Kefi - the start of a transformational two months when shares could double?...

Listen HERE: Tom Winnifrith Bearcast - will Asimilar be the much deserved Waterloo of Chris Akers? This stinks!

Loyal and very excited shareholder Tom Winnifrith writes: KEFI Gold and Copper (KEFI), you will note the name change, has announced the maiden Mineral Resource for the Hawiah copper project located in Saudi Arabia. This marks the start of two months which could and should be transformational for Kefi on two fronts and which will, we believe, have the potential to see the shares, now 2p offer, more than double...

Catenae Innovation – more ramptastic nonsense: Sell says Nigel Somerville, the Deputy Sheriff of AIM, HERE

In the background is the gold play at Tulu Kapi in Ethiopia. The final confirmation that it has financing secured should be announced in early October. That means work can really start in earnest on building a gold mine to start producing within two years. Now a reminder of the maths there. Using an 8% discount rate (maybe a tad aggressive) but a gold price of $1300 (very prudent) the NPV of a 45% stake (and Kefi’s stake might actually be closer to 50%) is $93 million (£75 million). The market cap is today £37 million. You can run all sorts of NPV models using $1500 gold or higher and that NPV roofs it but even on this far too cautious base case scenario the shares trade at well under 50% of NPV which is crackers.

Still not excited by DFS and sofaeconomics. Chris Bailey writes HERE

For the time being we can ignore the 733,000 oz of near surface gold at Jibal Qutman in Saudi. If this was a common or garden AIM promote it’d be shouting about it from the rooftops but it is small beer for Kefi. For away from Tulu Kapi there is a second ”company maker” project, Hawiah, where Kefi has a 34% stake. Now from there we have news of a maiden Inferred Mineral Resource Estimate of 19.3 million tonnes ("Mt") at 0.9% copper, 0.8% zinc, 0.6 g/t gold and 10.3g/t silver. This is a copper play but that added gold and silver credit will come in very handy. Critically this resource estimate is just opening the batting, the mineralisation remains open at depth and high-grade zones outside of current Mineral Resource will be targeted in the next drilling phase. In plain English this is only getting bigger. So what is it worth? Just a rough calculation suggests it has a materially greater value than Tulu Kapi and critically that will be confirmed in September when we will see a first Preliminary Economic Assessment (PEA) from consultants SRK. The joy of being in Saudi is that there is the potential for government development loans up to 75% of capex requirements and very quick approval timelines. The Saudis are desperate to generate non-oil earnings. This means that Kefi may only need to find 8% of the cost of opening a mine which is going to be very do-able given its potential.

Read HERE: Lekoil – follows loans restructuring with joint broker appointment. Hmmm...

All of this tells you that by October we will see clear deliverable value from the two lead projects net to Kefi of, we believe, a lot closer to £200 million than £150 million and that is based on very, very, almost overly, prudent metal price assumptions. And I remind you that a 2p offer the market cap is just £37 million. As such that is why our recently increased target price of 4.25p is, itself, we be believe far too conservative and as such we now increase it to 5p, but it is why the shares could easily more than double within two months. We upgrade our stance to STRONG BUY at up to 2.5p.

This article first appeared on HotStockRockets - to catch the next red hot share tip from the HotStockRockets team THIS FRIDAY for just £5.50 click HERE

Filed under: KEFI Gold & Copper, Asimilar, Catenae Innovation, DFS, Lekoil, HotStockRockets

2020-08-25 11:59:47

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