11th May 2020 12:01
(Alliance News) - KEFI Minerals PLC on Monday said it has raised GBP3.7 million via a 569.2 million share placing priced at 0.65 pence per share, after which RAB Capital now holds a significant stake in the company.
The gold exploration and development company's shares were down 27% at 0.82p in London in late morning trading.
Brandon Hill Capital Ltd acted as broker for the placing, which has two tranches. The first 113.8 million share tranche is conditional only upon admission of the shares to AIM, while the second tranche of 455.4 million shares requires shareholder approval.
RAB Capital, a UK special situation investor, will hold 263.1 million KEFI shares once the placing is complete, equivalent to a 12.6% stake in the firm's enlarged share capital. RAB is considered a long-term shareholder and has been given the right to appoint a director to KEFI's board provided its interest is 10% or higher.
KEFI said it plans to use the funds raised to close its approximately USD260 million project financing of the Tulu Kapi gold project in Ethiopia. This will include the initial closing of project level equity in the first quarter of 2020 plus "the identified debt funding in October 2020".
The company is still aiming for full gold production at Tulu Kapi in 2022.
Chair Harry Anagnostaras-Adams said: "The interest in this placing, in what are difficult times globally as a result of the Covid-19 pandemic, stands KEFI in promising financial shape and highlights the upside offered by its asset base. The whole consortium is focused on closing the full project financing in October 2020 and the government in Ethiopia has supported our efforts to see that the project can proceed without delay and to high international standards.
"Tulu Kapi is the first modern mine development in Ethiopia for decades and we could not ask for a more committed community and government. This is a national priority and will be the largest single export generator for Africa's highest growth country.
"We are also highly encouraged by the results to date of our ongoing drilling programme in Saudi Arabia, which has encountered drill intercept grades of up to 5% [copper] equivalent this year. KEFI is targeting a maiden JORC resource mid-2020, following the completion of the current drilling programme, on what already appears to be an attractive copper-gold system with in-situ metal content potentially larger than that of Tulu Kapi."
By Anna Farley; [email protected]
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