JOHANNESBURG (miningweekly.com) – As London-listed Kefi Minerals refines its financing and development plan for the Tulu Kapi gold project, in Ethiopia, focus now turns to the selection of the project’s preferred gold-streamer and the formalisation of the financing syndicate.
Following the engagement of financiers and appointed project contractors, a project partner and debt financiers and the advancement of the project’s front-end development engineering and design, the gold exploration and development company on Wednesday unpacked and presented the highlights of its preferred development and financing plans.
“The development and financing plan has been further improved with the syndicate of contractors and bankers which has emerged from our rigorous international selection process. Despite very tough capital market conditions, Tulu Kapi's robust economics have attracted support for production start-up in 2017, as planned,” said Kefi executive chairperson Harry Anagnostaras-Adams.
“While we continue to optimise our financing options pending finalisation and approval by the National Bank of Ethiopia in mid-2016, we have already selected our preferred syndicate of contractors and equity and nonequity capital [investors],” he added.
The syndicate's 2016 preferred development plan for the openpit Tulu Kapi highlighted gold production of 980 000 oz over ten years with an average of 115 000 oz/y.
This was higher than the comparative 2015 definitive feasibility study (DFS) estimates of 960 000 oz over 13 years at a steady-state average of 95 000 oz/y for the core production period.
The development plan accounted for all-in sustaining costs of around $742/oz, lower than the 2015 DFS estimate of $780/oz, while the projected net operating cash flow increased to $66-million a year from the initial estimates of $47-million.
The syndicate's preferred financing plan showed an internal rate of return of 50% and a projected net present value of $197-million, at a discount rate of 8%, by the end of 2017.
The initial project funding requirement, which would be finalised in the second quarter of this year, was estimated at around $120-million, including working capital.
The project’s debt-based and gold stream finance was expected to be around $100-million, excluding cost-overrun facilities, preproduction financing charges and hedging facilities.