JOHANNESBURG (miningweekly.com) – Aim-listed Kefi Minerals has made “good progress” in assembling a full consortium focused on raising all the development funding at project level for the Tulu Kapi mine.

The gold exploration and development company, which has projects in Ethiopia and Saudi Arabia, is planning a $150-million bond issue for debt, an increase on the prior $140-million target, to include extra cash reserves.

This is in addition to $40-million of project-level equity, half of which is the Ethiopian government's commitment, and excluding the already invested project equity of $60-million.

“The planned project consortium now includes the project contractors Lycopodium and Ausdrill, the government of Ethiopia and, under nondisclosure agreements, the bond arranger and one or more of the several potential project equity investors discussing terms,” the company said in an operational update on Thursday.

Kefi Ethiopia will remain the majority shareholder of Tulu Kapi gold mines, in which the government is co-shareholder.

The company plans to embark on exploration programmes in the second half of this year on a recently expanded land package targeting both gold and copper on "Tulu Kapi-style" gold mineralisation, as well as large volcanic massive sulphide systems.

Meanwhile, various preworks projects are under way, including the Ethiopian Roads Authority’s (ERA’s) expansion of the arterial road to within 12 km of Tulu Kapi as a prelude to upgrading the side roads to the project site as part of the government's project equity earn-in.

The ERA has committed to completing the upgrade by late 2019, while the Ethiopian Electric Power Company has confirmed it is planning to install the power connection from the main transmission line, also by late 2019.

“Various other preworks have been completed and are planned to serve schedule-efficiency as from the end of the wet season in Ethiopia from June to September, when major works can start,” the company said.

The project finance drawdown, subject to continuing satisfactory progress, is targeted to match the start of major works.

In the interim, due diligence, documentation and formalities continue.

Project commissioning is expected to start by the end of 2019.