Q and A

KEFI Minerals is committed to providing full and transparent disclosure of its activities, primarily via releases to AIM's company announcement platform. KEFI also holds a live webinar shortly after the release of the Company's Quarterly Operations Report during which shareholders's questions are answered (and recordings are available on KEFI's website).

KEFI often receives follow-up questions as well as questions regarding how market developments may impact the Company. Under AIM rules, KEFI Minerals cannot be party to selective disclosure of information to individual investors. Whilst some conversations are about material already in the public domain, it is a Company policy to be cautious about one-to-one conversation with individual shareholders.

In order to make answers to these questions broadly available, KEFI has set up this Q&A page to post answers to questions which are deemed likely to be of general interest. If you choose to post these answers on a bulletin board, we ask you to publish the Q&A verbatim on the bulletin board and cite this page as the source.

Please email your questions to info@kefi-goldandcopper.com.

The main questions received recently are summarised below as often we have received several similar questions.

Q: Why have KEFI shares performed so poorly, and only just beginning to show any promise?

A: As objective as the company can be in answering the question:

  • The mining sector generally has been out of favour for many years. KEFI hopes this is now changing given high gold prices. KEFI is among the small number of AIM junior miners that have endured over the past 15 years since the last gold boom (which peaked at a gold price of c. $1,900/oz). Since then, the majority AIM-listed mining and exploration companies have ceased to be listed. KEFI remains.
  • Despite significant challenges in both jurisdictions, KEFI chose to continue advancing its projects. This included the necessity of negotiating significant regulatory reforms in both host countries. In Ethiopia, we had to safeguard the project from upheavals at all levels as the country introduced democratic reform, and unfortunately endured a civil war. In Saudi Arabia, permitting was effectively frozen for approximately 8 years.  Conditions precedent for financing and launching had to be modified with changed circumstances in order to achieve “bankability”. Much of this was not foreseeable.
  • As a result, a significant amount of time and resources were diverted to defensive and corrective measures rather than directly advancing project work. To sustain these efforts KEFI raised equity capital on multiple occasions. This was deemed to be unavoidable and a necessary action for survival under adverse conditions beyond KEFI's control. The alternative would have been to relinquish the projects; KEFI has not contemplated this. We have built a strong growth platform which provides potential value growth as the sector, our countries and our projects get moving.
  • With the (then dilutive) raised funds, KEFI discovered or acquired gold-equivalent resources amounting to c. 5 million ounces, of which its beneficial interest is c.2 million ounces. All orebodies are yet to be closed off and a large pipeline of other opportunities is in place.
  • Currently, the net present value (NPV) of the Tulu Kapi Gold Project attributable to KEFI, and based on US$3,000/oz gold is c. $900M or c. £700M. This does not include any valuation for KEFI’s 15% stake in Gold and Minerals Co. This indicates considerable potential valuation upside from the company’s current market capitalization of £53M (post the May 2025 capital raise) as KEFI continues to de-risk the Tulu Kapi Gold Project.
  • There is further potential valuation upside from the Saudi assets. In November 2024, Orior Capital valued KEFI’s 15% stake in Gold and Minerals at US$50m to US$78m based on a comparison with recent M&A transactions in Africa. The report is available on KEFI’s website. 

Q: When you quote valuations per share, why do you not build in further dilution for future share issues?

  • KEFI publishes valuation-style information using industry conventional metrics based on actual share capital. 
  • Making assumptions about future share offerings would constitute Forward Looking Statements. This could be interpreted as policy, and could potentially be materially misleading. The Company on the other hand publishes its policy – which is to minimise dilution by optimising the structuring of equity-risk capital at the different levels of the corporate structure.
  • KEFI also sponsors proper in-depth research, given the lack of such research from the broking community, which generally does not allocate the time or resources to that function unless they can justify it with commissions made on share issues. Such research usually builds in assumptions about future changes to capital structure.
  • Recent in-depth research on KEFI is by Orior and Edison, both uploaded onto KEFI’s website.

Q: Why did you not sell 15% of GMCO instead of raising money?

  • KEFI announced a strategic review of its 15% stake in Gold and Minerals Co on 13 November 2024. This was not intended to be a ‘fire sale’, but rather a thorough review of KEFI’s choices and the cost/benefit of sale vs the other alternatives being worked on.
  • In that context, there have been several significant developments in respect of Ethiopia, as follows:
    • BCM, a leading mining contractor, being announced as the Preferred Contractor for the Tulu Kapi project in April 2025. BCM has agreed to contribute capital to the project, thus reducing the amount of capital that has to be raised from other sources.
    • Interest in the Ethiopian Preference Shares (one of the very few dollar-denominated instruments available in Ethiopia), and interest in KEFI’s critical minerals licences.
    • Major institutions joining the KEFI register to strengthen the group’s parent.
  • But there have also been several significant developments in respect of Saudi Arabia, as follows:
    • Gold and Minerals being awarded the Umm Hijlan licence at Hawiah in January 2025. Your Board believes this additional licence area adds significant further upside potential to the Hawiah project, both in terms of the VMS structures, and with the substantial outcropping and mineralised Mamilah gold system. Selling the stake in Gold and Minerals quickly would have deprived investors of the potential upside from exploration and development of this highly-prospective and known mineralised area.
    • The joint venture between Gold and Minerals and Hancock Prospecting being awarded the Al Hajar Northern exploration licence area in March 2025. Al Hajar lies on the Wadi Shwas Mineral Belt, a trend that is approximately 50km east of the Wadi Bidah Mineral Belt that hosts Hawiah. Al Hajar hosts known mineralisation, and historical work supports walk-up drill targets. There is the potential ultimately for Hawiah and any discoveries at Al Hajar to be developed jointly, with substantial potential synergies and cost savings. Again, a quick sale of KEFI’s 15% stake would have deprived investors of this further development potential.
  • The placing timing was driven by year-end audit sign-offs on solvency at KEFI, combined with pressure from KEFI’s bankers, contractors and the Government to commit certain costs (much of which can be recouped in due course) before drawdown of project finance for Tulu Kapi.

Q: How is the relationship with the majority Saudi partner, in light of the strategic review so far?

  • The relationship with our JV partner is excellent. 
  • GMCO is now looking at the development of Stage 1 at the Jibal Qutman Gold Project in the short term, to be followed by that of the Hawiah Copper and Gold Project. GMCO will also keep under review the possibility and optimal timing of a GMCO IPO.  These are not imminent actions, but longer term possibilities.
  • ARTAR’s is a conglomerate which has until this past month been completely private. And it is therefore interesting that its first IPO was implemented only this past week - for ARTAR’s medical group SMC, which has publicly reported that it raised $500M for c. 30% of that subsidiary and that the IPO was oversubscribed many times.
  • It is notable Saudi stock market places an attractive valuation on the only listed private sector-controlled miner, AMAK, which implies a very high potential valuation for the comparatively larger GMCO when it is production.

Q: Why does KEFI need institutional shareholders?

  • KEFI is proud of its large retail shareholder following, with share turnover of over 100% pa being a healthy thing for any listed company. 
  • However, the transition of KEFI from explorer to producer requires structural change at many levels, including to introduce institutional long-term shareholders, which will also add stability and support to the underlying share price. The sale of the GMCO shareholding, even if it had already been possible, would not have addressed this matter.

Q: Why did you need to raise money if capex was already covered “there or thereabouts” with funds already arranged or falling into place?

A: We tried hard to ensure the capital raise of Q4 2024 brought us to financial close, however the delay to achieving Ethiopian Parliamentary Ratification of our bank’s country membership reaching this point plus some costs being brought forward, meant we were required to raise funds. The rationale of the raise was therefore: 

  • protecting solvency; and
  • respecting the requests by the lender syndicate which, after all, is putting up almost all capex funding.

The bottom line is that the Project needed the money and KEFI had to put it up. We were fortunate that we were able to raise a large portion of the funds with specialist gold and other institutional investors, which concurrently addressed another important structural issue. Despite the additional shares in issue, the potential underlying value of KEFI continued to grow at the same time as the shares on issue and therefore remains many multiples of the prevailing share price; having taken so long to get the Tulu Kapi Project to a position of financial close on the broader $320M syndicate, we had to protect the Company’s position and did not want to delay or put the closing at risk. 

Q: What was the basis for pricing the placing?

A: The KEFI share price has been at or below the placing price for practically the whole of 2025. Indeed on 1 May it was still below 0.55p. The uptick in share price stemmed primarily from a tweet from the Ethiopian Government (not KEFI) that it was set to finally award AFC its long-awaited country membership, which it subsequently delivered upon. Whilst this led to an improved share price it was also a contributing factor requiring KEFI to undertake a placing for reasons previously outlined. Given the historic share price during 2025, the placing price reflects very favourably to 20-day VWAP and beyond, whilst also being at the same level as the Q4 2024 raise.

Q: How do you explain the share turnover of +500M shares on the day the placing was announced?

A: 420M was the booking of one of the specialist gold funds that subscribed in the placing for £2,310,000. As announced, the shares from the Placing are to be admitted on 28 May 2025, at which point they would become a circa 4.5% owner in the Company. As a discretionary investment manager, a TR1 is not required to be filed by the specialist gold fund until its shareholding increases above 5%.

Q: Who are the institutional shareholders?

A: We now have quite a few institutional shareholders , mostly on-boarded over the past 9 months. It should be noted that no shareholder needs to publicly identify itself until it owns 3%. The institutions who permitted us to disclose their involvement herein are Ruffer Gold Fund, RAB Capital, Konwave Gold Equity Fund and Premier Miton. Time did not permit more of the other institutions to respond in time for this publication.

Q: Explain again the make-up of the funding package and the role played by the funds from the recent placing:

  • The standing budget is $320M (currently undergoing final refreshing ahead of close) after deducting the mining fleet to be funded by the mining contractor and recouped from opex charges.
  • Assuming the capex budget remains $320M, the funding sources are targeted as follows:
    • $240M Secured lenders (committed by specialist African banks TDB and AFC)
    • $80M equity-risk capital:
      • $20M government, committed
      • $23M mining contractor, committed in-principle
      • $22M non-convertible Preference Shares issued by KEFI Minerals Ethiopia, commitments in-principle
      • $15M already spent or already catered for in recent placing
      • The above-listed aggregate is $80M, with some further flexibility within some of the components
    • A small percentage movement (up or down) on the budgeted capex number can impact the final requirement. That is normal project management and is why we currently retain some flexibility within the syndicate allocations.
    • We will also need to ensure that the disbursement schedule matches the FX drawdown schedule, either by domestic FX conversions or synchronising the currency of the drawdown.
    • These matters are as finalised as they can presently be, pending the completion of the current exercises of confirming final budget on the eve of signing definitive documentation. Much of these exercises could only be triggered upon receipt of Parliamentary Ratification. To have jumped the gun would have risked having to duplicate the finalisation of certain costs.
    • The total contracting package for capex and opex at Tulu Kapi represents aggregate financial commitments of almost $1 billion. Various teams on the ground and in the relevant international locations are well aware of the need to manage the process tightly and quickly. KEFI is responsible to lead, coordinate and support the overall process. In doing so, it has a fiduciary duty to its shareholders and also to its partners and its other financiers to strike an appropriate overall balance. 
    • There has to be “give and take” between the different stakeholders which is sometimes challenging but normal for such a large project.

Q: Please elaborate on the possibility of $5M costs being paid by KEFI shares, which has been referred to in recent investor presentations. Does that include any amounts payable to PDMR’s?  Do any individuals have conflicts of interest?

  • There are potential success fees payable to non-PDMR’s which exceed $5M.
  • A smaller amount of potential bonuses also exist to PDMR’s (these have already been disclosed in past announcements and the Annual Report).
  • It is reasonable to assume that an aggregate of a total of $5M of these fees will be accepted in shares if that is what KEFI wants/offers. 
  • The pricing of any of these shares would be at prevailing market prices post financial close (expected by the Company to be materially higher than current levels). 
  • They can also be paid in cash (assuming KEFI has the cash resources).
  • This is a small fraction of the total project finance budget and provides flexibility in planning.
  • The Company deals with conflicts of interest daily. It is part of fiduciary management to identify such issues and behave compliantly and honourably in all respects. KEFI’s assembly and preservation of alliances with Governments and major in-country and international organisations at all levels of the organisation should give some comfort to those stakeholders who are unfamiliar.

Q: How will we fund the KEFI corporate costs during construction at Tulu Kapi?

  • Until any explorer has started production, all funding must naturally come from equity or debt. Plus in our situation, some past KEFI costs may be refunded in cash rather than converted into equity in projects
  • Future corporate costs will remain under £1M per annum, bearing in mind the low-cost base in Cyprus and also after recoveries of costs from operating subsidiaries. KEFI has a contractual obligation to its financiers and contractors to build, oversee and support the fledgling project organisations, and we charge full refund of associated costs accordingly.

Q: How are salaries set - they seem so much higher than average income in the UK. Please specifically refer specific details with respect to the Executive Chairman, Finance Director and Chief Operating Officer.

  • KEFI pays industry standard salary based on independent mining industry surveys, which has nothing to do with UK average incomes. And it is absolutely critical to recruit internationally experienced expert management for the first production project, let alone seriously pursue the company’s ambitious growth plans
  • The remuneration of the top 3 executives is detailed in the Annual Report. Others in the group have been paid more than them but, to demonstrate commitment to the team, all three have typically historically taken their salaries twelve months in arrears and a large portion in shares, to support KEFI and align with shareholders.  PDMR’s would make a formal disclosure if these shares are ever sold.
  • Role definitions, performance reviews and remuneration decisions of these three and of all other personnel, are carried out by the Remuneration Committee and its sub-committees which take independent advice. We have a formal industry standard system, tying incentives to the specific KPI’s for which the executive is responsible.  

Q: What is the history of the Executive Chairman at Atalaya Mining in Spain, KEFI and Venus Copper in Cyprus?

  • He personally founded the three companies in 2005, focusing the combined missions of the three fledgling organisations on the Tethyan Belt from Spain to Cyprus, into Turkey and down into the Arabian Nubian Shield
  • He stood down at Atalaya in 2013 to facilitate Spanish management once that company and its project was set up. It had hitherto been a mess but was then ready for localisation, which is critically important in southern Spain. He had no further involvement other than to support Atalaya and the Spanish authorities in prosecuting certain interfering third parties.
  • He then switched his executive time to KEFI, which needed to achieve permitting, financing as well as to develop and not just remain focused on exploration. This was at the invitation of the major shareholders of the company which then owned Tulu Kapi Gold Project, which KEFI then proceeded to takeover and put in the right direction for development.
  • Atalaya later transferred Venus Minerals back to the Chairman as Atalaya was uncommitted to Cyprus. The Chairman installed a team and JV partner to manage that whilst he has focused intensely on KEFI.

Q: When is the Annual Report being issued and when and where is the AGM being held?

  • In early June we will issue the Annual Report, to be followed by a webinar with Q&A say a week later, to be followed by an AGM in London, which will have to be in July. We adjusted our plans last week in response to shareholder requests.
  • We have had most AGM’s in London, but we have held it in Cyprus and Addis Ababa the last two meetings given attendance/cost. In response to recent requests by UK shareholders we are now arranging to return it to London this year and we will refine as shareholders wish.

Q: There was publicity about an EGM being proposed. Is this correct?

A:  No formal request has been received. But we will be pleased to steer enquiries as appropriate.

Q. Is KEFI concerned that they have misled the market and their shareholders in that the timelines and information which has been released over the past 6 months was known to be false and / or unachievable?

A. Our announcements always provide achievable timelines that are always based on having checked with the counterparties involved ie they are reliable estimates at the time of publication if everyone delivers on schedule. However, the nature of such forecasts is that we can’t factor in potential delays from factors outside of our control. The main culprit recently was the delay in Ethiopian Parliamentary ratification of AFC Country Membership.

Q: Why be some open with communications if predictions of other people’s actions are often proven wrong?

A: That fundamental challenge will diminish as Tulu Kapi is launched and its progress much more predictable, with the funding under KEFI’s control rather than the control of other parties.

Q. Can the company please detail what they have spent over £1million per month on since the December raise?

A. The previous raise was mostly to repay liabilities as reported at the time.

Q. How can KEFI justify allowing Edison to release information on 20th March 2025 stating "No More Equity at Parent Company Level" and that short term funding is available at this stage of financial sign off if this is false?

A. Key events that have happened since publication of the Edison report are the delayed timing of Parliamentary Ratification and the fresh demands of the banks for closing and commitment fees. 

Q. Why do we never hear from Eddy Solbrandt? Is he even really “employed” at this point?

A. As KEFI’s COO, Eddy is focussed on managing most of the Company’s employees and in particular the work being done to prepare Tulu Kapi for development. KEFI’s Executive Chairman is focussed on all “external relations”. This split of responsibilities is normal appropriate. Eddy will likely be at at least some of events in London that we have undertaken to host if anyone wishes to meet him.

Q: What if shareholders want more interaction and communication with the Company?

  • KEFI considers itself more transparent than most, without breaching regulations or commercial-in-confidence matters. We try to be very communicative, such as with this Q&A.
  • We also until recently maintained Quarterly Reports and Webinars, neither of which is a regulatory requirement. We are happy to re-activate those processes if that is preferred by shareholders and will take another poll at the Webinar we will now hold in June to ensure this is a broad-based request.
  • One thing we cannot do is to provide exclusive briefings to selected shareholders or subsets of shareholders, in particular unregulated shareholders. We used to have shareholder get-togethers several times a year and that can also be re-instigated if numbers justify but the invitation has to go to all shareholders.
  • The Board itself is structured to seek maximum alignment with the business agenda and with shareholders’ wishes, as follows:
    • a deliberate balance of the spectrum of key mining and in-country expertise. This can be seen in the individuals’ CV’s as set out in presentations and the Annual Report.
    • We have analogous structures at subsidiary boards.
    • A majority of independent non-executive directors at the parent company board.
    • An overall composition of the parent company board which is reviewed and renewed annually by shareholders, with 2 directors standing always down each year for review and re-election at the discretion of shareholder vote.
Posted 26 May 2025