Good afternoon, ladies and gentlemen. Welcome to the KEFI Gold and Copper plc Investor Q&A session. This meeting is scheduled for 30 minutes. Throughout this recorded meeting, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just 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 is appropriate to do so. Before we begin, I would like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand you over to Executive Chairman Harry Anagnostaras-Adams. Good afternoon, sir.
Good afternoon. I just explained that I won't be giving a presentation today just because time doesn't permit today. We did publish a quarterly report and an attached PowerPoint in the last week or so. I encourage anyone who, you know, who's interested in those in particular to read them off the website. I will just be focusing on answering the questions, and I've got here a list of questions that have already been received. As the introducer explained, we'll anything I don't get to in the next half hour, we'll assemble answers for and publish them later. Mindful of time, I'll just get on with it. There's some questions and bear with me.
I'll just scroll through them. Could you give your general perspective on investment in the junior mining space, particularly in the last year? I think you know great fortunes have been made in the mineral sector throughout the history of man, and obviously that's why it's you know attractive to certain investors, but it is certainly high risk chasing high return. The last year the sector has been let's say cyclically poor for investment as an investment sector, but many others have as well. I know that Silicon Valley's had a rough time as well in the last year, and some of the majors on the major indexes have had a rough time in the last year.
The KEFI shares themselves have stayed relatively stable, but they probably would have gone up if the cycle hadn't been against us in this last 12 months. All I can say is that, in such a high-risk sector, it's critical to very closely follow people and the projects and in some cases, the country where it's a frontier market. Do you think that if KEFI had compromised, their correct, in my view, high moral stance in dealing with national and regional governments, that the Tulu Kapi mine would be in construction or even producing by now? Is the current environment now more receptive of KEFI's ideals? We don't set out to be moral preachers or policemen or anything like that. We just follow the rules.
We represent not just the shareholders, and therefore have to comply with regulatory, you know, requirements. We also represent syndicate members, banks and other investors and contractors, and they all expect compliance. That's all we do. We do stand our ground if we need to because that's a prerequisite for our work. Is the current environment more conducive? Yes, it's recently improved enormously. Re bulletin boards, what action can the company take against anonymous posters who are posting defamatory comments? I think mainly we rely on self-policing by people who participate in the bulletin boards. You know, any silly poster, I suppose, would be dealt with by other posters.
I think the only thing that really bothers any company, it's not KEFI alone, is if there are sponsored people, you know, who are doing things for commercial reasons. You know, in the worst possible case where there's you know attempts at extortion or anything like that, which is always extremely unusual, one can take legal action. I mean, I've been involved with that in a previous life, in a previous company in another country, and the culprits are in jail. Why is investing in KEFI today better than it was in the past? I think it's the first moment that you can tick the box of the countries being running with us.
You know, really running with us, not just our people working hard on the ground and our assets having advanced to a point of development, at least in Ethiopia. I think it's the first moment one can say that. You know, KEFI IPO'd as a prospector. It took the first six or seven years to focus on a particular region after trying various countries. Since 2014, it's assembled five million ounces of gold or gold equivalent. KEFI's beneficial interest is about half of that. It's about 50/50 in Saudi and Ethiopia. But it's only really recently that in both countries, the red carpet's been rolled out for the sector.
That's, you know, you don't need to be, you know, a genius to work out that Ethiopia has improved markedly from when it had a civil war, and Saudi Arabia is now promoting very strongly its mineral sector. That's the first time since 2008 when we focused on the Arabian-Nubian Shield. I can say that's the case. When will the market finally wake up to the Kapi share value? Well, I mean, it's investors probably better to comment on that than me. I think as we as management focuses on delivery against milestones and targets, hopefully the shares just naturally de-risk and better reflect intrinsic theoretical values.
The NPVs and other sort of measures of value give you a theoretical value in my mind. You know, the real value of the company only reflects what it's achieving and the proximity of the next success, and hopefully as we start to put runs on the board, and now that things, I think, are running with us, that will tend to happen. Do you regret working in Ethiopia or Saudi Arabia? No. It was harder and took longer than anticipated, but I couldn't do what I do in my life if I drove by staring at a rear vision mirror. I just can't operate that way. How has Kapi fared compared with the other companies in those countries?
You know, as unbiased as I can be, I think better than most. I could list any number of companies that have declared force majeure or haven't been able to progress anything. We know most of these companies very well. Because of the nature of our projects or where they are, and particularly Tulu Kapi where it is, it's not in a border zone. It has no artisanal conflict. It has no legacy issues. Things like that were important in our selection of the project, sort of come home to roost. We can actually get cracking, whereas other projects can't. I think better than most. How confident is the board of directors that financial closing will come in H1 2023?
We are confident, but I think instead of just giving you a one-line answer, I might just define what financial close sort of breaks into, in sort of my language anyway. First thing I'd say is that funds drawdown from banks won't be until 2024, after equity has been used up. Funds drawdown from project equity will be as soon as possible after the signing of definitive agreements by all parties. The signing of definitive agreements is today's focus. Everybody's working hard. The whole syndicate of banks, contractors and principal investors met in Cape Town, along with all principal advisors, a couple of weeks ago. We meet in Addis Ababa in two days' time. We meet in London again in a couple of weeks' time.
I mean, all this is not just have a jolly flying around. It's a whole bunch of people working hard to iron out their differences or iron out their, you know, remaining few issues to resolve. None of it's rocket science, but when you've got a dozen parties and all their, you know, advisors, you just gotta go through it properly and just keep at it until you finish the job. In Ethiopia, what communication has occurred between the government and Tulu Kapi in relation to outstanding items, precedent, outstanding conditions precedent ready to closure? Is the government keen to progress? Yeah, the communication is daily, literally. This is, I believe, one of the three national priority projects the Council of Ministers touches on every week.
It's a very important project, and it's now, you know, under the spotlight, if you like, with proactive collaboration. I'm sure some shareholders would know that we had some friction in the past and what I would call less than requisite collaboration in some particular areas. That's all disappeared now. Same question. In Ethiopia, what impact has the change of ministers had on financial closing? Does this change the process? Can the old ministers interfere? You know, I don't really wanna talk about personalities. Anyway, I think I've already said it's much better now and history is history. Please set out the financing steps to Tulu Kapi project finance closing. It seems so complicated. Well, it is complicated.
It would be really simple if we wanted to put up $390 million, we'd only have ourselves to deal with. The reality is that we lead and we coordinate, but we have no right to instruct the government or the banks or the big investors. It's their money. We have to, as I say, coordinate and lead, but we're not in a position to instruct. It's extremely frustrating, I know, for a shareholder who doesn't have insight as to what's going on day to day. I think it should be obvious to everybody that the last few years has been extremely challenging in the country, in Ethiopia.
I think it's becoming obvious now that that chapter in the country is finished, and so we can get on with it. We were pushing for Q2, Q4 rather, of last year to wrap up things for everyone to sign definitive agreements. That phase always was known to take no less than a few months. It did. We didn't quite get there at the end of December, and we're still in that phase. What is that phase? It required increased security. You know, there's now very, very strong deployment of very large numbers of security forces all around our area. You know, that's well and truly in train.
We have to close out the few remaining regulatory issues, which is why we're meeting in Addis Ababa in a couple of days to go through that face-to-face with the legal advisors of government agencies. It's mainly things really in the hands of government. As I said earlier, you know, the government could not be more energetic, you know, to support and close out. Following signing of definitive agreements when we've, you know, patted down the security and the last regulatory issues and the community is all ready to roll. There are thousands of people involved and have to be ready.
We've got to launch really, and that is, each individual household has to counter-sign the settlement contracts and raise insurances and attach schedules to contracts and register them in the various jurisdictions. Confirm final procurement prices and all the contracts because we've got fixed price commitments by contractors to protect the project, and they can't fix those prices until we're very, very close to launch. The supply chain internationally has gone a bit berserk the last few years, and contractors can't give a fixed price lump sum until they're very close to proceeding, placing orders. That's a sort of a last-minute thing. We think we've catered for it, but it has to be done properly and formally. We have to trigger general meetings for our shareholders to approve any conversion rights.
That's what I call the launching phase out that follows immediately after everyone's signing. Sort of unstoppable at that stage, but you've got to do it all to start drawing down money. What are the cash solutions pre the TK funding as we are starting to run very low and the Saudi Arabian development requires more to keep the momentum going? No rocket science here. We, for years, we've used unsecured advances to keep things rolling until we get to critical milestones, and that's what we're doing right now. How are the landowners at Tulu Kapi taking the further delay in their resettlement? You're talking about thousands of people here, so I can't talk for every one of all these people. By and large, they're embarrassed that we've been held up.
You know, there was a breakdown of law and order in much of the countryside, since that civil war and during the civil war in very basic policing and law and order. It has to be reinstated. They know we got held up. They know we wanted to go ahead. They know we didn't want to waste our time, our money, and they're embarrassed. How is the OLA fighting affecting Tulu Kapi financing? It's not. The political rivalries within the region or the country are not interfering with Tulu Kapi. Nobody wants to interfere with the project, with this project at least, and most projects at least, but certainly this one. Because they don't wanna do anything against the community. The community wants it, and there's no competing community interest.
There's no interest by artisanal people or anything like that. Everybody wants it to go ahead. As I said, it has to be done properly. It will be. With the possible Saudi listing, would it be better to list the Gold and Minerals joint venture rather than listing KEFI? Would ARTAR likely consider this? I don't think it's appropriate for me to talk about what ARTAR would or would not do. We can only talk about what we would do.
We would list KEFI on a major regional market which understands its own region better than people in far distant lands and is hungry to invest in its region. We would and the joint venture may at some other stage, but that, as you point out correctly, that would be largely an ARTAR decision because they're the majority holders of that joint venture. The reference to Saudi shareholders on the structure slide first appeared in slide seven of the presentation of 28 November, but the dual listing proposal was mentioned only last month. Is there any significance to be drawn from the sudden appearance of the reference to Saudi shareholders? You know, all it's saying is we're likely to get major regional investors involved, and we're already planning that.
We made that clear in the slides showing the structure of the Tulu Kapi investment for years now. Because of the take-off of Saudi Arabia and the take-off of our joint venture in Saudi Arabia, and the take-off of the capital markets in Saudi Arabia, you know, that it's more likelihood that Saudi investors will become part of it as well. That's just, it's not you know, I'm not saying anything profound. KEFI stated in the fourth bullet point of page five of the progress report of 23rd of January that TKGM owes KEFI circa GBP 12 million via KME. Full exercise of the warrants will provide GBP 14.4 million.
Will the company now clarify how much further can be paid into TKGM, and thus clarify how much of the GBP will remain to fund operations outside of Ethiopia? No, we're not ready to do that. We have to sort of. We have to close so that we know exactly how much of that warrant money is required. And how much of that TKGM money can be repaid to KEFI. That's what we're doing. We're jockeying everybody into position and closing. You know, we've got it covered one way or the other, you might say. What is the situation with the exploration licenses around Tulu Kapi? The previous mining business was said to have awarded them to a Hong Kong shell company. We're addressing that matter.
What happens if the warrants at 1.6 are not exercised? How will this affect Tulu Kapi? The market will set the price and the company will deal. If the market's 1p or 10p, we'll deal and get the show on the road. The value of the shares is theoretically 10p at today's metal prices. You know, the market will set the price. Does KEFI intend to mine all these licenses themselves or are they looking to joint venture? I think that's referring to all the licenses we have. In Saudi Arabia, we recently issued 15 licenses in the space of a year, which is compared with a handful in the previous 14 years, which shows you how much the country is taking off on minerals and I suppose how well-respected our joint venture is there.
You know, as an answer, some exploration licenses will flop. Exploration is exploration. It's not a. That's why it's called exploration. You know, and our success rate of two discoveries out of three or so licenses historically is incredible. You know, it's amazing. And I'm not suggesting we're gonna have, you know, 12 discoveries out of 15 licenses in the future. That would be a first for mankind. Whatever the rate of discovery is, we'll give it a good shake, and we've got an excellent team and a fantastic database we've developed over 15 years. We're extremely well-positioned. The JV partners will do whatever creates best value for the JV.
It might be developing it like we are proposing with the two discoveries to date. It might be joint venturing it with somebody else if that makes sense because it's a multi-billion-dollar, you know, deposit and best to bring in a major. We might sell it. You know, the JV will deal with that. That will be a problem of success. You know, the fact that a small AIM company has put all this together will hopefully one day be recognized as an achievement as we move forward. The AIM market itself has been particularly weak and obviously we've relied on our financial engineering and other geological and engineering skills to bring these projects to where they are and where they will be shortly.
We'll take the company onto major stock exchange boards internationally as well as in London in due course as we put the runs on the board and the value of the company progresses up the curve to its theoretical present values of hundreds of millions of pounds. That's the game we're in to create enormous wealth in this high-risk game. We've certainly demonstrated high risk. I think anyone who's watched us has seen it. I think, you know, we're in a better position than ever to start to generate the rewards that compensate for the high risks we've all had to live through, who have been with us for some years. I'll leave it there. I do have to run off to the airport, and I appreciate your attention.
As I said, we picked up, you know, top 20 questions that we could work our way through, and everything else we'll write up answers and put them on the website when we get a chance. Thank you very much and have a good evening or morning or whatever it is, wherever you are. Thank you very much. Thanks.
Harry, that's great. Thank you once again for updating our attendees online today. Could I please ask attendees online not to close this session, as you'll now be automatically redirected for the opportunity to provide your feedback so that the management team can better understand your views and expectations. This won't take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of KEFI Gold and Copper plc, we would like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all.