KEFI Gold and Copper, a London-listed mining company, has announced that it has received the final approval from its lead lender to proceed with its Tulu Kapi gold project in Ethiopia. The project, which has been in development since 2014, is expected to produce an average of 140,000 ounces of gold per year for seven years, with a total life-of-mine production of 980,000 ounces.
The approval from the lead lender, which follows similar approvals from other key syndicate members, including lead contractors and lead equity parties, marks the completion of the $320-million finance package for the project. The package is designed at the subsidiary level, with syndicate members who know the country and are keen to support KEFI in a tightly coordinated and safe manner.
KEFI said that it is now mobilizing in the field to prepare the community for the project launch, which is on course for the first half of the year, subject to the satisfaction of all the standard conditions precedent for a transaction of this type, independent confirmation that the project is ready for launch from security and community standpoints, and final board approvals of all parties.
The company also said that it has briefed church leaders and congregations, and has provided distributed medical treatment for victims of a recent malaria outbreak through the Tulu Kapi Charitable Endowment.
KEFI executive chairman Harry Anagnostaras-Adams said that the Ethiopian government and the lead syndicate members of the project have been working hard to support the project launch and that the government has recently made strong commitments, such as approving country membership for both of the project lenders, deregulating exchange controls, and committing to the preparation of security and the community.
He added that the project has the potential to generate significant value for the company and its stakeholders, as illustrated by the various industry-standard valuation benchmarks reported in the company’s corporate presentations.
The Tulu Kapi project is one of the few large-scale gold projects in Africa that is ready for development, with a mining license, a 5% government free-carried interest, and full permits for the development and operation of the project. The project is based on a high-grade gold deposit that was discovered and mined on a small scale by an Italian consortium in the 1930s.
The project is also expected to have positive social and economic impacts on the local community and the country, as it will employ 1,000 people directly and up to 10,000 people indirectly, and contribute to the development of infrastructure and services in the region.
KEFI said that it is also exploring the possibility of mining the underground deposit adjacent to the open pit, which could extend the mine life and increase production. The company also has a portfolio of exploration projects in Ethiopia and Saudi Arabia, which could further enhance its growth prospects.
The Tulu Kapi project is one of the many mining projects that are underway or planned in Ethiopia, which has a rich mineral potential and a favorable investment climate. The country is aiming to increase its mining sector contribution to the gross domestic product from the current 2% to 10% by 2025.
Source: Mining Weekly
