Investors can be a tough crowd. Junior miners and oil and gas companies often have a loyal band of followers, often found on online forums, who debate endlessly the genius or venality of their chosen company’s management even long after they might have sold out.
KEFI Copper and Gold (KEFI) found itself on the wrong side of its shareholders last week, when it announced $500,000 (£354,000) cash bonuses for executive chair Harry Anagnostaras-Adams and finance director John Leach.
To get the bonus, the men have to organise financing for the long-awaited Tulu Kapi gold mine in Ethiopia by the end of the year. This might seem a worthy task. But here is just one of many statements from Anagnostaras-Adams about the project financing from recent years: "Whilst it is disappointing we will not be able to close the project equity funding before the end of October 2019, as we had previously envisaged…”. This is something Kefi shareholders have been hearing for years.
The reaction from shareholders was strong enough that the company quickly adjusted - but did not cancel - the bonus structure. Now, the $500,000 will only be handed over if Kefi’s share price can stay over 3p for five days in a row.
Despite offering investors an entry into red-hot metals gold and copper, Kefi’s share price has trended down from 10p five years ago and it is trading a quarter below its 12-month high of 2.6p. On the bright side, the share price is double what it was a year ago and the long-awaited mine financing should give the market capitalisation a boost.
Building a mine is difficult, no question. But grabbing $500,000 for doing something you said would be done years ago? The junior mining investor crowd can be tough to please but in this case fury was fair. Stick the money into the project.
