Following meetings with senior representatives of stakeholders for aim-listed Kefi Gold and Copper’s Tulu Kapi gold project, in Ethiopia, at this year’s Investing in African Mining Indaba, all parties in the funding syndicate for the project will go to their respective committees this month to approve the $320-million transaction for the project.

The Ethiopian federal government also reaffirmed that its equity capital investment had been fully documented, committed and already partly invested.

As reported in Mining Weekly last month, Kefi received confirmation of conditional final credit committee approval from the lead lender for the project.

The contractors in the syndicate have all reaffirmed their intention and readiness to enter into the already-drafted definitive documentation to enable full project launch in the first half of this year.

Kefi notes that it is pleased with the long-standing collaboration with all parties involved and the current intensification of effort flowing from the government's key positive actions towards the end of 2023.

“The priority is to continue demonstrating safety while we implement the remaining, mainly administrative, tasks which are expected to be successfully and swiftly completed.”

Meanwhile, Kefi has started the requisite low-cost launch preparations to enable the project to move forward safely and efficiently.

Preparations include dispatching personnel into the field to brief the community and carry out required site works; dismantling the old exploration camp and installing new communication systems and staging bases along the company’s transport route as part of the upgrade of safety systems; and works by contractors.

Moreover, the long-agreed $320-million financing plan – excluding the mining fleet provided by the contractor and excluding historical expenditures of around $100-million – has been refined.

This involves the debt portion of $190-million that remains from lead lender the Southern and Eastern Africa Trade and Development Bank and co-lender the Africa Finance Corporation; the $40-million from share issues by Kefi subsidiaries that remains from the federal and regional government; and the $70-million equity risk notes that remain largely from local subsidiaries of multinational corporations who have been given government permission to invest local currency and be repaid in hard currency, repayable in cash or equity at Kefi's election as from year four at then market prices.

Additionally, having received the recent clarifications, Kefi notes that the subsidiary-level equity-ranking product-linked funding piece of $20-million can now also be finalised.

Discussions have already begun with well-known industry-specialist financiers.

“We have deliberately withheld commitments on this until now, when the rest of the funding package is clear.”

The principal project contractors are Lycopodium for process plant design and construction, PW Mining and the Ethiopian Electric Power Company and the Ethiopian Roads Authority.

"This multiparty 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.

"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.

"While 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 1980s,” says Kefi executive chairperson Harry Anagnostaras-Adams.