KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) executive chairman Harry Adams explains the latest news on the project financing for its Tulu Kapi gold project in Ethiopia.
Harry Adams: It's very positive. It was quite a critical milestone for us.
It was not only the credit committee approval, which is the bulk of the work on all the due diligence being approved, but also the fact that the president of that bank was able to visit Addis Ababa shortly thereafter to meet with the Prime Minister, the Minister of Finance, and I. It was quite symbolic.
One interesting comment was when the president of AFC asked the minister about considerations for this project, and the minister said, "Actually, it's our project."
It's great that everybody thinks it's their project. The main point is that the principal backers are all formally on board, and we agreed to finish it off.
Proactive: So, you've increased the proposed bank loan facilities to $240 million from $190 million.
The development finance package is now covered, and repayments should be manageable.
Harry Adams: The higher debt amount reflects an improved project risk rating and a better gold price outlook since our last refinements.
This increase is significant as it eases the funding package and reduces the residual requirement by $50 million.
Alongside our local participation drive, this makes the entire process much smoother.
Raising capital locally has been a major advantage, especially given how tough the international stock markets have been.
Proactive: I think you also highlighted strong local participation, both in private and public sectors?
Harry Adams: Public sector involvement started when we initially engaged with the government and encouraged participation at the equity level to support this frontier project.
Now, the push for economic recovery is strong. Ethiopia was once a top-growth country and is reclaiming that position.
Private sector reforms are ongoing, with recent changes exceeding those of past decades.
These include currency floating, the first IPO launch, and the forthcoming stock exchange.
All of this supports local investors, who can hedge against currency devaluation and inflation through gold-linked assets. This timing aligns well with our financing efforts.