KEFI Gold & Copper Reports Annual Results and Commences Construction at Tulu Kapi

Tulu Kapi economics look powerful at current gold prices

KEFI’s chairman leans heavily on project economics, and you can see why. At gold prices of US$3,000 to US$5,000 per ounce, the company says Tulu Kapi could generate average EBITDA – earnings before interest, tax, depreciation and amortisation – of approximately US$355 million to US$697 million per annum over the first three years of production.

Net to KEFI, that would be approximately US$305 million to US$599 million per annum. The company also quotes all-in sustaining costs of US$1,114 to US$1,254 per ounce and an all-in cost after debt servicing of approximately US$1,366 to US$1,506 per ounce.

That margin potential is why this share attracts speculative interest. If Tulu Kapi reaches production on schedule, the cash flow could be transformational relative to KEFI’s current size. The company’s own language is bullish, but on the numbers provided, it is not hard to see the appeal.

Why KEFI still made a loss in 2025 – and why that is not the main issue

KEFI reported a loss before tax of £9.7 million for 2025, compared with a restated profit of £1.2 million in 2024. That swing looks ugly at first glance, but it is mostly the normal reality of a company that has no operating revenue and is spending money to get a mine built.

Administrative expenses were actually slightly lower at £6.0 million. The bigger drag came from finance costs of £2.6 million and a fair value loss of £533,000 on the GMCO investment in Saudi Arabia.

So I would not focus too much on the headline loss by itself. For KEFI, the more important financial questions are whether it has enough cash, whether project funding holds together, and how much dilution shareholders suffer along the way.

There is a dilution trade-off and investors should not ignore it

This is where the RNS gets less comfortable. KEFI raised £29.5 million through share issues in 2025, and then another £35.6 million in March 2026 after the year end. The number of ordinary shares in issue rose to 10,741,165,000 from 7,047,589,000.

That is a lot of equity issuance. It has helped get Tulu Kapi moving, which is positive, but it also means existing shareholders have been diluted heavily. In plain English, the pie may be getting bigger, but each slice has got smaller.

KEFI also used shares to settle liabilities and bridging finance. In 2025 alone, £11.2 million of shares were issued for services rendered and obligations settled. That tells you cash discipline is important, but it also shows how dependent the company has been on equity and share-based settlements.

Going concern risk has not disappeared despite the stronger KEFI balance sheet

One of the most important lines in the accounts is that there remains a material uncertainty related to going concern. Going concern simply means whether the business can keep operating and meet its obligations as they fall due.

KEFI says the lenders have committed to the US$240 million debt package, but first drawdown still depends on conditions precedent being satisfied. These are standard pre-funding requirements, but the company admits they are not wholly within directors’ control.

That is the main risk in this story. The direction of travel is positive, but this is not yet a risk-free construction story. It is still a frontier-market mining project, with financing execution risk and geopolitical risk clearly acknowledged by the board.

Saudi Arabia portfolio still offers upside, but KEFI has diluted itself down

KEFI’s Saudi exposure now sits mainly in GMCO, where its shareholding diluted to 13.35% by 31 December 2025. That is down from 15.34% at the end of 2024, and below 25% from 31 January 2024, which is why the accounting treatment changed.

The good news is that KEFI still has exposure to projects such as Jibal Qutman and Hawiah Copper-Gold. The less exciting part is that the stake is now much smaller, so shareholders get less of the upside than they once might have expected.

The GMCO investment was valued at £5.955 million at year end, down from £6.432 million. Useful optionality, yes. Core value driver right now, no.

What retail investors should watch after these KEFI results

• Whether Tulu Kapi hits its construction milestones through 2026 and 2027.
• Whether the conditions precedent on the US$240 million project debt are fully satisfied.
• Whether further equity dilution is needed beyond the March 2026 fundraise.
• Whether management keeps the mid-2028 production target intact.
• Whether Saudi assets are monetised or developed in a way that creates clear value for KEFI shareholders.

My view on KEFI Gold and Copper after the 2025 annual results

This is one of KEFI’s strongest operational updates in years because Tulu Kapi finally looks real. The combination of construction launch, improved cash, project debt commitments and a clear production target gives investors something concrete to track.

But let’s not kid ourselves – this is still a high-risk share. The company remains loss-making, has relied heavily on issuing shares, and openly states there is material uncertainty linked to going concern until funding conditions are fully cleared.

So my read is straightforward. Strategically, this is a very positive update. Financially, it is better than it was, but not yet clean and simple. KEFI now has a genuine shot at becoming a gold producer, and that is why this RNS matters.