Acquisition of Interest in Tulu Kapi

AIM: KEFI

                                                                11 December 2013

                               KEFI Minerals plc                               

                                                                               
                     Acquisition of Interest in Tulu Kapi                      

                        Placing of new Ordinary Shares                         

                               Director Dealings                               

                         and Notice of General Meeting                         

KEFI Minerals, the AIM-quoted gold and copper exploration and development
company, is pleased to announce that it has entered into a conditional
agreement to acquire 75% of the issued share capital of Nyota Minerals
(Ethiopia) Limited (the "Target"), the owner of the Tulu Kapi licence (the
"Acquisition").

The consideration will be satisfied by the payment of £1 million in cash and
the issue of up to 116,666,667 Ordinary Shares at a previously agreed value of
3 pence per share. In addition, the Company has conditionally raised £4.5
million (before expenses) through the placing of 225,000,000 new Ordinary
Shares at 2 pence per share (the "Placing").

The Placing and the Acquisition are conditional, among other things, on the
passing of the resolutions to be proposed at the General Meeting (the
"Resolutions"), to be held at the offices of Moore Stephens, Level 6, 460
Church Street, Paramatta, New South Wales, Australia on 27 December 2013 at
10.30 a.m. AEDT.

The Company has today posted a circular to shareholders, which will be
available to download from its website at www.kefi-minerals.com, which sets out
the details of the Proposals and the notice convening the General Meeting.
Defined terms used in this announcement are the same as those defined in the
circular unless the context requires otherwise. The Company presentation is
also available to shareholders on the KEFI Minerals website.

HIGHLIGHTS

  * KEFI Minerals will, as a result of the Acquisition and Placing, have an
    enlarged market capitalisation of £17 million (circa $28 million),
    representing $18 per ounce of its beneficial interests in 1.6Moz of
    JORC-compliant mineral resources within its two advanced gold development
    projects in the highly prospective Arabian-Nubian Shield.
   
  * KEFI Minerals has fully financed the Acquisition by raising £4.5 million
    (before expenses) at a placing price of 2p a share. Management preliminary
    estimates of the Tulu Kapi project indicate attractive operating costs of
    circa $500/oz Au.
   
  * The funds raised will be used to pay for the cash element of the
    Acquisition; to complete additional work at Tulu Kapi and refine the
    Definitive Feasibility Study ("DFS") prior to development in 2015; to
    complete the Pre-Feasibility Study for Jibal Qutman in Saudi Arabia in
    2014; to ensure there are sufficient funds available to meet KEFI Minerals'
    share of the Target's VAT obligations to the Ethiopian Government in 2014,
    and for working capital purposes.
   
  * Tulu Kapi was first mined in the 1930s and a DFS was completed in December
    2012, which produced a JORC-compliant Inferred and Indicated Resource
    estimate of 25Mt at 2.34g/t Au (1.9Moz Au), including a Probable Reserve of
    17Mt at 1.82g/t Au (1.0Moz Au).
   
  * This DFS was based on the work performed to date, which comprised over
    120,000m of drilling and an aggregate expenditure of over $50 million.
   
  * The Directors of KEFI have set a development plan for Tulu Kapi aimed at
    reducing the anticipated capital and operating expenditure, which should
    allow for a lower start-up risk and a higher overall return.
   
  * Following completion of the Acquisition, KEFI Minerals and its subsidiaries
    (the "Enlarged Group") will be positioned as an operator of two gold
    development projects within the Arabian-Nubian Shield.
   
  * The Directors believe that both of these projects have significant resource
    growth potential beyond the deposit estimates already reported.
   
  * By 2017 the aggregate estimated production at these projects attributable
    to KEFI Minerals could exceed 80Koz Au p.a. The cash generated will be used
    to fund further exploration and, when appropriate, payment of dividends.
   
The Company is also pleased to announce that following the requisite approvals,
Jeff Rayner, the Company's Managing Director, and Harry Anagnostaras-Adams, the
Company's Non-Executive Chairman, have agreed to subscribe for Ordinary Shares
as part of the Placing. Following the subscription, Jeff Rayner and Harry
Anagnostaras-Adams will respectively be interested in 3,783,333 and 6,966,667
ordinary shares, representing approximately 0.44 and 0.81 per cent of the
Enlarged Share Capital (assuming the maximum number of Consideration Shares are
issued).

Jeff Rayner, Managing Director of KEFI Minerals, commented:

"We are extremely excited by the prospects of the Tulu Kapi licence, which will
significantly increase our development potential within the Arabian-Nubian
Shield. Ethiopia has diverse untapped mineral resources and is actively
encouraging exploration and development and we look forward to growing our
portfolio of operations.

"We remain equally focused on growing our footprint in Saudi Arabia - where
Jibal Qutman has provided rapid progress to date. We once again upgraded the
resource there and are continuing to move towards submitting a Mining Licence
Application. We hope to grow the number of exploration licences both in
Ethiopia and Saudi Arabia and are working hard towards becoming a producing
entity focused on generating dividends as well as organic growth within a
highly prospective region."

Enquiries

KEFI Minerals

Jeff Rayner [phone]

Fox-Davies Capital

Simon Leathers [phone]

Bishopsgate Communications

Nick Rome/Anna Michniewicz [phone]


Background to the Acquisition

KEFI Minerals has identified a gold opportunity in the Arabian-Nubian Shield
("ANS") of Western Ethiopia, the Tulu Kapi gold deposit, currently owned by
Nyota Minerals Limited ("Nyota"). KEFI Minerals has agreed to acquire 75% of
the issued share capital of the Target, a wholly owned subsidiary of Nyota and
the holder of the Tulu Kapi Exploration Licence ("EL") and surrounding ELs,
with Nyota retaining a participating 25% interest. The consideration comprises
up to 116,666,667 new Ordinary Shares (the "Consideration Shares") (subject to
adjustment as described below) at an agreed price of 3 pence per share and a
cash payment of £1 million (circa $1.6 million). The Consideration Shares are
being issued in addition to the Placing Shares and the cash payment will be
funded by the proceeds of the Placing.

Information on Tulu Kapi

Tulu Kapi was first mined in the 1930s and a DFS was completed in December
2012, which produced a JORC-compliant Inferred and Indicated Resource estimate
of 25Mt at 2.34g/t Au (1.9Moz Au), including a Probable Reserve of 17Mt at
1.82g/t Au (1.0Moz Au). This DFS was based on the work performed to date, which
comprised over 120,000m of drilling and an aggregate expenditure of over $50
million.


KEFI Minerals has devised an alternative approach, which the Directors believe
will reduce the anticipated capital and operating expenditure, thus
facilitating a lower start-up risk and higher overall return. Working in
partnership with Nyota, KEFI Minerals believes a limited programme of RC
drilling, surface sampling and metallurgical test work in 2014 will be
sufficient to refine a DFS for planned development in 2015 based on a
production plan of ± 85Koz Au p.a. Management's preliminary estimates of the
Tulu Kapi project indicate attractive operating costs of $500/oz Au.

Summary of the Acquisition terms

The Company has entered into a share purchase agreement pursuant to which it
has conditionally agreed to acquire 75% of the issued share capital of the
Target.

The principal terms of the Acquisition, as set out in the share purchase
agreement, are as follows:

  * KEFI Minerals will acquire 75% of the issued share capital of the Target.
    The consideration will be satisfied as to £1 million in cash and the issue
    of up to 116,666,667 Ordinary Shares.
   
  * The number of Consideration Shares to be issued to Nyota Bermuda - the
    vendor of the shares in the Target - (or, at the option of Nyota Bermuda,
    another member of its group) will be reduced by an amount equivalent to any
    sums due to KEFI Minerals under the secured loan facility referred to
    below.
   
  * Completion of the Acquisition is conditional on, inter alia; the
    satisfaction or waiver of the following conditions on or before 13 January
    2014 (or such later date as the parties may agree): (i) Shareholders
    approving the Resolutions; (ii) Admission; and (iii) KEFI Minerals being
    satisfied in its absolute discretion of the formalisation of an agreement
    with the Ethiopian Ministry of Finance on payment of the Target's reverse
    VAT liability and such liability not exceeding 105 million Birr (circa £
    3.31 million).
   
  * Each of KEFI Minerals and Nyota Bermuda has given the other party certain
    customary warranties. In addition, Nyota Bermuda has indemnified KEFI
    Minerals and the target in respect of certain matters.
   
  * Nyota has agreed to guarantee the obligations of Nyota Bermuda under the
    Share Purchase Agreement.
   
  * Nyota Bermuda has undertaken not to dispose of any interest in the
    Consideration Shares for six months following Admission, subject to certain
    limited exceptions or with the prior written consent of KEFI Minerals and
    have further undertaken for 12 months only to dispose of such shares on an
    orderly market basis.
   
Following completion of the Acquisition, the relationship between KEFI Minerals
and Nyota, as respective 75:25 joint venture partners in the Target, will be
governed by the terms of a shareholders' agreement, the principal terms of
which are as follows:

  * KEFI Minerals will be the manager of the Target and senior KEFI management
    will be based at the field offices.
   
  * Nyota's 25 per cent. beneficial interest in the Target remains undiluted by
    further investment made by KEFI Minerals until a revised JORC-compliant
    resource estimate for Tulu Kapi has been approved. KEFI Minerals currently
    anticipates publishing these revised estimates in Q1 2014.
   
  * Nyota will guarantee the obligations of Nyota Bermuda under this agreement.
   
  * The agreement contains provisions for the approval of work programmes and
    budgets, together with the manner of funding the Target's operations.
   
  * The agreement contains standard provisions concerning the transfer and
    issue of further shares together with certain reserved matters requiring
    the approval of both parties.
   
In connection with the Proposals, KEFI Minerals has also provided a subsidiary
of Nyota with a £360,000 (circa $590,000) secured loan facility. As noted
above, any amounts due to KEFI Minerals under this facility on completion of
the Acquisition will reduce the number of Consideration Shares to be issued to
Nyota Bermuda using the agreed price of 3p per Ordinary Share. The loan is
repayable on the earlier of completion of the Acquisition or 31 August 2014.
Interest accrues on the loan at a rate of 10 per cent. per annum.

Background to and reasons for the Placing

KEFI Minerals is raising £4.5 million (before expenses) to satisfy: (i) the
cash element of the Acquisition consideration; (ii) complete additional work at
Tulu Kapi and refine the DFS prior to development in 2015; (iii) complete the
Pre-Feasibility Study for Jibal Qutman in Saudi Arabia in 2014; (iv) ensure
there are sufficient funds available to meet KEFI Minerals' share of the
Target's VAT obligations to the Ethiopian Government in 2014, and (v)
contribute toward KEFI Minerals' ongoing corporate costs including the
arrangement of project finance facilities for the planned gold mine
developments.

The Enlarged Group

Following Completion, the Enlarged Group will be positioned as an operator of
two gold development projects within the Arabian-Nubian Shield: Tulu Kapi in
Ethiopia and Jibal Qutman in Saudi Arabia. The Directors believe that both of
these projects have significant resource growth potential beyond the deposit
estimates already reported.

Kefi Minerals' market capitalisation on Admission at the Placing Price of $27.7
million implies a valuation of $18/oz Au for its beneficial interest in 1.6Moz
of JORC-Compliant mineral resources within its two advanced gold development
projects in the highly prospective Arabian-Nubian Shield.

By 2017 the aggregate estimated production at these projects attributable to
KEFI Minerals could exceed 80Koz Au p.a. The cash generated will be used to
fund further exploration and, when appropriate, a dividend policy which the
Directors highlight as a priority.

Further ELs are expected to be granted in Saudi Arabia and project generation
is expected on other Ethiopian ELs, subject to the renewal and extension of the
existing ELs on acceptable terms.

The Placing

The Company has conditionally raised £4.5 million (before expenses) by way of a
placing by Fox-Davies, as agent to the Company, of 225,000,000 new Ordinary
Shares at 2 pence per share pursuant to the Placing Agreement. WHI Stockbrokers
assisted in the Placing and acted as agents to Fox-Davies. The Placing Shares
have been conditionally placed with existing Shareholders and institutional
investors.

The Placing is conditional, among other things, on Completion of the
Acquisition, the passing of the Resolutions to be proposed at the General
Meeting and Admission becoming effective on or before 8.00 a.m. on 30 December
2013 (or such later date as Fox-Davies and the Company may agree being not
later than 13 January 2014).

The Company is also pleased to announce that following the requisite approvals,
Jeff Rayner, the Company's Managing Director, and Harry Anagnostaras-Adams, the
Company's Non-Executive Chairman, have agreed to subscribe for Ordinary Shares
as part of the Placing. Following Admission, Jeff Rayner and Harry
Anagnostaras-Adams will respectively be interested in 3,783,333 and 6,966,667
Ordinary Shares, representing approximately 0.44 and 0.81 of the Enlarged Share
Capital on Admission (assuming the maximum number of Consideration Shares are
issued).

Under the terms of the Placing Agreement, the Company has given certain
customary warranties and indemnities to Fox-Davies in connection with the
Placing and other matters relating to the Company and its affairs.

The Placing Shares will be allotted and credited as fully paid and will rank
pari passu in all respects with the existing Ordinary Shares, including the
right to receive all dividends and other distributions declared, made or paid
on or after the date of their allotment.

The Placing Price was determined having regard to market conditions at the time
the Placing Agreement was entered into. The VWAP of the Ordinary Shares during
November 2013 was 2.32 pence and the Placing Price represents a 14 per cent.
discount to the VWAP. The Directors believe that the Placing Price is fair and
reasonable as far as Shareholders are concerned.

Application will be made to London Stock Exchange plc for the Consideration
Shares and Placing Shares to be admitted to trading on AIM and it is expected
that, subject to the passing of the Resolutions at the General Meeting,
Admission will become effective and that dealings will commence in the
Consideration Shares and Placing Shares on 30 December 2013.

Following Admission, there will be 863,255,721 Ordinary Shares in issue
(assuming the maximum number of Consideration Shares are issued) and Nyota will
be the beneficial owner of approximately 13.5% of the Enlarged Share Capital.

                                  ---ENDS---