Aim-listed Kefi Minerals has received the last remaining federal government consent for the financing and development of its Tulu Kapi gold project, in Ethiopia.
The company explained that the National Bank of Ethiopia finally provided its formal approval of the terms of the proposed full project finance package, an approval which the bank had initially held back until it had also simultaneously approved a policy director for general public application.
The full project finance package includes the right to use leasing as a form of finance, a debt-to-equity capital ratio of up to 70:30, recognition of historical expenditure in the calculation of the capital ratio, the right to use gold price hedging and the application of market-based long-term fixed interest rates.
The way is now paved for Kefi’s project-level partners to subscribe for Tulu Kapi shares for their combined $58-million equity investment and also for the mandated $160-million infrastructure financing.
Meanwhile, Kefi has also obtained the two other third-party approvals it needed.
Sanderson Capital Partners has agreed to security sharing arrangements with ANS Mining Share Company, which is Kefi’s private sector project equity partner in the Tulu Kapi project. This facilitates Kefi’s working capital arrangements and the project equity funding for the first part of the 24-month project development programme.
Additionally, Kefi’s government partner in Tulu Kapi, the Ethiopian Ministry of Finance, has also agreed to the undertakings requested by ANS Mining.
Consequently, upon finalising subscriptions by all three partners in Tulu Kapu, the first ANS Mining equity instalment of $11-million is now allowed.
The Tulu Kapi project may now proceed on the ground with the community and local authorities. The development schedule of the project provides for a cautious build-up of site activities, while site security, detailed engineering and the first small community resettlement are carefully dealt with.