Tuesday, October 7, 2014

KEFI Minerals re-activates mining licence application for Ethiopia project as it agrees funding

KEFI Minerals (LON:KEFI) said it has re-activated its mining application for the US$120mln Tulu Kapi project in Ethiopia following approval of indicative financing terms tabled by a banking syndicate chosen by the company.
Crucially, Tolassa Shagi, the Ethiopian Minister for Mines, has told KEFI he will fast-track the approval so the work can begin early next year.
This initial programme - including the first phase of community resettlement, roads construction and surface water drainage - is expected to cost US$10mln and will be funded by an early-stage secured loan.
The total capital investment is put at US$120-$150mln. KEFI said it plans to raise US$100mln senior secured debt, with US$30mln coming via a mix of equity and mezzanine finance.
Chairman Harry Anagnostaras-Adams said: “The reactivation of the mining licence application for Tulu Kapi marks an inflection point in KEFI’s history.

“With the recent verifications of our plans and analysis, as well as the approval of the indicative terms for project financing, we can see a clear path towards becoming a gold developer.
“We have the right team and, in Tulu Kapi, the right project to achieve this aim.
“We look forward to our mining licence application being granted so that we can progress to the construction phase and to delivering shareholder value.”
The AIM-listed mine developer also unveiled a boardroom shake-up with Anagnostaras-Adams exchanging his non-executive duties with KEFI for a full-time, executive position overseeing permitting, financing and team-building.
This will include appointing an “African-experienced mine builder and operator” as managing director and then the assembling of teams for construction and operations.
Current MD Jeff Rayner becomes the exploration director “with a particular focus on identifying the company’s value-adding stages beyond the construction and start-up of the Tulu Kapi open pit”.
The plan is to mine 86,000 ounces a year at an all-in cost of US$844 an ounce, putting Tulu Kapi at the lower end of the cost curve.