KEFI Gold & Copper Primed for Growth as Ethiopia Modernizes Mining Sector

• Ethiopia has shown strong economic growth in the past, but internal conflicts temporarily slowed progress. However, the country is now on a path of stability and development.
• KEFI Gold & Copper has projects in Ethiopia and Saudi Arabia, with a focus on de-risking and developing these projects to create wealth.
• The speaker emphasizes the strength of their team and their approach to financing and development in these regions, showcasing the opportunities for growth in the mining industry.

Ethiopia is Stabilizing Allowing KEFI’s Flagship Gold Project to Advance

KEFI Gold and Copper has been operating in the highly prospective Arabian-Nubian shield geological region for over 10 years, persevering through turbulent times to position itself for major growth as conditions now improve. The company’s perseverance is paying off, with its flagship Tulu Kapi gold project in Ethiopia finally set to move into development and two promising copper-gold exploration projects advancing in Saudi Arabia.

Ethiopia’s economy was among the 10 fastest growing in the world for nearly 20 years until civil unrest stalled growth and challenged the mining industry. However, with democracy taking root and the government focused on modernization, the mining sector is poised for rapid advancement.

Led by a highly experienced management team, KEFI has strengthened during the difficult years in Ethiopia and is now positioned to capitalize as the country stabilizes. The government is focused on growing the mining sector to diversify exports, but first needs successful miners like KEFI to establish durable operations and help build capacity.

Tulu Kapi Gold Project On Track for Near-Term Development

KEFI’s most advanced project is the open-pit Tulu Kapi gold project in western Ethiopia, where the company has persevered through repeated government turnovers and civil unrest. Extensive drilling by KEFI has outlined probable reserves of 1.05 million ounces of gold at a grade of 2.12 g/t. The project is now fully permitted and at an advanced stage of financing and contractor engagement.

The Tulu Kapi project is designed to produce an average of 115,000 ounces per year over a 7-year mine life, with low all-in sustaining-costs (AISC) of US$871 per ounce. At a gold price of US$1,700 per ounce, the project has an estimated net present value of US$278 million after tax.

The total capital cost is estimated at US$320 million, with KEFI’s share of around US$140 million based on its 45% ownership. About US$110 million of project finance has been arranged through Ethiopian banks and development finance institutions, while KEFI is raising the roughly US$30 million balance from equity investors.

With the project finance documentation now nearing completion, KEFI is poised to launch project development in the coming months, setting the stage for the first gold production in late 2024. The successful start-up of Tulu Kapi will establish KEFI as a leading gold producer in Africa.

Large Copper-Gold Projects Advancing in Saudi Arabia

Beyond Tulu Kapi, KEFI holds an interest in two promising copper-gold exploration projects - Hawiah and Jibal Qutman - located in the highly mineralized Precambrian Shield region of Saudi Arabia. As in Ethiopia, KEFI has leveraged its technical expertise to advance projects others overlooked.

At Hawiah, KEFI has outlined over 20 million tonnes of resources averaging 1.9% copper and 0.6 g/t gold within massive sulphide systems. The project shows similarities to the Olympic Dam deposit in Australia. Extensive drilling and other work have advanced Hawiah to the point where preliminary feasibility studies can commence.

The exploration team achieved another breakthrough discovery last week at Jibal Qutman, where initial trenching has exposed a new massive sulphide system with visible copper mineralization over a strike length of 400 metres. This highly promising new discovery is located just 50 kilometres from the main Hawiah deposit.

While its 45%-owned Ethiopian subsidiary Tulu Kapi Gold Mines is leading the development of the Tulu Kapi mine, KEFI retains a 40% share of its well-funded Saudi joint venture company Gold and Minerals Co. Thus shareholders have strong leverage to exploration upside, with development largely funded by project or joint venture partners.

Seasoned Team to Execute Development and Exploration Plans

KEFI Gold & Copper boasts a seasoned management team led by Executive Chairman Harry Anagnostaras-Adams, who has overseen numerous mining startups across Africa, Asia and Australia over his 40-year career.

The board includes other highly experienced mining executives such as John Leach, a former executive at gold major Gold Fields, and Mark Tyler, formerly the global head of mining and metals at development bank EBRD. The executive team and key consultants also bring decades of expertise in permitting, financing, developing and operating mines globally.

After persevering through unstable times, KEFI now looks poised to transition from explorer to emerging producer in the proven yet under-explored Arabian-Nubian shield. With Ethiopia stabilizing and opening to foreign investment, the Tulu Kapi mine is expected to make KEFI Africa’s newest gold producer within two years. Meanwhile, exploration success could fast-track copper production from Saudi Arabia.

KEFI Gold & Copper provides investors with attractive exposure to these emerging mining markets during an exciting stage of growth. The current share price around 2 pence offers strong re-rating potential as the company transitions to producer status. For investors seeking exposure to an overlooked region with major resource potential, KEFI warrants a close look.

The Investment Thesis for KEFI Gold & Copper

• First mover advantage in underexplored regions: KEFI has first mover advantage in the Arabian-Nubian Shield regions of Ethiopia and Saudi Arabia. These areas are geologically prospective but relatively underexplored, so KEFI has the potential to make major new discoveries.
• Near-term production at flagship project: The Tulu Kapi gold project in Ethiopia is fully permitted and nearing full financing, with production expected in 2024. First production could re-rate KEFI as it transitions from explorer to producer.
• Production would diversify country risk: Developing Tulu Kapi would establish KEFI as a gold producer in Africa. Its copper exploration projects in Saudi Arabia provide geopolitical diversification.
• Exploration success could be company-making: The large copper-gold projects in Saudi Arabia, if further delineated, have company-making potential. Exploration is a lower risk with partner funding.
• Strong project economics: Tulu Kapi has low all-in sustaining costs estimated at $871/oz with an after-tax NPV of $278 million at $1700/oz gold price. Robust economics if executed per plan.
• Funding seems secured: $110M of $320M capex is funded through financing partners. KEFI needs to raise just the $30M balance, which seems achievable.
• Management has a track record: The experienced management team has successfully permitted, financed and developed projects in the region before. This de-risks execution.
• Valuation upside if projects advance: A current share price of around 2 pence seems inexpensive if KEFI delivers on ambitious development and exploration plans.

KEFI Gold & Copper provides attractive leveraged exposure to highly prospective underexplored regions at what could be an opportune inflection point, if Ethiopia continues stabilizing and the company executes successfully.