KEFI Minerals plc (LON:KEFI) has cut the funding requirements for its flagship Tulu Kapi gold project in Ethiopia by a further US$13 mln.
The company aims to put together a syndicated financing package for Tulu Kapi by the end of the third quarter of this year, and had previously said that the required funding would be raised through a mixture of debt, direct participation by the Ethiopian government, and a gold streaming deal.
However, the gold streaming element of the financing has now been replaced by what the company called “alternative capital sources”.
Previously KEFI had said that Chinese funding might be available if required, but in any event the company appears to have concluded, in conjunction with its shareholders and the lead banks for the debt, that the streaming was too expensive a form of finance.
Ditching the streaming is part of the reason the company has been able to cut the costs at Tulu Kapi further.
But it’s also been able to refine the plans on the ground and the arrangements with potential contractors.
All told, and using a US$1,250 gold price, KEFI now reckons that it will be able to make US$173 mln available for debt repayment within the first three years of mining at Tulu Kapi.
The total cost of construction at Tulu Kapi is now put at US$130 mln, of which US$95 mln will be raised through debt, US$20 mln through project equity, and the rest through mezzanine or equity finance.