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(Alliance News) - KEFI Minerals PLC is exploring different funding options for the Tulu Kapi project ahead of the start of development early in 2020.
KEFI earlier November said administrative hold-ups from the Ethiopian government had been resolved, giving the go-ahead to the gold project.
Nicosia, Cyprus-based KEFI now has two options: a long-standing bond-lease based package or a conventional bank-project finance proposal from African banks.
The firm said the company operating the project, Tulu Kapi Gold Mines Share Co, has recently been offered a bank-based project finance proposal, which would be an alternative to bond-based financing.
"The emergence of this alternative funding reflects the improved outlook for Ethiopia and of the project in light of progress on the ground. The two proposals (bond-based and bank-based) have their own relative merits," said KEFI.
A decision will be made shortly, the company said.
Ethiopia is investing USD20 million into the project, with KEFI's partner ANS Mining Share Co investing USD38 million. This latter investment is now USD15.2 million upfront, from USD11.4 million previously.
These initial investments, KEFI said, are now subject to the normal administrative requirements. They also rely on off-site infrastructure being completed and independent assessments being updated.
Harry Anagnostaras-Adams, executive chair of both KEFI and TKGM, said: "I am delighted the project has reached this stage, after so many delays and setbacks as the country and the sector were going through quite an amazing change. We have shared the frustrations of our shareholders and our partners, but I now believe the project has encouraging momentum.
"As first mover for modern mining in Ethiopia, we have done the heavy lifting with the authorities and the community and we can now all share the benefits as we advance. It is especially pleasing to see the strengthening of capital market interest and support from capital providers both inside and outside the Ethiopia for the project."
KEFI shares were 7.4% lower on Monday at midday in London at a price of 1.47 pence each.
By George Collard; georgecollard@alliancenews.com
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