RE: Muktibagger23 Oct 2019 10:44
Tulu Kapi Gold Project, Ethiopia
· KEFI will own 80% of the exploration and holding company for Ethiopia, KME, which in turn will own 56% of TKGM, thus bestowing KEFI a 45% beneficial interest in the Project.
· KEFI is the operating partner of the operating joint venture company, TKGM. The other 55% beneficial interest is to be owned by the Company's long-standing partner, the Ethiopian Government and its more recently committed Ethiopian partner ANS Mining.
· Total TKGM subscribed equity is planned to be c. US$130 million including the past investment of c. US$60 million up to 31 December 2018 and the committed planned investment subsequent to that. Equity-funding will cover the initial phase of Project development and KEFI's partners have committed US$58 million (Ethiopian Birr equivalent) between them.
· Non-equity funding plans remain as previously reported. Debt-based finance of US$110 million for infrastructure, plus cash reserves, together with minor working capital facilities are planned. In addition, there are planned conventional construction and mine services contracts with the selected contractors.
· At a gold price of US1,400/oz the following are the estimates for the Project open pit only:
o Project export revenues are projected at c. US$200 million per annum, which would likely make it Ethiopia's largest single-enterprise export generator;
o TKGM NPV, at a discount rate of 8%, on start of production in 2021 is estimated at £196 million (US$249 million). From KEFI's viewpoint, the Company's planned 45% beneficial interest in the Project NPV at start of production would be £88 million (US$112 million); and
o Project free cash flow is estimated at £31 million per annum (US$40 million), of which KEFI's beneficial interest would be c. £14 million per annum (US$18 million).
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