KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) has announced that all key funding conditions for the Tulu Kapi Gold Mine in Ethiopia have been met, allowing it to proceed with reviews and approvals to unlock a US$390mln project finance package.
A total of US$370mln, which primarily covers arrangements with first-tier banks, contractors and investors, including the Ethiopian Federal and Regional governments, has already been assigned. The remaining US$20mln has also been allocated to specific participants and is expected to be finalised in the coming months.
This will follow the completion of all standard procedural conditions, particularly the Ethiopian government's formalisation of the agreements and the compensation packages for relocating households, compliant with legal requirements and World Bank IFC Performance Standards.
Support from the Ethiopian government is evident in several additional initiatives. These include the procurement of major components for the project's power grid connection by the Ethiopian Electricity Production Corporation and a delivery schedule for the new all-weather access road.
An increase in government equity investment in the project from US$20mln to US$30mln has been agreed and the Minister of Mines has initiated stakeholder discussions on legislative reforms to promote exploration and mining in Ethiopia, where KEFI is actively contributing.
"Our take-off in Ethiopia coincides with that in Saudi Arabia. These are the two largest jurisdictions in the highly prospective Arabian Nubian Shield, said KEFI chairman Harry Anagnostaras-Adams.
"Both countries are now proactively supportive and these continuing positive developments help to vindicate our longstanding focus there since 2008 and our tenacity to have successfully assembled three advanced projects and a world-class pipeline for future exploration."
Production at Tulu Kapi is expected to be 140,000 ounces of gold per year at an all-in cost of US$800-US$900 per year.