Name and Location
Tulu Kapi gold project, Ethiopia.

Client
Kefi Minerals.

Project Description
Tulu Kapi has a current mineral resource estimated at 20.2-million tonnes grading at 2.65 g/t of gold, and a reserve estimate of 15.5-million tonnes at 2.12 g/t of gold.

The project’s definitive feasibility study (DFS) is based on a conventional openpit drill-and-blast, and load-and-haul mining operation on 7.5 m benches, as well as a 1.5-million-tonne-a year carbon-in-leach processing plant, with gold recoveries averaging 91.5%.

Using semiselective mining techniques and 120 t backhoe configured excavators, it is planned that process ore will be mined above a cutoff of 0.9 g/t of gold for the first ten years, with ore mined between 0.5 g/t, and 0.9 g/t of gold being stockpiled for later processing.

The project is expected to produce 105 000 oz of gold over its ten-year mine life.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value (NPV) at the start of construction of $147-million, at an 8% discount rate, based on unleveraged cash flows, a gold price of $1 250/oz and an after-tax discount rate of 8%.

Value
Total capital for the project is estimated at $129.6-million.

Duration
Commissioning of the processing plant is expected to start in the fourth quarter of 2016, with gold production expected to start in 2017.

Latest Developments
Kefi has raised about $4-million through a conditional placing to advance its Tulu Kapi project.

The group has issued 877-million new ordinary shares of 0.1p each at a price of 0.3p apiece by way of a placing through Brandon Hill and the subscription of 54.8-million placing shares by Ausdrill.

The directors of Kefi and certain existing substantial shareholders have agreed to subscribe for placing shares pursuant to the placing – subscribing for an aggregate 60% of the sums raised.

Major shareholder Odey Asset Management will increase its shareholding from 10% to 26% upon the listing of the new shares.

The gold exploration and development company embarked on the placing to secure working capital to start the development of the Tulu Kapi gold project following renewed certainty about the respective roles of contractors and government.

“. . . we are now able to focus on finalising financing terms with our preferred syndicate, including the already-selected contractors and the government of Ethiopia. We have begun preparations for development and remain on track to commence production in 2017,” Anagnostaras-Adams has said.

Following the confirmation of intent by the Ethiopian government to invest $15-million to $20-million in Tulu Kapi in return for an increased equity interest, Kefi appointed the contractors for the plant construction and start-up, and for the mine start-up and operation in October.

Forward-teams have been mobilised by the contractors to start local procurement and other preparatory tasks to get the 22-month development of the project under way.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kefi Minerals (Ethiopia), tel +251 11647 9976/73 or fax +251 11647 9975.