The KEFI Gold and Copper Plc (LON: KEFI) share price spiked by 16.9% after announcing that it had secured the funding for its $320 million Tulu Kapi project in Ethiopia. The company noted that all the relevant stakeholders had agreed upon the funding deal and that it was being readied for signing.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
KEFI noted that most of the funding was attached to the project or its subsidiaries and that the details were consistent with its 2021 annual report. The company promised to reveal the details of the $320 million funding deal once the definitive agreement was signed.
Investors cheered the announcement, as evidenced by the spike higher in KEFI shares, but the rally did not last as the shares retraced all their initial gains. The primary reason behind the pullback could be the project timeline.
Given that the funding deal is yet to be finalised, investors must have figured out that it will be several years before the project can start producing the high-grade gold in large quantities, as expected.
Harry Anagnostaras-Adams, KEFI’s Executive Chairman, commented: “The Tulu Kapi Gold Project is designed to world-leading standards technically, socially, environmentally and in terms of financing arrangements acceptable to international capital markets. Today’s important milestone of the debt and equity leads approving the finalised finance plan allows all the respective Boards to formally approve the definitive documentation. I am pleased to report the Project is now up and away.”
The company also noted that Ethiopia had taken steps to attract foreign direct investments into the country, with conditions improving significantly since the beginning of the year. As a result, the company expects to start constructing the project in early 2023, with full production kicking off in 2025 via open-pit mining.
KEFI reiterated its commitment to supporting the Ethiopian Government’s efforts to develop its minerals sector. KEFI shares are up 30.97% in the past month and could rally higher as the Tulu Kapi project progresses.
*This is not investment advice.
KEFI Gold and Copper share price.
The KEFI Gold and Copper share price spiked 16.87% higher to trade at 0.97p, rising from Friday’s closing price of 0.83p.
