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Kefi Gold and Copper could be turning a corner in 2023

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Kefi Gold and Copper LON:KEFI, formerly known as Kefi Minerals, the gold and copper mining and exploration company with operations in Ethiopia and Saudi Arabia, has seen its share price gradually creep upwards over the last six months.

Although its early days, Kefi has offered a 17.4% return year-to-date and a 13% return over one year.

The miner opened trading this morning (17th January) at 0.785p, and over a 52-week period has ranged between 0.42p and 1.47p.

Red Sea presence

The company – established in 2006 exploring for copper in Turkey and Bulgaria – now straddles the Red Sea with one foot in (landlocked) Ethiopia and one in Saudi Arabia and has been exploring for minerals under the Arabian-Nubian Shield, a geological formation of Precambrian crystalline rocks on the flanks of the Red Sea, which has been a valuable mining location since biblical times.

The AIM-listed company formed a partnership with a Saudi company, Abdulrahman Saad al-Rashid & Sons (ARTAR) in 2009, and then four years later acquired a 75% stake in the Tulu Kapi project in Ethiopia, an interest it increased to 100% a year later.

However, since then (and a previous highpoint of 130p in March 2011) the company’s shares have been in an inexorable decline. Ethiopia is not the easiest market to operate in, has a history of corruption and has been beset by internal struggle and armed conflict for the last two years in its northernmost Tigray Region. Although the Tulu Kapi project is 1,000km from the conflict zone, the national state of emergency has slowed down the progress of the project.

Saudi Arabia has a long history of mining, however, in modern times the mining sector has been eclipsed by Oil & Gas, and been very much the poor cousin in terms of exploration spend, allocation of capital, logistics and water supplies.

But on both fronts things may be turning a corner for Kefi.

Ethiopian cease-fire

In Ethiopia, a lasting cease-fire was agreed between the government and Tigray Rebels in November 2022 and soon after Kefi announced that it had agreed USD320m (GBP260m) of project financing for Tulu Kapi. The company hopes that the mine will export around USD300m of gold per annum for eight-to-ten years starting in 2025.


There has also been a recent sea-change in Saudi Arabia’s approach to mining, with the government thinking – despite the current high price of oil – that it needs to diversify its economy away from a total reliance on Oil & Gas and look to exploit its other mineral reserves.

As a result the government has started to award more exploration licences, and earlier this month awarded Kefi and ARTAR five additional exploration licences on an initial five-year term in areas that have a long history of mining. The new exploration licences offer prospects in gold, copper and silver, which complement its existing more advanced gold projects in the Kingdom.

With a successful GBP8m equity funding exercise completed in April 2022, which cleared Kefi’s outstanding liabilities and gave it breathing room in terms of exploration spend and around GBP2.5m in the bank, the company confidently predicted its first gold pour some time in 2024.

Confident outlook

The company is still a loss-maker, reporting an increased GBP2.9m loss in its last results to 30th June 2022, up from a GBP2.2m loss for the corresponding period in 2021, but is approaching 2023 with a more confident outlook.

The company’s executive chairman, Harry Anagnostaras-Adams said at the time: “The improvement in the local working environment in both Ethiopia (security) and Saudi Arabia (regulatory) since late 2021 has allowed KEFI to make rapid progress during the period in both jurisdictions. Kefi is now better positioned than it has ever been with the improvement in the local working environment in both Ethiopia and Saudi Arabia allowing us to focus on our goals.”

Might 2023 be the year that long-suffering shareholders in Kefi have cause to celebrate? We are going to have to wait and see.

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