FROM THE BROKING DESK
There’s been some excellent news out on KEFI Minerals (LON:KEFI). Financing is near for the construction of its Tulu Kapi Gold Project in Ethiopia. KEFI has agreed innovative, conditional arrangements for the provision of US$155m of its estimated financing requirement of US$193m. On-site infrastructure will be funded by an SPV that will raise US$135m through debentures, with construction of the project through a fixed-price contract with the construction experts Lycopodium. Off-site infrastructure to a value of US$20m will be provided by the Ethiopian Government.
Tulu Kapi is an attractive gold development project, with planned production of 980,000oz over a ten-year mine life at LoM average AISC of US$779/oz. The company just announced an updated DFS in May. Reserves at Tulu Kapi stand at 1.05Moz, grading 2.1 g/t. This conventional open pit and CIL-based project is expected to have a competitive operating cost structure. Construction capex is estimated at US$161m, of which US$16m is deferred for a year, resulting in net initial capex of US$145m. The total funding requirement of US$193m includes US$15m of corporate working capital and US$33m relating mainly to rolled-up interest during the construction period. We’ll have a full piece out after we’ve gone over the full announcement.