10th Oct 2018 11:37
LONDON (Alliance News) - KEFI Minerals PLC on Wednesday said it is proposing to issue USD160 million worth of bonds as part of its project development funding proposal for the Tulu Kapi gold project in Ethiopia.
The mining company, which has licences in both Ethiopia and Saudi Arabia, is to issue USD160 million of listed senior-secured infrastructure bonds, with USD110 million to be used in on-site infrastructure and the rest for financing costs.
A stockpiling financing facility with a maximum value of USD20 million for use in working capital has also been proposed.
This funding will be in addition to existing agreements. The Ethiopian government has already committed USD20 million to the project and ANS Mining Share Co has committed between USD30 million and USD38 million.
KEFI itself has already funded pre-development costs of approximately USD60 million.
The miner said that its contractors in Ethiopia remain "on standby" for financing and that it has secured a number of permits. The following requirements remain: equity subscription registration; endorsement of its updated project plans; and the approval of finance documents and security arrangements by the Ethiopian central bank.
KEFI laid out its timeline, which showed construction beginning early in 2019 and all production commissioned by the second half of 2020.
Tulu Kapi is expected to have a payback of around three years and earnings before interest, taxation, depreciation, and amortization of more than USD73 million per year.
Shares in KEFI were down 9.6% at 1.88 pence on Wednesday.
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