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KEFI Minerals' losses widen following Lanstead deal
AIM-listed gold exploration and development company KEFI Minerals saw losses widen during its last trading year as a result of higher operating costs and as a result of its new equity sharing agreement with Lanstead Capital.
The company posted a pre-tax loss of £6.3m for 2017, a 425% widening from the £1.2m the firm lost in 2016, and an operating loss of £3.9m, down 300% from a year earlier
KEFI was held back by £865,000 in project finance transaction costs, compared to nothing the previous year, and a £2.3m loss on a change in the value of its financial assets following an equity sharing agreement.
Throughout the year, KEFI completed a fundraising, which saw the firm issue 82.4m shares to AIM-listed investment firm Lanstead Capital in order to allow the group to "benefit financially from positive share price performance, whilst limiting the financial downside risk from a negative share price performance".
"Whilst the share price underperformed, the Lanstead sharing agreement underpinned the company's expenditure for 2017 and KEFI received a total of £1.9m from Lanstead during 2017," KEFI Minerals said.
KEFI, which has yet to begin production, will not pay a dividend for 2017 but claimed it had long-term plans "to become a successful dividend-paying explorer and developer".
"2017 was a challenging year, but we now stand with assets, relationships and people that provide a great platform to deliver shareholder value by developing profitable mines in Ethiopia and Saudi Arabia," said KEFI's chairman Harry Adams.
"Our primary focus remains on our flagship Tulu Kapi Gold Project for which we have now assembled the proposed full project funding consortium including contractors, equity and non-equity capital," Adams added.
As of 1440 BST, KEFI shares had lost 2.94% to 2.65p.