KEFI Minerals signs £4m loan facility as it looks to progress Tulu Kapi

Gold and copper exploration and development company KEFI Minerals announced on Wednesday that, further to its announcement on 30 October, it has entered into an up-to-£4m secured convertible loan facility with an unnamed “long standing institutional shareholder”.

The AIM-traded firm said the facility would expand its flexibility for progressing the Tulu Kapi Gold Project and other operations, particularly catering for decisions taken recently amongst its project subsidiary consortium in Ethiopia, the Tulu Kapi Gold Mines Share Company (TKGM).

Those decisions included the start of certain “high-impact tasks” for community resettlement, project development and the initial reconnaissance of a now-enlarged area reserved by the Ethiopian Government for Tulu Kapi district exploration.

The loan facility would not only also expand the company's working capital, but would also complement the existing project financing plans, including the committed investment of between $30m and $38m at the TKGM level by Ethiopian institutional investors, of which the initial release of $9m to TKGM was due in December for the funding of community resettlement and other TKGM development costs in early 2019.

“The loan facility shall also provide the company with the funds to enable the procedural and documentary closing of the $260m project financing of the project, which it is envisaged will be entirely funded at the project level,” said the KEFI board in its statement.

“Such costs include those associated with implementing the full project closing for construction, mining and finance, as well as legal and community resettlement costs associated with the project.”

As it announced on 10 October, KEFI Minerals had now assembled the proposed full project funding consortium including contractors, equity, and non-equity capital.

“For the project to proceed, all stakeholders now rely on closing out the remaining Ethiopian Government processes and approvals, along with completion of due diligence and formal documentation.”