KEFI Minerals - which has projects in Ethiopia and Saudi Arabia - posts a pre-tax loss of £1.9m for the six months to the end of June - up from £1.6m last time.
KEFI said that despite the expansion of activities since the full permitting, in April 2015, of the Tulu Kapi gold project, KEFI has maintained tight cost control, illustrated by administrative costs at £861,000 (H1 2015: £876,000.
At Tulu Kapi, the Company has assembled an experienced development team and first-tier backers, including government, industry and financial organisations, and is poised to trigger the development by the end of 2016. The Project targets:
* Steady-state gold production of 115,000 oz pa from 2018 from the open pit at an impressive All-in Sustaining Costs ("AISC") level of c. US$746/oz
* Cash flows in the first 3 production years sufficient to repay all project debt, fund the development of the Tulu Kapi underground mine as well as the equity component of the initial operation in Saudi Arabia, exploration and consideration of the commencement of dividends
In Saudi Arabia, KEFI's gold discovery at Jibal Qutman has shaped up to be a viable project based on preliminary analysis, with a low-capex requirement and an apparent capacity to generate the net cash flows for financing an ambitious Saudi exploration program by the G&M joint venture, of which KEFI is 40% owner and operator. G&M targets:
* To apply for a mining licence at Jibal Qutman after assessing the outcomes of the Government sectoral policy review, which is expected by year-end 2016
* To explore its large portfolio of licences and applications, starting with the large target for precious and base metals at Hawiah, where G&M has commenced fieldwork, focusing on depth-measurement of large buried targets using geophysical surveys, as a prelude to drilling
- Raised £1.75 million (c. US$2.5 million) through the placing of new ordinary shares at 0.35p per share to provide working capital pending arrangement of Tulu Kapi project finance
- As part of preparations for the development phase, Mr John Leach has joined the senior executive team as Finance Director and Mr Mark Wellesley-Wood, experienced African mining operator, joined the Board as Non-Executive Director
- Since 30 June 2016, the Company has fully discharged the inherited VAT liability and is now entitled to an ETB73,497,020 refund (approximately £2.5 million) and also raised approximately £3.8 million (approximately US$5 million) on the 26 July 2016, before expenses, through the issue of 761,921,740 Placing Shares at a price of 0.5p per share.
Executive chairman Harry Anagnostaras-Adams said: "We are pleased with the tremendous progress made in the first six months of the year as we built on the momentum of 2015. In particular, the progress made on the ground at the Tulu Kapi Gold Project in Ethiopia has been excellent. The project economics are better today than at any time and with all-in costs estimated at US$746/oz, we believe it puts the Tulu Kapi project in the lowest cost quartile of gold producers globally.
"In the second half of the year, our focus is on working with the Government of Ethiopia on the community resettlement, livelihood restoration and community resettlement programmes. Also, we are in advanced discussions with potential finance syndicate participants. As a result, the Board looks to the future with confidence."
(LON:KEFI) KEFI Minerals PLC share price was +0.01p at 0.49p