Kefi prefers bank-loan-based financing for Tulu Kapi
Aim-listed Kefi Minerals has selected its preferred project infrastructure finance proposals for the Tulu Kapi gold project, in Ethiopia.
The preferred option is a bank-loan-based proposal received from two African banks as underwriters and co-lenders.
Kefi has signed a preliminary term sheet with the financiers, which is subject to credit approval.
Kefi’s subsidiary Tulu Kapi Gold Mines Share Company (TKGM) says the bank-based proposal is financially more attractive and straightforward to execute than a long-standing alternative bond-and-lease-based debt financing proposal.
Additionally, the proposed bank lenders are actively working in Ethiopia and are familiar with the local market.
"We have been very well supported by the bond-lease proposal and now we also have an attractive bank-loan-based alternative because capital market support for our project has recently improved markedly, both inside and outside Ethiopia.
“The expected savings from the preferred bank-based infrastructure finance proposal provide our project subsidiary, TKGM, with the opportunity to develop and further explore the underground Tulu Kapi deposit and significantly increase value for shareholders, without reducing net cash flows available for other purposes,” Kefi FD John Leach said in a statement issued on Thursday.
Kefi in October received all outstanding permits and reports required to close the equity financing for the project.
The only outstanding matter is for the Ethiopian government to resolve certain internal administrative matters around its shareholding in the project.
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