KEFI Minerals (LON:KEFI) has confirmed a change in the EPC contractor for its Tulu Kapi mine in Ethiopia after receiving better financial terms.
Australian firm Lycopodium will now be in charge of process plant construction and will adhere to the current schedule as well as being cheaper, said executive chairman Harry Adams.
He added that Lycopodium was the clear market leader with a track record of success in building gold plants in many African countries for over 20 years.
The lower costs were reflected in the latest funding update, which reduced the costs overall to US$130mln from US$145mln.
KEFI wants to arrange senior secured lenders for US$95m of project debt and a cost-overrun facility
In May, the Ethiopian government confirmed an equity investment of US$20m with the residual requirement for mezzanine and/or equity finance of US$15m.
Lycopodium has already started work and construction of the processing plant should start in the fourth quarter of this year.
Like mining contractor Ausdrill, Lycopodium will become a shareholder in KEFI and has agreed to receive the first US$2.5mln payment in shares.
A recent definitive feasibility study indicated Tulu Kapi would produce 980,000oz of gold over 10 years at an average of 115,000oz per steady-state year at All-in Sustaining Costs of US$746/oz.
Losses in 2015 were £3.2mln (£3.96mln).