17th Aug 2015 07:29
LONDON (Alliance News) - Kefi Minerals PLC Monday said it will spend around USD10 million less in capital expenditure on the Tulu Kapi gold project in Ethiopia than first thought and said it is "moving forward according to plan".
Kefi said it was now refining and confirming the bids received from the potential engineering, procurement and construction management contractors for the project. In July, the company said it was expecting to announce the winning bidders during August.
Based on the definitive feasibility study for the project, Kefi said the cashflow projections indicate an all-in sustaining cost of USD779 per ounce, " the lowest quartile of gold producers globally", it said.
In addition, Kefi said it plans to further reduce peak capital requirements from the definitive feasibility study estimate to USD120 million from the original USD130 million estimate, depending on final contracting terms agreed with preferred contractors, detailed engineering, procurement of plant and "the extent, if any, of government funding of infrastructure to be constructed within the public domain", said the company.
The Tulu Kapi project will have a net present value of around USD120 million once construction begins and at the start of production in 2017, that will rise to USD180 million based on a long-term USD1,250 per ounce gold price, it said.
On Monday, gold was trading significantly below that at around USD1,118 per ounce.
Kefi is now engaging with short-listed financiers to optimise the funding mix and terms between the financiers, the contractors and the Ethiopian government.
Kefi shares were down 1.3% to 0.790 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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