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KEFI Minerals' (LON:KEFI) chairman Harry Anagnostaras-Adams told Proactive that today's cash call comes after an earlier financing deal fell through and confirmed that a definitive feasibility study (DFS) and project financing for Tulu Kapi in Ethiopia were are at an advanced stage.
On Tuesday, Kefi said it had conditionally raised £2.9mln to fund development of the gold project.
New shares will be issued at 0.8p through a conditional placing, with directors taking up just shy of 9% of the issue.
Anagnostaras-Adams said a deal was struck at the end of last year, which had since fallen through, with Perth Global Funds, which had committed to invest £3mln but subsequently it had been unable to complete its commitment. The funds were to be used to pay for all programmes to take the firm through to the last quarter of 2015.
The fund missed a deadline in May and the deal was terminated, while Kefi started an alternative financing plan.
Anagnostaras-Adams said: "Effectively we've completely moved on from them but kept to the plan (development)."
On the larger financing required, KEFI is hoping to raise US$100mln of debt for the project, which has a net present value of US$112mln (assuming a gold price of U$1,250 an ounce and an 8% discount rate).
Construction is expected to begin late this year and will take around 12 months, with gold production commencing early 2017.
The chairman said indicative terms of the financing were on the table but that the secured lenders still needed final DFS sign off to go into final approvals.
A draft DFS has been tabled this month and the lenders are moving a team of technical auditors next week to the site to go through everything, he said.
The firm aims to tie-up the whole funding plan in the next quarter.
The project has around a one million ounce gold reserve, but KEFI hope it can double that exploration in the near vicinity of the planned mine.
Kefi shares are down 8.33% to 0.825p.