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(Alliance News) - Kefi Minerals PLC said Monday the subscription agreement for its Tulu Kapi project in Ethiopia has been completed by its project partner ANS Mining.
Shares in the gold and copper explorer and developer were up 17% in London in mid-morning trade at 1.62 pence each.
The government of Ethiopia is investing USD20 million into the project, with KEFI's partner ANS Mining providing USD38 million.
The firm said the company operating the project, Tulu Kapi Gold Mines Share Co, will now receive the first tranche of ANS Mining funding of USD9.5 million.
"Kefi greatly appreciates the confidence and commitment demonstrated by ANS Mining, its board of Ethiopian business leaders and its underlying shareholders, which comprise a broad syndicate of strong organisations in the local banking, insurance and investment sectors," the company said.
Executive Chair Harry Anagnostaras-Adams added: "I am delighted to confirm the signed subscriptions of ANS Mining into the project company. Whilst we have been working closely with ANS Mining for some time and developed an excellent relationship, I am now pleased to be able to welcome them formally as partners.
"Following first funds flow this month we will commence phase one of the community resettlement, trigger debt implementation and detail the final procurement and contractual arrangements with the principal project contractors. These are exciting times and I look forward to updating shareholders over the coming weeks and months as we move forward with the development of Tulu Kapi."
Based on already agreed upon financing, and last Friday's gold price of USD1,540 per ounce, Kefi estimates net cash flow over the life of the open pit will be USD433 million. The current net present value of the project - adding Friday's gold price to the definitive feasibility study - is USD323 million, meaning Kefi's 45% stake in the project is worth USD164 million.
Kefi has a market capitalisation in London of just GBP16 million.
By Paul McGowan; paulmcgowan@alliancenews.com
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