Proactive Investors - KEFI Gold and Copper PLC (LON:KEFI) told investors of further progress with its US$320 million development budget for the Tulu Kapi gold project in Ethiopia.
Executive chairman Harry Anagnostaras-Adams said: "All syndicate members are supportive and are working to ensure final documentation is entered into by mid-2024 to enable full project launch and drawdown of funds.”
Following the final approvals from the lead-bank, Southern and Eastern Africa Trade and Development Bank, the company said all other parties started their formal approval processes, with Anagnostaras-Adams progress with the co-lending bank and local equity-capital investors.
Furthermore, recent regulatory changes affecting the equity funding structure are expected to lower overall finance costs, including foreign exchange exemptions, an increase in the maximum permissible ratio of debt to equity and investments by multinational corporations of local currency retained earnings deemed as foreign direct investment.
This means the US$100 million to be provided through the issuance of equity risk notes can be focused on the lower-cost option fixed at 12% per annum, repayable in cash from operations or in equity.
KEFI said a local multinational investor has now received initial board approval.
“Our modelling and production profile for this high-grade open pit gold mine, based on a gold price of US$1,864/oz (versus current spot of US$2,170/oz), shows sufficient cash will have been generated at the proposed time of repayment to repay these ERN in cash at the time they fall due,” said Anagnostaras-Adams.
He said the company has also received confirmation from the co-lender, Africa Finance Corporation, that its approval processes are “underway and progressing well” for its-intended US$95 million investment, which would provide the balance of the required funding for project launch.
The company also detailed local steps being taken towards the launch of the project, including implementing extra security for the resettling local community and preparing procurement and construction with detailed tendering work packages, regulatory clearances sought by PW Mining and local and offshore bank accounts being opened.