LONDON (Alliance News) – Gold mining company KEFI Minerals PLC said on Monday the period between July to September was “exceptionally busy”, with extended funding for KEFI’s Tulu Kapi Gold Project in Ethiopia and new regulations in Saudi Arabia.
KEFI said the aim of closing the funding package to be supplied by Oryx Management Ltd by the end of 2017 remains on track.
Oryx has appointed a placing agent for the issue of listed bonds, submitted its draft financing agreement to the Ethiopian authorities for approval and is forming its Finance Special Purpose Vehicle which will be the bond issuer.
These arrangements are intended to reduce the residual capital requirement for development from USD289.0 million in 2014 to USD20.0 million through the introduction of targeted selective mining, reduced total tonnage movement and increased grade, as Oryx funds all on-site plant infrastructure and the government of Ethiopia funds all off-site infrastructure.
Oryx has agreed to expand its proposed finance facility to USD140.0 million from USD135.0 million as part of the arrangements to allow for an increase in ore processing capacity to a range of 1.9 to 2.1 million tonnes per annum from 1.5 to 1.7 million tonnes per annum, with upper and lower limits depending on ore hardness.
In Saudi Arabia, the newly created Energy, Industry and Mineral Resources Ministry is set to announce a new regulatory regime, with new mining policies and regulations to change the industry.
In response, Gold & Minerals Ltd, a joint venture in which KEFI Minerals owns a 60% stake, has upgraded its portfolio of licence applications as it awaits the regulatory changes.
“It has been an exceptionally busy quarter, pulling together our project funding for the Tulu Kapi Gold Project in Ethiopia for the closing planned for this year. We are pleased to have now also incorporated plans for extra processing capacity and for the drilling work required to add additional resources,” said Executive Chairman Harry Anagnostaras-Adams.
“In Saudi Arabia, we await the announcement of the new regulations intended to overhaul the mining industry with a view to facilitating growth and making it the third pillar of the Saudi economy. In the meantime KEFI has upgraded its portfolio and tenure,” said Anagnostaras-Adams.
“This is a transformational time for KEFI as the team works hard, together with our partners, to build KEFI during the next two years into a 100,000 ounce gold producer. At a gold price of USD1,250 per ounce, the first three production years’ projected net free cash flow per annum (after debt service and tax) exceeds the company’s current market capitalisation,” Anagnostaras-Adams added.
Shares in KEFI Minerals were down 5.7% at 4.08 pence on Monday.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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