-- adds chairman comments, share price--
Kefi Minerals (LON:KEFI) believes it can double the 1mln ounce (oz) gold reserve at its Tulu Kapi operation in Ethiopia based on early stage surface exploration of the surrounding area.
Kefi is looking for satellite feeds for Tulu Kapi under the planned open pit and in the adjacent exploration licences.
Jeff Rayner, Kefi’s exploration director, said the trench sample results were encouraging and could either provide satellite feed to the central processing plant or operate as standalone heap leach projects.
“We already see the potential to double the current one million ounce reserve at Tulu Kapi," he said.
Two parallel shear zones immediately west of Tulu Kapi - the Komto-Guji Shear and the Bila-Gulliso Shear - are host to a number of gold prospects.
Trench samples from two targets, Komto 1 and Komto 2, all returned positive ore grade intercepts over a 3km strike length, with best results seven metres (m) at 7.27 grams per tonne (g/t) gold; 13m at 1.07 g/t gold, and 6m at 1.24 g/t gold.
A limited drilling programme at Guji in 2014, meanwhile, returned a best intercept of 44m at 1.7g/t gold. The Guji and Komto prospects are 7km from Tulu Kapi mine and further trenching and shallow drilling is planned.
Another prospect, Soyoma, 15km north-west of Tulu Kapi, was channel sampled and returned best results of 3m at 4.2 g/t gold, 2m at 2.75 g/t gold. More exploration is also planned here.
Speaking later to Proactive, chairman Harry Adams said that the additional million forecast includes 200,000 oz already defined under the proposed pit, which is “clearly going to grow”.
At present, the plan is for a life of mine of 13 years, but just adding the underground potential might see that extended to 20 years before taking account of what it finds in the surrounding areas, he said.
That also depends on how the production profile changes, with boosting output another option especially if it is predominately oxide resources that are found that can be heap leached.
Adams expects an upgraded definitive feasibility study to be published this month, after which the focus will be on finance for the project.
This will be largely project finance, he said, with interest from a number of syndicated including Ethiopian groups.
Commissioning of the mine’s plant and equipment by end 2016 is the aim with first production n 2017.
Shares rose 6% to 0.9p.