Name of the Project
Tulu Kapi gold project.

Location
The project is located in western Ethiopia.

Project Owner/s
KEFI Minerals will own 80% of the exploration and holding company for Ethiopia, KME, which, in turn, will own 56% of Tulu Kapi Gold Mines Share Company (TKGM), thus bestowing KEFI with a 45% beneficial interest in the project.

Project Description
Tulu Kapi has an ore reserve estimate of 15.4-million tonnes at 2.1 g/t gold for 1.1-million ounces of gold.

Openpit gold production is estimated at 140 000 oz/y over a seven-year mine life.

Total life-of-mine production is estimated at 980 000 oz.

The conventional openpit mining operation will include a carbon-in-leach processing plant. The mine will be connected to Ethiopia’s electricity grid through a new 47-km-long, 132 kV dedicated power line relatively close to the country’s major hydropower-generation source. An emergency diesel power plant will also be installed to provide emergency backup power for critical process equipment in the event of a grid power failure.

A preliminary economic assessment indicates the economic attractiveness of mining the underground deposit adjacent to the Tulu Kapi openpit after the startup of the openpit and after positive cashflows have begun to repay project debts.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of $207-million at an assumed long-term gold price of $1 300.

The openpit has an internal rate of return of 49%.

Capital Expenditure
The 2020 Tulu Kapi plan shows total funding needs of about $221-million.

Planned Start/End Date
The start of full gold production at Tulu Kapi is expected in 2022.

Latest Developments
Kefi Minerals has recorded progress in achieving the goals of closing full project funding for its Tulu Kapi gold project in October.

"I am pleased to report that development and financing activities have been adjusted, following recent operational and global events, and plans remain on schedule for project finance closure in October, acceleration of construction in 2021 and gold production in 2022,” Kefi executive chairperson Harry Anagnostaras-Adams has said.

After inputs from all project contractors, TKGM has signed off all capital expenditure, operating and financing requirements as the final 2020 Tulu Kapi plan, he has added.

"The senior secured financiers are fully engaged in achieving our timetable. The final details of the finance plan await confirmation of the level of commitment from Ethiopian institutional investors, which we still expect will be clarified later this month.”

In spite of Covid-19, the implementation of the project development activities have continued as planned.

Infrastructure for the connection of roads and power and security upgrades, a long-lead activity, is on schedule to avoid delaying on-site construction over the next two years when new roads and electricity are required.

A road is being built into new host lands for Tulu Kapi residents to be resettled.

Security has also been significantly expanded in the mine licence area and surrounding district.

In terms of infrastructure for ore processing, process plant front-end engineering design has been completed by principal contractors Lycopodium, after updating pricing from the plant fabricators and integrating the results of recent geotechnical drilling in the final designs of foundations for the plant and dams.

Over the past 12 months, estimated capital expenditure (capex) for infrastructure has generally moved within the range of 5%, as refinements were considered, procurement markets varied with exchange rates and the impacts of Covid-19 had to be mitigated, besides other factors.

Estimated capex on owner's costs and interest during construction and other finance effects have fluctuated, with a net material overall saving, despite some costs having increased.

However, this is being more than offset by significant savings by changing the mix of the proposed funding sources and, in particular, using a more traditional project financing approach.

Key Contracts and Suppliers
Ausdrill (mine services).

Contact Details for Project Information
KEFI Minerals, tel +90 232 381 9431, fax +90 232 381 9071 or email info@kefi-minerals.com.