Name and Location
Tulu Kapi underground gold project, Ethiopia.

Client
Kefi Minerals.

Project Description
Kefi has reported positive results on a preliminary economic assessment (PEA) on the underground mining potential at the Tulu Kapi gold project underneath the planned openpit.

As the final mine plan for the openpit indicates a core of eight years’ production averaging 115 000 oz/y of gold starting in 2018, adding the planned underground mine will potentially increase production to more than 165 000 oz/y of gold.

Access to the underground pit will be through a decline from the openpit.

Mining will involve mechanised stopes designed for a vertical thickness of 4 m to 5 25 m and larger widths. The lodes have been mapped up to a width of 180 m.

Ore from the openpit and underground mining operations will be processed in the Tulu Kapi processing plant.

Net Present Value/Internal Rate of Return
The PEA of the underground mining potential of Tulu Kapi indicates an estimated net present value (NPV) of $44-million at a gold price of $1 250/oz.

This is based on a preliminary underground study of the indicated and inferred resources reported in August 2014 and using updated capital and operating costs estimated in February 2016. Combined with the NPV of the planned openpit, the total operation will have an estimated NPV of $200-million, based on projected after-tax cash flows at a discounted rate of 8%.

Value
Capital expenditure for the openpit is estimated at $37-million.

Duration
Kefi expects to start development of the underground mine after Tulu Kapi has started generating positive cash flows from the openpit mine and repaying its development finance. The plan is to introduce underground production between Year 2 and Year 4 of the openpit operation.

Latest Developments
Based on the PEA, there is exploration potential for tripling the current under-ground resource from 330 000 oz/y to about one-million ounces a year.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kefi Minerals, tel +90 232 381 9431, fax +90 232 381 9071 or email info@kefi-minerals.com.