Kefi remains on track with Tulu Kapi project

Gold and copper exploration and development company Kefi updated the market on its operations on Monday, reporting that the Tulu Kapi gold project in Ethiopia remained on track with previous guidance.

The AIM-traded firm said that through its subsidiary Tulu Kapi Gold Mines (TKGM), it has presented its project finance syndicate and submitted its finance plan to the National Bank of Ethiopia, for permission that it may proceed as outlined.

That followed a “long, thorough and rigorous” due diligence process by the senior lenders, the board said.

“Whilst the National Bank conducts its review, the other outstanding administrative details are being progressed with the various Ethiopian government agencies including, the Ministry of Mines and Petroleum (MOMP), Ministry of Finance, Ethiopian Roads Authority and Ethiopian Electricity Power Corporation,” the board explained in its statement.

“These are normal compliance procedures to enable Kefi and TKGM and its syndicate of financiers and contractors to proceed to financial closing, which includes the execution of detailed documentation, subscription of the asset-level equity funds and triggering full development, with debt funds to be disbursed later this year in compliance with the Senior Lenders specified conditions.

“These procedural matters include requests for finalising confirmations of registration of historic investment, establishment of correspondent bank account arrangements, confirmation of construction schedules for road and electricity, and various other administrative matters already agreed in principle.”

Starting full development of the project was the company’s and the government’s “highest priority”, the directors said.

“All key stakeholders are pushing hard to finalise preparations, and the company has undertaken to the MOMP that, upon timely receipt of these confirmations, KEFI will push to financial closing by the end of July 2021, or as near as possible thereto given the local document registration procedures and the Covid-19-affected limitations of syndicate parties' physical locations.”

Looking at recent activity at Tulu Kapi, Kefi said it was overseeing physical preparations for full development to be triggered at financial closing, including the clearing of new host lands for community members to be resettled, as well as the early works programme of detailed engineering and procurement by principal construction contractor Lycopodium.

It said it was also supporting the planning and procurement programmes of mining services contractor Coricam, as well as the 'new access road' and 'electricity connection' works contracts, under which surveys and procurement were complete.

The company said it was also triggering compensation procedures for the first resettlers at the Tulu Kapi electrical substation site, and recruiting further key personnel for the next stage of the project.

In Saudi Arabia, Kefi said the preliminary feasibility study for the potential start of development of the Hawiah deposit in 2023 was ongoing.

Among other recent activities, Kefi reported the completion of the environmental and social baseline study, adding that metallurgical testing was progressing with “reasonable recoveries” so far being indicated for all principal metals, being copper, gold, zinc and silver.

The company also confirmed the completion of construction on the exploration camp.

At 1553 BST, shares in Kefi Gold and Copper were up 0.66% at 1.84p.