Gold exploration and development company Kefi Gold and Copper has announced that all lead contracting and equity investment parties have agreed to the draft agreements for the financing of the Tulu Kapi gold project, in Ethiopia.  

The project, which has a total cost of $320-million, has received in-principle agreement from the lenders and is now in the process of being finalised for approval by syndicate members and regulators.   

This is a significant development for Kefi, as the company has now secured the support of nearly all government agencies involved in the syndicate.  

The company said on January 23 that the financing plan for the project is progressing as expected and that it is confident the project will move forward successfully. 

Kefi said the lenders have reaffirmed the financing plan in principle and have formally set out their indicative terms and conditions, which include satisfaction by all parties of their respective conditions and the receipt of all the necessary remaining Ethiopian government approvals. 

To this end, during the last months of 2022, the various relevant regulatory agencies were advised of the specific conditions and clarifications required from them so that progress could be made with the financing and definitive documentation signed, Kefi said. 

While the Ethiopian government is clarifying the outstanding regulatory matters, it is also reorganising its systems around the project, including for upgraded security and for preparing the community for resettlement. 

Following the completion of these steps and the receipt of final credit committee approval by the lenders, Kefi will call a general meeting of its shareholders to seek formal shareholder approval of the transaction. 

The company said it expects all outstanding issues to be addressed imminently, the exact timing of which will largely be driven by the Ethiopian government’s process, so that final lender documentation can be completed, and signing can take place, enabling the Kefi general meeting to be called, funds to flow and full project launch to proceed. 

Kefi said that the focus remained on achieving full project launch as soon as practicable, with the aim to achieve a full production from the openpit operations in 2025 and from the combined openpit and underground operation a few years later for combined gold exports of nearly 200 000 oz/y. 

"This is a large, complex transaction in a challenging working environment, against a backdrop of turbulent equity markets and progressive political reforms in Ethiopia,” Kefi FD John Leach said.  

He explained that the Tulu Kapi financing package was predominately at the project or subsidiary level, which was also as planned for the company’s Saudi project developments, the first of which, Jibal Qutman Gold, was smaller than Tulu Kapi.  

Leach said that Jibal Qutman Gold was expected to start construction towards the end of the year, while Hawiah Copper-Gold, which is bigger than Tulu Kapi, is expected to start construction after production has started at Tulu Kapi and Jibal Qutman.