KEFI Minerals (LON:KEFI) Executive Chairman Harry Anagnostara-Adams caught up with DirectorsTalk for an exclusive interview to discuss the triggering of the Tulu Kapi project and the commencement of drilling at Hawiah.
Q1: Congratulations on your results today Harry, can you talk us through the highlights?
A1: It’s really two key points I think, one is that over a multitude of meetings in both Australia and Ethiopia with all the partners, government, contractors and all the various others involved, we’ve all resolved formally to trigger the development of the Tula Kapi project as of the coming month. That’s really quite significant for us, obviously, but to have the confirmations from al the partners and the other parties in these formal Board meetings and so on is very important so that’s probably the most significant thing and really quite a watershed moment for company, it can’t be really overstated how important that is.
The second thing is that the exploration project in Saudi Arabia, that the drilling rig has mobilised two sites and drilling is about to commence there on a project which we’re very excited about, that we had to suspend 3 years ago for a number of reasons which we’d reported in that past but we’re only now finally, in a position where we can see that project start moving forward. Again, that’s a very significant thing and it happens to coincide with this moment in time.
So, they’re the two key things.
Q2: Can you just explain for us what exactly triggering Tulu Kapi in October entails?
A2: Well, obviously the plans are in place and the commitments are in place so it really comprises three key things I suppose that would be most important.
The most important one is that subscription funds in Addis Ababa would flow from project equity partner into the Tulu Kapi gold mine’s shared company, the project company.
Out of the community into Tulu Kapi itself, there would be the triggering of the resettlement phase which is a formal notice provision where you literally hand over notices to the individual households and lodge the compensation into special bank accounts for them.
Over in Perth and Cape Town, the construction and project management people will trigger what’s called ‘Front-End Engineering and Design’ phase.
They’re probably the three most critical things; the funds flowing, the resettlement notice and payments in Tulu Kapi and the Perth and Cape Town engineering commencement of the Front-End Engineering and Design.
Q3: Now, I also see that drilling is to start this week at Hawiah, can you please explain for us what this is all about ?
A3: This part of the world, both sides of the Red Sea, that KEFI Minerals is focussing on is called the Arabian-Nubian Shield, it’s really noted geologically for two principal reasons. One is the prospectivity, given major discoveries in similar geology in other parts of the world for the last few decades, and secondly the fact that so little has ben explored for geopolitical reasons, not really for geological reasons.
So, as a result of that, we’ve pegged particular types of ground where we have particular targets in mind and Hawiah, we’ve done a lot of work identifying a very long target zone, identified visibly on the surface from a very long rig, and some kilometres long. We’ve sampled and had high gold and copper returns along the whole ridge line, we’ve done geophysical surveys to identify what’s going on beneath the surface as best one can and finally, now we can start the drilling.
What we’re targeted is of a scale similar to some of the major developments in this part of the world, of the few developments that have got going in this part of the world with the little exploration that has been conducted, there have been some world-class ones where billions of dollars’ worth of minerals have been discovered and extraction has commenced.
So, one can only prepare and execute a drilling programme as best once can and the results will in due course stand on the results as they are but we are very fortunate to finally be able to get going and to break target.
I think the coincidence of getting Tulu Kapi going and starting the drilling at Hawiah is just terrific.
Q4: How is the rest of 2019 looking for KEFI Minerals?
A4: Essentially, October sees the start of a development schedule for Tulu Kapi gold mine which has an NPV of 10 times our current market capitalisation once the plant’s been built so it can’t get a lot more significant than that in October. Likewise, the fact that we’re now drilling Hawiah means that we’ll have first results, we’ll see the first evidence from the first drilling. So, October, in many respects, unlocks or unblocks the value creation that we’ve been building towards for so long.
What happens in November and December and onwards really flows on from that. You’ve got a development schedule triggered in October, you’ve got a drilling programme which hopefully yields the results that warrant the flow on from that.
So, it’s frankly a flow on effect of implementation of the items that we’re triggering in the coming months.