KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) has confirmed that BCM Group has joined the Tulu Kapi Gold project syndicate.
BCM is set to act as 'Preferred Mining Contractor', subject to due diligence and final approvals.
BCM has agreed to contribute US$23 million of pre-production costs through equity risk notes – which may be repaid in cash or converted into KEFI shares once production begins.
With BCM’s inclusion, KEFI stated the full project development budget is now covered by conditional equity and debt commitments.
"It is a great time to launch such a high-grade/high-recovery open pit gold mine in rapidly growing Ethiopia, and we will now also push for this development be followed quickly by the underground mine development at Tulu Kapi,” said executive chair Harry Anagnostaras-Adam said.
"We progress towards launch of Major Works at the Tulu Kapi Gold Project at what is a very propitious moment in time.
“At a US$3,000 per oz gold price, net operating cash flow after royalties and taxes for the first year of production is estimated at c. US$304 million, of which US$240 million would repay all project debt.”
Final cost updates and definitive agreements are due at Tulu Kapi this quarter.
KEFI expects to launch the ‘Major Works’ shortly after agreements are signed.
Also, the company noted it is no longer under pressure to sell its stake in its Saudi Arabian joint venture, but would continue ongoing talks to seek the best outcome.
“We will push the development in the short term of the initial open pit gold mine projects at Jibal Qutman and Hawiah,” Adams added.
In London, KEFI shares rose 6% to trade at 0.53p.