Conditional Approval of Jibal Qutman Development

KEFI’s Saudi JV advances Jibal Qutman with US$87m plan, but awaits mining licence to proceed.

What the company is saying

KEFI Gold and Copper plc, via its 13%-owned Saudi joint venture GMCO, is announcing conditional board approval for the US$87 million Stage 1 development of the Jibal Qutman Gold Project, pending the grant of a Mining Licence by the Saudi Minister of Industry and Mineral Resources. The company frames this as a major milestone, emphasizing the project’s seven-year, 258,000-ounce gold recovery plan and the establishment of a platform for future Saudi and Ethiopian developments. Management highlights robust project economics, citing a post-tax NPV of US$141–275 million and IRR of 23–60% at gold prices of US$3,000–5,000/oz, and positions Jibal Qutman as the first in a sequence of staged developments across a 4.0 million ounce gold-equivalent resource base. Executive Chairman Harry Anagnostaras-Adams is named as both KEFI’s leader and a GMCO director, reinforcing institutional oversight. The company stresses its flexibility in future funding rounds and the independence of GMCO’s management structure. The tone is confident, focusing on the scale of the Saudi portfolio and KEFI’s exposure to long-term production growth.

What the data suggests

The disclosed figures show GMCO’s board has conditionally approved a US$87 million capital program for Jibal Qutman Stage 1, with development targeted to begin in Q4 2026 if a Mining Licence is granted. KEFI’s share of initial equity is US$6 million, with a further US$5–6 million to be determined after 12 months, totaling US$10–12 million over two years if all is contributed as equity. JQ1 is projected to recover 258,000 ounces of gold over seven years using carbon-in-leach processing. At gold prices of US$3,000–5,000/oz, the project’s post-tax NPV is estimated at US$141–275 million, with an IRR of 23–60%, payback in 1.9–0.9 years, and breakeven at US$1,871/oz. GMCO’s portfolio holds 4.0 million ounces gold-equivalent resources, with a long-term production target of 350,000 gold-equivalent ounces per year. The 2025 Jibal Qutman MRE is 37.0 Mt at 0.76g/t gold (902,000 ounces), and Hawiah’s MRE is 36.2 Mt at 0.82% copper, 0.85% zinc, 0.64g/t gold, and 10.0g/t silver (297,000 t copper, 310,000 t zinc, 745,000 oz gold, 11.6 Moz silver). All economic outcomes are estimates based on hypothetical gold prices; no realised production or cash flows are reported. The project is at a late pre-construction milestone, with regulatory approval as the key gating item.

Analysis

The announcement is upbeat, highlighting conditional approval for the Jibal Qutman Gold Project and providing detailed resource and economic estimates. However, nearly all key benefits—such as project commencement, gold production, and financial returns—are forward-looking and contingent on the granting of a Mining Licence and completion of other procedural steps. The capital outlay is significant (US$87 million for JQ1, with KEFI's share at US$10–12 million), but no immediate earnings or cash flow impact is disclosed. Projected NPVs and IRRs are based on hypothetical gold prices and are not realised outcomes. While the resource estimates are specific and credible, the narrative inflates the signal by emphasizing long-term production targets and economic potential that remain unproven at this stage. The gap between narrative and evidence is most pronounced in the use of optimistic language around future production and returns, with little in the way of realised operational or financial progress.

Risk flags

• ●The primary execution risk is regulatory: development cannot commence until the Mining Licence is granted by the Saudi Minister of Industry and Mineral Resources. Delays or failure to secure this licence would halt the project.
• ●Financial risk is significant due to the capital intensity of the US$87 million program, with KEFI’s US$10–12 million share representing a material funding requirement. The financing structure is not fully finalised, with half the capital to be sourced after 12 months, introducing uncertainty around terms and dilution.
• ●Project economics are highly sensitive to gold prices, with NPVs and IRRs modeled at US$3,000–5,000/oz—well above long-term historical averages. If gold prices fall below these levels, project returns could be materially lower or negative.
• ●Operational risk is present as Jibal Qutman is GMCO’s first development, and actual performance may differ from feasibility estimates. There is no track record of delivery for this JV in Saudi Arabia.
• ●Portfolio growth and future staged developments are predicated on successful cash flow generation from JQ1, so any underperformance at this stage could constrain the broader strategy.

Bottom line

KEFI’s Saudi joint venture has conditionally approved a US$87 million plan to develop the Jibal Qutman Gold Project, aiming to produce 258,000 ounces over seven years and establish a foundation for broader regional growth. The project’s economics look robust on paper, with a post-tax NPV of up to US$275 million and IRR up to 60% at high gold prices, but all benefits remain contingent on the imminent granting of a Mining Licence. KEFI’s US$10–12 million funding requirement is material, and the financing mix is only partially defined. No realised production, revenue, or cash flow figures are reported—everything is forward-looking and dependent on regulatory and operational execution. Investors should focus on the Mining Licence outcome and clarity on financing as the next critical milestones. The main takeaway: this is a late-stage pre-construction approval with high potential but equally high execution and regulatory risk.

Announcement summary

(AIM: KEFI) KEFI Gold and Copper plc announced that its Saudi Arabian joint venture, Gold and Minerals Company Limited (GMCO), has conditionally approved the development of Stage 1 of the Jibal Qutman Gold Project (JQ1), subject to completion of outstanding procedural requirements. KEFI holds a 13% interest in GMCO, with ARTAR holding the remaining 87%. The JQ1 development programme has an estimated capital cost of approximately US$87 million, with development expected to commence during Q4 2026, pending the granting of a Mining Licence by the Saudi Arabian Minister of Industry and Mineral Resources. JQ1 is an oxide-ore gold project designed as a conventional carbon-in-leach operation, with an estimated seven-year operating period and recovery of approximately 258,000 ounces of gold. At gold prices of US$3,000–5,000 per ounce, JQ1 is estimated to generate a post-tax NPV at a 5% discount rate of US$141–275 million and an IRR of 23–60%. KEFI’s 13% contribution to the capital is expected to be approximately US$10–12 million over 24 months if all contributed as equity, with an initial equity contribution of c. US$6 million and the balance of US$5–6 million to be optimised after 12 months. GMCO's aggregate Mineral Resources total approximately 4.0 million ounces of gold equivalent, with a longer-term production target of 350,000 gold and gold equivalent ounces per annum. At KEFI's 13% interest, this equates to approximately 45,000 attributable ounces per annum. The 2025 Mineral Resource Estimate (MRE) for Hawiah is 36.2 Mt at 0.82% copper, 0.85% zinc, 0.64g/t gold, and 10.0g/t silver, containing 297,000 tonnes of copper, 310,000 tonnes of zinc, 745,000 gold ounces, and 11.6 million silver ounces. The 2025 Jibal Qutman MRE is 37.0 Mt at 0.76g/t gold, containing 902,000 ounces of gold, with 748,000 ounces in the Indicated category and 318,000 ounces in Oxide Resources. Gold equivalency calculations use metal prices of US$2,300/oz for gold, US$30/oz for silver, US$9,350/t for copper, and US$3,300/t for zinc. GMCO operates with an independent management structure, with KEFI represented by Executive Chairman Harry Anagnostaras-Adams, who also serves as a director of GMCO. The next anticipated developments are Stage 2 of Jibal Qutman (sulphide gold resources) and the initial development of oxide resources at the Hawiah Copper-Gold Project. KEFI’s Ethiopian and Saudi development pipeline presents a pathway to a beneficial interest in a combined 205,000 oz gold and gold equivalent production.

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