jaylett18 Jan '18 - 12:54 - 53755 of 53758
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KEFI Minerals scheduled to start work at Tulu Kapi this year
"During the next two years Tulu Kapi is to be built as a 140,000 oz pa gold producer"
KEFI Minerals PLC (LON:KEFI) expects to start construction of its Tulu Kapi gold mine in Ethiopia in the second quarter of 2018.
A consortium compromising mining contractor Ausdrill, engineer Lycopodium, and the Ethiopian government is responsible for the infrastructure and building work.
Lycopodium will build the on-mine infrastructure (including the plant) under a hybrid EPC/EPCM contract, said broker
This is planned to be funded through the issue of US$140mln, 9-year debentures with a gold price-related interest rate, which the broker anticipates will be 10% at a gold price of US$1,250/oz (rising to 15% at US$1,700/oz).
Some US$12mln of pre-production mining costs are planned to be deferred for a year and up to US$20mln of off-site infrastructure is set to be funded by the Ethiopian government.
That will leave US$42mln to be funded from other sources including an equity raise and working capital loan.
Production will amount to 980,000oz over a 7.5-year mine life at average sustaining costs of US$773/oz over its life.
Reserves stand at 1.05Moz, grading 2.1 g/t, with operations to be a conventional open pit and CIL-based project.
A scoping study on a potential underground resource at Tulu Kapi suggests the production rate can rise to 150,000oz pa from Year 4,
In addition, KEFI has identified more satellite targets within trucking distance of the mine site.
"The final Tulu Kapi project models were agreed within the consortium and uploaded into the formal financing data rooms, said Harry Anagnostaras-Adams, executive chairman, in January 2018.
They show some improvements for shareholders, as compared with recent company guidance," he added.
During the next two years Tulu Kapi is to be built as a 140,000 oz pa gold producer and, at the current gold price of $1,300/oz combined with any of the contemplated financing scenarios, KEFI shareholders' beneficial interest in the net free cash flow per annum (after debt service and tax) exceeds the company's current market capitalisation.
A project-level transaction on the same terms as with the Government would imply a project valuation of c.US$100 million (100%) and, under that financing scenario, KEFI shareholders would expect to retain a beneficial ownership interest in the order of 55% in the project.
Jibal Qutman still developing
In Saudi, KEFI has a 40%-stake in the Jibal Qutman project, where new country-wide mining laws are being introduced in a bid to encourage the development of the sector into an important part of the economy.
Kefi said it is waiting for final clarification of the country's new policy.
Value undemanding says broker
The broker remains a buyer but has lowered its target price to 6.8p due to recent weakness in the shares.
RFC Ambrian assumes the company will raise US$25m in equity at a price of 3p and secure a US$17m working capital facility.
Shares rose 10% to 3.55p valuing the miner at £10.7mln.
Gold & Minerals ("G&M") Ltd, an incorporated joint venture with 60%-partner ARTAR, Saudi Arabia
New minerals policies announced by the Saudi Government: to facilitate growth and making it the third pillar of the Saudi economy.
Portfolio of Licence Applications: G&M has upgraded its portfolio and now has pegged much of a major structural VHMS belt - a structural corridor containing several systems of volcanic hosted massive sulphides. A separate RNS will be issued when the new regulatory details are clarified along with G&M's particular tenements.
Government approvals being implemented as required:
o The Mining Licence transfer to TKGM has been cleared and execution in process as has regulatory approval of most historical investment by KME, in that 95% of the spending to 31 December 2014 has been formally approved and the balance, along with the spending since 1 January 2015, is now being dealt with.
o The community compensation surveys, calculations and negotiations have been completed.
o The Ethiopian Electricity Power Corporation and Ethiopian Roads Authority have confirmed their budget and schedule commitment to construct the project's off-site infrastructure.
o National Bank of Ethiopia (central bank) has approved most administrative requests and is engaging on the remaining issues
18 Jan '18 - 09:05 - 53705 of 53750 0 3 0
Just spoken with H, the first RNS was regulatory and had to be released in it's format.
He went on to say there is no change to the funding plan and sources of cash, the Oryx agreement is 'simplifying' the structure and agreagreed mutually.
Other than the removal of Oryx, everything remains the same.
This is the key statement:
"-- Planned funding remains unchanged but the structure has been streamlined. Oryx and KEFI mutually agreed to terminate their relationship. The structure for the development of the Company's Tulu Kapi project will otherwise remain the same, with the other existing consortium members still performing all the various required roles as previously outlined."
18 Jan '18 - 09:14 - 53713 of 53750 0 2 0
Andy - He referred to them as 'middle men' and i understand they are a spin off of the main contractor. Oryx were going to operate an SPV in respect of placing/managing the bonds.
My understanding is that this middle link has been removed.
Is was a short phone call, probably cost me £0000s!
During the next two years Tulu Kapi is to be built as a 140,000 oz pa gold producer and, at the current gold price of $1,300/oz combined with any of the contemplated financing scenarios,
It remains the case that additional project-level equity investment may minimise the dilution of KEFI shareholders' beneficial interests. A project-level transaction on the same terms as with the Government would imply a project valuation of c. US$100 million (100%) and, under that financing scenario, KEFI shTulu Kapi Project Financing:
Drawdown: target timing to be synchronised with community resettlement and the triggering of procurement and construction in Q2-18. Remains subject to completion of due diligence, regulatory approvals and execution of binding documentation.
areholders would expect to retain a beneficial ownership interest in the order of 55% in the Project
18 Jan '18 - 10:04 - 53732 of 53750 0 3 0
The original structure involved funding bonds and a finance lease. So the money was to flow from the bond subscribers to the SPV to Oryx who would then use the money to pay for all of the on-site infrastructure (the processing plant, the dams, the on-site roads and housing etc etc). Oryx would own all of that stuff and would lease it to the project company.
The streamlining might be the elimination of the finance lease but I am just guessing. It is possible that they got into a bit of a twist trying to sort out the land interests for that structure. The land is owned by the State. The project company will have a licence - granting is in progress. The project company would then have to grant Oryx a sub-licence so that they can commission the development works and have an interest in the land from which they could grant the finance lease and Oryx would then grant back a sub-sub licence of the developed site, the finance lease, to the project company.
http://www.teausa.com/14531/reading-tea-leaves so boiling it down gold price up resettlement gradually getting there as is government red tape final finance arrangements still up in the air, company communication consists of shareholders phoning harry up to explain the latest explanation.
Probably the most significant long term news for Kefi the KSA The Saudi Arabian Government's new pro-mining policy considering the companies portfolio there probably news of which could explain the recent rise in the share price.
Many thanks robjm66 . Steady trading all day but you're probably right not enough volume for a leak on anything major, still good to see an increase though and with a bit of luck we'll get some partnership / finance news this quarter.
Nice rise Norris107 today so some info could have leaked if it has and i would have to guess it would most likely concern relocation efforts as kefi was advertising for a community resettlement officer the other day.
If it was a breakthrough in a finance deal or bringing a new partner on board i would have expected a bigger rise and on more volume.
No definite news on advfn about what could have prompted the rise and no one there has picked up a rumour or a titbit by googling.
Other factors could be people thinking the share price is oversold, gold is higher now over the last month, or a lack of selling.
I am usually busy on Wednesday but apart from that day i check advfn at least once every day and usually paste up anything that could be significant though that is always going to be my best guess.
hpn robjm66 -
not much input here lately? plus I've a problem accessing ADVFN and keep getting "site has an unsupported protocol" message when I try to log into the bulletin board - also got the same when I went look at the 'nice job'.
All new to me and not appreciated!
Anyway - nice price hike today, long over due imo and was wondering if there were any
rumours/insights stirring the pot?
Some admin issues still to work through probably cleared by early January but good to see ambassadors actually looking after their countries interest.
EBC seems to not to got the memo that it is a news channels duty to provide a constant stream of human misery and bad news stories. Maybe they need the BBC and channel four to show them how it is done.
Charliee whichever way you cut it Lycopodiam is spending their money now in expectation that it will pay off down the line.
You could say though it is disingenuous to say that amount will lead to big dilution at present shareprice then say you have no idea when it will be paid in shares discounting kefi will not just give them the cash or do a part cash part share deal.
"Subject to full legal documentation and completion of the finance syndication
Likely any deal will be tweaked after this doubt that Kefi would give either party more than the ten percent each in shares mentioned in the RNS at the time.
Proper pasty see you still think you are a better mining expert than the mining experts. Reams of stuff out there showing how the figures stack up and the mining plan has been constantly refined.
Not only are kefi looking to get TK up and running but use it as a base for other mining prospects in the area. Guess it all a massive conspiracy involving kefi the Ethiopian government, Lycopodiam, Ausdrill and all the independent experts along the line.
The post you quote refers to the low grade of the resource and the reality that any company can alter the grade beyond the achievable by playing with numbers " in house".
Of course, " in house" does not cut the mustard in sourcing finance.
Said director sold out on a discussion board pump in 2011 when the company had 300M odd shares at 8p plus.
Today it seems to have a similar number in issue BUT with a 17 to 1 consolidation and some other diluting vehicles in place and at an sp of below 3p the 2011 shares are today at one fiftieth of their 2011 value at least.
So the director was shrewd then and probably shrewder now to disappear.
The resource is a dog. But it meets the current directors needs as it did when it met the needs of previous the directors of Nyota in providing a fat salary and expense account.
As for bringing the resource into production that would bring a risk of ending the gravy train! Why do it?
Better to do as little as possible and dilute and keep bleeding the company dry until the inevitable.
"Subject to full legal documentation and completion of the finance syndication, both of these major project contractors would then stand with significant shareholdings in KEFI of under 10% each. Lycopodium has granted KEFI the discretion to pay for the first US$2.5 million of its programme of works in KEFI shares, at market price"
So far, there do not appear to have been shares issued to Lycopodium.
Presumably, therefore, within current liabilities (if HAA is to be believed) there is an amount owing of $1 million, which will either be paid to Lycopodium or they will receive 25 million shares (and the whole $2.5 would be close to 65 million shares at today's market rate).
If Kefi is going to pay for the work it is disingenuous to say that Lycopodium are spending their own money and if it is shares, when is that triggered under the agreement?
Huge dilution for small sums: shareholders need to know, as Lycopodium could be joining Lanstead on the short merry go round.
2011 lol things have moved on a bit since then even in the last year.
2015-06-25 Proper Pasty
The effective mining of this resource to produce the ever increasing subjective headline grades has always been the key for NYO or KEFI. KEFI have never been able to provide any confidence or third party support for the highly selective mine plan to justify the unreal "head grades".
estseon5 Dec '17 (advfn)
The closure boulder will start to roll following receipt of the clearances currently sought and that should be early in Q1 2018.
The syndicate will be fully committed before the end of Q1 2018 - 'no turning back'
"Pre-works" by Lycopodium ($1m already spent) and the relocation will be triggered soon after clearances are received - Q1 2018.
Ausdrill will be given formal notice by the end of Q2 2018 to be ready to commence mining in mid-2019 to build up stockpiles (there is virtually no overburden where the mining is scheduled to commence)
The plant should be fully commissioned within about 23 months of commencement of construction in Q2 2018 with commissioning scheduled to commence Q4 2019.
Note that Lycopodium is spending its own money at the moment and that is part of its equity contribution ($2.5m).
Would not be surprised if kefi is late hitting a scheduling target thats a safe bet with most mining companies including kefi. However its going to happen or companies like Ausdrill Lycopodium would not be wasting their time or money.
Norris107 Always in the interest of mms to exaggerate any swings on the upside or downside and jump on a trend to generate trades. They are also going to be quick to identify shifts in sentiment as well, as they know how a rns is likely to go over from experience.
Having said that they are neutral in the aim casino as long as the punters keep putting the chips on the table they do not care what number they pick.
Thanks for the last 2 posts robjm66, both in my view clearly show/explain that nothing significant had happened or that should have effected the share price so signifantly. The movement in price cannot be 'blamed' on shareholders or investors expectations not being met or 'skitishness' - The sell quantities over the last week were insigificant and infact the majority of sells were generated subsequent to having 20% illogically wiped off the share price in 1 day followed by another 10% the next.
It's not surprising that some jumped ship but it wasn't their sells that generated the drop - it was at the whim of the mm's over whom there seems to be no control or regulation that makes any sense.
Nothing new there I hear you say - better/smarter folk than you have complained about the apparent unfairness of AIM and got nowhere - true, but I still think it's amazing that everyone rolls over & accepts this everyday and commonplace form of daylight robbery without a murmur.
KEFI Minerals legal success outweighed by financing disappointment. BUT...
By HotStockRockets | Friday 1 December 2017
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Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Good news from KEFI Minerals (KEFI) with an announcement that the Federal Supreme Court of Ethiopia has dismissed its potential liability regarding an inherited claim for damages. However, the shares currently remain depressed following a project finance update...
On the legal claim, despite it having been based on the impact of exploration field activities which pre-dated KEFI's Tulu Kapi gold project involvement, the company was still liable for $0.6 million. It adds if another appeal is raised, which remains a possibility, KEFI would defend its position on the basis that it remains firmly of the belief, on legal advice and as previously reported, that it has no contingent or actual liability.
The shares are though currently down despite also that the project finance update announcement commenced; KEFI Minerals confirms that it has made considerable progress towards finalising the US$140 million infrastructure finance lease facility for the development of the Tulu Kapi gold project. Major milestones achieved included the documentation having been lodged with the Ethiopian Government for approval and the Ethiopian Minister of Finance and Economic Development has formalised budget approval for the Government to proceed with their construction and investment roles for the project. The issue looks to though be in the following paragraph;
The proposed financing structure has been refined in response to soundings with potential investors in the listed bonds and the placing of the bonds is now expected to commence during Q1 2018, with drawdown expected soon thereafter conditional on equity capital subscription. The c. US$20 million residual equity requirement will then be triggered and may comprise, in order of preference, equity issues at one or more of the intermediate, project, or parent company levels.
This compares to it previously stated, for example, the rest of 2017 is expected to be equally busy as we work to close the project financing and move towards development. The slight delay here and explicit mention of equity requirement has seemingly spooked investors. However, the latter looked already discounted and the company continues to expect project construction to lead to production commissioning towards the end of 2019.
We recently noted an estimated NPV (8%) at the start of construction of $74 million. With the shares now at 3.5p to buy, that compares to a market cap of £11.6 million (currently $15.4 million). We continue to consider that discount far too large and that it will close. As such, we retain faith and the stance remains buy.
Think TW has or had some kind of family trust with kefi shares guess that could colour his objectivity on one hand but shows his confidence in kefi coming good eventually on the other.
As for how good a TW tip is most peoples view is likely to depended on whether they have lost money or not on them. Worth reading his views as he probably has good access to kefi board but also worth reading peoples views who are more negative on kefi on various boards even if (as i do) you disagree with them.
Share Prophets put a link up from Cantor Fitzgerald.. 27/11/17.
They claim it was only meant to read by institution investors very bullish.
Helped give me the courage to average down again ( St Andrews day buy ) @ 2.73p
As with all AIM have to hope no placing in in the background .
Just after my buy e-mail from hot stocks rocket suggesting " short term financing disappointment buying opportunity "
That might of put me off as not sure how trustworthy TW is.
Sentiment not good at the moment and Harry seems to make it worse every time he opens his mouth. He is actually a lot more relaxed than share holders as he is confident that Kefi will get there in the end and seems too complacent over delays.
Maybe having lost most his hair already he is not concerned about shareholders pulling theirs out!
Having said that underlying prospects are no worse than they were when the shareprice was higher maybe even a bit better. Catch a knife? Well the share price could easily go lower.
Possible boost on the upside in the short or middle term if harry says he has cobbleded together a deal for the remaining money needed at intermediate of project level.
I agree - nothing significantly new in todays RNS and there's nothing quite like a 'no new news' RNS to upset the impatient and give the MMs a chance to test support. I thought -20% and the final -15% was very harsh considering the volumes involved - if I'd been around I might have topped up a little bit.
Still got plenty of anticipation though and firmly believe our day will come and think that today's reaction was disproportional.
Well the title was a bit deceptive as do not see much new in the rns to indicate progress from what I already understood the situation to be Hanky Panky.
Think even if they have one or two people locals dragging their feet over re settlement they might change their mind when they see other people moving or get a slightly better deal. Meanwhile the company has to be sensitive and patient with local communities.
So i would say of the two factors the final dealand its make up is a lot more significant and likely slowing things down still. Especially when you see the push for a intermediate deal a new partner and faster expansion in Ethiopia.
You are right Freddie. What I was trying to say was that they had chosen a financial rather an operations update.
My take was that in order to get this project underway they need the resettlement and finances to be sorted, so which was holding this back previously and which now?
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