Kefi Gold and Copper, an AIM-listed company, is making significant strides towards launching its Tulu Kapi gold project in Ethiopia, slated for mid-2024. This project, which is situated in a high-grade gold zone with 1.72 million ounces at 2.65 grams per ton, is poised to become a cornerstone of Ethiopia’s mining sector and a substantial economic contributor.
The company recently updated its progress, indicating that the finance syndicate board processes are on track with final (conditional) approvals expected in May. These approvals are crucial as they pave the way for project initiation, currently scheduled for production commencement in mid-2026. The project’s timeline aligns with a period of renewed positivity in Ethiopia, following a series of challenges in recent years that have affected the broader economic landscape.
Kefi has also managed to increase its beneficial interest in the Tulu Kapi Gold Mines Share Company, which holds the project, to 80%. This increased stake underscores Kefi’s commitment to the project and its potential returns. Additionally, the company is seeing increased corporate activity within the Arabian Nubian Shield and has received expressions of interest from various parties looking to invest in Ethiopia’s burgeoning gold sector.
On the operational front, Kefi has appointed Jacques Kruger as the new project development manager. Kruger, working alongside project director Norman Green, founder of Green Team International, is tasked with steering the project through its next phases of development. Simon Cleghorn, Kefi’s original resource geologist and a pivotal figure during the project’s overhaul between 2014 and 2015, has rejoined the company at an executive level, bringing valuable experience from his recent roles in Kazakhstan.
Safety and regulatory compliance are also focal points for Kefi, with several precautionary measures and independent checks already completed. These steps have reassured government and syndicate partners, facilitating the progression of final approvals.
The project’s financial framework is robust, supported by a $320-million international project finance package, which stands out in today’s challenging capital market conditions for the junior mining sector. Harry Anagnostaras-Adams, executive chairperson of Kefi, emphasized the strategic timing of the project’s launch, coinciding with improving conditions in Ethiopia and a rising gold price. The Standard and Poor’s long-term forecast for gold is pegged at $1,965 per ounce, with current spot prices even higher.
Kefi’s Tulu Kapi project is expected to produce approximately 200,000 ounces of gold annually, potentially generating about $400 million in yearly export revenue at current gold prices. This output would make it Ethiopia’s largest single export generator, providing significant local and regional economic benefits.
Projected all-in-sustaining costs for the Tulu Kapi gold project are estimated at $860 per ounce, with break-even costs after debt service at around $1,200 per ounce. These figures indicate a strong cash flow position for Kefi, with a projected net cash flow entitlement of approximately £63 million ($74 million) per year over the first nine years, starting from the second half of 2026.
To ensure the long-term success and sustainability of the project, Kefi plans to enhance community consultations to ensure that local stakeholders are involved and supportive of the development. This community involvement is essential for the project’s success.
The Tulu Kapi gold project is a significant milestone for Kefi Gold and Copper and the Ethiopian mining sector. With solid financial backing, strategic operational leadership, and a favorable economic environment, the project is well-positioned to take advantage of Ethiopia’s gold potential, providing significant economic benefits while setting a precedent for responsible and profitable mining practices in the region.
Source: Mining Weekly
