KEFI Minerals plc Tulu Kapi Update Following Financiers’ Site Visit

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KEFI Minerals Plc (LON:KEFI), the gold exploration and development company with projects in the Kingdom of Saudi Arabia and the Federal Democratic Republic of Ethiopia, has today reported an update on Tulu Kapi Gold Project (“the Project”) provided to project financiers during their site visits this week to the Project. These visits follow far-reaching Government actions recently.

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Key points made during the site briefings include the following:

· Strong collaboration with and commitment from all levels of the Ethiopian Government:

o Recent Government actions are assisting domestic stability and improving governance whilst maintaining Ethiopia’s position as one of the world’s top 10 growth countries. Government actions over recent weeks indicate an even stronger resolve to proceed with Project development as soon as possible. The Prime Ministerial Committee established to fast-track the Project has reinforced its commitment to and collaboration with KEFI.

o The Shareholders’ Agreement for the Government’s partnership with KEFI has now been passed to the relevant Ministry for final review and execution.

o The Company has re-confirmed with the Government’s legal office the calculations for determining the resettlement compensation in accordance with Ethiopian law. KEFI will not only comply with Ethiopian law but will also provide additional benefits in accordance with the Equator Principles and World Bank (IFC) principles.

o The Government has also encouraged KEFI to plan an ambitious exploration program in the district around Tulu Kapi and elsewhere in Ethiopia. Targets have been identified for both satellite gold deposits and stand-alone development projects.

· Advancing operational preparations

o Mining contractor Ausdrill/African Mining Services, has confirmed mining fleet specifications and is finalising reviews of detailed contract specifications.

o The proposed mining method and equipment specification are considered straightforward and technically sound by the lenders’ independent technical expert. Under the draft mining contract specifications, only c. 5% of the total material movement is categorized as “selective” ore and waste mining, indicating standardised mining methods.

o Processing plant contractor Lycopodium, is finalising reviews of detailed contract specifications for its fixed-price lump-sum construction and commissioning contract.

· Preserving debt finance alternatives

o Potential mining-specialist lenders are engaging to potentially participate alongside the Development Bank of Ethiopia and the other non-specialist banks interested in co-lending.

o Debt drawdown is still targeted for H1-17. This period will coincide with the expected conclusion of the far-reaching administrative improvements by the Government (see Background comments below). In the meantime, KEFI will preserve some flexibility with regards to project finance composition in order to protect shareholders’ interests.

· Optimising equity and mezzanine finance at project and parent-company levels:

o Project-level: The Government has welcomed KEFI’s invitation to increase its equity above the $20m committed to date and the discussion will be concluded upon the new Government Ministry settling in. Other parties are also engaging for potential project-level participation

o Parent-level: KEFI has completed its first institutional roadshow, with meetings in several global centres for mine finance and the results indicate wide-ranging interest in mezzanine and equity finance when completion is triggered.

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