15:44 29 Jun 2017
The company has elevated its focus onto alternative financiers familiar with Africa and especially Ethiopia
KEFI Minerals plc (LON:KEFI) has reiterated that its Tulu Kapi gold mine in Ethiopia is viable at at a gold price well below current levels and that financing talks are making progress.
Three proposals built around alternative project contracting syndicates have been received, said Harry Adams, chairman, at the annual meeting.
“We have prioritised the funding structure designed around the preferred contractors selected in 2016 – Ausdrill for mining and Lycopodium for processing.”
He added he was comfortable over the economics of the mine at current gold prices.
“The foundations of risk management for funding Tulu Kapi include that all short term (up to five years) debt servicing commitments are met even if the price of gold drops to and stays at c. US$900/oz whilst longer term (5-10 years) commitments are acceptable as long as they are covered by a flat price of c. US$1,000/oz,” he told shareholders at the annual meeting.
“It is notable that the lowest gold price in the past seven years is c. US$1,100/oz and the highest c. US$1,900/oz.”
“KEFI’s progress on project financing was delayed during 2016 as a result of the tightening of the mining debt-finance sector generally and the declaration of the Ethiopian State of Emergency, which had the effect of depressing the interest of financiers unfamiliar with Ethiopia.
“The company responded by elevating its focus onto alternative financiers familiar with Africa and especially Ethiopia and, in particular, to design financing proposals with African-experienced gold project contractors,” Adams said.
Source -Provocative Investors (UK)