10th Dec 2015 10:22
LONDON (Alliance News) - KEFI Minerals PLC Thursday said it has now formally raised GBP2.6 million from its placing announced in November after all of its resolutions were passed by shareholders at its annual general meeting.
Shareholders approved the share issuance at the AGM held in Australia, allowing KEFI to raise the proceeds through 877.2 million shares at 0.3 pence per share. Those funds will be used to back work on the Tulu Kapi gold project in Ethiopia.
That issuance has swelled KEFI's share capital to 2.62 billion shares from 1.74 billion shares, representing around a 50% increase.
KEFI Chairman Harry Anagnostaras-Adams addressed attending shareholders at the meeting and confirmed that the front end engineering and design work for the Tulu Kapi project is around 40% complete, with the expectation for the work to be finished in February next year.
He also said 12 out of the 15 equipment tender packages for the project have been issued to suppliers for procurement and installation in 2016 and 2017.
Tulu Kapi seems robust even at current gold prices, with all-in-sustaining cash costs forecast to be between USD724 to USD750 per ounce of gold, with gold trading at USD1,073 per ounce on Thursday morning.
Anagnostaras-Adams said that all-in cost is in the bottom quartile compared to existing gold producers.
Initially, whilst the company is focused on the open pit at the mine, it will produce around 115,000 ounces of gold per year.
Anagnostaras-Adams also reiterated the company's achievement in bringing down the capital cost for the project to USD129.0 million from the original estimate of USD176.0 million. That was also accompanied by news that the government had agreed to invest USD15 to USD20 million into the project, bringing KEFI's costs down further.
KEFI is now focused on securing the financing for the project.
In Saudi Arabia, where it has the Jibal Qutman gold development project, KEFI plans to submit its application for a mining licence before the end of 2015 which would allow it to conduct its heap leach operation shortly after Tulu Kapi comes online.
"We are one of few parties being licensed in Saudi Arabia and believe that we are helping to establish a new minerals province. We will report, this month, the results of the completed infill drilling of Jibal Qutman's set of planned shallow open pits," said Anagnostaras-Adams.
"It is, indeed, pleasing that we continue on track to target profitable gold production from late 2017 and to establish a powerful platform for further discovery in a most-promising region of the world," he added.
KEFI shares were up 1% to 0.313 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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