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Kefi awaits final Tulu Kapi approvals

Kefi Minerals (AIM:KEFI) expects to receive the remaining regulatory consents for its Tulu Kapi gold project in Ethiopia in the coming weeks, which it needs in order to receive US$9 million of equity funds from ANS Mining Share Company.
Kefi awaits final Tulu Kapi approvals Kefi awaits final Tulu Kapi approvals Kefi awaits final Tulu Kapi approvals Kefi awaits final Tulu Kapi approvals Kefi awaits final Tulu Kapi approvals

Kefi Minerals should soon have all approvals for its Tulu Kapi gold project in Ethiopia

Staff reporter

Kefi said in a project update the Ethiopian Federal and Regional Government agencies had advised the imminent approval of the final community resettlement plans, project financing details and the updated works programme and schedule up to the planned first gold pour in H2 2020.

It received key development and financing policy approvals from the government in September. 

Once the remaining signoffs have been received, Ethiopian investment syndicate ANS will release the first part of equity funds for work in the March 2019 quarter, including the first phase of community resettlement and ongoing project financing and planning costs.

ANS has also committed to releasing another $9 million at the end of the March quarter to fund activities for the next three-month period.

"The remaining balance of ANS's planned $30-38 million equity investment is expected to coincide with full project finance close as soon as the non-equity component is accessed," it said.

Kefi said ANS' funding would ensure that the company could commit to moving local residents and start the first phase of Tulu Kapi's construction before closing the $160 million bond/lease non-equity capital project financing.

As part of closing the non-equity financing, Kefi said Micon International had completed due diligence reports, and the receipt of the upcoming approvals would allow it to proceed with detailed legal documentation in the various jurisdictions.

In anticipation of this, Kefi said it had approved the mandated bond/lease indicative terms and the other stipulations of the bond arranger.

"By sequencing the project funding in this manner, it provides the opportunity to start the programme of works with equity funding and thereby expand the post-construction period available to build cash flow prior to first repayment to the lender/lessor," the company said.

The updated knocked 3.27% off Kefi's shares to 1.33p (US1.69c).