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Kefi shares pop on official launch of Tulu Kapi

By Josh White

Date: Monday 20 May 2024

Kefi shares pop on official launch of Tulu Kapi

(Sharecast News) - Kefi Gold and Copper officially launched the Tulu Kapi Gold Mines (TKGM) project in Ethiopia on Monday.
The AIM-traded firm said the TKGM board, which includes representatives from Kefi and the Ethiopian federal and Oromia regional governments, approved the project following the establishment of dedicated site policing and confirmations from the project's finance syndicate.

Early works, continuing until September, would involve preparations for community resettlement, detailed engineering for procurement, community consultations on social development plans, and recruitment.

At the same time, Kefi said it would close project financing, with independent monitoring ensuring progress under new safety systems.

Following the completion of necessary documentation, equity-risk capital drawdown was planned from October 2024 to mid-2025, followed by debt capital.

Major works, starting in October, would include international procurement and plant fabrication, community resettlement, site earthworks, grade-control drilling, plant assembly, and mining activities, culminating in a definitive feasibility study (DFS) on the underground mine.

The finance plan included $190m in secured debt from development banks and $110m in equity risk capital from Ethiopian subsidiaries of multinational corporations, repayable in cash or Kefi shares, along with $20m from the federal and regional governments.

Key economic metrics for the project included creating around 1,000 direct jobs and 5,000 to 10,000 indirect jobs, with a foreign direct investment of around $500m.

At a gold price of about $2,350 per ounce, the project expected annual exports of $377m, royalties and taxes of $69m, and operating spending of $119m, with a preference for local procurement.

The all-in sustaining costs (AISC) were projected at $887 per ounce, with break-even costs of $1,315 per ounce, providing an internal rate of return to equity of over 50%.

Even at a gold price of $1,550 per ounce, the internal rate of return remained above 20%, with an all-in sustaining cost of $831 per ounce and break-even costs of $1,091 per ounce.

Recently-approved exemptions from exchange and capital controls would ensure unrestricted capital servicing for investors and financiers, the board said.

"Our launch timing is fortuitously coinciding with the improved conditions in Ethiopia and all-time high gold prices," said executive chairman Harry Anagnostaras-Adams.

"Tulu Kapi's high grade and high process recovery, combined with our project design, has resulted in a robust set of economics for long-term operations which should support further exploration and development along with good opportunities to continue supporting local social development projects such as the already provided local school and water supply.

"The returns for the capital investors and lenders are attractive and the recent exemptions from exchange controls has rendered the Ethiopian mining investment climate internationally competitive."

Anagnostaras-Adams said the company could now proceed to safely complete its early works on schedule, and satisfy all conditions to drawdown full project finance, thus enabling the major works to commence from October.

"This deliberately sequenced and disciplined approach is commensurate with being a first mover adhering to the highest performance standards in respect of safety, social, environmental, technical and other aspects.

"We are determined to ensure that Tulu Kapi preserves its standing as a showcase project for an important new business sector for Ethiopia.

"We greatly appreciate the support of the community and all local and international stakeholders."

At 1203 BST, shares in Kefi Gold and Copper were up 22.99% at 0.89p.

Reporting by Josh White for


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