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Alliance News


KEFI Minerals Gets USD135 Million Funding For Tulu Kapi Gold Project

Mon, 17th Jul 2017 11:50


LONDON (Alliance News) - KEFI Minerals PLC on Monday said it has signed a mandate letter and heads of terms for USD135.0 million of project funding with Oryx Management Ltd, to finance and operate all the on-site infrastructure at KEFI's Tulu Kapi gold project in Ethiopia.

Shares in KEFI were trading up 36% at 5.68 pence on Monday following the news.

Oryx will establish a special purpose vehicle called Finance SPV to issue bonds, the proceeds of which will be used to build and own all the on-site infrastructure for the project, which will then be leased to the project company Tulu Kapi Gold Mines Ltd (TKM).

The receipt of lease payments from TKM will be used by Finance SPV to pay the principal and interest on its bonds.

Oryx will also operate the on-site ore processing infrastructure on an open-book cost plus performance-bonus based operating contract.

The Ethiopian government is funding the building of all off-site infrastructure for the project.

KEFI said the project's remaining funding requirement has now been reduced to USD32.0 million from the original USD289.0 million set when KEFI took over Tulu Kapi in 2014. A "variety of sources" to finance the remaining requirement are being considered, KEFI said, including working capital facilities with Development Bank of Ethiopia, project-level equity with a mining and engineering group and further equity from KEFI in the project company.

"KEFI has selected a development funding approach considered more appropriate for start-up purposes than bank debt due to its longer nine-year tenor and its repayments commencing 30 months after drawdown," Executive Chairman Harry Anagnostaras-Adams said.

"At a gold price of USD1,250 per ounce, Tulu Kapi's robust project cash flow projections, combined with the innovative financing proposal from Oryx, looks to well serve KEFI's objective to rapidly repay debts whilst implementing our targeted exploration programs and commencing dividends during the early production years. We welcome Oryx to the Tulu Kapi syndicate and look forward to putting the funding in place to commence development of Tulu Kapi this year," he added.

By Karolina Kaminska; karolinakaminska@alliancenews.com; @KarolinaAllNews

Copyright 2017 Alliance News Limited. All Rights Reserved.

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