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Kefi – another small step forward: BUY

By HotStockRockets | Saturday 8 September 2018

Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

We shareholders in Kefi (KEFI) are suffering an unusual torture, that is to say we can see the prize, a final go ahead for the Tulu Kapi gold mine in Ethiopia almost within our reach but just as we extend our hands there seems to be another delay. But the big last piece of the jigsaw (confirmation of project funding) is almost upon us so in the meantime we have to be content with minor titbits.

So today we discover that Kefi has “received the key development and financing policy approvals for the Company's Tulu Kapi Gold Project  from the Ethiopian Government.” Even Kefi admits that this is essentially “ the implementation of administrative matters, which include the registration of actual audited historical investment, registration of the updated Project development plan for its latest refinements, approval of the finance-lease structure, finalised Project insurance policies and the various ancillary local permits that can only be granted upon TKGM taking possession of the Project land from all resettled households.”

But it shows that the new Government wants to crack on and in that respect it feels the same was as AIM investors. The shares nudged higher on this news to 2.03p-2.25p. That spread, incidentally, is another reason why market makers should be strong up with piano wire.

The big re-rate of the shares is that project funding approval. When that comes – and we expect it soon – the shares will start to reflect fundamental value which we believe to be, at least, 9p per share. On that basis at 2.25p the stance remains very much BUY.

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