# KEFI Minerals plc Signs Detailed Heads of Agreement

- Link: https://www.directorstalkinterviews.com/kefi-minerals-plc-signs-detailed-heads-agreement/412757178
- Published: 2018-08-24T07:20:15+01:00
- Author: Giles Arbor

**KEFI Minerals plc** ([LON:KEFI](https://www.directorstalkinterviews.com/company/kefi-gold-and-copper/kefi.l)),
the gold exploration and development company with projects in the Federal Democratic
Republic of Ethiopia and the Kingdom of Saudi Arabia, has today reported that it
has now signed the Detailed Heads of Agreement with the Ethiopian investors, as 
originally outlined in the announcement of 11 June 2018. The Ethiopian investors
intend to make their investment of US$30-35 million via Arabian Nubian Shield Resources
Limited, a company which is in the process of incorporation.

ANS Resources’ injection of the first instalment of US$9 million (Birr-equivalent)
is subject to completion of remaining due diligence and execution of the binding
share subscription agreement, which are expected this quarter. ANS Resources’ injection
of the balance is subject to full project finance closing proceeding, fully approved
by the Ethiopian Government.

ANS Resources is being established as an investment vehicle to enable subscriptions
by a number of identified Ethiopian financial insititutions and family offices. 
It is the intention that no one syndicate member will hold more than 10% of ANS 
Resources or have any involvement in the gold mining business.

Given demand, recent refinements to the proposed transaction (since KEFI’s announcement
of 11 June 2018) include the right for ANS Resources to subscribe in local currency
alongside the Government of Ethiopia for up to US$35 million (rather than the original
US$30M) in new shares of Tulu Kapi Gold Mines Share Company Limited (“TKGM”). The
final investment sum of ANS must not exceed that which preserves KEFI as majority
shareholder of TKGM.

The requisite Government consents are that: (a) the historical equity capital investments
in TKGM by KEFI’s subsidiary KEFI Minerals (Ethiopia) Limited (“KME”) be registered
so that final equity percentage ownership can be confirmed, (b) that the planned
subscription by ANS Resources be permitted by the Government waiving its pre-emptive
rights on any share issue by TKGM, and (c) that ANS Resources be provided the right
to appoint two Non-Executive Directors to TKGM’s Board of Directors.

The initial subscription of US$9 million (of the US$30-35 million) will be set aside
into a locked account, with settlement commencing 31 August 2018 and completed no
later than 30 September 2018 along with commitment to the full amount being invested
by year-end alongside full project-finance commitments. The ANS Resources founders’
US$3 million subscription has already been committed.

Disbursement of the initial subscription funds is earmarked to commence any time
from October 2018, to fund TKGM’s project finance closing costs and the first phase
of the Tulu Kapi community resettlement, when triggered by the Regional Government
of Oromia in consulation with TKGM. TKGM plans to use these equity funds for the
initial project expenditures, with debt drawdown to follow.

> **KEFI Minerals plc Managing Director, Mr Harry Anagnostaras-Adams said** “Project
> equity investor ANS Resources is being carefully structured to provide diversified
> local equity participation in Ethiopia’s first modern mine development for its
> exciting new gold sector. This approach also ensures clear Tulu Kapi Gold Project
> control by KEFI, as required by the planned non-equity financiers.
> “ANS Resources represents a diversified group of financial investors assembled
> specifically for this transaction and its involvment will be a further significant
> milestone in unlocking the gold potential of the Tulu Kapi orebody and district.”
> “Subscription by both the Government of Ethiopia and ANS Resources to project 
> company TKGM implies a valuation of c. US$66 million to a residual KEFI holding
> of 54%. This compares with investment to date by KEFI shareholders (including 
> shareholders which KEFI inherited from the previous project owner) of US$60 million.
> It also compares with the previously resported NPV of US$57-97 million (NPV at
> start of construction versus NPV at start of production) for KEFI’s proposed final
> interest in the Tulu Kapi open pit development, whilst ignoring any potential 
> upside from underground mining, Tulu Kapi district exploration or its portfolio
> of targets in Saudi Arabia.

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