JOHANNESBURG (miningweekly.com) – Retaining the bulk of its focus on the flagship Tulu Kapi gold project, in Ethiopia, asset developer Kefi Minerals will continue to advance it exploration portfolio of “carefully selected” targets in the Arabian-Nubian Shield, Kefi chairperson Harry Anagnostaras-Adams said on Wednesday.

"We made tremendous progress during the last quarter which, post period, culminated in the reactivation of the mining licence application (MLA) for Tulu Kapi.

“With the strong support of the Ethiopian government, Kefi can now see a clear path towards becoming a gold developer and commencing commercial production,” he said in a quarterly update.

TULU KAPI
Reflecting on the “historic” quarter ended September 30, the company said it had largely focused on receiving the requisite independent verifications of project plans and headline indicative financing terms to enable the reactivation of Tulu Kapi’s MLA in October.

The Ethiopian government had, meanwhile, indicated that it would expedite the processing of the MLA to enable the start of construction early next year.

Over the third quarter, Kefi also took full control of the project, after the shareholders of Tulu Kapi's previous vendor approved the sale of the remaining 25% for £6-million.

The company now owned 100% of the project, but this would convert to 95% upon the government exercising its right to a 5% free-carried equity position.

Moreover, the independent verifications received during the period included an updated Joint Ore Reserves Committee-compliant indicated and inferred mineral resource of 23.7-million tons at 2.51 g/t gold for 1.9-million ounces of gold.

In addition, an openpit mine plan had outlined targeted production of 86 000 oz a year for 10.5 years and the processing of 1.2-million tons a year at 2.4 g/t gold.

Meanwhile, post period-end, Kefi had received headline indicative financing terms of $100-million from several financial institutions, all of which were familiar with the project and had already undertaken initial due diligence.

“The finance plan remains to fund all predevelopment obligations and activities with equity capital of $5-million through mid-2015, and that the $130-million investment required for development in 2015 will be optimised in mid-2015 and mostly financed by project-related debt,” said the company.

Kefi was now working to update the definitive feasibility study, with other priorities including the assessment of cost-saving opportunities, such as the establishment of a refurbished plant rather than a new one and the use of contract mining rather than owner-mining.

EXPLORATION PROSPECTS
Kefi added that drilling and trenching had continued at its Jibal Qutman project, in Saudi Arabia, over the period, with July drilling results including 17m at 3.72 g/t gold, 8m at 3.22 g/t gold, 13m at 2.27 g/t gold and 22m at 2.51 g/t gold.

“Mineralisation remains open in three of the five adjacent pits included in the reported mineral resource,” Kefi advised.

Meanwhile, elsewhere in Ethiopia, the company continued drilling at licences adjacent to Tulu Kapi, reporting exploration results at Guji including 44 m at 1.73 g/t gold and results at the Chalte prospect of 8 m at 1.91 g/t gold.

Kefi believed these results reaffirmed the prospectivity for additional gold deposits within haulage distance of the planned processing plant at Tulu Kapi.