Aim-listed Kefi Gold and Copper has said that the security situation in Ethiopia has materially improved since the end of last year, following the end of the civil war in the country's northern regions during December, the lifting of the national state of emergency in February, and the agreed ceasefire in March.

Kefi has a vested interest in Ethiopia, where the Tulu Kapi gold project is being progressed towards development, following the granting of a mining licence in April 2015.

No other mining project of this scale in Ethiopia has been brought to Tulu Kapi's stage of advancement during recent years, Kefi said on July 13, adding that Tulu Kapi would be the first industrial-scale mine development in Ethiopia in over 30 years.

Kefi said the focus of Ethiopia’s political rivals was now peaceful negotiation and the focus of the domestic security forces has now switched to the policing of priority areas, which still experience localised conflicts from time to time. No such conflicts have taken place in the vicinity of the project site, however.

Tulu Kapi's stakeholder management and security systems, comprised of apparatus, policies, procedures and team structures, have been upgraded, while field activities within the Tulu Kapi district have continued to build ahead of full project launch, focusing both on the site and its transport and supply routes.

There is no artisanal activity at or near Tulu Kapi, no mining legacy issues, no inter-ethnic rivalry and, despite the wide-ranging changes in local politics over recent years, no local parties have ever sought to obstruct the project.

“It has taken years of extensive technical redesign of the project, years of overhaul by the Ethiopian authorities of financial policies, which previously hindered mining project finance and the patient and cautious traversing by the company of recent well-publicised events within the country,” Kefi said.

The company added that the project had imposed many demands on a regulatory system, which the Ethiopian government continued to upgrade, determined to build a modern minerals sector.

During the second quarter, project launch preparations continued.

The project financing umbrella agreement was signed in the second quarter, while the associated documentation has been assembled with the project's lead lenders and equity investors, and the focus has been maintained on full project launch in the Ethiopian dry season, starting in October – pre-conditioned on the security situation being independently assessed as completely ready and the few remaining regulatory administrative tasks being completed.

In collaboration with the regulatory agencies at all four levels of the Ethiopian government, progress during the second quarter was made on several fronts.

Firstly, initial community youth employment programmes were established which support the project, such as those covering road maintenance and expansion of revegetation nurseries.

Secondly, the Ministry of Mines has now audited and endorsed the historical project costs incurred up to 2020 of about $80-million, and can now report this to the Ethiopian central bank.

Thirdly, the central bank has permitted that both development banks be allowed to lend on the same terms, while formal ratification is awaited from the government.

Kefi said it remains keen to restart exploration of additional prospects that have been successfully identified within the Tulu Kapi district exploration area. While most historical drilling was of the Tulu Kapi deposit, there was significant work done on many further prospects which await follow-up, the company said.

"Work is gathering pace. . . We are firmly on track . . . in Ethiopia for financial close and the launch of construction of our Tulu Kapi gold project. This marks the beginning of an exciting chapter . . . and continues to demonstrate our ability to operate as a first-mover explorer and developer in challenging environments," Kefi executive chairperson Harry Anagnostaras-Adams said.