2nd Jun 2016 06:53
LONDON (Alliance News) - KEFI Minerals PLC Thursday said the amount of funding required for its flagship gold project in Ethiopia has been reduced once again whilst the expected finance costs have also been lowered.
KEFI said the net funding requirement for the Tulu Kapi gold project has been reduced to USD131.7 million after the company further refined contracting arrangements and project plans. The net funding requirement stood at USD145.0 million when the company published the definitive feasibility study-based open-pit plan back in 2015.
Of that total net funding requirement, the capital expenditure for the project has fallen to USD107.9 million from the previous estimate of USD129.6 million in the study last year.
The miner also said the cost of finance has been reduced by removing a large gold stream finance facility and replacing it with "alternative capital sources".
"Right from the start our strategy has been to make the Tulu Kapi project an economically robust proposition. With the support of our project contractors, lead banks and major shareholders at the project and parent-company level, we continue to refine the project and keep the costs under control," said Executive Chairman Harry Anagnostaras-Adams.
In addition, KEFI has updated the plan for Tulu Kapi in order to increase net cash generation, stating the new plan suggests USD173.0 million of cash would be available in the first three years of production which could be used to repay debt, reinvest and/or to pay dividends.
One major difference of the new plan compared to the one published in 2015 is the mine-life, which has been reduced to 10 years from an original 13 years. However, that will allow annual production to increase to 115,000 ounces from the previous 95,000 ounce estimate.
The new plan also shows all-in sustaining costs have been reduced further to USD746 per ounce from the previous USD779 per ounce.
By Joshua Warner; [email protected]; @JoshAlliance
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