Last close As at 05/08/2026
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▲ 0.14 (12.78%)
Market capitalisation
GBP166m
Research: Metals & Mining
In its post-Indaba release of 13 February, KEFI announced that the multi-party, subsidiary-level financing of its Tulu Kapi gold project in Ethiopia is now advancing on the back of Ethiopian federal government commitments finally received in October 2023. As a result, the lead lender quickly processed its approval in December 2023 and now all other stakeholders are triggering their respective flow-on processes. At the same time, the Federal Government of Ethiopia has confirmed that its equity capital investment has been fully documented, committed and already partly invested, while the contractors to the project have reaffirmed their intention and readiness to enter into the already drafted agreements to enable full project launch in H124 (as previously indicated by KEFI).
KEFI Gold and Copper |
Counting down to launch in H124 |
Project timing update |
Metals and mining |
13 February 2024 |
Share price performance
Business description
Next events
Analyst
KEFI Gold and Copper is a research client of Edison Investment Research Limited |
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In its post-Indaba release of 13 February, KEFI announced that the multi-party, subsidiary-level financing of its Tulu Kapi gold project in Ethiopia is now advancing on the back of Ethiopian federal government commitments finally received in October 2023. As a result, the lead lender quickly processed its approval in December 2023 and now all other stakeholders are triggering their respective flow-on processes. At the same time, the Federal Government of Ethiopia has confirmed that its equity capital investment has been fully documented, committed and already partly invested, while the contractors to the project have reaffirmed their intention and readiness to enter into the already drafted agreements to enable full project launch in H124 (as previously indicated by KEFI).
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
0.0 |
(3.4) |
(0.2) |
0.0 |
N/A |
N/A |
12/22 |
0.0 |
(3.3) |
(0.2) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(3.5) |
(0.2) |
0.0 |
N/A |
N/A |
12/24e |
0.0 |
(11.5) |
(0.2) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.
Financial model adjustments
Our last valuation of KEFI was 2.19p/share in December 2022, when we assumed that project launch was imminent. Since then, we have 1) delayed launch by one year to end FY23, 2) adjusted its funding mix to reflect US$40m in share issues by KEFI subsidiaries to Ethiopia’s federal and regional governments (cf US$28.5m previously), 3) allowed for dilution of KEFI’s interest in G&M in Saudi Arabia from 30% to 25%, 4) adjusted to reflect interim equity issuance (albeit mostly already included in our models), 5) updated our financial model to reflect the positive pre-feasibility study at Hawiah in June 2023 and 6) updated our long-term gold price expectations (see Shades of the 1970s, Gold: September 1979 revisited, published in September 2023).
Valuation: Nearly four times current share price
In the wake of our assumption changes, we calculate that KEFI’s trio of projects are capable of generating free cash flow of c £82.6m in FY27–32 (cf £84.0m previously), making average (maximum potential) dividends of 0.66p/share possible (cf 0.63p/share previously) and valuing KEFI today at 2.47p/share (cf 2.19p/share previously) fully diluted to account for a residual £1.9m in equity issuance at the corporate level this year. This suggests an immediate value for KEFI of £122.6m or US$155.0m. This current valuation reduces to 2.18p/share (cf 1.92p/share previously) if all convertible instruments are converted at our valuation of the shares in three to four years’ time. At current metals prices, however, it increases to 4.14p now and 5.50p in FY27 (plus a further c 1.80p/share for Guji-Komto), which implies an internal rate of return for investors of 43.7% in sterling terms over the next 13 years. Note that our timing assumes Tulu Kapi commissioning in late 2025 and we believe that this goal is still achievable as long as project launch is before the end of April. In the event of a six-month delay, our valuation (all other things being equal) reduces by 4.7% to 2.36p/share.
Exhibit 1: Financial summary
£000s |
2020 |
2021 |
2022 |
2023e |
2024e |
||
December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Revenue |
|
|
0 |
0 |
0 |
0 |
0 |
Cost of Sales |
(2,663) |
(2,257) |
(2,744) |
(2,994) |
(1,000) |
||
Gross Profit |
(2,663) |
(2,257) |
(2,744) |
(2,994) |
(1,000) |
||
EBITDA |
|
|
(2,663) |
(2,257) |
(2,744) |
(2,994) |
(1,000) |
Operating profit (before amort. and excepts.) |
|
(2,706) |
(2,274) |
(2,768) |
(3,024) |
(1,030) |
|
Intangible Amortisation |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
174 |
(47) |
(268) |
916 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
(2,532) |
(2,321) |
(3,036) |
(2,108) |
(1,030) |
||
Net Interest |
(100) |
(1,121) |
(527) |
(495) |
(10,473) |
||
Profit Before Tax (norm) |
|
|
(2,806) |
(3,395) |
(3,295) |
(3,519) |
(11,503) |
Profit Before Tax (FRS 3) |
|
|
(2,632) |
(3,442) |
(3,563) |
(2,603) |
(11,503) |
Tax |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(2,806) |
(3,395) |
(3,295) |
(3,519) |
(11,503) |
||
Profit After Tax (FRS 3) |
(2,632) |
(3,442) |
(3,563) |
(2,603) |
(11,503) |
||
Minority interests |
0 |
0 |
0 |
0 |
3,451 |
||
Net income (normalised) |
(3,894) |
(4,877) |
(6,087) |
(8,255) |
(8,052) |
||
Net income (FRS3) |
(2,632) |
(3,442) |
(3,563) |
(2,603) |
(8,052) |
||
Average Number of Shares Outstanding (m) |
1,663.2 |
2,178.9 |
3,537.3 |
4,452.1 |
5,105.8 |
||
EPS - normalised (p) |
|
|
(0.2) |
(0.2) |
(0.2) |
(0.2) |
(0.2) |
EPS - normalised and fully diluted (p) |
|
|
(0.2) |
(0.2) |
(0.1) |
(0.1) |
(0.1) |
EPS - (IFRS) (p) |
|
|
(0.2) |
(0.2) |
(0.1) |
(0.1) |
(0.2) |
Dividend per share (p) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
- |
- |
- |
- |
- |
||
EBITDA Margin (%) |
- |
- |
- |
- |
- |
||
Operating Margin (before GW and except.) (%) |
- |
- |
- |
- |
- |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
24,545 |
28,424 |
31,481 |
30,644 |
124,447 |
Intangible Assets |
24,510 |
28,361 |
31,356 |
34,490 |
38,490 |
||
Tangible Assets |
35 |
63 |
125 |
95 |
89,898 |
||
Investments |
0 |
0 |
0 |
(3,941) |
(3,941) |
||
Current Assets |
|
|
1,817 |
685 |
683 |
1,327 |
1,147 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
448 |
291 |
463 |
361 |
181 |
||
Cash |
1,315 |
394 |
220 |
0 |
0 |
||
Other |
54 |
0 |
0 |
966 |
966 |
||
Current Liabilities |
|
|
(3,125) |
(6,791) |
(5,182) |
(5,182) |
(3,181) |
Creditors |
(3,125) |
(5,556) |
(4,002) |
(4,002) |
(2,001) |
||
Short term borrowings |
0 |
(1,235) |
(1,180) |
(1,180) |
(1,180) |
||
Long Term Liabilities |
|
|
0 |
0 |
0 |
(344) |
(74,028) |
Long term borrowings |
0 |
0 |
0 |
(344) |
(74,028) |
||
Other long term liabilities |
0 |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
23,237 |
22,318 |
26,982 |
26,445 |
48,385 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
(2,092) |
(329) |
(2,634) |
(2,880) |
(2,821) |
Net Interest |
(100) |
(1,121) |
(527) |
(495) |
(10,473) |
||
Tax |
0 |
0 |
0 |
0 |
0 |
||
Capex |
(4,389) |
(3,064) |
(5,245) |
(3,929) |
(93,833) |
||
Acquisitions/disposals |
0 |
54 |
0 |
0 |
0 |
||
Financing |
6,996 |
826 |
6,405 |
6,741 |
33,443 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
415 |
(3,634) |
(2,001) |
(564) |
(73,685) |
||
Opening net debt/(cash) |
|
|
814 |
(1,315) |
841 |
960 |
1,524 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Other |
1,714 |
1,478 |
1,882 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(1,315) |
841 |
960 |
1,524 |
75,208 |
Source: Company accounts, Edison Investment Research
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Research: Real Estate
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