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 15.4-million tonnes at 2.12 g/t of gold.

Kefi has reported progress on the preferred development and financing plan for the project as refined since the 2015 definitive feasibility study (DFS).

The preferred development plan envis-ages gold production of 980 000 oz over nine years at an average of 115 000 oz/y, excluding the start-up year and the closure year. The comparative 2015 DFS estimates were 960 000 oz over 13 years at a steady-state average of 95 000 oz/y for the core production period. The Tulu Kapi development plan is based on a conventional openpit mining operation and a 1.5-million-tonne-a-year to 1.7-million-tonne-a-year carbon-in-leach (CIL) processing plant, with gold recoveries averaging 93.3%. Using semi-selective mining techniques, it is planned to process ore grading higher than 0.5g/t gold.

Net Present Value/Internal Rate of Return
The preferred financing plan will result in an internal rate of return of 50% and a projected net present value at the start of production at the end of 2017 of $197-million, at a discount rate of 8%.

Value
The preferred development funding plan requirement is estimated at $122.9-million, including working capital. The exact quantum will be finalised nearer to financial closing, which is expected in the second quarter of 2016 (for minor elements such as cost-overrun requirements and preproduction costs of hedging and finance), to reflect final plant procurement terms and the then-prevailing gold spot and forward prices.

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 is focusing on selecting the preferred gold-streamer, based on tabled headline terms, and then formalising documentation for the financing syndicate as a whole.

Front-end development engineering and design are at an advanced stage, with the development schedule, along with the community resettlement schedule, expected to start in 2017.

Meanwhile, the preliminary economic assessment (PEA) of the underground mining potential at the proposed Tulu openpit has produced positive results. The PEA indicates that the total production of the openpit and underground mine at Tulu Kapi could be about 150 000 oz/y.

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.