11th Jun 2018 10:45
LONDON (Alliance News) - KEFI Minerals PLC shares spiked Monday after it the company reached an agreement with an Ethiopian investment syndicate for 30% of KEFI's wholly-owned operating subsidiary KEFI Minerals Ltd.
Shares in KEFI Minerals were up 32% at 3.70 pence each, having earlier spiked to 4.19p.
The Ethiopian investment syndicate will take a 30% interest in KEFI Minerals - the holder of KEFI's interest in the Tulu Kapi Gold Mines Share Co Ltd - in exchange for a USD30 million investment.
The Tulu Kapi gold project ownership, upon completion of the deal, would be split with 23% owned by the Ethiopian government and 77% by KEFI Minerals Ltd. KEFI Minerals Ltd in turn would be 70% owned by KEFI and 30% owned by the Ethiopian investment syndicate.
KEFI say the USD1 million per percentage point of ownership entered into with the investment syndicate are "broadly consistent" with the terms agreed earlier with the Ethiopian government.
The gold producer has now assembled the full proposed project funding. The project proceeding, KEFI said, is now up to the Ethiopian government "closing out the remaining process and approvals". It expects to move towards full financial close "later this year".
Chairman Harry Adams said: "We are delighted to have agreed terms with the Ethiopian investment syndicate, which further strengthens our alignment with local stakeholders for our Tulu Kapi project. Their investment on roughly the same terms as the Ethiopian government means that about 46% of the project equity will now be held by the Ethiopian government and local investors to complement the other benefits.
"KEFI's remaining about 54% beneficial interest in the project, along the lines previously foreshadowed, gives the company an implied valuation of USD66 million based on these transaction metrics, whilst not including any value for the Tulu Kapi underground deposit or the exploration prospects in Ethiopia and Saudi Arabia, the largest countries within the highly prospective Arabian Nubian Shield where KEFI is focused."
Related Shares:
Kefi Gold & Copper