KEFI expects Ethiopia financing deal by June - Proactive Investors UK

Gold group KEFI Minerals PLC (LON:KEFI) anticipates presenting its financing plan for the Tulu Kapi mine in Ethiopia to shareholders at the AGM in June.

The gold group said a package of around US$65mln senior secured debt, US$15mln overrun facility, US$40mln gold finance plusa 100,000 oz hedge facility was under discussion.

Equity finance will add a further US$25mln including US$20mn from the Ethiopian government.

Capital expenditure for the mine is estimated at US$145mln, with production schedule to start from the end of next year at a rate of 115,000 oz annually at an all in sustaining cost of US$742 per oz.

Adding an underground operation would boost output to 150,000 oz per year and start after a chunk of the development finance has been paid down.

Elsewhere, KEFI is taking to regulators in Saudi Arabia over its licence application for Jibal Qutman.

The equity capital requirements for the heap leach operation will be less than US$5 million for KEFI's 40% share, based on a capital expenditure of under US$40 million and approximately 75% being provided by project finance.

Harry Adams, executive chairman said solid progress had been made over the last quarter in Ethiopia

Projected cash flows are robust, with the first three years of open pit production targeted to repay all debts, commence the payment of dividends and fund growth in the highly prospective Arabian-Nubian Shield.

We look forward to soon finalising the Project's integrated syndication package and proceeding with development."

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