JOHANNESBURG (miningweekly.com) – Aim-listed gold miner Kefi Minerals’ Tulu Kapi project in Ethiopia, is now expected to produce about 100 000 oz/y over a ten-year period, up from the previously estimated 75 000 oz/y over a 13-year period, owing to a planned increase in process plant capacity from 1.2-million tons a year to 1.5-million tons a year.

The expanded plant capacity would not increase the assumed level of funding required to develop Tulu Kapi, the company said in a statement, adding that construction contractors short-listed from the eleven candidates had now been invited to submit fixed price bids for the larger plant.

“The 33% increase in planned average yearly gold production has no effect on the openpit mine plan as set out in the definitive feasibility study, as it envisaged processing stockpiles over the final three years of a 13-year mine life.

“However, we expect to reduce all-in sustaining costs from $779/oz to $760/oz,” the mining company said.

The planned process plant expansion increased Tulu Kapi's after-tax net present value at the start of construction from $125-million to $147-million, based on unleveraged cash flows, a gold price of $1 250/oz and an after-tax discount rate of 8%.

Meanwhile, Kefi noted that a winning bidder had emerged from the five shortlisted candidates who bid for a six-year mine operation contract.

The winning bidder and the nearest bidders had now been invited to bid for an expanded scope of work to include the pre-mining site earthworks and the full ten years of mining the openpit. This was expected to further improve the mining costs per tonne. The company would then formalise an appointment.

"We are pleased to report an increase in Tulu Kapi's planned gold production and, in particular, that it is likely to have a favourable impact on the all-in sustaining costs and cash flow, thereby further improving the economics of the project.

"The emergence of the least-cost mining contractor, who will now need to bid for an expanded scope of work, also represents an important step towards reaching the development stage. We look forward to being able to report further improvements in project economics once the final bids have been received,” Kefi executive chairperson Harry Anagnostaras-Adams said.