7th Oct 2014 08:27
LONDON (Alliance News) - KEFI Minerals PLC Tuesday said it has reactivated the mining license for its Tulu Kapi project in Ethiopia, and received terms for the financing of the project from several financial institutions.
KEFI shares were up 34% to 1.75 pence per share on Tuesday morning.
The mining license had been suspended in the middle of 2013 by the previous owner of the asset, Nyota Minerals Ltd. The Ethiopian government has told KEFI it intends to approve the mining license soon, which will allow an 11-year open pit mine and the establishment of an underground mine beneath it, said KEFI.
KEFI also said it has received terms for the financing of the project from several financial institutions. The project finance plan is intended to be implemented in parallel with the project development timetable.
The package comprises of a USD10 million initial development programme, including initial construction work, which is due to begin in the first quarter of 2015. This first stage is to be funded by a secured loan, it said in a statement.
It also includes a USD120-150 million major works programme for the mine, processing plant and infrastructure due to start in the fourth quarter of 2015. The cost will depend on whether KEFI deploys contract-mining and second-hand plant, or if it proceeds as the owner and operator with all-new plant and equipment, said the company in a statement.
The second stage will be funded in the form of a senior secured debt funding of USD100 million and a non-senior debt funding in the middle of 2015 of up to USD30 million, comprising of a mix of equity and finance, it said.
"With the recent verifications of our plans and analysis, as well as the headline indicative terms for project financing, we can see a clear path towards becoming a gold developer," said Executive Chairman Harry Anagnostaras-Adams
To ensure the development of Tulu Kapi, KEFI said it is expanding and reorganising its management team. Anagnostaras-Adams will appoint a managing director for the project's construction and operations, the company said in a statement. Jeff Rayner will be exploration director with a focus on identifying opportunities beyond the construction and start-up of the Tulu Kapi open pit.
By Joshua Warner; [email protected]; @JoshAlliance
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