Development Activities Recommence at Tulu Kapi

3 March 2022

KEFI Gold and Copper plc

("KEFI" or the "Company")

Recommencement of Development Activities at Tulu Kapi

KEFI (AIM: KEFI), the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, is pleased to announce that development activities at the Tulu Kapi Gold Project (the "Project" or "Tulu Kapi"), part of the KEFI-operated Ethiopia joint-venture Tulu Kapi Gold Mines Share Company ("TKGM") have recommenced.

Following the abatement of Ethiopia's civil war at the end of 2021 and its State of Emergency being lifted, TKGM has worked intensely with the Ethiopian Ministry of Mines (the "Ministry") to monitor the situation to ensure that it is appropriate for the recommencement of activities at the Tulu Kapi site and in the wider district.  The Company is pleased to report that over the past two months the security situation has remained stable at both the site and the preferred transport routes, enabling activities at the Tulu Kapi site to recommence in an appropriately managed manner.

The Project's principal contractors, Lycopodium (plant construction) and Corica (mine services), are expected to deliver the final costings for confirmation at the end of April 2022.  The anticipated final capital estimate for the Project has not changed from previous guidance and remains fully covered by the previously announced non-binding subscriptions from the Project's financing syndicate, with any required residual contribution also now covered in the event of exercise of the Company's warrants issued in December 2021.

Recent meetings with the Project's senior lenders and other finance syndicate members have reconfirmed the targeted financial closing in in mid-2022, subject to the security situation remaining stable as activities increase over the coming months, and various documentation and government administrative tasks being completed.  The independent security assessors have commenced regular field inspections.

TKGM is now recommencing refurbishment of the existing site camp to accommodate the initial construction workforce and have recently completed detailed design for the procurement and construction of: the security camp; a new all-weather access road; the permanent camp; water dam 1; plant and administrative buildings; Bir-Bir river pump station and pipeline; tailings storage facility - stage 1; process plant; bulk fuel and lubricant storage area; grade control drilling; on site metallurgical testing laboratory; explosive supply and storage; and the mining fleet service area.

Tasks to be undertaken ahead of Project finance closing are summarised as follows:

·    March 2022:

o  All field programmes recommenced for community consultations and new host land preparations, with regular independent security monitoring over the ensuing months.

o  Remaining few Ethiopia regulatory administrative tasks completed, such as endorsement of historical costs, working rules for the London clearing account to avoid restrictions of capital controls and clearance for both banks to lend on same terms.

o  Updated term sheet for offtake-linked mezzanine facility now involving senior lenders as well the metals trader.

·    April 2022:

o  Launch of Tulu Kapi Foundation, administered with local authorities, community representatives and Ethiopian Evangelical Church of Mekane Yesus.

o  Final pricing agreed with contractors.

·    May-June 2022:

o  Drafting of the remaining detailed documents, flowing from the regulatory approvals, mezzanine term sheets and Project contractor pricing updates in March and April.

o  Insurance package and pricing confirmations.

o  Independent security review and decision as to when to sign final documents.

o  Signing of binding documents by all

Harry Anagnostaras-Adams, KEFI Executive Chairman, commented: "It is great to see that Ethiopia has settled down so quickly over the past two months and that TKGM's teams are back in the field for launch preparations.  Everyone is now pushing for full Project launch.

"And it's doubly impactful that the turnaround in Ethiopia has coincided with a take-off of our projects in Saudi Arabia. KEFI has turned onto the front foot in both jurisdictions, after particularly frustrating years in both.

"KEFI now has three advanced development gold and copper-gold projects with significant resource upside in two now-supportive jurisdictions of the Arabian Nubian Shield, and in which our beneficial interest is already the equivalent of 2.1 million oz gold. I look forward to keeping shareholders appraised of our progress."

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Notes to Editor

KEFI Gold and Copper plc

KEFI started as a grassroots explorer equity-funded via AIM and is now the operator of large exploration and development joint ventures with strong local partners in the Arabian-Nubian Shield, with most of the funding being sourced at the project level.

KEFI is focused primarily on the development of its advanced projects in both Ethiopia and Saudi Arabia, plus the expansion of its resource base at these projects and through exploration of its other prospects in the Arabian-Nubian Shield. KEFI targets that production at its three development projects, starting with Tulu Kapi Gold in Ethiopia and adding production from Jibal Qutman Gold and Hawiah Copper-Gold in Saudi Arabia will generate cash flows for capital repayments, further exploration and dividends to shareholders.

The following tabular summary presents KEFI's updated estimated share of the projects' aggregate NPV's, as at mid-2022:

Note that aggregate NPV's in mid-2025 using the same underlying assumptions as above, are estimated to be approximately 80% higher than those at mid-2022, reflecting that production will have commenced at Tulu Kapi, assumed to be imminent at Jibal Qutman and soon-to-follow at Hawiah. This project sequencing will be refined as the Saudi development studies progress. The scale of the projects in value terms to KEFI is highlighted by the table above as at mid-2022, but of equal importance from a financing viewpoint is the emphasis of project-level capital funding as well as the sequencing of their development. These aspects are illustrated in the table below:

KEFI Gold and Copper in Ethiopia

Ethiopia is currently undergoing a remarkable transformation both politically and economically.

The Tulu Kapi gold project in western Ethiopia is being progressed towards development, following a grant of a Mining Licence in April 2015.

The Company has now refined contractual terms for project construction and operation. Estimates include open pit gold production of c. 140,000oz pa for a 7-year period. All-in Sustaining Costs (including operating, sustaining capital and closure but not including leasing and other financing charges) remain c. US$800/oz. Tulu Kapi's Ore Reserve estimate totals 15.4Mt at 2.1g/t gold, containing 1.1Moz.

All aspects of the Tulu Kapi (open pit) gold project have been reported in compliance with the JORC Code (2012) and subjected to reviews by appropriate independent experts.

A Preliminary Economic Assessment has been published that indicates the economic attractiveness of mining the underground deposit adjacent to the Tulu Kapi open pit, after the start-up of the open pit and after positive cash flows have begun to repay project debts. An area of over 1,000 square kilometres adjacent to Tulu Kapi has been reserved for exploration by KEFI's wholly-owned Ethiopian subsidiaries upon commencement of development by TKGM, with a view to adding satellite deposits to development and production plans.

KEFI Gold and Copper in the Kingdom of Saudi Arabia

In 2009, KEFI formed Gold & Minerals Limited ("G&M") in Saudi Arabia with local Saudi partner, ARTAR, to explore for gold and associated metals in the Arabian-Nubian Shield. KEFI has a 30% interest in G&M and is the operating partner.

ARTAR, on behalf of G&M, and G&M directly hold over 16 Exploration Licence (EL) applications pending the introduction of the new Mining Law. These new regulations have recently been proclaimed and G&M now holds 3 EL's.  ELs are renewable for up to three years and bestow the exclusive right to explore and to obtain a 30-year exploitation (mining) licence within the area.

In addition, G&M has a Mining Licence Application over the Jibal Qutman Gold Project which recent informal indications by the authorities provide some confidence that the licence will be granted in 2022.