Kefi Gold And Copper Plc

Good morning and welcome to the Kefi Gold and Copper PLC quarterly update investor presentation. Throughout this recorded presentation, investors will be in listening mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated in 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 Anaxaras-Adams, Executive Chairman. Good morning to you.

Good morning, everybody. I apologise. My video is off because of my current location. The bandwidth apparently is not quite good enough. I'm on the road and travelling around between locations. Nevertheless, hopefully you can see the screen with my... with the slides on it, I had in mind to walk through the first handful of slides and hopefully they will answer perhaps some of the more obvious questions given recent transactions. And then we can answer questions. So on the screen, you've got this cover slide is a picture of the Tulikapi deposit. It's the hill in the middle. That's a million ounces 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 today. generally in the Western media in particular over the course of the last year and perhaps in particular the course of the last quarter. But I'll come to that shortly.

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Now, the corporate overview is conveying a hell of a lot of information. I'll try to do it as succinctly as possible, particularly for the people who may be new to the company, because I understand there are some people on this call who are new to the company. The company started as a junior explorer and was listed in 2006, at the end of 2006, as I think around a £2 million listing IPO on AIM. But over time, as it moved into development planning and permitting, pure exploration was replaced by a focus also on 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. The scale of the AIM listed parent doesn't really reflect that yet. 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. In one, we own a bit over two-thirds. In one, we own a bit under one-third, and we manage both. Both of them, one in Ethiopia, one in Saudi Arabia. We have very large influential local partners. One's the government in Ethiopia and one's a very large Fortune 50 family office in Saudi Arabia and the other one. Now, of course, when focusing on trying to create value 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 on issue? And in our case, if you just look at the table at the bottom, I won't go through every particular point here to take too long, but I'll just make a couple of highlight points. 18 months ago, 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 Tula Kapi. It had been permitted, had reserves, and had a completed feasibility study and so 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 what's changed from, say, 2020 to today. The company at the time had a project which was worth about £114 million to us, to Kefi. Today, we have three projects that warrant compensation. 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 uh 348 million pounds 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 18 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 share basis today we're at the very, let's call it highly discounted end of the value spectrum and one would expect that those values on the stock market appreciate as we move through milestones 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 would I point out on this slide? Reasonable turnover, share turnover 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 assessment of values and 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 have done quite well. I won't belabor any of those points any further. I just really wanted to highlight that we've gone from a one asset, one to an asset company 18 months ago to a free 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 had quite a number of frustrations and disappointments on the way through that process. But to cut a long story short, we have a project which is development ready but for what I would describe as the local scene. And that Ethiopia started changing within two years of our entry into the country. All for the better in the long term, a wonderful transformational move towards democracy. And, you know, the feeling in the country of the majority of the population is overwhelmingly positive and optimistic. But nevertheless, it's been quite a ride, if I can put it that way. Nevertheless, the project finance syndicate for this project is a $356 million package of which Kefi only puts up less than 10% of it. So there's a point to emphasize that Kefi shareholders are actually relying on the support of people who are putting up 90% of the capital. Therefore, as fiduciaries, the company is not just, if you like, a fiduciary for Kefi Shell as an operator of joint ventures, but also a fiduciary for the people who are putting up most of the capital. So we have to strike the correct balance of transparency and honouring our commitments to all these stakeholders. Otherwise, they won't put up most of the capital. The whole syndicate has hung in there with us. 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 perhaps is new to Ethiopia or perhaps some even new to African mining. I don't know. But nevertheless, they've 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 necessary. when we all agree it's ready to go. This has been... Last year was quite a climactic year. You know, 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. And the climate... What do you call it? The conflict has abated dramatically, and the scene is quite set for... for a ceasefire and deals to get done, but that hasn't been done yet. Okay, I'll keep moving. Saudi Arabia, Hawiya now is, in terms of metal content, it's about double the size of Tula Kapi. And we kept drilling because it's still open. So this thing will turn out to be a lot bigger. And Jubal Kutman has come back on our radar. It was our first discovery and we were getting very excited about it a few years ago. But what we, I suppose, diplomatically call the quagmire regulatory process at the time, sort of stopped us and we thought we'd better sort of de-emphasise 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 licences to us next to Hawiya and the, and noises that we should get our mining licence clarified during this year now, 2022 at Jim O'Cutman. Over in Saudi, the funding would be a lot simpler in many ways than it is for Ethiopia, A, because Saudi Arabia is very stable, if I can put it that way, but also we're a very large, well-capitalised partner. So 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. So that all you're really looking at is what has Kefi done to these assets? It's 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 2020 and the end of 21? Well, on Tula Kapi, it's gone up in value because we've had to rejig the financing structure. 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 uh 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 it's um as its resource and 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 positive encouragement to 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 114 in 2020, where we've gone to on the denominator, what do you call it? The numerator of asset values. 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 doubled over an 18-month period. And notwithstanding this placing that we've just announced, it stays around double what it was 18 months ago. just because of the changes in the numerator as well as the denominator. 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 funding package and how it gets sourced and who puts up what. And essentially, if you go right to the very bottom line, it says that... as everyone else puts in their designated sums, it leaves about $29 million down the bottom, if you like, for the last brick in the wall. And if one takes into account internal cash generation during commissioning, then that would leave about $9 million to come in from Kefi. And then if you cast your mind, if those of you are familiar with the placing we just announced, there's a warrant attached. It was quite deliberate. 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 auction with any capital issue. But 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 um that the warrant on exercise of that those warrants it tips in the amount of money that's not um designated to be to be generated internally so the way in which that placing was structured um was also with the knife to like to to doing that um actually i'll i'll pull up there i don't i'm happy to uh uh um you know elaborate on any directors or other things but i i don't want to chew up the whole time on present presenting rather than answering questions so i'll stop there 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&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 a recording of this presentation along with the slide deck and the published Q&A can be accessed via your investor dashboard. Harry, we received a number of pre-submitted questions from investors and I want to start off the Q&A session with these. The first one reads as follows. You pointed 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?

The question about the broker is simply that the person who was heading... The team that did our work at Brandon Hill switched to Vera, so we switched with them. That's all it is. There's nothing... profound about it, but they're the people who've looked after the company for some years, and we just stuck with them. There is no plan to spin off Saudi assets. I mean, we're not closed-minded about anything, but there's no plan to do so.

Thank you. The following question is 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 Kapi financing completion at the very low price?

Well, Essentially, we got snookered, I suppose you could say. We've since reported why and how, but they reported kidnapping with four of our personnel having been taken hostage. It was a very uncomfortable two months there in captivity. We weren't able to tell publicly what was going on. We had to focus on protecting the people. um and 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 tulacapi 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 um Now, we did handle it, as it turns out, with hindsight all very well, but we were stuck for some months. And, I mean, that's essentially it. We had 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. And also, you know, going into balance date of 31 December, 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, what do you call it, the conflicts in Ethiopia going into a sort of a climax, it was considered prudent to de-risk 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 conflict, the war has effectively ended, unless something weird happens again, but the war has effectively ended. The conflicts have abated. And it looks like, you know, 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 de-risk the balance sheet. Now, it's some comfort to all of us as shareholders 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 assets. But of course, it took away from us the possibility that we increased 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 what was a very challenging period.

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

I think the fairest way to answer about personal expectations is just to say that when you... Look at any benchmarking of companies like this that are going into development. There's 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 12p, 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 then. So it'll be up in the high teens. And of course, that ignores the fact that we expect our resources to keep growing and the value to keep increasing. So the best way to answer it is that NPV is what we target and NPV should be bigger than what it is today. The first goal would be around the end of 2023. Thank you. Now turning on to the next question.

What do you have to say to the long-term shareholders who invested in Kefi 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... Incentive options per se are obviously for people involved with the management and they're done for specific reasons under a scheme that's been approved and well publicised in the past and presented to shareholders. The warrants, as I said earlier, are specifically constructed to bring in capital for the Tulikapi financing. They're not just sort of issued, you know, as a sort of a benefit or something. That's not the way we look at them. they're issued as an instrument to being in capital at the funding requirement. So, you know, we haven't sort of looked at it that way. The question is sort of looking at them as sort of benefits. The incentive options are only worth something 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 the development to the company thank you um 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, therein lies the dilemma. You know, 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 biggest, how would I put it, philosophical challenge policy decision that was made on Saudi Arabia was when we went into it in 2008. And we decided upfront that better to have a minority stake in a giant pie, because we were convinced that there would be huge discoveries in Saudi Arabia. And we thought we could have a crack at being one of the ones making those discoveries. And so 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 though that might seem hard to believe at the moment. But 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 stand our corner going forward because we really don't want to keep diluting for the reason that the questioner said. And now that, you know, 18 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 months ago... probably the question wouldn't have been asked. And today the question is asked with the benefit of hindsight. So I agree with the questioner now, but we didn't know that 18 months ago, did we?

Thank you. Turning to the next question. Do shareholders have to expect another new share placing during 2022, 2023? Was the financing secured yet? Well, again,

I just want to, I never like to mislead. 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 us to get into production. And the way that I presented with our slides, with that chart, it showed you very clearly what we're aiming to do with Chillicappy and the bottom line number of 29 million, of which 9 million 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 think that answers the question.

Thank you. The next question asks about the recent fundraise and why existing investors were not given the opportunity to avoid dilution with an offer.

Yeah, well, I was a matter of, was a great disappointment to me because 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 I've explained, 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 that. But I'm certainly not trying to prevent any shareholder participating, but it's very, very difficult to provide retail shareholders as compared to 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 of warrants over shares that were granted in place of salary, to be fair?

Well, I can tell you, the syndicate, at least, I'm not sure what the majority of shareholders feel, but the syndicate are pretty pretty encouraged and comforted by the fact that senior management get paid in shares instead of being paid in cash. And that they were prepared to do that. If you like put their money where their mouth was type of thing. So They weren't being granted warrants in lieu of salary. The placing terms were defined, as I said earlier, to close the financing with the market, the market set the terms, and to have an eye to the structure to look at the financing. 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 it.

That's great. Now turning to the next theme, which deals with the Tulukapi financing and mining licence, where the first question asks, is the Tulukapi financing likely to be completed before the state of emergency ends in Ethiopia? If not, is that soon enough for the Minister of Mines?

The state of emergency is until May, and it might be worth just explaining what that means to people who may not be familiar, but what it does is, I mean, I was pleased from the point, I knew it would perhaps horrify distant observers to hear that there was a state of emergency, but I, who had was one of the people on the ground in Ethiopia for most of last year, sort of staying very close to everything. I was pleased when the state of emergency was declared because what it did was to give certain powers to the government to maintain law and order in a more effective way. And that was a good thing. And it's been declared until May. 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 we don't drive these events, we don't drive the security events seen around us. 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 that the state of emergency has to end, but it has, the whole scene has to turn, keep turning. It's already started to turn for the better so that, 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 construction and transport logistics is available. These are just 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 you can't hold a gun to a bank's head and say send in your $140 million and all the equity, send in your $200 million regardless of whatever's going on around the site, he just can't do that. So 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 stated, because that's all he can ask for, 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?

Right now, it's not good enough because the conflict is only really just debated. If you follow it closely enough, you'd know that... 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 diplomatic initiatives only in the last few days around Ethiopian Christmas, which was only two days ago. So, you know, it's all hot stuff. You know, it's a hot topic. It's certainly looking extremely encouraging. And I know my new tie around our site, around our people, around various other things, which reinforces the fact it's extremely encouraging. But it has to go from being encouraging to actually settling down into a ceasefire. And what I said earlier, independent, sign-off, So it's not just our opinion or a government opinion or a minister's opinion, but, you know, independent security specialists saying, yeah, your routes are fine, your site's fine, your procedures are fine, and your team's in place. 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. And... I think that defining the window as February to May is still reasonable. It's what we had in the current circumstances of what we had in our minds when we set that sort of framework up for timetable management. But it has to keep getting there, if you know what I'm trying to say, in order to be ready. And it's getting there, but it has to get there.

Next question we've got for you here, Harry, is the Ministry of Mines given a deadline of the end of January 2022 for the funding of Tulu Kapi mine to be signed off. Has this date given by the Ministry of Mines changed with the Tigray conflict, or does it still have to be completed so the license is not revoked after the 31st of January 2022?

Sorry, I left my phone on in case I had to dial in by phone, but someone keeps ringing me. 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 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. Um, and, um, 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. So he's under intense pressure to get this show on the road, but, um, our license is in good standing. It's solid. We've done nothing wrong ever. Um, um, and, um, whatever the political pressure is to proceed, we'll just do the right thing. And the banks have been in the country explaining exactly what they need to release funds. And I don't believe anybody's being unreasonable about it. They've been going there of their own volition. 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 demeanour as a company, I think, is perfectly reasonable. It's not a negotiation. We just have to be disciplined and reasonable about it and explain ourselves to everybody. Unfortunately, some of the messaging has been by media messaging, which hasn't exactly helped. We're in that position to conduct negotiations or communications via the media. So it hasn't helped and it's confused shareholders, but 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?

They are sitting there. The lead bank has gone through their credit approvals. The support bank has said, well, 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 hung in there. The question is what progress has been made. We've maintained a syndicate despite a civil war and a kidnapping. And that's a critical point, number one. Frankly, if they hadn't been how would I put it, if they'd been the bond people that we had in place a couple of years ago, they would have probably run for the hills during the last 12 months. But we've got a syndicate that's just 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 of sort of get it or understand it and um and so they've all hung 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 um you know it sounds perhaps hard to believe but it's in incredibly detailed work. And it's the first major development of this nature that the government has done, you know, for 30 years. So everything seems to take, uh, 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. Um, 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 that's just, unfortunately, the cost of not putting, if Kefi Shelders wanted to put up the $350 million and not rely on banks and all these risk mitigating measures, then Kefi could have done that, but that's not possible. what we've done we've set out to raise the 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 far as the last few months has been concerned frankly we we had a big scare um it was a big fright to have gone through the last four or five months um and we came out of it uh all intact and um preserving the safety of all our people, no ongoing conditions as a result of the kidnapping. In fact, the kidnappers have since surrendered. And the 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 appear to preserve the value on a per share basis, 10 to 15 times the current share price. So I hope that doesn'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 operations. but we haven't heard anything since. How likely is this to come into fruition?

Well, that's the Gibralt Kutman announcement we made, which is why we brought that project back up onto the centre stage alongside the other two that... Jim O'Goodman was a string of discoveries, like a string of pearls, a lot of little potential pits. And we stopped at around 730,000 ounces as a major resource. And we did some metallurgical testing to confirm we could expect to recover the oxides via heat bleach. And then we submitted a mining license to put our foot on tenure and make sure it was 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 have taken all this time since then to rectify it. So, yes, we've announced that that project is back on the books again and looking pretty positive. And the answer, you know, if the question really is, will you develop Jebel Qutb and quickly, to get cash flow going quickly, then I think the answer is yes. We would add another team to get that going quickly because it's relatively small capital investment to get that cash flow going. And by the same token, proving up that Hawia now is a large part of it is now open pittable. It's the same thing. That has the Hawia economic model has probably dropped $100 million off its capital requirements to get going because it can get going as an open pit. So whatever prompted that question, I'm all the way with it to get these open pits going quickly.

That's 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 only, it's 10 or 12 kilometers from Hawia, so it's a satellite deposit in that sense. So the plant can, it looks the same, the same type of geology, mineralogy, a little work we've done. We've done quite a lot of surface sampling under reconnaissance license, and we some good numbers out of all of that, and we can see it's very similar to Hawiya. But we've done no drilling, so whatever I say is highly conjectural. But, you know, superficially, there's sort of zero chance it's not worth something, and there's a high probability that it's sort of a twin or a baby twin or whatever. of Hawia. It's going to add metal to Hawia. It'll make Hawia bigger than it otherwise would be. So, you know, how big, I don't know, but Hawia's already sort of double. I think we said earlier that a gold ounce equivalent, Tula Kapi in our model is about 1.2 million ounces, and Hawia is about 2.2 or something like that million ounces, a gold equivalent. And it would be very easy to sort of, you know, to speculate that it might, you know, increase another 50% or double again, or who knows. But clearly Algodia is a very important exploration license for us because it complements and scales up Hawia. And so Hawia will keep growing for the foreseeable future, no question.

Thank you. The next question is in relation to the ATA relationship in Saudi. What are their mining ambitions in the region and how is Kefi's relationship with them developing?

Well, we've been in a joint venture since 2008 and we know each other very well. Without speaking out of school, 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 a small listed company on AIM really keep up with the big boys game? That would be their natural concern. So 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 scrounges money together from drill hole to drill hole. They want to see us develop a multi-mine operation and they're very comfortable with our management and they just want to see that 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, they're 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 accepted our front 60-40 with us being 40. I think I'd feel uncomfortable below 30, and I wish it was still 40. but i i do think that taking all the responsibilities of the operating part 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 um they're pretty pretty silly wouldn't it to dilute below 30 percent but you know it's it's the it's the old dilemma again you know 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 third.

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&A tab, read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

I'll skip over 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 placings? Well, I wish it was issued before, but it wasn't ready before. And I wish we had, um, 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 on balance that, that we really didn't need to de risk the balance sheet as we were saying earlier. Um, 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 the value of how we 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 13 pence per share to 12 pence per share. That's really almost immaterial. The real question to an investor today is, should one buy shares at 0.8 of a P when their NPV is 12 P? That's the real question, not whether it's gone from 13 P to 12 P, if I may say. Another question is, why is Tula Kapi commissioning now 24? Well, 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 have started commissioning at the end of 23, and the construction people are incentivised to do it earlier, but it's not reasonable to assume that'll be achieved, but it's a two-year build. Another question is, do you plan to fund Tubal and Huia? via another large share placement at the end of next year. It's another question saying, can you build these mines, please, but don't raise any money, basically, is what he's asking, I think. there's a fundamental problem here and I know it's terribly disappointing and, you know, I'm the first one to be disappointed and I can't tell you how disappointed my family is that, you know, basically, um, we've just sunk in anything that, uh, all my time for the last six years, since I came as an executive has just been a bet on Kefi. Um, and, um, And they're sitting in other countries and never see me. And so it's the frustration by the executive is, whether you believe it or not, is no less or arguably a lot higher than the frustration of shareholders. But we're managers who will just keep putting runs on the board as best we can of building value, which we've talked about today. withstanding civil wars, which we've talked about today. We own frontier markets, which have issues, and we 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 Jubal Qutbun joint venture relationship is such that the joint venture partner is completely reliable to put up his 70 odd percent. And there's no shortage of debt capital in the country of Saudi Arabia to put up its 75 percent or whatever the total project costs. So Kefi will only have to put up 30 percent of 25 percent. If Kefi is not prepared to put up 25 or 30% of capital to develop a mine 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 whatever. But 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. But what really needs to happen is to close the gap between the share price and these NPVs. The financing itself isn't the problem. Otherwise, we shouldn't be in the industry. As I say, I haven't checked the numbers that the questioner has quoted here, but work it out. If it's, if Chiba, if Hawiya has come down to 160 odd million, say, and work out what 30% or 25% of that is, if we can't put up about 20, 30% or 25% of 160 million to develop Hawiya, well then we should give it away. Give the game away. It's just not, it would be, you know, it'd be ridiculous, I think. Probably not the answer you'd like to hear, but that's what I believe. The question is, with Hawia now being proven to be an economic deposit, why have you now decided to continue to drill? It is now looking like Hawia is delayed by more than a year. Why keep drilling? That's not true. We only discovered it. 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 a 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. So there's a sequence here and a fast track is what we're targeting. And the fast track is that we will be developing this around the time Tula Kapi starts. And that's a pretty fast track to get from a discovery in 2020 to a startup of development within four years and then being, what do you call it, production within 18 months of that. That's a pretty fast track. um so i can see the time slipping by and it's another question from the same person's uh the same um person asked about three more questions i'll just i'll go back in if i can but i'll just see what anyone else has asked what's been put in place to avoid any more kidnappings of any more employees um uh I mean, I can only be generic about it, but all I can say is that they were released unharmed with the only condition being we didn't name the kidnappers, and the kidnappers have since surrendered. And there's been a... The upgrading of security protocols and systems and teams for that was planned... with Project Launch, the people that were kidnapped were part of the inspection teams going around, planning all of that. And unfortunately, they got kidnapped. 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 Hawaii has lived from H122 to H222 in November. It's a fairly 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 the exploration team leader stepped down to allow it to go into the development and financing uh 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 not aiming to be an explorer, but quite the contrary. If you look at the CVs, if you like, of the people on the board, it's in that slideshow, and the people in the senior executive, they're not your classic explorers. They're your classic builder operators. And so all I can say is that the average in the world globally from the first successful discovery hole to production used to be about 15 years, but today I'm told it's crept up to around 20 years, but I haven't seen the stats myself. 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 environmental side and development permits around the environmental side in Australia can take five or 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 trying to get into production as soon as possible. We don't want to be an explorer. We want to be a profit maker. And in the slideshow today, we summarise that we see ourselves as $200 million 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 how we see ourselves as the operator of production. production units with a pipeline of exploration around them. There's some questions questioning that CAPEX has gone down at Hawia. We used to say 220. 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 had to get going with and do the rest of it during production from the open pit. And so that's what we're doing. Are Kefi, are ATAH aware and comfortable of Kefi needing to get TKGM built and generating revenue as a prerequisite for the We Are Mine being funded and built? We've never said that it's a prerequisite. ATAH knows about us very well. As I say, we've been partners since 2008. They selected Kefi 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 warrants. When are you selling off something like... This one says, answer the question, Harry. And the question is, when are you selling off something like Hawia? Well, I don't plan to, so I'm not sure why that's the question. Another question. There's another 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. Well, that's a matter of... conjecture and opinion. Those 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 never have to raise money again, I think is where they're coming from. 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 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 think that I don't want to dramatise, 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 realise that the Not only were the syndicate of partners in Saudi Arabia and Ethiopia and bankers who deal with this around Ethiopia and contractors, not only were they, let's say, at ease with our handling of the circumstances, but they were comforted on our disciplined approach. I think it's important to say that for shareholders. I know it's frustrating that there were delays again, but I think it's also important to realise that when you're 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 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 personally was really quite shocked at the western coverage western media coverage of ethiopian conflict 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 the Ethiopian people wanting democracy and not wanting single ethnic group to rule the country. And I was staggered, really, the way international politics works. was beating the country up. And I'm really pleased personally, I probably shouldn't say politically motivated or not motivated politically, but make political commentary, but I'm really pleased that the country has preserved its sovereignty and it's, you know, and the people are winning, the democracy is winning, which I think is fantastic. And it's calmed down and, I think it'll go like a rocket, 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 20 years running. So I believe it'll go like a rocket again, and we'll forget all this 2021 period quite quickly, I hope. So I feel very optimistic about Ethiopia now. Two years ago, we didn't have a discovery. We only had one discovery 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. Two years' time, it might be the opposite. I don't know. But if you're dealing in frontier markets, unfortunately, it's testing at times. And one of them will shoot ahead, and the other one will fall behind, and so on and so forth. So I personally would think if we can set this company up to prosper in the Arabian-Nubian shield with strong foundations, with a foot in at least two jurisdictions that cover each other and support each other, I think it would be a 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've just got our noses to the wheel. So I feel like we've had a tough time the last year in particular, shareholders and the company as a whole. And I feel we're a much stronger company now and 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 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.

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