KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) said it expects to complete the full financing package for its flagship Tulu Kapi gold project in Ethiopia this month, after confirming it has signed a term sheet for $30 million of new funding.
The AIM-listed miner moved to clarify recent media speculation by saying the funding would take the form of so-called gold streams, a specialist type of finance commonly used in the mining sector.
Under a gold streaming deal, an investor provides upfront cash in return for the right to buy a portion of future gold production at a fixed, discounted price.
For miners, it is a way of raising money without taking on more conventional debt or issuing large amounts of new shares. KEFI said the $30 million would rank as equity risk capital within the wider project funding structure.
The company stressed that the agreement is still at the term-sheet stage. Final completion depends on detailed legal documentation being agreed with the funding provider and signed off by the project’s senior lenders, who typically have first call on cash flows.
Tulu Kapi, a high-grade, high-recovery project, has been years in the making. Securing finance has been the final hurdle before construction can begin.
KEFI said it continues to expect to have the entire project finance package in place before the end of the month, which would allow the formal launch of the development.
Further updates will follow as approvals are completed.