KEFI Gold and Copper (KEFI): Hawiah developing ...

Edison Investment Research Limited Edison Investment Research Limited: KEFI Gold and Copper (KEFI): Hawiah developing rapidly behind Tulu Kapi 18-March-2022 / 07:00 GMT/BST London, UK, 18 March 2022 KEFI Gold and Copper (KEFI): Hawiah developing rapidly behind Tulu Kapi Since we published our last outlook note on KEFI in July 2021, the company has raised additional equity to deleverage its balance sheet and announced a turnaround in the working environment in Ethiopia, plus the take-off of its projects in Saudi Arabia. In particular, KEFI reports the civil war in Ethiopia effectively ceased in December with no clashes outside the northern part of the country (which is over 1,000km from Addis Ababa and over 1,300km from Tulu Kapi) since then. It also reports that, with the explicit support and agreement of the Ministry of Mines, the finance syndicate members are now all engaging to launch full construction programmes and the field teams are back on the ground, restarting tasks suspended in 2021, as well as completing development tasks to demonstrate safe conditions ahead of project launch. We calculate that KEFI's trio of projects are capable of generating free cash flow of c £78.6m a year for seven years, from 2025 to 2031 (inclusive). This, in turn, drives average (maximum potential) dividends of 0.90p/share for the six years from 2026 to 2031 and values KEFI at 2.62p/share (cf 4.35p/share previously) fully diluted at the prevailing share price to account for a further assumed US$12.0m/£9.1m equity issue over the course of the next two years. This suggests a projected dividend-based value for KEFI of £77.0m or US$101.2m. The valuation reduces to 2.46p/share in the event that all convertible instruments involved in the funding are converted at our valuation of the shares in two to three years'. At current metals' spot prices however it increases to 8.27p in FY27 plus c 1.21p/share for Guji-Komto. Click here to view the full report or here to sign up to receive research as it is published. All reports published by Edison are available to download free of charge from its website www.edisongroup.com About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information, please contact Edison: Lord Ashbourne [phone] [e-mail] Learn more at www.edisongroup.com and connect with Edison on:  LinkedIn  www.linkedin.com/company/edison-group-/ Twitter   www.twitter.com/Edison_Inv_Res YouTube  www.youtube.com/edisonitv Dissemination of a CORPORATE NEWS, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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1305503 18-March-2022