Name of the Project
Tulu Kapi gold project.

Location
Ethiopia.

Client
Kefi Minerals.

Project Description
A definitive feasibility study (DFS) update for the Tulu Kapi project was completed in May 2017.

The 2017 DFS incorporates due diligence and refinements since the 2015 DFS published in August 2015, and provides increased confidence in the company’s plans to develop the project.

The 2017 DFS has similar outcomes to the 2015 DFS.

Forecast openpit gold production has increased slightly from 961 000 oz to 980 000 oz over ten years, owing to improved metallurgical recovery, with an average of about 115 000 oz/y for the first eight years of production. This is based on warranted processing plant throughput, which has increased from 1.2-million tonnes a year to 1.5-million tonnes a year for normal operations and to 1.7-million tonnes a year when processing softer ores.

The mining method planned is conventional openpit drill-and-blast and load-and-haul, reflecting a semiselective mining approach, whereby a bulk mining approach is applied to 79% of ore, or 95% of all material, and a selective mining approach to 21% of ore, or 5% of all material.
The processing plant comminution circuit refined and primary semiautogenous (SAG) mill and secondary ball mill circuit have been replaced with a larger SAG-only circuit. 

The designs for the tailings storage facility (TSF) and water storage dams have also been revised.
The TFS has been relocated downstream to reduce capital costs, with no reduction in capacity for a neutral balance.
New access roads have also been refined to decrease capital costs.

Various components remain unchanged from the 2015 DFS, including geology and mineralisation (ore reserves and mineral resources); metallurgical testwork data; and environmental and social permitting. Mining the underground deposit below the planned openpit has not yet been fully considered and will be addressed in due course.

A preliminary economic assessment completed in early 2016 evaluating the current indicated resource – 1.1-million tonnes grading at 5.6 g/t gold – has indicated that the addition of an underground mine has the potential to increase total openpit and underground gold production to more than 150 000 oz/y over four years. The orebody remains open and further potential will be added.

Jobs to Be Created
Not stated.

Net Present Value/Internal Rate of Return
The net present value (NPV) of the project at the start of construction has decreased from $125-million, at an 8% discount rate in the 2015 DFS, to $97-million in the 2017 DFS, while the NPV at the start of production has increased from $256-million to $272-million.
The internal rate of return has decreased from 28% in the 2015 DFS to 22% in the 2017 DFS.
Payback has increased from 2.5 years to three years.

Value
The $160-million total funding requirement for the project is consistent with Kefi’s recent guidance for required funding.
Duration
The 2017 DFS update development schedule envisages gold production to start in late 2019, the exact timing of which will flow from the start of major construction, depending on resettlement of the community. This assumes the community resettlement will occur in early 2018. The community and Kefi are, however, preparing for this to occur in late 2017, so that construction can start earlier.

Latest Developments
None stated.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Kefi Minerals, tel +90 232 381 9431, fax +90 232 381 9071 or  email info@kefi-minerals.com.