KEFI Minerals making progress at Tulu Kapi
Gold and copper exploration and development company KEFI Minerals updated the market on its Tulu Kapi gold project in Ethiopia on Thursday, reporting that activities there continued to progress at a “significant” pace.
The AIM-traded firm said a newly-recruited construction manager and senior site risk manager would now relocate to site from next week, joining around 100 locally recruited personnel who had already been hired for land clearing, and the drilling rigs required to complete the geotechnical surveys for the final design of the foundations, for the processing infrastructure and dam walls.
It said the programme of works followed the advice the company had received from the Ethiopian federal and regional government agencies that the handful of remaining regulatory consents required for triggering the project were expected to be provided in the coming weeks.
Those mainly comprised the approvals of final community resettlement plans, approvals of project financing details, and the updated works programme and schedule leading to the planned first gold pour in the second half of 2020.
Project equity investor ANS Mining Share Company had advised that, upon receipt of the government consents, it intended to release the previously-announced $9m of equity funds into KEFI’s project subsidiary Tulu Kapi Gold Mines Share Company (TKGM) at the end of the month, for funding the planned first quarter 2019 project activities.
It would also, at the same time, commit to release an additional $9m of equity funds at the end of the first quarter of 2019 to fund the planned second quarter project activities.
KEFI said that would ensure that TKGM could commit to completing community resettlement and the first phase of project construction, prior to the closing of the $160m bond/lease non-equity capital project financing.
It said the remaining balance of ANS's planned $30m-$38m equity investment was expected to coincide with full project finance close, as soon as the non-equity component was accessed.
The non-equity component comprised the proposed $160m bond/lease project financing, the process for which had reached the stage where the project due diligence reports had been completed by independent technical expert, Micon International.
KEFI said detailed legal documentation in the various jurisdictions would proceed upon receipt of the government consents confirming the structure.
In anticipation of that, the KEFI and TKGM boards had approved the mandated bond/lease indicative terms, and the other stipulations of the bond arranger.
By sequencing the project funding in that manner, the board said it provided the opportunity to start the program of works with equity funding, and thereby expand the post-construction period available to build cash flow prior to first repayment to the lender/lessor.
“It certainly is an interesting period in Ethiopia, with many changes taking place, including far-reaching transformation on many levels,” said KEFI Minerals managing director Harry Anagnostaras-Adams.
“Our Tulu Kapi Gold Mine Project has remained a high priority for all stakeholders throughout this period and I am pleased with both the speed and level of progress being made.
“I would like to take this opportunity to thank all our partners and in particular the Ethiopian government at many levels for their continued support.”