Having recently announced the signing of the final umbrella agreement for the financing of its Tulu Kapi project in Ethiopia, after all the lenders’ conditions were met and agreed upon by the Ethiopian government, KEFI Gold & Copper (LON:KEFI) is set to become AIM’s next gold producer. Directorstalk caught up with WH Ireland analyst Paul Smith to discuss the company.
Q: Can you tell us about KEFI Gold & Copper’s primary project?
A: KEFI Copper & Gold’s most advanced asset is the Tulu Kapi project in western Ethiopia. This project is set to be developed into an open-pit gold mine, producing 1Moz of gold over an eight-year mine life. The project benefits from reliable roads and power transmission lines passing in close proximity to its borders.
Q: What is the current status of the Tulu Kapi project?
A: KEFI has recently announced that all major financing conditions have been met for the Tulu Kapi project, and it is proceeding to committee for final approvals to release the $390m finance package required to get Tulu Kapi built. The Ethiopian authorities have shown their support for KEFI and the development of Tulu Kapi. The timing of the release of funds is the biggest risk to development.
Q: What are the expected revenues from the Tulu Kapi project?
A: Based on a conservative gold price ($1,850/oz gold), our DCF indicates that net revenues will average more than $225m over the mine life. There is potential to extend the mine life with the incorporation of deeper sulphide mineralisation.
Q: What other projects does KEFI Gold & Copper have in its portfolio?
A: KEFI has other assets in Saudi Arabia: Jibal Qutman and Hawiah. These projects offer commodity and jurisdiction diversification. With revenues then to fund exploration, we believe that KEFI can leverage its operational base at Tulu Kapi to advance its portfolio and pursue other opportunities in the highly prospective, yet underexplored, ANS.
KEFI Gold and Copper is focused primarily on the development of the Tulu Kapi Gold Project in Ethiopia and its pipeline of highly prospective exploration and development projects in the Kingdom of Saudi Arabia, also in the Arabian-Nubian Shield. KEFI targets that Tulu Kapi Gold, along with its two most advanced Saudi projects Jibal Qutman Gold and Hawiah Copper-Gold will come into production over the period 2025-2027 and will generate cash flows for capital repayments, further exploration and dividends to shareholders.
