KEFI Minerals moves closer to commencing at Tulu Kapi

KEFI Minerals moved a step closer to commencement at its Tulu Kapi Gold Project on Wednesday, announcing the successful selection of its preferred senior secured lenders.

The AIM-traded gold exploration and development company, which has projects primarily in Ethiopia, said the lenders were a leading African mining bank and a leading African development bank.

KEFI Minerals did not make the identity of the lenders immediately clear, however.

The company's board said the lenders' non-binding terms for the financing of Tulu Kapi included senior secured project loans of $60m (£41.2m) with an average tenor of six years.

It also included gold hedging of 100,000 ounces out of total ore resources of 1m ounces, and a term that the balance of capital requirements was to be sources from product-linked gold finance and equity capital.

"KEFI's successful overhaul of Tulu Kapi has rendered it a robust project", said finance director John Leach.

"The selection of the preferred banks, the backing of the Government of Ethiopia as project partner and the quality of the emerging syndicate of stakeholders serves to reinforce the board's confidence as we move towards commencing in 2017", he added.

Following the selection of lenders, the company was shifting its focus to complete front-end engineering and design of a fixed price construction project, to be completed as soon as possible.

It was also to agree insurance and other transaction costs, a cost overrun facility, and complete agreement of product-linked finance terms.

KEFI Minerals was positive it would have a complete syndicate by June 2016.