Kefi Gold and Copper (LSE:KEFI) — Q1-2022 Quarterly Operational Update

0:01 Good afternoon, ladies and gentlemen, and welcome to the KEFI GOLD AND COPPER PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll. And if you'd give that your kind

0:32 attention, I'm sure the company would be most grateful. And I now would like to hand you over to founder and executive chair, Harry Adams. Good afternoon, sir. Good afternoon, everybody. Thank you very much for making the effort to join. I'm not sure how many there are, but I was led to believe that that it looked like it might be a couple of 100 people. So I do appreciate everyone putting aside the time. What I had in mind this afternoon is to actually walk you through the PowerPoint over the first twenty minutes or so because I think it really is more important than just a quarterly report. In my in my view, what we're dealing with here is a company that's changed from having a headwind to having a tailwind.

1:27 And and I'd and I'd have to say that it's it it completely changes the way in which we we can move and the pace at which we can move. And and therefore, you know, treating everybody as an owner, as a partner, I think it's important to explain that carefully rather than just treat it as a as a quarterly report or quarterly q and a. Also, the second thing I might say is that we did receive I was given by the the organizers here 20 or 30 questions that had been submitted up until yesterday, And and I did sit down last night and and and answer them all, and therefore, I I hope you don't mind, but I'm I'm we're just gonna publish that q and a later instead of taking up time talking about questions that I've already written down answers for that can be released after the the webinar.

2:22 So what I'll do is make a presentation and answer live questions. And after the webinar, anyone who feels that the question they'd submitted in the last few days should be answered. They can look it up how it's already been answered so as not to waste waste time. Hope that makes sense. I'm told that if I press a button here, it'll open up the slide. That's great. And I've got control of the slides. In fact, they seem to start on slide 11. I'll I'll flip you back to the first slide.

3:03 Here we are. Slide one. Okay. So most of you, I suspect, would know that's actually Tulakapi, the hill that you see in the middle of the screen. And this quiet rural setting is where we, KEFI, first arrived in the country, and it was a very quiet place, 2014.

3:33 Perhaps an autocratically run country then, but very tightly run, and this place was a very serene, rural setting with very peaceful, friendly people. My family spent time moving around the district, getting to know people as an example of how safe and secure it was in our eyes. The country started changing in 2016, '17 before our eyes, and that crazy thing called democracy started to be introduced, so to speak, and and the the the changing of the guard, the changing of norms and rules of governance led to quite some turmoil for us, which really held us back a lot. That peaked last year, and the country's on the front foot again. That war is over.

4:33 And Tulakapi is not quite as calm and peaceful as it was when I first arrived there, but it has lurched back to being something similar, and we can start moving around and doing things.

4:52 Now what's changed? Today, the company is being pushed and encouraged to go as fast as we can in both Ethiopia and Saudi Arabia, and we just about can go as fast as we can. In both countries, both pushing us hard, both such that we can run. Only four months ago, we only had one definitely economic project that was in us in in an environment that we wanted to see improve. We had a one horse race. We're a bit stuck in the mud, so to speak, and we had a couple of gonna be projects over in Saudi Arabia.

5:45 Today, it's completely different. Today, we have three economic development projects, definitely. We have two countries that are pushing us and creating an environment where we where we can actually proceed, definitely. So we've actually pivoted from a one horse race and the horse was stuck in the mud to a three horse race on two different racetracks where there's no mud. So it's it's it's a I hope you don't mind my metaphors, but I'm just trying to convey the fact this isn't just a quarterly update. The the company, all of a sudden, has got a tailwind.

6:30 Two tailwinds, not not one headwind. In Ethiopia, I think you understand what I mean by flipping from a headwind to a tailwind because of the end of the war there and because of of the surrounding changing circumstances as a consequence of that. Ethiopia was a top 10 growth country in the world for nearly twenty years running, and I I'm sure it will be again now. It lost a couple of years due to COVID and all this strife. And over in Saudi Arabia, we've been there for fourteen years. Incredible prospectivity, world class, walk up drill targets, but frankly, a terribly frustrating regulatory system.

7:22 And in hindsight, I'd have to say that half of those fourteen years was probably a waste of time. Hindsight's a wonderful thing. We're dealing with frontier markets here, and they're called frontier markets because they're frontier markets. They they they haven't settled down into a mature jurisdiction for our industry, and they've been changing around us whilst we've been getting ourselves going. But today, in Saudi Arabia, the regulatory system regulatory system is not only saying all the right things, but it's actually doing all the right things. We've been granted licenses. We've been promised more, and we're being pushed along on the ground in reality, not just words in the major city. So what's the key points on this slide?

8:08 We now have two projects, or we now have two countries that have come good for us. We're worth 5 to 7 p per share in each of them, if I can put it that way, based on NPV, which is the most commonly relied on measure for trade transactions and fundamental value assessments. So we're now, if you like, much less risky as a company with two strong asset bases. And the other thing that this slide really just walks through is is, you know, a brief description in each particular jurisdiction and touches on the the the profitability that will emerge. We're building a mid cap here.

8:55 This is no longer getting Tulakapi going in Ethiopia. This is actually getting a 400,000 ounce gold or gold equivalent producer going over the next few years of which just under half of that is to our account as KEFI. Completely different situation to last year. What does the share price chart show? It shows that the the share price as it's been for the last year or so dropped enormously around our an hour announcement of a of a security incident last September, October, and it hasn't recovered since.

9:41 And we've recovered. The incident was managed very well, I might say. All our syndicate partners are very pleased with the way it was managed. The community was pleased with the way it was managed, and the perpetrators apologized at the end of it, and the real culprits on the ground who caused it have surrendered, but the share price hasn't recovered. So the fact that by the end of the year, the broader situation in Ethiopia had had calmed down and Saudi Arabia had actually come alive for us in a real sense hasn't yet been reflected in the way the shares are measured on the exchange.

10:29 This slide looks a bit sort of confusing, but I'll just explain the points it's trying to convey. One is that the market capping, the red bit, is a lot smaller than the company's interest in three projects, and all three projects are are are open and they they're gonna grow in value as we drill further, the deeper or a long strike on all three of them. And you can see the size of the block at Tulakapi is the size of its value today and how we are the size of its value and Jibail Equipment the size of its value for Tulle KEFI. One thing I would say is that Jibel Kutman, the the tiny one there, if the share price reflected averages for the sector given where Jibbok Goodman is and its gestation, I think what you can see there is that Jibbok Goodman actually justifies the market value of the company in in the stock market that is. And therefore, the smallest project, at least in my eyes, underpins the market cap of the company today.

11:47 The other thing I would highlight here is that if you take any price effects out of this, metal price effects, all these NPVs are based on December 21 metal prices, all of them. So what's happened to the company since 2020 up until the end of twenty one is that the, if you like, the NPV per share has doubled,

12:18 notwithstanding the share issues we've had to make to keep the lights on during civil wars and whatnot. So we we we have added a lot of value at least in those two years, and we see a lot more value coming down the track as we allow to start running harder with these projects.

12:40 We you know, it's it's very difficult for a stockbrokers analyst to do very in-depth research. They just don't have the time usually. So we commissioned a chap who used to be a senior person in Macquarie Bank, a mining bank in Australia, which obviously has a lot of mining analysis expertise, to spend some weeks doing an in-depth deep dive to research. These are just some of the graphs out of their report, and this this report was published the other day. I anyone who really wants to dig dive to truly understand what the hell is going on, I do recommend that report, and Edison's did a report a few weeks ago. But this one here, I I sort of feel like, you know, I grew up in Australia. I I understand the the the vernacular, the the the patterns, the systems, and this guy sort of got it. I I do think because he grew up in that mining world.

13:40 And any which way you cut it, KEFI is amongst the cheapest entries into this sector for for the type of company that it is, a development company. The other thing I would say is the bottom right hand corner, a graph of grade which shows that we're, you know, a reasonable grade. If you strip the underground mines out of that graph and you just had the open pits on that graph, we'd probably be the highest, I'd imagine. We're a high grade open pit. Undergrounds are typically higher grade than open pits. Oh, sorry. Wrong button. Group strategy close on the financing. I'll elaborate on that in a moment. But, you know, we were getting ready to close a few years ago when the country started wobbling, and we've lost a few finances along the way, and we had to replace them. And then we were getting ready to close last year, and the company country went into a civil war.

14:44 And we we've kept the syndicate together, and now everyone's running around with their lawyers. We've got lawyers coming out of our ears with about a dozen companies involved. Everyone's working hard for closing. So that's our number one priority today. This this project will close. It's it's it's going forward. You know, it's easy to lose a week or two with when you got 12, you know, participants and lawyers and government departments and and so on, but we have very few things left to do. And as long as the security situation continues to improve the way it already is and, you know, we've come from a high risk situation to a relatively low risk situation, but it needs to keep improving and stay stable, we're away, and we're targeting closing at the end of June.

15:34 To continue to build value across the portfolio, as I said earlier, we're we're now a multi asset company, and we're we're we're building a mid tea mid tea, but in the mining industry vernacular, mid tea company producing over 300,000 ounces, nearly 400,000 ounces equivalent or gold, and just on behalf of that to KEFI's account. This is the the roadway to that mid tier scale, and it shows with Tulakapi closing June construction and then into production in '24.

16:22 Jibbo Kukman will be the next one coming along about a year later, perhaps a bit earlier. We'll see. Coming along about a year later after that. So you we've got now a healthy pipeline of three, definitely economic projects in two, definitely, pro mining jurisdictions.

16:49 The industry's arriving. A lot of them have, in fact, all of them have been stalled in Ethiopia for all the same reasons that I've referred to, and we're the first large, you know, cab off the rank. There are there are a couple there's a smaller project that's got going recently, but but their total resources is about four months of Tulakapi production.

17:16 So, you know, the industry is keen to see Tulakapi go. The government's keen. The finances are keen. The community's keen. We just gotta pull it all together and get get cracking. And capital markets tend to follow the industry, but the biggest players in the world are there, Barrick and Newmont. Other serious industry players like the Orca guys, the Sunpig guys, they're very, very serious industry players. They're they're in that part of the world now. And as I say, you know, forerunners go first by definition, and and other industry players follow. And then, you know, the the general investing public eventually turns up after, you know, guys have been in there for a while. And Ethiopia, where the first first mover of a very large project, and in Saudi Arabia, where where where not quite first mover, but other than the government company, we're the only people who've been there over a decade on the ground throughout that period. So we've got very strong database, very strong people, and we've made two discoveries, which is testament to to our performance there.

18:34 Now I'll just check on how much time I've taken because I don't wanna chew up too much time talking. I wanna switch to questions. And I've got, let's say, five or ten minutes left. I'll just I'd like to highlight a few points. You got plenty of time, Harry. Plenty of time. Okay. Thanks. Okay. The sort of conventional measuring sticks over a gold project. Tulipup is a good one. High grade open pit.

19:12 All in sustaining costs under a thousand dollars, all up costs just over a thousand dollars, plenty of margin. At today's gold price, more or less, a $100,000,000 a year for us. Net operating cash flow at $1,600 a year gold price. $70 a year for us, net operating cash flow. Now here's a bit of a busy chart. The simple bit of the chart is Saudi Arabia. We have a partner who owns 70%.

19:59 We own 30% of a giant pie in Saudi Arabia, which is a hell of a lot better than earning a 100% of a small pie or a 100% of a pie where you can't get going. In Saudi Arabia, world class prospectivity making two discoveries of economic deposits on three license areas that we've had is testament to the fact that, you know, it it it it is that's probably a statistic you wouldn't find anywhere else with any other company. To being granted only three license areas and to make two major discoveries out of the three is testament to it. Now how do we finance going forward in Saudi Arabia?

20:47 Well, all the money is in the country, really, other than our 30% of equity. But on Jibbok Kutman, for instance, a $40,000,000 capital bill, let's say, subject to finalizing feasibility studies, but based on preliminary studies, $40,000,000, 75% project debt should be eminently doable, and 70% of the equity, our partner, which is a very one of the world's wealthiest families. That's not a problem

21:20 for them. So we, as KEFI, would have to, if you like, provide 30% of 25% or $40,000,000, which is actually about $3,000,000. What would that give us? Well, if it starts up at 30 odd thousand ounces, we're getting a 10,000 ounce interest, thousand dollar per ounce margin, $10,000,000 per annum, on a $3,000,000 investment. That's and and all the money's in the country. You don't have to take any capital to the country, and, you know, we will have very relatively little to do to arrange all the financing as KEFI.

22:08 Over in Saudi over in Ethiopia, all the other boxes pertain to there because there, you have to bring the capital to the country, and you have to work harder to to do so because, you know, it's it's another country for everybody. So starting from the top, a $356,000,000 package, mining contractor to put up the mining fleet and get paid by the ton, which is quite conventional and better way to control the contractor's performance, reduces the total to 300. Senior debt down the bottom there, a 140,000,000, a bit under fifty fifty, quite conservative gearing ratio deliberately.

22:55 So leaving a 160. So left to finance of the 160. The offtake mining finance or mezzanine finance, 60. Now we're down to a 100 of straight equity. Local investors, 30, 38, leaving, 62 for KEFI. So KEFI's piece is $62,000,000. Now of the 62, we've already arranged. It's not yet binding. None of these guys will be binding until we sign altogether final binding agreements.

23:40 But everyone everyone has signed term sheets, and most have already got board approval to proceed. But they all need to see the final, binding documentation with all the final clearances from government, i's dot dotted and t's crossed. Otherwise, one does not deploy $356,000,000 to Ethiopia without all the i's dotted and the t's crossed. So of that 62,000,000 from KEFI, we've arranged 35,000,000 convertibles, approximately half of it convertible at the price three years hence, so it doesn't dilute today, and half it at the price post closing at a premium to it, so it doesn't dilute today.

24:34 And that leaves 27, and that last little footnote down the bottom lays out the 27. We have warrants out there which deliver some of it or should, and we have two other sources outlined there which deliver the rest of it or should. So I I think, you know, the the the challenges to a junior listed on AIM to bring a $356,000,000 package to a country in turmoil last year were too big to overcome. That's the simple truth. We didn't know the country would go into that level of turmoil when we first went there, but we stood our ground. We protected the project. We protected the syndicate. We defended the syndicate and preserved it, and we're ready to go now.

25:24 And over in Saudi, it'll be dead easy compared to all of that. Now time doesn't permit. I I don't wanna spend time just talking. I wanna answer questions, but the rest this one, think, is fairly straightforward on the sequencing of the development program in Ethiopia. This one shows you the underground, which is still open, and our actual plant as designed of the drawings is shown there in a three d image. The point of this slide is just to tell you that the resources will get bigger because the last drill holes were still in ore. We haven't got to the end of the ore. That's the point. We don't know whether it'll stay at 1,700,000 ounce. Well, it won't stay at 1,700,000 ounces.

26:14 It'll be bigger. But will it be 2,000,000 ounces or 4,000,000 ounces? We don't know. But an an an extra million ounces underground would would not be a surprise. Saudi, actually, just on that. Believe it or not, Saudi has similar geology to Ethiopia, but, obviously, there's some things that are quite different to the eye. One is there's no soil or trees in a lot of the country, whereas in Ethiopia, there is in a lot of the country, and there are a lot less people compared to Ethiopia. Now up until up until December, we couldn't really talk about Jubal Kutman because it was stuck. We applied for a mining license in 2015, and it wasn't proceeding, and it was not going to proceed.

27:13 And we've been advised it will now proceed. So that changed in December only. And about Hawea, it wasn't definitely economic until we announced the drilling that was completed in December. So Hawiya turned economic because of scale and discovery, and Jubail Kutman turned economic because of regulatory clearance. So we have two live ones in in Saudi Arabia, and up until December, we had none. We have five projects that we're focusing on in Saudi. Two of them we've talked about, three we won't until we get licenses granted and we can do some work. But all five have had historical work on them. All five are highly perspective.

28:06 And so there's a, you know, if you like, a growth pipeline coming down the track in Saudi Arabia. This is the surface outcrop of Hawiya. There's green stained rocks in here and there, which means copper's around. But until we drilled, we didn't know whether the ore body was below or whether it had been above and had eroded away over hundreds of millions of years. Anyhow, the geophysics suggested it was below. The drilling confirmed it was below. And then on the next slide, that's the results of the drilling in long section showing tabulating the results.

28:53 I think I not sure if I said it earlier, but it's about double the metal content of of the open pitted Tulakapi. In terms of metal content, it's already doubled Tulakapi. That's the grade distribution over in Hawia. It shows you the the the southernmost section of the ore body so far is where the highest grade is. Actually, going back a step, the darker patches are where we're looking at putting in open pits to take out the material more quickly before going underground into the lighter blues. In December, we were granted a license down the road called Algodia or two licenses, and the team hit it running. Very excited because everyone really felt strongly that it was going to be another Hawiya, and it's turning out to be. The geophysics, the trenching, and the drilling are all indicating that it indeed is another Hawiya.

30:05 Jibbo Kutman. What's the best way to jump through that? This section here this this plan sorry. This schematic map. The stars are where we've discovered open pittable deposits. So it's a string a string of small open pits, and the string will include more open pits, and there's mineralization at depth we haven't drilled yet, but we just focused on that more closer to the surface material to run out some numbers on a quick start up operation, which is what I've discussed a bit earlier. The the resource statement there.

30:54 What else would we just touch on? The board, head of mine finance, one of Africa's largest banks. He was the head there, Mark Tyler. Norman was the ambassador to Ethiopia. Rich did run did run Goldfields, South Africa. So a strong board for this mission. John always been finance in the mining sector, and I've been in the mining sector most of my life, mainly in Australia. Very strong head office people overseeing the operations, and we have a managing director in each country, always have had, full time for each joint venture company supported by these people.

31:44 This is just the NPVs per project, the structure in Saudi Arabia. Sorry. I'm skipping, but I'd like to get on to questions and the development plan for Jibbo equipment. That that's a very quick run through. I Harry, that's absolutely perfect, and thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just using the q and a tab that's situated on the right hand corner of your screen. But just while Harry takes a few moments to review those questions submitted already, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published q and a, can be accessed via your investor dashboard. Harry, firstly, thank you very much indeed for taking the time to provide answers to all those questions that were presubmitted ahead of today's event. And as you kindly mentioned, we will publish all those responses to investors after today's presentation.

32:32 But perhaps before doing so, Harry, if I could please ask you just to open up that q and a tab. And as you can see, we've received a number of questions throughout today's presentation. Thank you to all investors for submitting their questions. If I could please just ask you where it's appropriate to do so to read out those questions and give a response, and then I'll pick up from you at the end. Thank you. Alright. I first one, the question's about a page long. I'll just try to glean the question. Bear with me, please. Security situation has been stable for months now, but it's still being used maybe as a delaying tactic. Okay. What can you do to assure shareholders that you're not using as a delaying tactic?

33:28 Why can't you finance quicker? Why can't you close in weeks? Well, let me just explain. If you lived in Ethiopia and you have children and there was a war going on a few months ago, would you send your children on a holiday to Tulakapi today, or would you ask around and make sure it's safe to do so? Well, I think we all know the answer to that question. Then if you're a director of a company who can invest in any one of 200 countries in the world or lend money to any one of 200 countries in the world, would you send your money, your hundreds of millions of dollars to Tulakapi two or three months after the end of the war, or would you ask a security expert to independently review it for a few months to make sure things are happening properly?

34:35 And I think we know the answer to that question. If you're a contractor and you're asked to send tens of your experts from Australia or South Africa to work and build a mine, would you want to wait a few months to let it demonstrate itself? I think we know the answer to that question. I'm not trying to be arrogant here, but I'm just saying that you listen, the the the frustration and the desire to get cracking is palpable in the company. You know, I just want you to to be rest assured that the the the team have no interest in taking longer than they than they need to. But we we we are responsible people, and so we will start activities on the ground, and we have started activities on the ground.

35:23 And we do bring independent experts to monitor and assess and report monthly. And then when we've demonstrated that things can happen safely and and not just, you know, three weeks of it or two months of it, but several months of actually doing things on the ground and building clearing lands and building starter homes and paying out money without it being stolen by anybody and or anything like that. That's what we have to do, and that's all we're doing. And I think it's perfectly normal. It's not an excuse. I'm not making stuff up. It's just perfectly normal responsible management. And the fact that we've preserved the syndicate's interest in the country when they could have said, listen, forget about it. We'll come back next year or the year after.

36:10 It was our achievement up until Christmas, and now we have to do what you're saying, and that is to, you know, to to to close and get going. But I do think it's perfectly reasonable for anyone who wants to deploy hundreds of people and hundreds of millions of dollars to want to make sure before they do so. The other thing I should say, by the way, is the government does have to sign off a whole bunch of things absolutely clearly. No if, buts, or maybes. No. We'll sort that out next month. It has to be signed off or the money won't flow. And we're we're working very hard with the government. We've got government offices working our offices as we speak to do these things, and that has to be done. Money won't get released until everything's done. And as I say, you know, June's the time.

36:58 Private investors are receiving detailed updates on three projects. It is sometimes difficult to easily equate data. In very simplistic terms, what are your views of percentage increase expected on current share price? Well, I I think the that those charts that I showed you answer that question. What all it's saying is that this type of company around the world, pardon me, usually trades usually trades at much higher numbers in a share price terms vis a vis its underlying value, and those graphs cut underlying value in various different ways to show you alternative basis.

37:57 And in in my language, the most the most important one is NPV, that is to me. Others might prefer another measure. But typically, they'll trade it a bit over NPV when they get into production because NPV is only measure bankable reserves usually, and there's usually other material that you'll mine as well. And and so between now, it whatever the share price is today, know it's gone up a little bit the last few days. But if it's at one p today and those graphs show you it should be 10 or 15 times that, then over the next few years as we come into production, it should be, you know, it should be 10 or 15 p. And there's various measures there. Now that analyst on Monday who published their the the OREO report, that analyst took into account future dilution, took into account all that I said, and crunched the numbers in their own way, has been doing it all all their lives on on mining stocks, and and that that analyst came up with 8.8 p. So what that analyst is effectively saying is that over the next, you know, two, three years, whatever it was measuring, the stock should go from where it is now to to nine or 10 p in that area if it's slightly over NPV after dilution.

39:21 And that's that's my summary of it anyway. Next question is, I've been in KEFI over eight years. Why do you think the share price is where it is today? Because we didn't achieve what we thought we'd achieve when we'd achieve it. This is this is frontier markets and by definition, frontier markets means that they're not predictable markets. And I openly admit hand on heart, I had no idea Ethiopia would play up and change the way it did when I went there in 2014 or 2013. And I stayed on the I've been there half of the last seven years to support the team because the country was changing before our eyes.

40:07 That's why the share price is low because we weren't able to achieve what we wanted to when we wanted to, and this is the first time in that period that the country apart from the first two years after we'd arrived, we weren't really ready to start. This is the first time that the country's, you know, giving us a tailwind. That's it. I'm not making excuses. It's the truth. Could you put some meat on the bullet point in the April 1, RNS, that the Ministry of Mines formally requested to allow recommencement of exploration in in yeah. Well, we we've asked them.

40:56 There's been there's been a couple of things have happened about our exploration ground. We have today we have today three development projects in two countries, as I've said, and all the numbers that I've quoted are all to do with those projects. So, you know, ignoring, if you like, what may or may not emerge in these exploration areas. So every number of quoted NPVs and so on, and those graphs are only to do with, you know, those development projects. But we do have a lot of exploration ground, mainly in Saudi Arabia, and where we know there are a couple of historically productive projects in some of those exploration areas.

41:43 But we also want to get going in in Ethiopia on some exploration, and we we we we've offered to start doing some work sooner rather than later if we're allowed to. That's all. And, you know, the the authorities are considering it. There's been you know, there's always some negotiation with the authorities. The authorities, they want us to get going on the development, and they've been using these exploration areas as a bargaining stick, unfortunately. And we've said, listen. If you want us to get going, we'll get going on that as well. Obviously, the main job for everybody are the development assets. I hope that answers that question. Great update. Thank you.

42:35 Can you confirm that if need be, we would raise money in the market, provide debt to keep 30%? That our policy is definitely not to go below 30%. So that's that's that's correct. We wouldn't you couldn't borrow to keep 30%. That's it's equity risk capital, really, at this stage. When we're in production, we've got cash flows. It'll be a different matter. But, yes, we don't wanna go below 30% of Saudi. Thanks. Yeah. Management hold a lot of equity. How optimistic are you? Well, to be honest, you know, people have been recently since this is the first time I've seen you smile in years, Harry, but I I know I it it I'm just I'd like to think I'm a pretty readable person in that I don't conceal, so to speak, you know. And and frankly, we were under siege last year.

43:33 And, you know, when I first landed in Tulakapi, it was incredibly peaceful, easy to tackle assignment. And within two years, the country started changing before our eyes, and last year's situation in the country where where, you know, I lived lived it with the team there really was very challenging, and I I we were seriously under siege. So today, to feel that we have three live projects, all economic, and that we have a tailwind is just a completely different scene. You know? It's just a breath of fresh air, to be honest. So it's it's easy to smile now. When you have successfully delivered finance, will you be able to take time to visit The UK and meet shareholders for a celebration?

44:34 Definitely. Has any initial walk around evaluation work taken place with Elgaudia? More than that, we've announced some early results, and we're drilling it already. It is another Hawia. Don't know whether it's a quarter or three times bigger. Don't know, but it's another Hawia. What company is doing the independent security assessment? When will that be completed? It's called Constellis security firm multinational, quite large. And I think as I've said, they need they need to observe peaceful, uninterrupted, undisturbed, happy, smiling faces working productively for several months.

45:32 If everything's calm during several months, then that's fine. If there's a blip, they'll say, let's look at it for an extra three weeks or whatever. You know? So I can't guarantee the country's condition, but what I can say is that the war's finished. The community is absolutely bursting for this to go forward. The church is involved with us, wants to support, and even the bad guys who conducted a kidnapping on us last year, I think I said earlier, they admitted it was a mistake. They asked us not to tell anybody who it was. They embarrassed, and the actual culprit surrendered. So all the signs are positive, but it will be an objective assessment by Constellis.

46:18 And I'm very optimistic, but an objective assessment is an objective assessment. On a scale of one to 10, what are the chances of any one of the investors pulling out before June if there's no binding contract? Well, please understand that all these people have invested a lot of time and money. They're not doing this work because they don't wanna proceed. And put yourself in their shoes. Why would they keep investing time and money in a country that went through such turmoil last year? And you can answer the questions for yourself.

47:04 They obviously think the project is robust. They obviously think the company is managing it reasonably. They obviously think the country will come good, and that the opportunities down the track justify the effort. So they're all considered people. These are all, you know, international companies who operate in other countries. They don't have to be there. When we've lost a syndicate member in years gone by, we replace them. And if we lose one now, we do one of two things or both. We'd replace them like we have in the past, and we have other people around, or we would flex the syndicate. You know, we would we'd we'd we'd just move around the syndicate and say you take an extra 10,000,000, you take an extra 3, you take an or whatever.

47:56 There's flex within the syndicate. That's one of the reasons we have so many parties so that you can recalibrate around anyone who plays up. So there's method in the madness if you like, so I think we're okay. The cost of energy, tools, and materials have rocketed recently. Is there a plan b if contract is so much higher cost? Good question. Excellent question. On the money question. We repriced everything last August ready for closing last year. So if you like, we're only whatever that is, five months, six months out of touch.

48:46 And when they price, they lock in for several months. Pricing now means they're locked in for several months. Pricing in August means they are locked in for several months so that we can do the paperwork. Excuse me. So all our numbers reflect August pricing. Any change in numbers will reflect changes from August that had anticipated what might happen till towards the end of the year '21 that would pick up anything since then. Ukraine has thrown some pricing out of out of kilter in the world, so we have to see. We're getting it all repriced this month.

49:36 But it's the same question we just had re re realistically. There's enough flex within it. The gearing is down under fifty fifty. There's enough flex within each of these groups to sort of recalibrate. So I think the the fundamental thing is that if KEFI were financing 356,000,000, well, we wouldn't own it. We couldn't do it. But because it's a syndicate of financing with Flex within the syndicate, and already we we had updated the numbers to only a few months ago, the risk isn't isn't really significant today. If you believe TK will get over the line now, why can't you put some of your own cash in rather than options?

50:28 Well, I don't know how wealthy whoever the questioner is thinks I am, but I I have certainly invested more in KEFI than I've ever been paid by KEFI. My first eight years as chairman, I didn't get paid a dollar by KEFI. And since then, I've invested more than I've ever been paid by KEFI. So I believe I've put my money where my mouth is in all in all sincerity. And the the management team as a whole is is is is invested enough to own 12% of the company. So I think I I think you'll find that the management team here is is has a lot of skin in the game. And, you know, we're living and breathing it. We're the guys there under siege suffering kidnappings and suffering civil wars and managing all through that, and they're coming out the other side.

51:17 We've got every incentive to make this happen. So asking me to put in some more money, I don't think it's quite recognizing what we've already done to demonstrate our commitment. Based on recent and current conversations, news, our confident value, clear about financing, Give it a score out of 10. I mean, the financing will happen. 10 out of 10. I can't guarantee security will behave itself every week between now and then, so I think it could easily slip a week or three, but it's definitely gonna happen. There's no doubt in my mind. When you say a couple of months of monitoring by Constellis, when did this start or has it started?

52:08 It it's they've done their first report. Didn't get we didn't get a 10 out of 10, but we're on the right track. Three sorry. In in what what in what way will Ethiopia pay back the 60 or 70,000,000 which Ethiopia spent over the years? I I think this is referring to given the historical investment, how how will it repay the money invested? Well, I think I already said earlier that at today's gold price, KEFI's share of net cash flow of net net cash flow is a $100,000,000.

52:59 So I think the the project will provide plenty of return, I think. I would like to thank and congratulate the team on recent progress as it's good wonderful to see. Blah blah blah. Appreciate it. It's not a question. It's a compliment or a thank you. You know, I you only see me. My job is, in many ways, to shield the team from work that might distract them to allow them to focus on their work. And it it it really is a solid team in both Ethiopia and Saudi Arabia, even our head office team. Yeah. Our head office is only three people in Cyprus.

53:47 They work extremely hard, probably one tenth the cost of what we'd be paying if we had an office in London, and they're all very driven people. And please don't think that it's it's a company run by Harry. I might be the executive chairman, but there's some very, very driven, hardworking people, and I I thank you for paying that compliment to the team. Does KEFI sorry. I think one bounced out of the way. Oh, no. That's does KEFI have plans to expand the resource near term at at Tulakapi? As soon as construction starts at Tulakapi, one of the first things we'll do is to is to revise the reserve resource statement without doing any drilling. And what I mean by that is that when we did the reserves at Tulakapi, we assumed a gold price of $1,100 because we were being conservative.

55:04 And we didn't believe gold would trade below $1,200. It's only traded below as low as $1,200 5% of the time in the last decade, and we believe it'll trade closer to around $2,000 for the next decade. But nevertheless, to design the mine, we assumed $1,100. I think in hindsight, that $1,100 has turned out to be too conservative. Hindsight's a wonderful thing. So the first thing we'll do is we'll probably rerun it at whatever we decide, maybe 1,500. And that of itself will lead to some design changes with a bit more material coming into production profile.

55:55 It wouldn't be too hard to tweak the plant up by five or 10%, but we'll look at that as well. So there is some there's some tweaking to do because with the passage of time, some of our assumptions when we set up our bankers cases were a bit too conservative. At the same time, we'll start we'll start doing some drilling underground as is being alluded to, not because we wanna report bigger resources per se, but because what we really wanna do is bring the underground on by year three of the open pit. That would be a sensible operational plan so that the two are supporting each other, the high grade underground and the open pit supporting each other to have a, you know, a ten, twelve, fifteen year mine life of the two combined rather than an open pit followed by an underground. That would be a a healthier operation.

56:54 So, yes, long long answer, but I also wanted to point out to you that there's some things we'll do just from the desktop once we once we start construction. I think I might have got to the end of the questions. Harry, that's great. Thank you very much indeed for addressing all of those questions that have come through today. And, of course, we will publish all those responses on the investment company platform where it's appropriate to do so. And ladies and gentlemen, you'll be notified by email when these are ready for your review. Harry, perhaps before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments to wrap up with? Thank you. Well, as I said at the beginning, this isn't a just a quarterly update. It's more important in treating you all as my partners.

57:46 If we're all sitting around together here chatting face to face, I'd say, you know, it's completely different to where what it was in November. We had one project under stress and two maybe projects. Now we've got three projects economic and moving forward. Completely different. The numbers tell you that there's a lot of upside to be gained, and the most important thing that's changed is that dealing in frontier markets can knock you backwards as it has for years, but when it swings the other way, it can knock you forwards, which is hopefully what's happening now.

58:35 You know, the the the concerns around can you get going in May? Can you get going in June? All that sort of stuff. If you're really and I don't say this lightheartedly or flippantly. If you're really concerned about whether you can make 10% on this stock or 20% on this stock in the next month or two, or if something might be held up by a week or two, I strongly recommend that you don't invest in Frontier Markets Explorer developers because they'll drive you crazy. That's the truth. But if you're really after trying to make, you know, ten, twenty, 30 baggers or whatever by picking people you think are being honest and and trustworthy and determined and have the tenacity to to sort of stay the course, then then in the words of the people who published that report on Monday, this is your cheapest entry that he's aware of, and I think it's a great entry point. The timing for entry, it it couldn't be better in my view.

59:49 You know, will will will some local band that play up on us, you know, next month? Sure. But, I mean, these these these companies that are involved in the syndicate, they operate in much risky jurisdictions elsewhere. The the experts from Constellis, openly say that Ethiopia is nowhere near as troublesome and risky as, say, Mali or parts of Burkina Faso or the DRC. But the thing that threw everybody was that it changed. It was it was a terribly calm, peaceful place, Top 10 growth country for twenty years running, and then it changed. And that completely threw everybody. Well, now it's going back to what it was before, and and it's doing so very very quickly.

1:00:40 I've got I can see it before my eyes, and it's happening very quickly. So I wouldn't worry too much about that side. That's it for me in terms of closing comments. I hope I hope you can sort of feel that the team is feeling some elation now that we can get get cracking, and, all the best to all of you. Thank you. Harry, that's great. Thank you very much indeed for taking the time to update investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure we'll be greatly valued by the company. On behalf of the management team of KEFI GOLD AND COPPER PLC, we'd like to thank you for attending today's presentation.

1:01:25 That now concludes today's session. So good afternoon to you all.