Broker SP Angel has updated its target price for KEFI Gold and Copper (KEFI), following a recent US$21 million fundraise.
Perhaps more significantly, the broker also said it was now plugging in a US$4,000 gold price into its modelling for KEFI, as opposed to the US$3,300 it had been using previously.
It also updated for KEFI’s new effective holding of 83% of the Tulu Kapi gold mine in Ethiopia, where previously the stake had been assumed to be 70%, and factored in various details of the now completed debt and equity funding that will be used to finance construction.
KEFI is currently in the early phases of construction of Tulu Kapi.
Lycopodium has started work as the lead design and construction contractor for the plant and all onsite infrastructure and work on the power supply and roads is underway.
KEFI is aiming for commissioning in 2027 with full production in 2028.
So, how much will this mine prove to be worth?
Well, SP Angel now sets the risked NAV of US$690 million for Tulu Kapi.
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KEFI’s current share price is 1.18p, at which level the company is valued at just under £130 million. That represents a doubling of the price from where it was a year ago, as the company has moved steadily towards greenlighting production, systematically assembling its financing and securing all the requisite permits. SP Angel, though, clearly reckons there’s a lot more value on offer, given the chunky margins Tulu Kapi is likely to deliver, and the ongoing strength in the gold price. If KEFI does hit SP Angel’s target, that would mean the market capitalisation of the company would be well over £500 million. But in the current gold price environment, and set against comparable companies, that doesn’t look unreasonable.