JOHANNESBURG (miningweekly.com) – Aim-listed Kefi Minerals has raised around $4-million through a conditional placing to advance its Tulu Kapi project, in Ethiopia.

The group issued 877-million new ordinary shares of 0.1p each at a price of 0.3p apiece by way of a placing through Brandon Hill and the subscription of 54.8-million placing shares by Ausdrill.

“We are delighted by the faith shown by our shareholders as we move ever closer to becoming a gold producer,” Kefi executive chairperson Harry Anagnostaras-Adams said.

The directors of Kefi and certain existing substantial shareholders have agreed to subscribe for placing shares pursuant to the placing – subscribing for an aggregate 60% of the sums raised.

Major shareholder Odey Asset Management would increase its shareholding from 10% to 26% upon the listing of the new shares.

The gold exploration and development company embarked on the placing to secure working capital to start the development of the Tulu Kapi gold project following renewed certainty about the respective roles of contractors and government.

“As a result of the placing, we are now able to focus on finalising financing terms with our preferred syndicate including the already-selected contractors and the government of Ethiopia. We have begun preparations for development and remain on track to commence production in 2017,” Anagnostaras-Adams said.

Following the confirmation of intent by the Ethiopian government to invest $15-million to $20-million in Tulu Kapi in return for an increased equity interest, Kefi, in October, appointed the contractors for the plant construction and start-up and for the mine start-up and operation.

“The terms agreed with the contractors indicate a capital requirement of $129-million, which is intended to be satisfied by $110-million from the aggregate of project debt and gold streaming finance,” he explained.

Forward-teams have been mobilised by the contractors to kick off local procurement and other preparatory tasks to get the 22-month development of the project under way.

Kefi would also allocate some of the proceeds for the preparation of the mining licence application for Jibal Qutman, in Saudi Arabia, exploration activities, progressing project financing arrangements, payment of inherited value-added tax liabilities in Ethiopia and general corporate administration costs.