KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF, FRA:KMSA) earlier this week signed detailed documentation for its $240 million debt package to fund development of the Tulu Kapi gold project in Ethiopia.
Executive chairman Harry Anagnostaras-Adams joined Proactive to explain how and why KEFI sequenced debt ahead of equity, and outlined the preparatory infrastructure works now underway.
Anagnostaras-Adams also discusses developments in Saudi Arabia.
Proactive:
Harry, very good to speak with you. You reported in October that the debt of $240 million was approved. And you've now reported that the detailed documents have been signed. What's the significance of this really?
Harry Anagnostaras-Adams:
Well, to an experienced project developer, last October, one would have said this is done. And, you know, knowing who was in our team and their experience, you would have said, well, this is done. But most of our approximately 5,000 shareholders are not experienced project developers.
So we adopted more transparent and detailed reporting to help them follow us more precisely, given they may not be familiar with the processes involved. So to me, it was done last October. But there's probably a lot of shareholders out there who thought, well, now it's done. Each to their own specialties. But that's the reason.
Proactive:
You reiterated that more than enough equity capital has been assembled, but not all yet closed formally. Can you explain why these steps are one step at a time, rather than all done and dusted faster and altogether?
Harry Anagnostaras-Adams:
That's a good question. Obviously, everybody just wants to get it done as fast as possible. But if we had finalized our equity arrangements before our debt was committed, we would have had fewer choices, harder pricing, and tougher terms.
We convinced our banks to commit first in order to bring more choices to the table at better pricing and do a better job for shareholders. It might have added more time, but the sequence has always been clear. Debt is 70% of development, so we wanted to get the best deal possible before finishing the 30% equity component.
Proactive:
In the meantime, what's happening on the ground, and when can we see photos of physical progress?
Harry Anagnostaras-Adams:
The essence of the Tulu Kapi kickoff is a bit frustrating. You don't see photos of bulldozers on the ground because the area is occupied by people who have to be resettled. Most gold projects don't have people living on them, so you can't just go in and start bulldozing.
What’s happening now includes electricity connection works in the local center heading toward Tulu Kapi, access roads from the bitumen highway, and land clearing for housing in the local village. A new subdivision is being set up with schooling and health facilities.
Bulk earthworks will start after the first resettlement phase, in a couple of months. The plant fabrication is already taking place in international specialist factories and will be delivered for installation after the earthworks. There’s no overburden on the pit, so mining can start in 2027. We’ll have photos next month, though we don’t publish faces due to our security policy. Once full-scale operations begin, photos will flow regularly.
Proactive:
Switching focus to Saudi Arabia, how did your visit last week finish up? We've seen lots of news flow from the Future Minerals Forum. No announcements from KEFI though?
Harry Anagnostaras-Adams:
It’s quite astounding. I’ve been involved in nine or ten successful developments, but most of them happened during tough market conditions and took a lot of perseverance. In contrast, the Future Minerals Forum in Riyadh was held in a six-star convention center with hundreds of wealthy institutions and family offices looking to invest. There’s more money than there are projects.
As for KEFI, though we haven’t made announcements yet, our JV company, Gold and Minerals, will have a gold development coming up, followed by a second one. We were there with a new joint venture partner — another major — who’s coming in. So it's all going very well. The boom in Saudi mining is real, and the atmosphere reflects that.
Proactive:
Harry, I hope you'll keep us updated on progress on all those projects as well as those photographs from Tulu Kapi. Thank you very much for your time today.