Aim-listed gold exploration and development company Kefi Gold and Copper has announced an oversubscribed fundraising to raise gross cash proceeds of £8-million through a firm placing of 550-million new ordinary shares of 0.1p each in the capital of the company at a price of 0.8p per ordinary share to raise £4.4-million and a conditional placing of 450-million new ordinary shares at the placing price to raise £3.6-million.

The firm and conditional placings were arranged by Tavira Securities.

The placing was to reinforce the rapid advancement of three advanced projects in Ethiopia and Saudi Arabia, said Kefi chairperson Harry Anagnostaras Adams on April 20.

The placing shares, combined with the exercise of the warrants and those from the placing announced on December 21 last year were intended to provide an additional £22.3-million of share capital, designed to complete the last piece of the planned Tulu Kapi project financing package of $356-million, and to build on the ongoing success of Kefi’s exploration programmes in Saudi Arabia.

In Ethiopia, one of Kefi’s subsidiaries had historically invested about $70-million in the Tulu Kapi project, with Kefi now at the stage to increase development and also exploration activities, as allowed by the government authorities, to demonstrate both good faith and to also show that security is appropriate for full project launch from midyear, Adams said.

“This is very important as we have now conditionally lined up all the equity and debt funds required for full development project financing and the finance syndicate is keen to work very closely with the government to ensure security and all regulatory clearances are in order,” he noted.

Regarding Kefi’s two interests in Saudi Arabia, Hawiah and Jibal Qutman, the company must contribute its 30% share to the joint venture (JV) to ensure drilling and development studies can be accelerated.

"At the recently granted Al Godeyer licence, we will look to undertake further drilling on identified targets which have yielded rock chip grades of up to 1.8% copper and 7.2 g/t gold from surface trenching,” Adams said.

He said Kefi remained optimistic that discoveries in the area were similar to those reported for the adjacent Hawiah deposit, which remained subject to further extensive exploration this year as the existing resources remained open and additional targets had been identified.

"At our Jibal Qutman project, our JV is also optimistic of receiving a mining licence this year and this capital raise will ensure the company is well positioned to meet its share of preliminary development planning for the low-cost/quick-to-start heap leach operation,” Adams said.

He said the company had the opportunity to build substantial value from derisking and advancing the three projects.

He explained that the company's internal net present value (NPV) on the three projects at current metal prices indicated a combined NPV of 12p a share, after dilution from the placing announced today.

“Therefore, we know that there is considerable merit in putting the capital in the ground and pushing the company towards its goal of becoming a midtier gold and copper producer," Adams concluded.