JOHANNESBURG (miningweekly.com) – An inherited claim of $12-million for damages during exploration field activities at the Tulu Kapi gold project, in Ethiopia, between 1998 and 2006, has been reduced to $600 000, Kefi Minerals said on Tuesday.

The potential legacy liabilities – for a period which had predated Kefi’s involvement in the project – are expected to be further reduced as Kefi appeals to the Federal Supreme Court in Ethiopia on the basis that it “remains firmly of the belief” that it has no contingent or actual liability, having already settled any obligations when the matter was originally closed by both the regulators and the land occupiers.

“It is pleasing that the legacy issues we inherited on acquisition of Tulu Kapi are being dealt with as one would expect. This applied to the inherited reverse value-added tax liability Kefi had paid and has now begun to be reimbursed [for] – and [it] is now also applicable to the inherited exposure to any rehabilitation liabilities, which are also being laid to rest satisfactorily,” said Kefi executive chairperson Harry Anagnostaras-Adams.

The Federal Supreme Court has officially admitted Kefi’s appeal after due review and the case is expected to be heard within the next two years.

The claim for damages was lodged in 2014 based on the impact of exploration field activities, which comprised the construction of drill pads and access tracks.

The Oromia Regional Supreme Court rejected 95% of the claims as having no basis in fact or law, subsequently reducing Kefi’s potential liability to $600 000.

“No objections had been made until 2014, when certain parties from outside the Tulu Kapi district raised this matter and initiated court action. Those parties have since been removed by the court rulings from the list of plaintiffs,” the company explained.

Tulu Kapi is being progressed towards development and, following the granting of a mining licence in April 2015 and the subsequent completion of the definitive feasibility study, Kefi is currently refining contractual terms for project construction and operation.