KEFI Gold and Copper PLC (LSE:KEFI) announced that its Saudi Arabian joint venture, Gold and Minerals Company Limited (GMCO), has conditionally approved an approximately US$87 million development programme for Stage 1 of the Jibal Qutman Gold Project.
The development is expected to begin during the fourth quarter of 2026, subject to outstanding procedural requirements, principally the granting of a mining licence by Saudi Arabia’s newly appointed Minister of Industry and Mineral Resources.
KEFI holds a 13% interest in GMCO, while its Saudi Arabian partner, industrial conglomerate ARTAR, owns the remaining 87%. The proposed development represents the joint venture’s first planned mining operation within its Saudi Arabian portfolio.
Jibal Qutman Stage 1 Development Receives Conditional Approval
GMCO’s board has approved the approximately US$87 million capital development programme for Jibal Qutman Stage 1, known as JQ1.
The decision remains conditional upon completion of the outstanding procedural requirements, including the award of the project’s mining licence.
Management expects these requirements to be completed shortly, allowing development activities to commence during Q4 2026.
JQ1 is planned as an oxide-ore gold mining operation using conventional carbon-in-leach processing technology.
The project has an estimated operating life of seven years, during which approximately 258,000 ounces of gold are expected to be recovered.
The development would be the first operating project within GMCO’s portfolio, which also includes the Hawiah Copper-Gold Project.
Project Economics Indicate NPV of $141 Million to $275 Million
KEFI reported estimated economic returns for Jibal Qutman Stage 1 based on gold price assumptions ranging from US$3,000 to US$5,000 per ounce.
Under these assumptions, the project has an estimated post-tax net present value, calculated using a 5% discount rate, of between US$141 million and US$275 million.
The corresponding internal rate of return is estimated at between 23% and 60%.
These figures represent projected financial outcomes rather than realised returns and depend on the underlying gold price assumptions and successful project development.
The estimated capital expenditure required to develop JQ1 is approximately US$87 million.
The announcement did not provide a detailed breakdown of projected annual production, operating costs or the expected construction timetable beyond the targeted development commencement in Q4 2026.
KEFI’s Funding Contribution Estimated at $10 Million to $12 Million
Under its existing 13% ownership interest in GMCO, KEFI’s potential equity contribution towards the JQ1 development is estimated at approximately US$10 million to US$12 million over a 24-month period, assuming the capital requirements are funded entirely through shareholder equity.
Based on current discussions, the company expects approximately half of its total funding requirement to be provided when development begins.
The remaining US$5 million to US$6 million would be assessed after approximately 12 months, taking into account available financing alternatives and the amount of additional equity required.
KEFI retains the option to participate in future equity funding rounds or accept a proportionate reduction in its ownership interest in GMCO.
The joint venture operates through a standalone management and operational structure, with oversight provided by its shareholders.
The final funding arrangements have not yet been confirmed.
Saudi Arabian Portfolio Contains 4 Million Ounces of Gold Equivalent Resources
GMCO’s Saudi Arabian mining portfolio contains aggregate Mineral Resources of approximately 4.0 million ounces of gold equivalent.
The portfolio comprises the Jibal Qutman Gold Project and the Hawiah Copper-Gold Project, both of which are expected to be developed through multiple stages.
Jibal Qutman Stage 1 is intended to establish an initial operating and financial base for subsequent development activities.
According to KEFI, cash flow generated from the first operation could support future exploration programmes and additional project developments at Jibal Qutman and Hawiah.
The joint venture has established a longer-term aggregate production target of approximately 350,000 ounces of gold and gold equivalent annually across its Saudi Arabian projects.
This target relates to the wider portfolio rather than the initial JQ1 development and remains dependent on future project implementation.
Jibal Qutman Development Forms Part of Wider Mining Strategy
KEFI’s participation in GMCO provides an interest in the planned development of gold and copper projects in Saudi Arabia alongside its mining activities in Ethiopia.
The company identified Jibal Qutman Stage 1 as the proposed first phase of a broader development programme within the Saudi Arabian joint venture.
GMCO plans to develop its portfolio sequentially, with the initial gold operation potentially providing funding for subsequent exploration and project development.
KEFI has indicated that its funding flexibility within GMCO allows it to determine its participation in future capital requirements while continuing work on its Ethiopian projects.
The company has not announced a final decision on how it will fund its full share of the JQ1 development.
Tulu Kapi Development Programme Being Reset Following Security Incident
KEFI also provided an update on its principal development activities in Ethiopia.
The company said it is recommencing a revised development programme at the Tulu Kapi Gold Project following a recent security incident.
According to management, the renewed programme will begin with community-related priorities.
The announcement did not provide further details of the incident, its operational consequences or a revised timetable for the Tulu Kapi development.
KEFI continues to identify Tulu Kapi as its principal development focus while maintaining its participation in GMCO’s Saudi Arabian projects.
The company also referred to its broader Ethiopian and Saudi Arabian development pipeline as providing a potential pathway to a combined attributable production interest of approximately 205,000 ounces of gold and gold equivalent.
This figure represents a future production objective rather than current output.
Executive Chairman Comments on Development Approval
Harry Anagnostaras-Adams, executive chairman of KEFI Gold and Copper, commented on the conditional approval and the company’s development priorities:
“The conditional approval of the development of Jibal Qutman Stage 1 is an important milestone for GMCO and for KEFI’s interests in Saudi Arabia. With the remaining procedural requirements expected to be completed shortly, we look forward to the commencement of development during the fourth quarter of this year.
“Jibal Qutman Stage 1 is an attractive project in its own right, and its wider significance lies in establishing the first producing operation within GMCO’s substantial portfolio of gold and copper assets. We anticipate that the cash flows generated by this initial development will provide an important foundation for funding GMCO’s exploration activities and the progressive development of identified further projects at Jibal Qutman and Hawiah.
“For KEFI, our interest in GMCO provides exposure to a significant and growing Saudi Arabian mining business, alongside our principal development activities in Ethiopia. The joint venture’s stand-alone management structure and our flexibility regarding future funding commitments allow us to participate in this opportunity while maintaining our focus on starting up Tulu Kapi, where we are recommencing a re-set development program following the recent security incident, commencing with community priorities.
“KEFI’s Ethiopian and Saudi development pipeline presents us with a pathway to a beneficial interest in a combined 205,000 oz gold and gold equivalent production.”
The company expects the remaining procedural requirements for Jibal Qutman Stage 1 to be completed before development activities begin.
More About KEFI Gold and Copper
KEFI Gold and Copper PLC (LSE:KEFI) is a mineral exploration and development company focused on projects within the Arabian-Nubian Shield, including assets in Ethiopia and Saudi Arabia.
In Saudi Arabia, KEFI holds a 13% interest in Gold and Minerals Company Limited, with ARTAR owning the remaining 87%.
The joint venture’s portfolio includes the Jibal Qutman Gold Project and the Hawiah Copper-Gold Project, with combined Mineral Resources of approximately 4.0 million ounces of gold equivalent.
In Ethiopia, KEFI is progressing development activities at its Tulu Kapi Gold Project.
The conditional approval of Jibal Qutman Stage 1 establishes a proposed US$87 million development programme, with commencement targeted for Q4 2026 subject to the granting of a mining licence and completion of other procedural requirements.
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