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By HotStockRockets | Friday 25 June 2021
Disclosure: I own shares in one or more of the stocks mentioned. 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.
Kefi Gold & Copper (KEFI) “is pleased to provide an operational update”, but the shares are currently relatively flatlining at 1.85p so what’s the news?
The update comes on election day in Ethiopia, where the company is looking to progress development of the Tulu Kapi gold project. The plans have been submitted to various Ethiopian Government agencies, following a detailed due diligence process and “the company has undertaken to the Ministry of Mines and Petroleum that, upon timely receipt of these confirmations, KEFI will push to financial closing by the end of July 2021, or as near as possible thereto given the local document registration procedures and the COVID-affected limitations of syndicate parties’ physical locations” – the financing syndicate already assembled and awaiting approval.
There has been various unhelpful speculation amidst the electioneering atmosphere, so a calming of this and some more certainty should be helpful for a project including a “goal of ultimately contributing over US$250 million per annum to Ethiopia’s export revenues”.
That provides confidence as Kefi continues to oversee the physical preparations for full development, whilst there are also 34% owned interests in Saudi Arabia – where it is working to finish a drilling programme in the next quarter to facilitate an expanded and upgraded mineral resource and other preliminary feasibility study work continues.
Recent results included “on a Net Present Value basis, the indicative value of KEFI’s share of its two main assets has increased to $465 million in May 2021, or about £339 million”. There are clear macro and micro risks, not least the operational progress to production…but the current market cap is below £40 million. We continue to consider that the shares could zoom towards 4p on Tulu Kapi funding finally being enabled and with the clear further potential from Saudi a massive bonus the stance is BUY.
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