulu Kapi Gold Projectis currently 95% beneficially owned by KEFI through KEFI’s wholly-owned UK subsidiary KME. The Hawiah Copper-Gold Project, the Jibal Qutman Gold Project and other Saudi projects are held by GMCO in which KEFI currently has a 15% interest.
Both TKGM and GMCO are being developed by KEFI and its partners as separate operating companies so that each can build a local organisation capable of developing and managing long-term production and exploration activities, as well as exploit future development opportunities.
Tulu Kapi
Significant progress was made in the period and KEFI is on schedule to begin the full development program of Tulu Kapi in October 2025. We have approved and expect to sign shortly the formal commitment of the project loan facilities. And the construction contracts have been finalised for signing upon drawdown of equity which can now be finalised amongst the assembled local and regional investors.
Project financing status
As previously announced, the Tulu Kapi project has an updated capital budget of US$340 million, a small increase from the previous 2023 estimate of US$320 million. This capital is being raised through a US$240 million debt facility and equity-risk capital issues of US$100 million, which are proposed almost entirely at the subsidiary level.
· Debt facility: The expanded facility of US$240 million, which has been formally offered by the co-lenders and accepted by KEFI and its local subsidiaries, is expected to be signed within the coming week. Detailed facility and account opening documentation will then be executed as we complete arrangements with the proposed investors of equity-risk capital.
· Equity-risk capital: The US$100 million is being assembled primarily at the subsidiary company level. A significant portion has already been secured, with US$20 million from the Government of Ethiopia, US$10 million already invested by KEFI and c.US$10 million of KEFI share participation post-closing in respect of closing fees and costs. The remaining US$60 million is currently being finalised and KEFI has received conditional proposals that exceed this amount. This will be raised through a combination of non-convertible preference shares for Ethiopian investors (“KEFI Ethio Prefs”) issued by one of KEFI’s Ethiopian subsidiaries, an equity risk note structured as a “Gold Prepayment” or “Stream” from a mining specialist fund, and the issue of ordinary shares in either of the Ethiopian subsidiaries, priced on the basis of a TKGM valuation reflecting its status as a funded project. The breakdown and details of the finalised equity-risk capital instruments will be published by KEFI upon commitment and the signing of definitive documentation.
Project economics
The life-of-mine projected operating metrics remain consistent with recent guidance, including all-in sustaining costs (AISC) of c.US$1,100/oz and first full year production of 160koz from the open pit. Annual production is planned to then increase with the introduction of initial underground production. Year 1 net operating cash flow is projected at c.US$200 million at a US$2,500/oz gold price and c.US$300 million at a US$3,500/oz gold price, from the open pit with processing at nameplate capacity.
Preparations and future plans
Site preparations are progressing on schedule, with a focus on both infrastructure and community relations.
· Infrastructure: A new all-weather road is nearing completion, and another access road for heavy loads is scheduled to begin construction within the next two months. Procurement for the electricity connection is complete, with construction mobilisation having started.
· Community and social: The local government, with support from TKGM, is already implementing the “Resettlement Action Plan”, including the community compensation programme. The phased approach eases the process for the community and ensures compliance with international standards.
· Mining operations: The main mining fleet will be procured in early 2026 and initial open-pit mining is targeted to begin in mid-2027. While the project will initially focus on the open pit gold reserve, future plans include underground development to extend the mine’s life and expand production to a targeted 200,000 ounces per year.
The project has been designed taking into account both local and international ESG (environmental, social, and governance) standards and alignment with local stakeholders, including the community, government, and private sectors. The project is seen as a showcase for international project finance in Ethiopia, contributing to the country’s growing gold sector.
GMCO
In Saudi Arabia, the Company’s GMCO joint venture continued to make good progress during the period. In the Wadi Bidah Mineral Belt (“WBMB”), following the start of drilling in 2019 three VMS discoveries have subsequently been announced – Hawiah plus its discoveries at Al Godeyer and Abu Salal.
On 15 February 2025, KEFI announced substantial increases and upgrading of the Mineral Resource Estimates for both the Hawiah deposit and the nearby Al Godeyer deposit. The Hawiah Mineral Resource Estimate increased by 25% or 7.3 million tonnes (“Mt”) to 36.2 Mt at 0.82% copper, 0.85% zinc, 0.64g/t gold and 10.0g/t silver.
In addition, the granting to GMCO of the Umm Hijlan Exploration Licence (“EL”) in the period has almost doubled the targeted strike length of the Hawiah mineralised system. Drilling is currently taking place.
Over the coming year, Hawiah development studies will be progressed in conjunction with drilling programmes to upgrade and expand GMCO’s copper-gold zinc-silver Mineral Resources in this major VMS district. In addition, the new joint venture between GMCO/ARTAR and Hancock Prospecting will focus on the recently granted 910km2 EL over the adjacent Wadi Shwas Mineral Belt parallel to and geologically analogous with the WBMB.
Separately, GMCO’s Jibal Qutman Gold Project saw a material upgrade in its Mineral Resources in the period with an increased Mineral Resource Estimate of 37.0Mt at 0.76g/t gold, containing 902,000 ounces of gold, 30.5Mt at 0.76g/t of gold (including 748,000 ounces in the Indicated category). Initial development is expected to be approved at Jibal Qutman during 2025 focusing on open pit mining the oxide ore and Carbon-In-Leach (“CIL”) processing. In addition, systematic exploration is ongoing across the expanded Jibal Qutman tenure to identify further resource potential and confirm structural controls on recently identified higher-grade gold mineralisation. Drilling to date has focused only on an 8km long section of the original Jibal Qutman EL. The full 35km mineralised strike length remains to be tested.
Board and Management Team
KEFI Leadership
· Board of Directors: KEFI’s board is led by Executive Chairman Harry Anagnostaras-Adams and Finance Director John Leach, both of whom have extensive experience in launching, restructuring and operating natural resource-based companies. The board also includes three independent non-executive directors with deep industry and Ethiopian knowledge: Richard Robinson (mining operations), Alastair Clark (environmental and sustainability), and Addis Alemayehou (Ethiopian business and investment).
· Executive Committee: This committee, which includes Mr Anagnostaras-Adams and Mr Leach, is responsible for operational policy, organisational development and oversight of day-to-day operations and features specialists in key areas: Chief Operating Officer Eddy Solbrandt (systems and organisational optimisation), Rob Williams and Simon Cleghorn (technical due diligence), Norman Green (construction), and Geoff Davidson (mining engineering).
Tulu Kapi project-level governance
The governance and leadership structure for Tulu Kapi is composed of a diverse team drawn from KEFI and its project-level subsidiaries, with significant participation from Ethiopian stakeholders.
· KME Ethiopia Holdings: This entity, which has recently been incorporated to own the Group’s shareholding in TKGM, will in due course seek listing on the Ethiopian Stock Exchange (ESX), will have a board where KEFI holds the majority, but which also includes non-executive directors nominated by local investors.
· TKGM: The board of this main operating company is also majority-appointed by KEFI, including its Executive Chair, COO, and an operations-focused non-executive director. Crucially, the Ethiopian government appoints non-executive directors representing its Federal Sovereign Fund, Ministry of Finance, and the Oromia Sovereign Fund, ensuring direct government oversight.
Tulu Kapi operational and advisory team
The on-the-ground TKGM operational team is led by Managing Director Simon Cleghorn and features a mix of international and local expertise, with key roles including Head of Finance Theron Brand and Head of Government Relations Abera Mamo. The project also relies on a wide array of specialist advisers for various technical, financial, and social aspects, including Snowdens (mineral resources), Lycopodium (processing), and Constellis (security).
GMCO
KEFI and its majority partner ARTAR (Al Rashid & Sons LLC) have, over the past 17 years, developed a stand-alone management structure for GMCO in which both shareholders are represented at the Board level (via the Executive Chairmen of each).
Both shareholders also provide additional support in respective areas of expertise.
Financial Review
As at 30 June 2025 the Company had not drawn any working capital facilities other than small overdraft facilities in Ethiopia. Net assets increased to £41 million as at 30 June 2025 (30 June 2024: £32,6 million) which reflects the Group’s conservative accounting policy of writing off all exploration. For instance, GMCO is carried at nil book value and TKGM at book value of £40.5 million.
The Company’s comprehensive loss for the period reduced to £3.8 million (H1 2024: loss of £6.1 million). This primarily reflected a reduction in the Group’s administration expenses from £3.3 million in H1 2024 to £2.4 million, a reduction in finance costs from £1.5 million in H1 2024 to £0.7 million and differences in the amounts accounted for in relation to jointly controlled entities.
Shareholder Meeting
The Company expects to convene a general meeting of shareholders in November 2025 to approve certain elements of the Tulu Kapi project finance package requiring shareholder approval, such as the debt package requiring approval under KEFI Gold and Copper’s Articles of Association. Further details will be announced in due course.
