Name of the Project
Tulu Kapi gold project.

Location
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.

Jobs to be Created
Not stated.

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 estimated funding requirement, including contingencies and provisions, is between $150-million and $160-million, with a $20-million committed equity investment from the government of Ethiopia as it increases its ownership in the project to 30%.

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 said that progress is being made in ongoing discussions with Ethiopia’s government and development bank as work advances on its flagship Tulu Kapi gold project.

Negotiations with the Development Bank of Ethiopia, which this year completed an evaluation process of the emerging gold project for senior secured debt are at an advanced stage, with the parties now awaiting the appointment of a co-lender.

In line with this, government has established an investing entity, the Ethiopian Mines, Petroleum and Bio-Fuel Corporation.

“The government's recent policy directive requiring a maximum 50% debt-gearing policy for new projects is considered consistent with Kefi's plans because clarifications received from the National Bank of Ethiopia (the regulator) indicate that historical spend on the project of approximately $60-million counts as equity in the calculation,” the company has told investors.

The gold exploration and development company is also continuing its support role in the community resettlement, livelihood restoration and community development programmes that are under way.

The first phase of the community resettlement programme is expected to start by the end of the year, triggering minor works at Tulu Kapi, with major works to start in the second quarter of 2017.

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.