KEFI Gold and Copper plc (LON:KEFI), the gold and copper exploration and development company focussed on the Arabian-Nubian Shield, with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has announced that, having launched the development of the Tulu Kapi Open Pit Mine and Processing Facility, it will now commence detailed planning for the development of its second mine, the Tulu Kapi Underground Mine following the results of a positive standalone Preliminary Economic Assessment. The addition of the Tulu Kapi Underground Mine is expected to raise combined steady-state production at Tulu Kapi to c.180,000 oz of gold per annum.
This decision follows the recent updating of the Tulu Kapi Preliminary Economic Assessment based on already-established JORC compliant Mineral Resources beneath the open-pittable Ore Reserves. The Underground Mine development schedule will target decline development to start as the Open Pit mine is commissioned and starts production in mid-2028. The activities in its first development year would include the establishment of drilling platforms for both infill drilling and extensional drilling plus trial production.
At Tulu Kapi, a potentially high-grade, high-value, large system remains open at depth and, as indicated in the Company’s announcement on 19 March 2026, will be tested through the reinitiation of exploration activities. The last drill hole at the northern limit of the presently delineated underground mining domain returned 90m at 2.8g/t gold (TKBH_293, from 364m to 454m, downhole width, announced 4 March 2017), highlighting the prospectivity of the region.
The PEA supersedes the indicative underground assessment referred to in the Company’s announcement of 18 March 2025, which contemplated recovery of approximately 200,000 oz from c.1.5 Mt. The increase to 2.38 Mt and c.253,000 oz of contained gold reflects a revision of the cut-off grade.
Highlights of the 2026 Preliminary Economic Assessment of Tulu Kapi Underground Mine are:
· Application of a cut-off grade of 1.45 g/t based on an assumed gold price of US$2,350/oz;
· Post-tax NPV 5% of c.US$274.1 million and IRR of 220%, with payback of 9 months, on a standalone incremental basis at a gold price of US$2,350/oz;
· Preliminary underground mining inventory of 2.38 Mt at 3.30 g/t Au, comprising Indicated Mineral Resources, containing approximately 253,000 oz of gold;
· The updated schedule reflects a steady-state stoping production target of approximately 500,000 tpa, with the objective of maintaining two developed levels ahead of active stoping; underground ore is incremental and blended with open pit feed based on a 20% increase in plant throughput above nameplate capacity of c.2.0 Mtpa. Associated capital expenditure is factored in;
· Recovered gold is expected to be c.237,000 oz, at an assumed metallurgical recovery of c.94%, to complement open pit production of c.985,000 oz, for a combined 1.2M oz of gold recovered over 8 years;
· Pre-production development capital is estimated at US$8.09 million with the maximum cash drawdown required for the Underground Mine estimated to be c.US$10.5 million, the timing of which would be optimised in 2028 as the Company approaches production start-up at Tulu Kapi, and is expected to be funded from Open Pit Mine operating cash flow with no new equity assumed;
· At assumed gold prices of US$3,000-5,000/oz Au, combined open-pit-plus-underground estimated AISC has been updated to c.US$1,100-1,300/oz, which reflects the impact of Government royalties at higher gold prices.
· Material depth extension potential beyond the current mining inventory, to be tested by the extensional drilling programme scheduled to commence in 2029.
Harry Anagnostaras-Adams, Executive Chairman of KEFI, commented:
“At Tulu Kapi we are in month six of the development schedule to start production in mid-2028. We have procured the fabrication of plant at international specialty workshops, and at site we remain focused on community resettlement and mobilisation for construction, which is scheduled to accelerate in the imminent dry season.
“The PEA confirms that we can now add this second mine at Tulu Kapi using existing mineral resources and the existing plant with minor, already considered modifications. It is therefore timely to commence a parallel stream of preparatory work for the second mine at Tulu Kapi, the Tulu Kapi Underground Mine.
“Based on existing mineral resources, this would underpin combined production for 7 to 8 years of 180,000 oz of gold per annum. However, the ore body is open and there is potential for large high-grade zones at depth.”
Next Steps and Milestones
· Engineering Works for the Underground Mine – commencing immediately, targeted for completion in Q4 2027;
· Infill and extensional drilling from underground platforms – 2029, with an updated Mineral Resource estimate targeted for 2029;
· Decline development – commencing as the Open Pit Mine is commissioned in mid-2028, with trial production in the first development year; and
· First stope ore and ramp-up to steady state – 2029.
Cautionary Statement Regarding the Preliminary Economic Assessment
The PEA is preliminary in nature. The preliminary underground mining inventory of 2.38 Mt at 3.30 g/t Au is not an Ore Reserve and has not been demonstrated to be economically viable in accordance with the JORC Code. It includes Mineral Resources classified as Inferred, which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Ore Reserves. There is no certainty that the results of the PEA will be realised, that the mining inventory will be converted to Ore Reserves, or that the production, cost or cash flow outcomes described in this announcement will be achieved.
