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 envisages 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 semiselective mining techniques, it is planned to process ore grading higher than 0.5 g/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 net funding requirement for the Tulu Kapi project has been reduced to about $130-million, from a previously anticipated $145-million, following further refinements to project contracting arrangements and project plans.

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 appointed Australian firm Lycopodium as the preferred engineering, procurement and construction (EPC) contractor to build the process plant for the Tulu Kapi mine.

Lycopodium will replace the previously announced preferred EPC contractor Sedgman.

Kefi has said that Lycopodium’s proposal offers better financial terms and an unchanged timetable, with construction of the plant still on track to start in the fourth quarter of this year.
  
Lycopodium is expected to become a shareholder in Kefi, alongside Ausdrill, the mining contractor for Tulu Kapi.

Subject to full legal documentation and completion of the finance syndication, each of the two contractors could gain a less than 10% shareholding in Kefi.

Lycopodium has also given Kefi the option to pay for the first $2.5-million of the plant construction programme of works in Kefi shares.

Key Contracts and Suppliers
Ausdrill (mining contractor) and Lycopodium (EPC contractor).

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.
Ausdrill, tel +61 8 9311 5666 or email info@ausdrill.com.au.
Lycopodium, tel +61 8 6210 5222 or fax +61 8 6210 5201.