Kefi Gold and Copper (LSE:KEFI) — Quarterly Update

0:00 Good morning, and welcome to the KEFI GOLD AND COPPER PLC Quarterly Update Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Simply type in your questions 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. But before we begin, I'd like to make the following poll. And now I'd like to hand you over to Harry Adams, executive chairman. Good morning to you. Good morning, everybody. I apologize. I my video is off because of my current location.

0:47 The bandwidth apparently is not not quite good enough. I'm on the road and traveling around between locations.

0:55 Nevertheless, hopefully, you can see the screen with with the slides on it. I had in mind to to walk through the the the first handful of slides, and hopefully, they'll answer perhaps some of the more obvious questions given recent transactions. And and then we can answer, yeah, and answer questions. So on the screen, you've got this cover slide is a picture of the Tulakapi deposit. It's the hill in the middle. That's million ounces. It is in and underneath that hill. What you see on the screen is a relatively quiet rural setting, which I suppose belies the publicized situation of Ethiopia generally in the in the western media in particular over the course of the last year and perhaps in particular, of course, to the last quarter. But I'll come to that shortly.

2:00 Now the corporate overview is

2:09 is conveying a hell of a lot of information. I'll try to do it as extremely as possible for particularly for the people who may be new to the company because I understand there are some people on on this call who are new to the company. The company started as a as a junior explorer and was listed in 2006 at the end of 2006 as a I think around a a £2,000,000 listing IPO on AIM. But over time, as it moved into development planning and permitting, pure exploration was replaced by a focus on some development and the other things one has to do to get development going on projects. It is now really quite the manager of fairly large joint ventures. They the the scale of the AIM listed parent doesn't really reflect that yet.

3:01 But underneath the aim listed parent, there's some quite large joint ventures, and we're the manager of them and the shareholder in them. One in one, we own a bit over two thirds, and one we own a bit under one third, and we manage both Both of them, one in Ethiopia, one in Saudi Arabia. And we have very large influential local partners. One's the government in Ethiopia and one's a very large, you know, fortune fifty family office in Saudi Arabia, the other one. Now the the of course, when when focusing on on trying to create value for shares for shareholders and on a per share basis, it's a function of the numerator, what does one do with the assets or to the assets, and what does one do with the number of shares unissued.

3:50 And in our case, if you if you just look at the table at the bottom, I won't go through every particular point here. It would take too long, but I'll just make a couple of highlight points. Eighteen months ago, the the NPV of the then only project that rated a mention from the point of view of putting any sort of intrinsic value numbers on it as compared to, you know, subjective, you know, assessments of exploration potential. The only one we could do that with at the time was to look up. It had permitted had been permitted, had reserves, and had a completed feasibility study and and and so on. On. And it was at today's metal prices, we've converted all the projects into today's metal prices so that one can sort of look at them as a like for like and ignoring price effects on on what's changed from, say, $20.20 to today.

4:48 The the the share the company at the time had a project which was worth about a £114,000,000 to us, to KEFI. Today, we have three projects that warrant these sorts of measurements of value because they're all now in advanced development planning stages, all three of them. And the three of them combined £348,000,000 to KEFI shareholders. So from the point of view of, let's call it the numerator in any value assessment of the company from a shareholder's viewpoint, the if you like the numerator, the value on the top of the equation has about tripled over the last eighteen months. And obviously, the number of shares on issue has increased, and we'll get to that as we go through it. On a per per share basis, today, we're we're we're at the very, let's call it, highly discounted end of the value spectrum, and that one would expect that that that those values on the stock market appreciate as as we move through milestones.

5:49 And, obviously, there are a number of milestones that are quite important for the company, which we'll get to a bit later. What else do I point out on this slide? Reasonable turnover share turnover for for a company on AIM. And what else? The number of options and warrants on issue is under 10% of the total capital. So it's not really a large sort of swing factor in in assessment of values and and and the the value what do you call it? The volume weighted price of those options and warrants is several times the share price today. So for them to be exercised, everybody should should have done quite well.

6:39 I I won't belabor any of those more any of those points any further. I just really wanted to highlight that we've gone from a one asset, one to one asset company eighteen months ago to a three development asset company today. Now Ethiopia, which has been our preoccupation really because it's the first cab off the rank for us and indeed the first cab off the rank for Ethiopia. And we've, you know, had quite a number of frustrations and disappointments on the way through that process. But cut a long story short, we we have a a project which is development ready but for what I would describe as the local scene. And that that that Ethiopia started changing within two years of our entry into the country.

7:31 All for the better in the long term, a wonderful transformational move towards democracy and, you know, the the the feeling in the country of the majority of the population is overwhelmingly positive and optimistic. But nevertheless, it's been, you know, quite quite a ride, let me put it that way. Nevertheless, the the project finance syndicate for this project is a $356,000,000 package of which KEFI only puts up less than 10% of it. So there's there's a point to emphasize that KEFI shareholders are actually relying on the support of of people who are putting up 90% of the capital. And therefore, as fiduciaries, the company is not just a, if you like, a fiduciary for KEFI shareholders and an operator of joint ventures, but also a fiduciary for the people who putting up most of the capital. So we have to strike the correct balance of transparency and honoring our commitments to all these, you know, stakeholders.

8:37 Otherwise, I won't put up most of the capital.

8:41 The whole syndicate has hung in there with us. You know, they're all African experienced and some of them, particularly Ethiopian experienced, much more so than, if I may say, the typical KEFI shareholder who, you know, perhaps is new to Ethiopia or some even new to African mining. I don't know. But nevertheless, they they sort of ridden with it and just expected us to manage things carefully and properly and to keep them informed and to press the button when when we all agree it's ready to go. This has been last year was quite a climactic year. You know, it's I think that's obvious to anybody. You've probably seen a fair bit of publicity, I suspect. It actually did come to a bit of a crescendo during the last quarter that we're reporting on here.

9:32 And with climb what do you call it? The conflict has abated dramatically, and the scene is quite set for for a cease fire and and deals to get done, but but it hasn't been done yet. Okay. I'll keep moving.

9:54 South sorry. Saudi Arabia, how we are now is in terms of metal content, it's about double the size of Tulakapi.

10:11 And if we keep drilling because it's still open, so this thing will turn out to be a lot bigger. And Jibal Kutman has come back on our radar. It it was our first discovery, and we were getting very excited about it a few years ago. But but but what we, I suppose, diplomatically call the quagmire regulatory process at the time sort of stopped us, and we thought we better sort of deemphasize the project and not put NPVs on it until we clarified all of those things. But that's the environment in Saudi Arabia is clearly, you know, much for the better now, very pro development and the granting of the Al Ghadi licenses to us next to to Hawiya and the and and noises that we should get our mining license clarified during this couple of this year now, 2022 at KEFI GOLD AND COPPER PLC.

11:10 I've been I've been Saudi, the funding would be a lot simpler in many ways than it is for for Ethiopia, a, because Saudi Arabia is very stable, if I put it that way, But also we're very large, well capitalized partner. So we're not we're not really being relied on to bring capital to the table. We're just being relied on to bring technical expertise to the table. But to keep up our end. But our end is probably only a third of a quarter of the total development requirement. So it's a very much more easily digestible, if you like, capital requirement. The development project, slide six, we've tabulated them there just for ease of reference, and they're all done at the metal price of 31 December.

12:06 So that all you're really looking at is what what has KEFI done to these assets, not what the price of markets have done to the assets. But what has KEFI done to these assets or what has happened with these assets in KEFI's hands between the middle of twenty twenty and the end of twenty one. Well, on Tula Kappi, it's gone up in value because we've had to rejig and we've the, you know, the financing structure, but we've done so in a way which which, you know, optimizes the position of of KEFI shareholders, and that's that's increased the the value to ship to KEFI. With how we are, it's a discovery. So it went from zero to where it is today based on what we've just announced as its as its resource.

12:57 And we we we didn't present NPVs because we felt it was misleading to to present or promote NPVs when there was a question mark against the license. But now that we've been given, you know, positive encouragement to get get into our planning again because it'll come through. It should actually be presented again because it's live again. So you can see there from a 114 in 2020, you know, where we've gone to on the the what do call it? The numerator of asset values. The third the the second last column on that table is what's happened to the shares on issue, and the last column is what happens to the NPV per share. And you can see there that, you know, it's it's it's about doubled over an eighteen month period and notwithstanding this placing that we've just announced that it's it stays around double what it was eighteen months ago just because of the changes in the numerator as well as the denominator.

14:01 And down below, we spell out various assumptions for anyone who wants to dig into it. This chart organization chart, slide seven, is just summarizing the kit the, you know, the funding package and how it gets it's supposed to it puts up what. And essentially, if you go right to the very bottom line, it it says that, you know, as everyone as everyone else puts in their, you know, designated sums, it leaves about $29,000,000 down the bottom, if you like, for the last brick in the wall. And if if one if one takes into account internal cash generation during commissioning, then that would leave about $9,000,000 to come in from And then if you cast your mind, if for those of you familiar with the placing we just announced, if if you you there's a warrant attached. It was quite deliberate.

15:01 I think it's the first time we've ever issued a warrant with the placing. It's perhaps probably one of the very few times I've personally been involved with issuing a warrant or option with any capital issue. But we've done it we've done it partly really to fit into that box there because everything we do everything we do has to keep the syndicate together and has to demonstrate that KEFI will keep up its end, both both in terms of providing the the human resources and in providing and assembling the capital resources. And that the warrants on exercise of that those warrants, it tips in the amount of money that's not designated to be to be generated internally.

15:51 So the way in which that placing was structured was also with the to to doing that. Actually, I'll I'll pull up there. I don't I'm happy to, you know, elaborate on any directors or other things, but I I don't wanna chew up the whole time on on present presenting rather than answering questions. So I'll stop there

16:18 and hand over to the mediator to ask any questions. Harry, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated in the top right corner of your screen. But just while the company take a few moments to review those questions, I'd like to remind you that the recording of this presentation along with the slide and the published Q and A can be accessed via your investor dashboard. Harry, we received a number of pre submitted questions from investors, I want to start off the Q and A session with these. The first one reads as follows. You appointed to Vera as a broker. Why the change? Is there a plan to spin off the Saudi assets onto an exchange in The Middle East?

16:56 The the the question about the broker is simply that the the the person who was heading the the the team that did our work at Brandon Hill switched to to Vera, so we switched with them. That's that's all it is. There's nothing profound about it, but they're the people who've looked after the company for for some years, and we just stuck with them. There there is no plan to spin off Saudi assets. I mean, we're not close minded about anything, but there's just there's no plan to do so. Thank you. The following questions are broken down into three themes. The first theme is share issues, and the first question asks, what made you change your mind and raise funds before the Tulu KEFI financing completion at the very low price? Well, essentially, we we got snookered, I suppose you could say. There we've since reported why and how, but the reported kidnapping that with four of our personnel having been, you know, taken hostage.

18:00 It was a very uncomfortable two months that were in captivity. We weren't able to tell tell publicly what was going on. We had to focus on, you know, protecting

18:12 the people. And it and it stalled us. We couldn't because we couldn't tell publicly what was going on, we couldn't do anything with capital raisings or anything like that. So it was sort of stuck. You know, we were sort of stuck. And the financing of Tulli Capi was stuck. Everything was stuck, and we just had to focus exclusively on making sure those people were returned harmless with conditions that meant that we weren't left with a legacy of concern for the future. Now we did handle it as it turns out with hindsight all all very well, but we were stuck for some months. And, I mean, that that's essentially it. It it it we other timing in mind, and that kidnapping couldn't have happened at a worse time from the point of view of stopping us in our tracks.

19:02 And also, you know, going into balance date of December 31, you know, we can all look backwards now and look what's happened in the last month or two. But back in September, in the middle of a kidnapping and then coming out of it in November, and this the what do you call it? The conflicts in Ethiopia going into a sort of a climax.

19:30 It was considered prudent to derisk the balance sheet completely and get rid of its liabilities just to protect the company in case something went wrong or unexpectedly in Ethiopia. And as it turns out, you know, the conflicts the the war has effectively ended unless something weird happens again, but before has effectively ended, the conflicts have abated. And and it looks like, you know, it'll it'll it's turning its corner for us. But, of course, that's with hindsight, and we felt we had to take it on the chin and and derisk the balance sheet. Now it's our comfort to to all of us as shareholders to to know that it's barely affected the value per share after you take into account that all the value increase we've achieved on the on the assets. But, of course, it's it's took away from us the possibility that we increase the value per share during that period. But I was supposed to put a positive spin on it. We protected the project and protected our people, and then we protected our balance sheet, and we've protected our value per share through through what was a very challenging period.

20:42 Thank you. The next question asks, what is your personal share price expectation at the moment, and when is the first gold being sold?

20:52 I think the the the fairest way to answer about personal expectations is just to say that when you when you look at any benchmarking of companies like this that are going to development. It is a very strong body of statistical evidence to say that as you come into production, they traded around or a bit better than NPV. If the NPV today is 12 p, it'll be higher than that when the first one comes into production just because of the passage of time and all the money will have been spent by them. So it'll be, you know, up in the high teens. And, of course, that ignores if the fact that we expect our resources to keep growing and the value to keep increasing.

21:39 So the the the the best way to answer it is that NPV is what we target, and NPV should be bigger than what it is today.

21:49 The first goal would be around the end of twenty twenty three, 2023 at Tula Company. Thank you. Now turning on to the next question. What do you have to say to the long term shareholders who invested in after any of your previous presentations and have since seen their holdings value dive without the benefit of lower and lower option and warrant guarantees or warrant issues. Sorry. The question's about why can't everybody get warrants and options. Well, the the incentive options per se are obviously for people involved with the management, and they're they're done for specific reasons under a scheme that's been approved and well publicized in the past and presented to shareholders.

22:38 The warrants, as I said earlier, are are specifically

22:43 constructed to bring in capital for the financing. They're not they're not just sort of issued, you know, as a sort of a benefit or something. They're that's not the way we look at them. They're issued as an instrument to bring in capital at the at the funding requirement. So, you know, I I don't I we haven't sort of looked at it that way. The the the question is sort of looking at them as sort of benefits. The the incentive options are only worth something if if the value of the company is well above where it is today, and the warrants are only worth something likewise, and also bringing the capital for for for the development of Total Capital.

23:27 Thank you. Why do you keep diluting the company's share of the Saudi Arabian joint venture when it looks to be a huge opportunity? We are giving away a share of billions for the cost of drilling. Well well, there in lies the dilemma. You know? You you you can't have a share of something unless you put up some money. And so our job is to find the balance between putting up asking shareholders of KEFI for capital to keep a share in Saudi Arabia. You know, you sort of can't have it both ways. So, you know, what we started the The the the biggest, how to put it, philosophical policy decision that was made on Saudi Arabia was when we went into it in 2008.

24:16 And we decided upfront that better to have a minority stake in in a giant pie because we were convinced that there would be huge discoveries in Saudi Arabia, and we we

24:29 thought we could have a crack at being one of the ones making those discoveries. And so we we we took that on the chin up front. And even though there's been terribly frustrating delays in Saudi Arabia, much worse in Ethiopia even, although it might seem hard to believe at the moment. But the the fact of the matter is that we've allowed ourselves to be diluted from 40% down to near 30% because we judged at the time that it was appropriate not to ask shareholders for that extra piece of money. But we have to we have to stand our corner going forward because we really don't want to keep diluting for the reason that the question I said.

25:21 And now that, you know, eighteen months ago, we didn't have a discovery that was live for development, and today, we have two. So it's changed the complexion, hasn't it? 18 ago, probably the question wouldn't have been asked. And today, the question's asked with the benefit of hindsight. So I agree with the question now, but we didn't know that eighteen months ago, did we?

25:42 Thank you, Tan. Next question. Do shareholders have to expect another new share placing during 2022, 2023? Was the financing secured yet? Well well, again, I I just wanna I never like to mislead. You know, the the fact of the matter is we are an exploration development company. And until there's production cash flows, the only capital that comes into the company itself is from shareholders. And we're fortunate that we have people who advance capital to us to sort of try to optimize those moments of asking capital from shareholders. But at the end of the day, the shareholders have to put up the capital for

26:24 us to get into production. And the way the way that I presented and, you know, with our slides, with that chart, it showed you very clearly what we're aiming to do with Chula KEFI and the bottom line number of 29,000,000, of which 9,000,000 to come in from shareholders. If we can achieve that, I mean, I think that would be a fantastic achievement. I don't know what the questioner thinks, but I think that if someone can achieve that, it would be a fantastic achievement. And and that's our objective. And the warrant that was attached to the placing we've announced is designed to bring in that amount of money. So I I think that answers the question. Thank you. The next question asks about the recent fundraising why existing investors were not given the opportunity to avoid dilution with an offer.

27:19 Yeah. Well, I I was a a matter of that was a great disappointment to me because, you know, we really did want to do that, and the idea of this thing called primary bid was sort of appealing philosophically to us, but we bumped into the fact that having designed it to have a warrant or a half warrant attached for the reasons of of explained,

27:49 We then bumped into the fact that the stock exchange doesn't allow a primary bid offering to be made if there's a warrant attached. So that put the kibosh on on that, But I certainly not trying to prevent any shareholder participating, but it's very, very difficult to provide retail shareholders as compared to, you know, institutional professional investors as defined by the stock exchange to participate in capital raisings. But we'll keep trying. Thank you. The next question asks, why did the directors consider the granting warrants over shares that were granted in place of salary to be fair?

28:36 Well, I can tell you the the syndicate, at least I don't I'm not sure what the majority of shareholders feel, but the syndicate, I'm pretty pretty encouraged and comforted by the fact that senior management get paid in shares instead of being paid in cash, and that they're prepared to do that. If you'll, like, put their money where their mouth was type of thing. So I went with granted option warrants and salary. They were they they they their placing terms were defined, know, as I said earlier,

29:24 you know, to be to to close to close the financing with the with with the with the market, the the market set the terms, and to have an eye to the structure which will look at the financing. And and the management any management that was prepared to take payment in shares and warrants attached was just really just accepting whatever the market had dictated the terms to be. It wasn't the management dictating the terms. So, yeah, I think that answers. That's great. Now turning to the to the next theme, which deals with the TULU KEFI financing and mining license where the first question asks, is the TULU KEFI financing likely to be complete before the state of emergency ends in Ethiopia?

30:10 If not, is that soon enough for the minister of mines?

30:16 The state of emergency is is until May, and it might be worth just explaining what that means to for people who may not be familiar. But what it does is I mean, I I was pleased from the point I knew it would have perhaps horrified distant observers to hear that there was a state of emergency, but I, who was one of the people on the ground in Ethiopia for most of last year, I'm just sort of staying very close to everything. I I was pleased when the state of emergency was declared because what it did was to give certain powers to the governments to maintain law and order in a more effective way, and that was a good thing.

31:06 And it's been declared until May.

31:09 And you might have noticed that in our announcements, we've said that we expect the closing to be within the window of February to May targeting March. And because because we don't drive these events, you know, we don't we don't drive the security events that's seen, you know, seen around us. We we can only drive what we do about them for ourselves. But we've maintained the syndicate, and we're focused on that window. So it's not necessarily the state of emergency has to end, but but it has the whole scene has to turn keep turning. It's already started to turn for the better so that,

31:59 you know, there's a ceasefire and independent sign off that security is in order on our traffic routes and around the site. And insurance normal insurance for for construction and transport logistics is is available. The this is a standard procedures and requirements for any project finance transaction, and the minister acknowledges that. You may not see that in his public statements, but privately, he's not unfamiliar with the fact that so we can't hold a gun to a bank's head and say, send send in your 140,000,000 and all the equity send in your 200,000,000 what regardless of whatever's going on around the site, you you just can't do that. So what what the minister's looking for is not us to have, you know, triggered the project by the end of January. He's just looking to make sure that our syndicate is in there, is committed, subject to those normal conditions as I've just

32:59 stated. Because that's all he can ask for, and and and that's all he has asked for. That's great. Moving on to the next question. Is the national security in Ethiopia good enough currently to permit financial close to happen so that the TK mine project can finally enter development?

33:23 Right now, it's not good enough because the conflict is only really just debated. If you're following closely enough, you'll you'd know that a a big pushback of these rebel forces only commenced in November, and it appears to have succeeded by the end of December. And then there were some very important, you know, diplomatic initiatives only in the last few days around Ethiopian Christmas, was only two days ago. So, know, it's all hot stuff. Hot you know, it's a hot topic. It it started looking extremely encouraging.

34:12 And and and I know I I know my new tie around our side, around our people, around various other things, which which all which reinforces the fact it's extremely encouraging. But but it has to go from being encouraging to actually settling down into a ceasefire. And what I and what I said earlier, an independent sign off so it's not just our opinion or government opinion or a minister's opinion, but, you know, independent security specialist saying, hey, your roots are fine, your site's fine, your procedures are fine, A new teams in place. Insurance insurance companies, underwriters saying, yeah, you can have your construction insurance and logistics insurance at this price now, and so on. It's just straight up project finance management.

34:59 And and I I think that defining the window is February to May is a is a is a is still reasonable. It's it's what we had in the current circumstances or what we had in our minds when we set that that sort of framework up for timetable management. But it has to keep keep getting there, if you know what I'm trying to say, in order to be ready. And it's it's it's getting there, but it has to, you know, it has to get there. Next question we've got for you here, Harry, is the Ministry of Mines has given a deadline of the end of January twenty twenty two for the funding of to to to to signed off. Has this date given by the Ministry of Mines changed with the conflict, or does it still have to be completed so the license is not revoked after the 01/31/2022?

35:50 Sorry. Let's see. I left my I left my phone on in case I had to dial in by phone, but someone did ring. I think I've more or less covered that already, but just to make sure, this is a very important question. The minister is not expecting financing to be closed at the end of January. He just wants to make sure these banks are the banks in particular, he knows that the, you know, the rest of the syndicate flows around the banking in particular. The banks are the toughest sort of guys to know. And so he just wants to make sure the banks are still there. And without in any way being disrespectful of anyone in the government, you know, they've been under intense pressure. This is the largest export generator plan for the country at the moment.

36:40 So he's under intense pressure to get this show on the road. But our license is in good standing. It's solid. We've done nothing wrong ever. And whatever the political pressure is to to proceed, we'll we'll just do the right thing. And and the banks have been in the country explaining explaining exactly, you know, what they need to to release funds. And I don't believe anybody being unreasonable about it. They've been going there of their of their own volition, you know. Nobody forced them to go there in the middle of all that conflict. They still went there to explain and give comfort. So I think that the legal position is crystal clear, and the political pressure is understandable, and our demeanor as a company, I think, is perfectly reasonable. You know? We it's not a negotiation.

37:37 We just have to be disciplined and reasonable about it and explain ourselves to everybody. Unfortunately, some of the messaging has been by by media messaging, which hasn't exactly helped. You know? We're in that position to conduct negotiations or communications via the media. So it hasn't helped, and it's confused shareholders, but that they're the facts that I've just stated. Thank you. The next question reads as follows. What progress has been made in the last few months regarding project financing? Have you converted the remaining 37% of funding sources that were yet to give conditional approvals? Yeah. They they they are sitting there. You know, you the lead bank has gone through their credit approvals.

38:24 The support bank has said, well, we're we'll we'll move when the situation's ready. The lead equity investor has given his conditional approval. The support equity investor said we'll move when they sign off. So they're all basically, you know, they've all hang in there. The question is what what progress has been made. We've maintained the syndicate despite a civil war and a kidnapping. And that that's that's a critical point number one. Frankly, if if they hadn't been how to put it? If they had been the bond people that we we had in in place a couple of years ago, they would have probably run for the hills during the last twelve months. But we've got a syndicate that's just stayed stayed steady and firm. And so, you know, one of the costs of all the chopping and changing of Ethiopian politics in the last few years has been delays, but one of the benefits has been that we've ended up with a syndicate to sort of get it or understand it.

39:27 And and so they will hang in there, which is to me the most important thing. But at the same time, you know, any technical issues, legal due diligence, and more importantly, the detailed agreements with the there's probably about 10 different agreements with different government agencies. And, you know, it sounds perhaps hard to believe, but it's incredibly detailed work, and it's the first major development of this nature that the government has done, you know, for thirty years. So everything seems to take take the government agencies a lot longer because they're unfamiliar with it. So we've been nailing those things down, taking the time to do that.

40:15 Again, you know, very collegiate, very collaborative, but, again, we have to be clear that money, people, and capital cannot flow unless all standard conditions are complied with. And it's just, unfortunately unfortunately, the the the cost of not put if if KEFI want if KEFI shareholders wanted to put out the $350,000,000 and not rely on banks all these risk mitigating measures, then then KEFI KEFI could have done that, but but that's not what we've done. We've set out to raise capital in the classic project financing structure. It's quite normal, and we need we need all those things to be tied down. And as so far as the last few months has been concerned, frankly, we we had a big scare.

41:04 It was a big fright to have gone through the last four or five months. And we came out of it all intact and preserving the safety of all our people. No ongoing conditions as a result of the kidnapping. In fact, the kidnappers have since surrendered. And government, I believe, is understanding that we are serious and just trying to do things properly. And the Saudi side has come through, you know, terrifically. And as a result of that, we we we appear to preserve the value on a per share basis, you know, 10 to 15 times the current share price.

41:50 So I hope that it didn't crash, but that's what we've achieved in the last few months. Thank you, Harry. Now turning on to the next thing, which is Saudi Arabia. The first question reads as follows. In August, you mentioned the case for a potential 30,000 ounce heap leach gold operation, but we haven't heard anything since. How likely how likely is this coming to fruition? Well, that that's that's the Jibel Kutman that's the Jibel Kutman announcement we made, which is that which is why we brought that project back up onto the center stage alongside the other two that Jibbo Goodman was a string of discoveries in a in a like a string of pearls, a lot of little potential pits.

42:41 And the it was we stopped at around 730 odd thousand ounces as a major resource, and we did some metallurgical testing to confirm we could expect to recover the oxides with by heap leach. And and then we submitted a mining license to put our foot on tenure and make sure it's all in order. And that's when indeed, it's a good thing we had done so because we discovered these problems with the tenure, and I've I've taken all this time since then to rectify it. So so, yes, we we've announced that that that project is back on on on the books again and look looking pretty positive. And the answer to the you know, if the if the question really is, will you develop your equipment quickly?

43:30 Do you have cash flow going quickly? Then I think the answer is is yes. We we will add we would add another team to get that get that going quickly because it's relatively small capital investment to, you know, to get that cash flow going. And by the same token, proving up that how we are now is a lot a large part of it is now open pitable. It's the same thing. You know, that that has the how we are economic model has probably dropped a $100,000,000 off its capital requirements to get going because it's been it's you know, can get going as an open pit. So what what whatever prompted that question, you know, I'm I'm all the way with it, you know, that to get these get these open pits going quickly.

44:23 That was great. The next question we have here relates to Algodea and if you could give some early indications of the potential from this license. Well, it's it's only it's 10 or 12 kilometers from Hawiya, so it's a satellite deposit in that sense. So the plant can it looks the same the same type of geology, minerality, you know, from a little work we've done. We've done quite a lot of surface sampling under reconnaissance license, and we've got some good numbers out of all of that, and we can see it's very similar to how we are. But we've done that drilling, so whatever I say is highly conjecture. But, you know, superficially, is sort of zero change. It's not worth something, and there's a high probability that that it's sort of a twin or a baby baby twin or whatever of Hawiya.

45:20 It's gonna add it's gonna add metal to Hawiya. It'll make Hawiya bigger than it otherwise would be. So, you know, how big? I I don't know, but Hawiya has already sort of doubled. Yeah. I think we said earlier that it's and at gold ounce equivalent to the copy in our models is about 1,200,000 ounces, and how we use about 2.2 or something like that million ounces gold equivalent. And it'll be very very easy to sort of, you know, to speculate that that it might might, you know, increase another 50% or double again or who knows. But but clearly, our guard here is a very important expiration license for us because it complements and scales up Hawiya. And so Hawiya will keep growing for the foreseeable future. And that's my question.

46:14 Thank you. The next question is in relation to the Alta relationship in Saudi. What's their mining ambitions in the region, and how is KEFI's relationship with them developing? Well well, we well, we we we've been in a joint venture since 2008, and we know each other very well. Without speaking out of school, I think I think they're very comfortable with what we're doing as the operating partner. I think their only concerns would be that can little KEFI and it's and a small listed company on IIM really keep up with the big boys game. That that's that that's that would be their natural concern. So they they they want to see KEFI develop and grow and prosper so that KEFI can keep up its end and not just be, you know, a little a little company on AIM that sort of scrounge his money together from drill hole to drill hole. They they wanna see they wanna see us develop a multi mine operation, and they're very comfortable with their management.

47:27 And I just wanna say that this this structure via AIM listings is actually, you know, feasible to make sure they're comfortable as the partner. But I think that so far as the relationship is concerned, there there are no problem there at all. That's great. The final pre submitted questions asks, what's the minimum share of the Saudi Arabian joint venture that you're willing to dilute to fund the drilling? Well, it's not a company policy, but if you ask me my personal view, as I said earlier, we we accepted our front sixty forty with us being 40. I I think I'd feel uncomfortable below 30, and I wish it was still 40.

48:14 But I I I do think that taking all the responsibilities of the operating partner and and seeing that we've now got assets there that are moving ahead in leaps and bounds at last with the regulatory regime having really turned under the front foot. They're pretty pretty silly, wouldn't it, to dilute below 30%. But, you know, it's it's the old it's the old dilemma again, you know. We we as shareholders can't expect to keep up unless we put up some money as well, and so we just have to find the right balance. But I wouldn't like to go below 30. Thank you very much. As you can see, we have received a number of questions today, and thank you to all the investors for submitting their questions. Could I please ask you to open up the q and a tab, read out the questions, and give responses where appropriate to do so, and I'll pick up from you at the end.

49:11 I'll I'll skip over anyone that any questions that seem to be repeats, so I don't take up everyone's time. One question. Why was the updated MRE for Hawiya issued after rather than before the recent share placing? Well, I wish it was issued before, but it wasn't ready before. And I wish we had you know, I wish we we we we didn't have to have we didn't have to have dealt with kidnappings and situations in Ethiopia, but the board felt unbalanced that that we really didn't need to do derisk the balance sheet as we were saying earlier.

49:59 But, I mean, looking forward, it's some consolation that the value per share hasn't really gone down just because of what's happened to the assets and and the value of how we are and our growth on these assets generally will continue, so it should actually start going up further. But the main point today, frankly, isn't the dilution from 13p per share to 12p per share. That that's really almost immaterial. The real question to an investor today is should one buy shares at point eight of a p when the NPV is 12 p? That's the real question. Not whether it's gone from 13 p to 12 p, is what I'm saying.

50:50 Another question is, why is TulaCopy commissioning now 24? Well, it's a two it's a two year thing. It's a two year build. It's as simple as that. If you start today, it's two years until you start production. So we'll we'll have started commissioning at the end of twenty three, and the the the construction people are incentivized to do it earlier, but it's not reasonable to assume that'll be achieved. That's a two year bill. Another question is, do you plan to fund to buy another large share placement at the end of next year? Yeah. It's another question saying, can you build these mines, please, but don't raise any money? Actually, it's what you're asking, I think.

51:41 The the the the there's a fundamental problem here. I know it's terribly disappointing and, you know, I'm the first one to be disappointed and, potentially, I disappointed my family is that, you know, basically, we've just sunk anything that all my time for the last six years since I came as an executive has just been based on And and, you know, they they they're sitting in other countries and never see me. And so it's the frustration by the executive is, like, you know, whether you believe it or not, is no no less or, like, a lot higher than the frustration of shareholders.

52:31 But we just we're managers who will just keep putting runs on the board as best we can of building value, we've talked about today, withstanding civil wars, which we've talked about today. We are in frontier markets, which have issues and talked about that today. And insofar as raising capital to go into mining, if the equation ahead of us for Saudi Arabia is not palatable to KEFI, then we should get out of the industry. Because the Hawiya and Jibel Kutman joint venture relationship is such that the joint venture partner is completely reliable to put up his 70 odd percent.

53:20 And there's no shortage of debt in the country of Saudi Arabia to put up at 75% or whatever of the the total project costs. So KEFI will have to put up 30% over 25%. Now if KEFI if KEFI is not prepared to up 25 or 30% of capital to develop a mind that it spends years to discover, then we really shouldn't be in this industry. And, you know, you can criticize management for maybe not promoting more or promoting better or or whatever. But the the fundamental decision of a company to go into exploration and development is to find things and then to develop them or to sell them to someone else who can develop them. And then while we've set up this structure, we should be capable of developing them to reap the rewards for the shareholders.

54:11 But what really needs to happen is to close the gap between the share price and these NPVs. It's not the financing itself isn't the problem. Otherwise, we shouldn't be in the industry. As I say, for I I haven't checked the numbers that the question is quoted here, but work it out. If it's if she will if how we has come down to a 160, say, and work out what 30% or 25% of that is, if we can't put up at 20 30% or 25% of a 160,000,000 to develop a we will then we should give it away. Give the game away. It's it's just not it would be, you know, very it'd be ridiculous, I think. Probably not the answer you'd like to hear, but that's that's what I believe.

55:02 Yeah. Is it the question is, with how we are now being proven to be an economic deposit, why have you now decided to continue to drill? It is now looking like Korea is delayed by more than a year. Why keep drilling? That's not true. We only discovered it. And we just declared a maiden resource in August 2020, I think. This is as fast as it gets in the mining sector. I absolutely guarantee you, we're looking to submit a mining license during 2022. And you have to keep drilling to upgrade it to reserve category. We've got an indicated resource now on part of it, which is great. But we have to keep drilling to infill it out to get it up to indicated and then reserves for the lot.

55:55 So there's a sequence here, and a fast track is what we're targeting. The fast track is that we will be developing this as to look around the time to look at the starts. And that that's that's a pretty fast track to get from a discovery in 2020 to start up of development within four years and then being what do you call it? Production within eighteen months of that. That's a pretty fast track. So I can see the time slipping by, and it's another question from the same persons the same person asking me three more questions. I'll I'll just I'll go back in if I can, but I'll just see what anyone else has asked.

56:42 What's been put in place to avoid any more kidnappings of any more employees? It's not I mean, I can only be generic about it, but all I can say is that they're released unharmed with the only condition being we didn't name the kidnappers, and the kidnappers since surrendered. And there's been a the upgrading of security protocols and systems and teams for that was planned with project launch. The the people that were kidnapped were part of the inspection teams going around, planning all of that. And unfortunately, they got kidnapped.

57:29 And so we've had to bring forward a whole bunch of things that would have been launched at project launch to make sure that doesn't happen whether there's a project launch or not, but that we've done all of that. But I have to leave it fairly generically for security reasons. The next question is the PFS day for Rui has lived from h one twenty two to h two twenty two in November. It's still a long question. So given your current business plan of being an explorer and not a producer, We're not we're not an explorer rather than a producer. The company was launched as an exploration company.

58:20 The exploration team leader stepped down to allow it to go into the development and financing. He's still around to advise, but he stepped down six years ago so it would go into development and permitting and financing. So So we're we're not aiming to be an explorer, but quite the contrary. If you look at the character, you know, the CVs, if you like, of the people on the board, it's in that slideshow, and the people in the senior executives, they're not your classic explorers. They're your classic builder operators. And so all I can say is that the average the average in the world globally of the from the first successful discovery hole to production used to be about fifteen years.

59:15 But today, I'm told it's crept up to around twenty years, but I haven't seen the stats myself. So and it's usually because of things not to do with technical stuff. It's usually to do with things like we've been dealing with. And even in Australia now, it can take longer than Ethiopia or Saudi Arabia even though it's such a mature mining jurisdiction. But now getting exploration permits around the expert around the environmental side and development permits around the environmental side in Australia can take five to six years. So our timelines are not driven by being an explorer and wanting to carry on exploring. Our timelines are driven by wanting to get into production as soon as possible. That's as simple as it is. We're we're trying to get into production as soon as possible.

1:00:03 We we we don't wanna be an explorer. We wanna be a a profit maker. And in the slide show today, we summarize that we see ourselves as $200,000,000 EBITDA within a few years based on about half from Ethiopia and half from Saudi Arabia. We've laid that out in the quarterly in today's presentation. That's what that's how we see ourselves as the operator of production production units with a pipeline of exploration around them. There's some questions questioning that that CapEx has gone down at who we are. We used to say two twenty, now we're saying lower. It's because of the open pit. We used to say, but, you know, don't hold us to this because we only just published an upgraded resource days ago. So we haven't actually done all these numbers carefully enough yet to be held to account on CapEx estimates until we do the work properly. But, clearly, by starting with an open pit, we can pull the CapEx down if we have to get going with and and do the rest of it during during production in the open pit.

1:01:15 And so that that's that's what we're doing. KEFI are are aware and comfortable with KEFI needing to get two KTM builds and generating revenues of prerequisite for the We Amine being funded and built? I believe never said that it's a prerequisite. Arthur knows about us very well. As I say, we've been partners for since 2008. They selected from a beauty parade of a lot of other companies. They know exactly what we're up to, but we would never stand in the way of development in Saudi Arabia for the sake of development in Ethiopia. We will do whatever each of these projects wants.

1:02:04 When are you selling off something like KEFI? This one says, answer the question, Harry. And the question is, when are you selling off something like KEFI? I don't plan to, so I'm not sure why that's the question. Another great it will this other one saying, it will deliver more shareholder value. So I think these people are saying discover things and sell them. We're not interested in developing, I suppose, is what these people are saying. Yeah. Well, that's that's, you know, a matter of conjecture and opinion. The the those two two or three last questions on my list here were really from people who just want us to sell something to make some money quickly and and never have to raise money again, think is where they're coming from.

1:02:58 I think I've answered all the questions I see in front of me. Thank you for that, Harry. You've been very generous with your time. I think you've addressed all the questions you can. And, of course, the company will review all all of the questions submitted today. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company. Could I ask you for a few closing comments? Well, I I think that it's I I don't wanna dramatize, I suppose, what the company's been through the last four or five months, but it was quite testing. And maybe it's some comfort to shareholders to realize that the not only were the syndicate of partners in Saudi Arabia and Ethiopia and bankers who deal with this around Ethiopia and and contractors, not only were they, let's say, at ease with our handling of the the circumstances, but they were they were comforted on our disciplined approach. I think it's important to say that to shareholders.

1:04:06 I know it's frustrating that there were delays again, but I think it's also important to realize that when you're, you know, putting people and hundreds of millions of dollars of capital to work, it has to be got right to allow those things to flow. And I think we from a point of view of measuring up as a group as a company to develop a number of mines, we stood the test of that crisis management for one of a better expression. Secondly, I would say that the Ethiopian situation has turned. I I I personally was really quite shocked at the Western coverage, Western media coverage of Ethiopian conflict.

1:04:59 I was staggered. I was in Ethiopia for most of last year watching that coverage and looking around me, what was going on internally. And I'm very, very personally very supportive of of the Ethiopian people wanting democracy and not wanting single single ethnic group to rule the country. You know, it's staggered really the way international politics was beating country up. And and I'm really pleased, personally. I probably shouldn't say politically motivated or not motivated politically, but make political commentary, but I I'm really pleased that the country has preserved its sovereignty. And and it's you know, and the people are are winning.

1:05:44 The the the democracy is winning, which I think is fantastic. And it's calmed down, and I think it'll go like a rocket when and and it's gone and it'll settle down very quickly, I believe, now. And Ethiopia has been in the top 10 growth countries of the world until last year for twenty years running. So I believe it'll go like a rocket again, and we'll forget all this this 2021 period quite quickly, I hope. So I I feel very optimistic about Ethiopia now. And, you know, two years ago, we didn't have a discovery. We only had one discovery in in Saudi Arabia, and it was a dormant thing because licensing was stuck. And today, it's the best thing since sliced bread, and everyone wants us to drop Ethiopia and get on to Saudi Arabia. In two years' time, it might be the opposite. I don't know. But if you're dealing in frontier markets, you know, unfortunately, it's it's testing at times.

1:06:38 And one of them will shoot ahead and the other one will fall behind and so on and so forth. So I personally would would think if we can set this company up to prosper in the Arabian, the Arabian shield with strong foundations with a foot in at least two jurisdictions that cover each other and support each other, I think it'd be much more powerful company. But, you know, we may well sell something here or there. I don't know. But it depends on the opportunities, and our partners are commercially minded. But at the moment, there's so much value to be built in these projects that we just gotta notice to the to the wheel. So I I I feel I feel like we've a tough time the last year, in particular, shareholders and and the company as a whole.

1:07:24 And I feel we're a much stronger company now and probably probably cheaper than we've ever been from the point of view of someone who looks at the shares. But I hope that's useful. Thank you. Harry, thank you again for updating investors today. Could I please ask investors not to close the session as as you'll now be automatically redirected 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 will 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, and good morning to you all.