The Saudi decision

KEFI Gold and Copper published no regulatory announcements on 3 November 2026. (LSE:KEFI) Its most recent material update, released on 27 October, concerned its Saudi Arabian interests rather than its flagship Tulu Kapi project in Ethiopia. The company said Gold and Minerals Company, known as GMCO, had approved development of the first stage of the Jibal Qutman gold project, subject to remaining procedural requirements.

GMCO is a joint venture in which KEFI holds 13% and the Saudi industrial group ARTAR holds 87%. (LSE:KEFI) The principal outstanding requirement is the grant of a Mining licence by Saudi Arabia's newly appointed Minister of Industry and Mineral Resources. Development is targeted to begin in the fourth quarter of 2026.

What Stage 1 involves

The first stage, referred to as JQ1, is an open-pit development of oxide gold resources using conventional carbon-in-leach processing. (LSE:KEFI) Based on a definitive feasibility study, the estimated Capital cost is about US$87m, and the operation is expected to recover roughly 258,000 ounces of gold over seven years at an average grade of 0.5 grams per tonne.

The company presented two illustrative price scenarios. (LSE:KEFI) At US$3,000 an ounce, it estimated post-tax net present value at a 5% discount rate of US$141m and an internal rate of return of 23%. At US$5,000, those figures rose to US$275m and 60%. The breakeven gold price in both cases is given as US$1,871 an ounce. These are project-level estimates for the joint venture as a whole, not KEFI's share, and are management projections.

KEFI's financial commitment

The financing plan envisages at least half of the initial capital coming from Shareholder equity, implying about US$44m in total, of which roughly US$6m would be KEFI's share and US$38m ARTAR's. KEFI estimates its total 13% contribution at around US$10m to US$12m over 24 months if all of it were funded as equity, with the second half to be optimised in amount and source after 12 months.

KEFI said it retains flexibility to fund its share or accept proportionate dilution of its GMCO stake. On our reading, that option matters because the group is simultaneously restarting a development programme at Tulu Kapi, where its own funding needs are far larger, and its interim accounts carried a Going Concern material uncertainty.

Why it matters to the wider portfolio

JQ1 would be GMCO's first producing operation. The joint venture's Saudi resources total about 4.0 million ounces of gold equivalent across Jibal Qutman and the Hawiah copper-gold project, which the company describes as roughly twice the resource at Tulu Kapi. GMCO's longer-term ambition is aggregate output of around 350,000 gold-equivalent ounces a year. At a 13% interest, KEFI calculates that would equate to about 45,000 attributable ounces annually. The company intends Cash Flow from JQ1 to fund further exploration and staged developments.

Risks and limitations

The approval remains conditional, and licence timing rests with Saudi authorities. GMCO runs its own management structure, so KEFI has limited direct control over execution. Gold-equivalent totals depend on assumed metal prices and recoveries, and the company itself cautions that they are illustrative. Construction costs, gold prices and the outstanding Debt element of financing could all shift the economics. A 13% stake means Saudi progress is unlikely to offset Ethiopian delays.

What comes next

Investors will watch for confirmation that the mining licence has been granted and that development has started within the targeted fourth-quarter window, alongside further news on Tulu Kapi's restart. The chairman has also described a pathway to a beneficial interest in combined Ethiopian and Saudi output of about 205,000 gold and gold-equivalent ounces, which we read as an annual aspiration rather than a forecast. The shares closed the 3 November session at 0.608p, according to LSE delayed data.