It’s a bold company in the current climate that attempts to finance a gold project.
But KEFI Minerals (LON:KEFI) is proving that with the right project and the right management it can be done.
The company has just announced that it’s selected preferred senior secured lenders to provide US$60 mln of debt finance for the development of the Tulu Kapi gold project in Ethiopia.
Overall, Tulu Kapi will require US$120 mln to get it into production, so there’s more to be done.
But bank due diligence can be pretty thorough, and it represents a real tick in the box for a project that many thought was dead in the water before KEFI took it over a couple of years ago.
Since then the company has boosted the reserve, slashed costs and brought a disgruntled Ethiopian government back on side.
Now it’s beginning to put the money in place, and is confident that first production will take place next year.
“This is the first key step,” says Harry Anagnostaras-Adams of KEFI Minerals.
And, as far as the remaining US$60 mln is concerned, he has a plan for that too.
“Around a third of it will come from a streaming deal,” he says.
Which leaves a final US$20 mln or so to be funded from a deal that is likely to allow the Ethiopian government to raise its stake at the project level.
As a back-up, and depending on exactly where the gold price is when all the parties come to sign on the dotted line, Anagnostaras-Adams also has a Chinese company waiting in the wings.
“The problem is,” says Anagnostaras-Adams, that all these things have to be done in sequence.
But the ball is now rolling, and more announcements will follow.