KEFI Gold & Copper (KEFI) has completed a placing and subscription to raise £7 million at 0.55p per share. The company is also issuing £600,000 of equity in lieu of liabilities.
The money raised will be used to take KEFI past the point where project finance is in place and construction on the Tulu Kapi gold project in Ethiopia begins.
The fundraise follows the recent announcement of the ratification in parliament of Ethiopian Country Membership for both the company's project finance banks.
The banks and the Ethiopian government are now pressing KEFI to intensify preparations for the launch of the Tulu Kapi gold project.
The addition of new shareholders complements the existing strength of investors at the in-country subsidiary level, which includes the company's joint venture partners in Ethiopia comprising the Ethiopian Federal Government, Oromia Regional Government, and the Ethiopian Sovereign Fund, the largest in Africa.
In Saudi Arabia, KEFI is also supported by major local shareholder Abdulrahman Al Rashid and Sons (ARTAR) and its exploration joint venture partner, Hancock Prospecting, through their operating joint venture company, Gold and Minerals Limited.
The net proceeds of the fundraise will be used to cover lender-related expenses and commitment fees, the company's costs for securing fixed price components and scheduling, legal expenses incurred in successfully defending the project against false claims, as disclosed in January, and general working capital.
"This month's Parliamentary ratification in Ethiopia of our co-lender bank's entry into the country has triggered requests from Government and from our banks, that we proceed to signing of detailed definitive agreements and full project launch of the Tulu Kapi gold project,” said KEFI executive chairman Harry Anagnostaras-Adams.
"Today's fundraise will allow the payment of various closing preparation costs including legal costs, bank commitment fees and various other launch-related requirements such as certifications of costs and schedule. It also serves to strengthen the company's capital base by welcoming to the KEFI share register a major institutional investor, complementing the strategic investors and financiers already installed at the subsidiary levels including the Government of Ethiopia the leading Saudi investment group ARTAR, major African banks TDB and AFC and other strategic investors and financiers.”
View from Vox
With this fundraising complete, KEFI is now off to the races. Government wants the project built, the banks want it, and KEFI wants it too. With the gold price riding so high, the economics look compelling. It’s a sizeable sum KEFI has raised here, but the discount wasn’t too steep, and the market looks like it’s at last beginning to have a little faith.