KEFI Minerals plc (LON:KEFI), the gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has provided an update on the Company’s activities in Saudi Arabia. KEFI’s operations in Saudi Arabia are conducted through its 34% owned joint venture company, Gold and Minerals Co. Limited, where KEFI is the operating partner.
· Larger maiden resource of c. 20 million tonnes now expected in August 2020, an increase of 66% from the previous target of 12 million tonnes
· This is based on completion of the first 9 months drilling and subsequent analyses and interpretation, covering a strike of over 4km to a depth of up to 350m
· Hawiah remains open along strike and depth, where some higher grade intercepts have also been encountered, for further follow-up
· Expected average copper equivalent grade of c. 2% copper, representing c. 400,000 tonnes of contained metal, with an in situ value in excess of US$2.5bn at current market prices
· Saudi Cabinet recently approved new mining investment law, which should help unlock value at KEFI’s additional Saudi projects, including the Jibal Qutman Gold Project
Hawiah Maiden Resource
Following the completion of the first 12,000m diamond drilling programme at Hawiah in May 2020, the work required to estimate the initial Hawiah Mineral Resource is now well underway with the maiden resource expected to be published in August 2020.
Diamond drilling undertaken by G&M since September 2019 has consistently intersected copper-zinc-gold-silver mineralisation contained within massive sulphide, across more than 4 kilometres of strike length. This drilling has allowed for the definition of three distinct zones, or lodes, within this strike length of the massive sulphide structure, which are the focus of the maiden resource.
KEFI previously advised in February 2020, that the combined volumes of these three lodes in the sub-vertical structure drilled to date was likely to exceed 12 million tonnes. The wireframes constructed for the Mineral Resource Estimate (“MRE”) now indicate that the combined tonnage of the massive sulphide lodes will likely be in the region of 20 million tonnes. The Hawiah deposit has only been tested to a vertical depth of 350m and remains open at depth and along strike. Increasing copper grades intersected in the deepest drill hole at the Camp Lode indicate an excellent opportunity to add additional high-grade copper-gold resources during the next phase of drilling.
Copper will contribute the majority of potential revenue at Hawiah, therefore it is useful to convert the copper-zinc-gold-silver grades into a copper-equivalent grade. At current metal prices and an estimated average grade of c. 2% insitu copper-equivalent, the Hawiah deposit is estimated to contain the equivalent in-situ value of approximately 400,000 tonnes of copper within the three delineated massive sulphide lodes.
Despite a number of challenges brought on by the COVID-19 pandemic, good progress has continued to be made on the block modelling and resource development, following what was a highly successful drilling campaign. The maiden Hawiah resource estimate is expected to be released in August 2020, following the lifting of certain COVID-19 related restrictions.
Saudi Arabia New Mining Law
KEFI notes and welcomes the approval by the Saudi Arabian Cabinet in June 2020 of a new Mining Investment Law which is aimed at boosting the country’s mining industry and is part of Saudi Arabia’s plan to diversify its economy away from hydrocarbons. The Company also welcomes the expanded role of the Saudi Investment Development Fund specifically to support mining project finance.
This new regulatory impetus is expected to also help clarify the path forward to unlock value from KEFI’s Saudi gold discovery at Jibal Qutman, which has been on hold awaiting Mining Licence tenure confirmation. An Internal Preliminary Economic Assessment in 2015 suggesting estimated operating costs of c. US$600/oz and estimated capital expenditure of US$30 million demonstrate that Jibal Qutman’s Mineral Resources, totalling 733,000 ounces of near-surface gold, should be highly profitable in the current gold price environment.
Harry Anagnostaras-Adams, Executive Chairman of KEFI Minerals, commented: “KEFI and our G&M partner ARTAR look forward to participating in the development and expansion of the Saudi Arabian minerals sector, which the Saudi Government has made a national strategic priority. The recent approval by the Saudi Cabinet of the new mining investment law is a very positive development for our Hawiah (copper-gold) and Jibal Qutman (gold) projects in Saudi Arabia.
“The Hawiah deposit is shaping up to have similar mix of metals and to be a larger deposit than the nearby operating Al-Masane underground mine in southwest Saudi Arabia.
“We look forward to releasing the initial Hawiah Mineral Resource in August and thus providing further confirmation that our valuable Hawiah deposit has the scale and grades for a potential long-life, profitable mine. At current copper prices, it is notable that the in-situ value of Hawiah is already likely to be more than US$2.5 billion.”
Q2 2020 Operational Update
The Company will issue its regular quarterly operational update, covering Q2 2020, before the end of July. The Company will also conduct its quarterly shareholder webinar on 30 July 2020, the details of which will be announced closer to the time.