Business
Strategic Review of GMCO JV in Saudi Arabia
Strategic Review of GMCO JV in Saudi Arabia.
About this update from Kefi Gold And Copper Plc
[{"type":"text","content":"\n\n13 November 2024\n \nKEFI Gold and Copper plc\n(\"KEFI\" or the \"Company\")\nStrategic Review of Gold and Minerals Joint Venture in Saudi Arabia\nKEFI (AIM: KEFI), the gold and copper exploration and development company focused on the Arabian-Nubian Shield since 2008, provides an update regarding the Company's Gold and Minerals SLA (\"GMCO\") joint venture in Saudi Arabia.\nA strategic review is being conducted by the two partners of GMCO, KEFI and its majority partner, Abdulrahman Saad AlRashid & Sons (\"ARTAR\"). Initial conclusions include that KEFI forego its right to contribute US$10 million and maintain its 25% GMCO shareholding and, instead, accept dilution to 15% of GMCO. That is now being implemented formally. \nIn addition, the ongoing business planning scenarios currently being evaluated include the potential sale of KEFI's residual 15% shareholding, the potential proceeds of which would be receivable by KEFI.\nKEFI's decision is reflective of:\n· GMCO will shortly be looking to trigger its initial development and increase regional exploration\n· GMCO's commitment to growth would normally see KEFI funding its pro rata share\n· For the past 12 months ARTAR has sole-funded exploration activities of GMCO in Saudi Arabia, including KEFI's net share of US$10 million\n· The cost of KEFI raising sufficient funds via the issue of KEFI equity to maintain KEFI's interest in GMCO is considered dilutive to KEFI shareholders, given the disconnect between the current market valuation of the plc and the Board's considered view of the inherent value of KEFI's shareholding in GMCO, of KEFI's majority-owned flagship Tulu Kapi Project, and of KEFI's pipeline of projects offering majority ownership\n· The dilution for KEFI's non-contribution in GMCO has been based on the historical cost of investment by the partners\n· Any sale of KEFI's remaining GMCO shareholding will be based on open market valuations which, the KEFI Director's believe is expected to be, following consultations with market analysts, at a significant premium to the read-through valuation of this transaction with ARTAR which was based on historical cost only. However, this is a potential future transaction and there can be no ...