KEFI Gold and Copper plc (LON:KEFI), the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has provided an update on the Company’s Gold and Minerals Limited Hawiah Copper-Gold Project and Jibal Qutman Gold Project in Saudi Arabia. G&M is owned 30% by KEFI and 70% by its partner Abdul Rahman Saad Al Rashid and Sons Ltd.
Highlights
Hawiah:
· Hawiah Exploration Licence (“EL”) has been renewed for five years
· Drilling programmes are proceeding as planned at both Hawiah and adjacent Al Godeyer ELs, with four drilling rigs operating across the licences
· On track to complete new Mineral Resource Estimates and Hawiah Preliminary Feasibility Study (“PFS”) in Q4-2022
Jibal Qutman:
· Discussions with the Ministry of Industry and Mineral Resources regarding G&M’s Jibal Qutman licence applications continue, and the Company remains hopeful this this matter will be resolved in the near future
· Accordingly, G&M have initiated actions which will allow this project to be advanced rapidly. These include:
o Independent audit of Mineral Resource Estimate;
o Detailed mine planning and scheduling;
o Engagement of Lycopodium to complete a 2 Mtpa carbon-in-leach (“CIL”) Detailed Feasibility Study (“DFS”) by December 2022; and
o Updating the environmental and social studies to comply with new legislation.
· The intent is to be in a position to trigger project financing formalities for development commitments as soon as the necessary clarification is obtained
· A relatively quick financing and development schedule is targeted because the Saudi Government has simplified and sped up regulatory clearances for development and the financing thereof
Harry Anagnostaras-Adams, Executive Chairman of KEFI, commented:
“In Saudi Arabia, we now have two development projects in progress after being held up for many years awaiting a regulatory overhaul. We are looking to develop our Jibal Qutman Gold Project and then to follow with the start-up of the Hawiah Copper-Gold Project. Both projects are growing, but already in the feasibility study stage and, combined, the KEFI interest therein is already projected to exceed that of the Company’s Tulu Kapi Gold Project in Ethiopia in terms of NPV and cash flow generation.
“Drilling at Hawiah during 2022 should not only further grow the copper-gold resources but also upgrade the classification to the confidence required for mine planning in the PFS, to be completed by the end of this year. Drilling at Hawiah and the nearby Al Godeyer Prospect is also targeted to provide additional near-surface oxide gold resources to be mined first in open pits, expediting first revenue, prior to the underground mine and base metal processing facility being developed.
“With recent encouragement from the Saudi Government, Jibal Qutman is likely to be developed first as KEFI has already commenced work to update the PFS completed in 2014. The preferred development approach for Jibal Qutman is now likely to be a straight-forward CIL gold processing plant, at a larger scale than previously envisaged, as the economics for mining and processing the whole resource now are much more robust at the higher current gold prices. Another important consideration is that project financing in Saudi Arabia will not require foreign banks and that Jibal Qutman will not require the resettlement of communities.
“Our teams in Saudi Arabia and Ethiopia are all working hard towards potentially developing both Jibal Qutman and Tulu Kapi in 2023 and then Hawiah shortly afterwards.”
Hawiah
Hawiah was discovered in September 2019 and now ranks in the top three base metal projects in Saudi Arabia and one of the top 15% VMS projects worldwide. The G&M team is progressing at great speed on this exciting project which is located close to major infrastructure.
G&M has recently received confirmation from the Saudi Government that the Hawiah EL has been renewed for five years to 2027. This follows the granting in December 2021 of the two Al Godeyer ELs which are located immediately west of the Hawiah EL.
G&M is now well placed to complete the work required to apply for a Mining Licence at Hawiah in 2023. Integral to the Hawiah Mining Licence application will be the Preliminary Feasibility Study and updated Mineral Resource Estimates that the G&M team are working towards completing in late 2022.
The required work is proceeding as planned with:
· completion of initial geotechnical drilling and hydrology drilling programmes;
· drilling of the Central Zone and the Oxide/Transition Zones now well advanced;
· ongoing metallurgical test work to determine the preferred flowsheets, including on the bulk samples of the oxide mineralisation from trenches across the Camp and Crossroad Lodes;
· commencement of preliminary underground, open-pit, and surface infrastructure designs; and
· evaluation of building an oxide gold circuit that would add early cash flow.
Initial exploration of the Al Godeyer ELs has confirmed similar copper-gold mineralisation to the Hawiah VMS deposit and indicated good continuity of the mineralised horizon.
Trenching across the extensive Al Godeyer gossans has been completed as well as an initial 19 drill Reverse Circulation (“RC”) holes targeting oxide and transitional mineralisation. Assays from the samples collected are awaited. Diamond drilling is currently ongoing, targeting deeper portions of the sulphide horizon.
The Al Godeyer exploration focus for the remainder of 2022 will be on drilling to define near-surface oxide gold resources that would contribute to early open-pit production at Hawiah.
Jibal Qutman
Jibal Qutman was KEFI’s first discovery in Saudi Arabia with Mineral Resources in excess of 700,000 ounces of gold. Drilling undertaken by G&M identified gold resources in six areas – Main Zone, West Zone, South Zone, 3K Hill, 4K Hill and Red Hill. Given the established regional prospectivity for shallow oxide gold deposits, EL applications have been prepared for four additional areas near Jibal Qutman.
As a result of the new regulatory system and positive developments at the Saudi Arabian Ministry for Industry and Mineral Resources, development planning studies have recommenced at Jibal Qutman, and indications from Saudi Arabia’s Government are that the Mining Licence will progress in 2022.
The current gold price is considerably higher than the US$1,200/ounce used in 2015 when the Company lodged its initial Mining Licence application. Several alternative processing options are likely to have become more attractive since 2015, which may enable more of the known gold deposits to be economically mined. This would result in a larger resource and production profile.
Prior to receiving formal regulatory approvals which will enable the commencement of field activities, several consultants have been engaged to evaluate processing options for Jibal Qutman and update elements of the Mining Licence application. This work includes open-pit design and scheduling, metallurgy, processing options and updating the Environmental and Social Impact Assessment.
Given the higher gold price and increased Mineral Resources since studies were completed in 2015, the preferred development option is currently a 2 Mtpa open-pit mining operation feeding a standard CIL gold processing plant. Subject to metallurgical testwork confirming that more of the unoxidized gold mineralisation has good recoveries, the processing rate may double from that previously envisaged with a commensurate increase in gold production.
Lycopodium has been engaged to complete a Detailed Feasibility Study for Jibal Qutman by December 2022. The DFS will be essential to secure project finance with Saudi financial institutions (including the Saudi Industrial Development Fund (SIDF)) and build a mine.
Drilling at Jibal Qutman for the remainder of 2022 is aimed at collecting data required for the DFS:
· geotechnical data;
· metallurgical samples; and
· testing key areas to improve geological knowledge.
There is excellent potential to expand the Jibal Qutman Mineral Resources with drilling programmes to test various gold mineralised zones now being planned. The current Mineral Resource estimate for Jibal Qutman totals 28.4 million tonnes at 0.80g/t gold, containing 733,045 ounces, with the majority of the Mineral Resource in the Indicated category.
The G&M Board believes that this work will place them in a strong position to rapidly develop the Jibal Qutman project and, should regulatory approvals be granted, allow KEFI Gold and Copper to commence gold production in 2024.
