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KEFI Minerals

Small refinements and robust numbers

Update | Mining | 31 May 2017

On 24 May, KEFI announced an update to its 2015 definitive feasibility study (DFS) in order to account for all of the initiatives undertaken by the company in the intervening two years. Without exception, the operational parameters of the mining operation (throughput, grade, recovery, etc) were identical to our prior expectations. Cash operating costs are now expected to be just 3.5% higher (equivalent to an annualised inflation rate of 1.7%), while capex costs, although towards the top of the range of our prior expectations, are materially lower than those presented in the original 2015 DFS (albeit the latter were calculated on an owner-manager, rather than a contract miner, basis). Note that all forecasts and valuations are here presented on a post-17:1 share consolidation basis (which became effective on 2 March), unless otherwise specified.

KEFI Minerals

Executive interview - KEFI Minerals

Edison TV: | Mining | 29 Nov 2017

After announcing the acquisition of Tulu Kapi from Nyota in 2013, KEFI is now putting together the final touches of its financing plans to put the mine into production. In its most recent update, KEFI announced that its financing facility with partner, Oryx, has been increased by 3.7% to US$140m in order to accommodate an increase in processing capacity to 2.0Mtpa. Here, the company’s executive chairman, Harry Anagnostaras-Adams, and its finance director, John Leach discuss how they achieved this.

KEFI Minerals

Up to 90% of the way there

Update | Mining | 28 Nov 2017

KEFI has announced that it has made “considerable progress” in finalising the US$140m infrastructure lease facility for the development of Tulu Kapi in Ethiopia. The announcement follows the release of KEFI’s updated financial projections for Tulu Kapi in late October, based (for the first time) on a c 25% increase in ore processing capacity to 1.9-2.1Mtpa. It has also reconfirmed the project’s timeline, with construction anticipated in FY18-19 and commissioning at the end of 2019, and a residual equity/mezzanine requirement of US$20m (in line with our expectations).

KEFI Minerals

Tulu Kapi financial projections update

Update | Mining | 02 Nov 2017

The release of KEFI’s updated financial projections for Tulu Kapi earlier this week follows the operational update in October in which it first posited a c 25% increase in ore processing capacity from 1.5-1.7Mtpa to 1.9-2.1Mtpa (depending on ore hardness), funded by an expansion of the proposed Oryx financing facility, from US$135m to US$140m. The detail provided in the updated projections has allowed us to firm up our forecasts and expectations relative to the indicative estimates presented in our update note of 9 October.

KEFI Minerals

Plant capacity expansion beckons

Update | Mining | 09 Oct 2017

In its quarterly update, released today, KEFI announced that its funding partner, Oryx, is actively implementing finance closing (scheduled this quarter) and has also agreed to expand its proposed finance facility for Tulu Kapi from US$135m to US$140m to allow an increase in ore processing capacity from 1.5-1.7Mtpa to 1.9-2.1Mtpa (depending on ore hardness). This will take plant capacity back to that proposed in Nyota’s 2012 definitive feasibility study – albeit at a reduced capital cost.

KEFI Minerals

83% of the way there

Update | Mining | 20 Jul 2017

This week, KEFI Minerals announced that it had signed an agreement with Oryx for US$135m of lease funding for Tulu Kapi. As a result, Oryx will assume c 70% of the project’s on-site capex requirements in a form of build, own, operate and transfer (BOOT) arrangement. Following full repayment of the lease, ownership will revert to KEFI.

KEFI Minerals

Securing Lanstead: Tulu Kapi financing underway

Update | Mining | 13 Feb 2017

This morning, KEFI announced it is to raise £5.62m (gross) via the issue of 1.7bn shares at a price of 0.33p, including £4.62m from Lanstead. The majority of the funds raised will be expended on the development of Tulu Kapi over the next 12 months, with the next largest segment being directed towards exploration and the balance to corporate costs. Directors and contractors have supported the fund-raising by subscribing for c £0.4m. Afterwards, a 17:1 consolidation of the shares has been proposed (to be voted on, among other things, at a General Meeting of the company's shareholders on 1 March).

KEFI Minerals

Maintaining flexibility

Update | Mining | 21 Dec 2016

KEFI has today issued a quarterly operational update in which it has confirmed the partial lifting of the current conditions of the State of Emergency in Ethiopia plus its expectation that it will be completely lifted around the end of Q117. At this point, KEFI anticipates being able to announce a co-lender to the Development Bank of Ethiopia followed by the start of actual development at Tulu Kapi.

KEFI Minerals

Still aiming high

Update | Mining | 21 Nov 2016

Since our last note in July, KEFI has updated its capex forecast for Tulu Kapi as well as the consequential funding mix. KEFI has also advised that the start of Tulu Kapi gold production is now expected to be mid-2018 (vs late 2017) due to recent events in Ethiopia and subsequent mitigating actions by the government. Finally, Edison has also updated our long-term gold price forecasts which have reduced our valuations.

KEFI Minerals

Steady as she goes

Update | Mining | 27 Jul 2016

KEFI has raised £3.8m (gross) in equity, via the issue of 761.9m shares yesterday at a price of 0.5p per share. Notably, Odey Asset Management subscribed above its pro rata shareholding to increase its interest in KEFI to 29.5%. Odey is also reported to have offered to underwrite the placing, although this was rendered superfluous by the level of demand from other investors. Ausdrill (a contractor and existing shareholder) subscribed to maintain its shareholding at 7.31%. KEFI's share price closed at 0.565p on Monday 25 July (the day before the placing was announced), on which basis its theoretical ex-placing price should be 0.552p.

KEFI Minerals

Reduced capex estimate

Update | Mining | 07 Jun 2016

Since our last update note on 10 March, KEFI has announced a £1.75m equity raising; confirmation that the Ethiopian government is to take an additional 20% interest in Tulu Kapi in return for a US$20m funding commitment relating to infrastructure (vs our prior expectation of 25%); a reduced capex estimate and modified funding requirement mix; and, replaced the construction contractor with market leader Lycopodium.

KEFI Minerals

Going underground

Update | Mining | 10 Mar 2016

KEFI's announcement of the results of a preliminary economic assessment (PEA) of an underground operation at Tulu Kapi indicates a project with an estimated NPV8 of US$44m, based on a gold price of US$1,250/oz and 100% ownership (cf US$156m for the open-pit project on the same basis). The project envisages producing 50koz of gold pa (in addition to that from the open pit) over four years, at a cash operating cost of US$664/oz and all-in sustaining costs (AISC) of US$845/oz.