KEFI Minerals inks Tulu Kapi agreement with Ethiopia government

KEFI Minerals said subsidiary KEFI Minerals (Ethiopia) Ltd (KME) and the Federal Democratic Republic of Ethiopia have signed the shareholders' agreement for the incorporation, ownership and operation of Tulu Kapi Gold Mines Share Company Ltd (TKM).

This would see TKM owning 100% of the Tulu Kapi Gold Project. The exploration projects outside the Tulu Kapi Mining Lease area were not part of TKM and remained 100% owned by KEFI.

The shareholders' agreement set out the parties' respective commitments to invest equity capital in TKM and the mechanisms for control of the development and operation of the Tulu Kapi Gold Project.

Based on the latest project cost estimates, KEFI (via KME) would own about 75% of the share capital of TKM and the Government of Ethiopia would about 25%.

The composition of TKM's board and its corporate governance mechanisms reflected the respective ownership levels of KEFI and the Ethiopian Government.

Kefit said today's step represented an important initial formality within the timetable allowing the company to start development activities in H2 2017.

"This will follow financing and community resettlement, both of which the Company is actively implementing and will report progress as other milestones are met."

At about 13:43 BST, shares in AIM-listed Kefi Minerals were unmoved at 5.7p each.