KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) said it had received initial committee approval from a second co-lending bank to fund its Tulu Kapi gold project in Ethiopia.
In addition, the project banks supplying the finance have also agreed to increase the loan facility to US$240 million from US$190 million,
Finalisation of formal approvals from the first two co-lenders and definitive detailed documentation is being sought this quarter, Kefi added.
Overall, the US$320 million development finance package is now covered by plans at subsidiary level, the junior said, with KEFI’s beneficial interest in Tulu Kapi expected to be 80%.
Harry Adams, KEFI executive chairman, commented: "Today's announcement that our project finance banks are looking to increase the Tulu Kapi project debt offering from US$190 million to US$240 million is testament to KEFI's focus, diligence and tenacity.
"Tulu Kapi's high grades and high recoveries offer the potential to repay all project finance debt from the estimated net cash flows of the first full year of production, at US$2,600/oz gold price.
“Moreover, at US$2,100/oz to 2,600/oz gold, Project NPV to KEFI shareholders is 6.9 to 10.5 pence per share, 12-17 times the current share price, ignoring our other assets."