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(Sharecast News) - Gold and copper explorer and developer Kefi updated the market on the progress of its Tulu Kapi Gold Project in Ethiopia on Tuesday.
The AIM-traded firm said that, following discussions with key stakeholders at the Mining Indaba 2024 in Cape Town, South Africa, it had made significant advancements in project launch preparations.
It said a number of critical milestones were achieved in October, meeting the conditions precedent set by project lenders and paving the way for final credit committee approval by the lead lender in January.
At the moment, all other parties in the funding syndicate were moving towards approving the proposed transaction this month.
The board said the Ethiopian Federal Government, a key participant, had reaffirmed its commitment to equity capital investment, which had already been documented and partly invested.
Additionally, contractors involved in the syndicate had confirmed their readiness to finalise definitive documentation, facilitating the project's full launch in the first half of 2024.
In parallel with financing activities, Kefi said it had initiated low-cost launch preparations, focusing on community engagement and physical infrastructure enhancements.
That included briefing the local community, upgrading safety systems along transport routes, and various works by contractors such as establishing corporate entities and procuring necessary equipment.
Regarding project financing, a $320m funding plan had been refined, incorporating debt, equity, and equity-linked products.
Notably, discussions to finalise a subsidiary-level equity-ranking product-linked funding of $20m had started.
The project's principal contractors included Lycopodium for process plant design and construction, PW Mining for mining services, and Ethiopian Electric Power Company and the Ethiopian Roads Authority for infrastructure development.
"This multi-party subsidiary-level financing is now advancing on the back of the government commitments finally received in October, triggering the lead-lender to quickly process its approval in December 2023 and now all other stakeholders triggering their respective flow-on processes," said executive chairman Harry Anagnostaras-Adams.
"This ramp-up of activities by all stakeholders coincides with a take-off of mineral sector activities in Ethiopia and in our other host country, Saudi Arabia.
"Whilst Tulu Kapi will be the first internationally financed bankable project development in Ethiopia, many other projects' exploration and related activities are now being remobilised in the country, including Allied Gold, SunPeak, Akobo Gold and privately-owned conglomerate Midroc, which is now drilling-out its proposed second mine, already being the operator of the Lege Dembe Mine developed by the Ethiopian Government in the 1980's."
At 1400 GMT, shares in Kefi Gold and Copper were up 16.93% at 0.67p.
Reporting by Josh White for Sharecast.com.
