KEFI (AIM: KEFI), the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, is pleased to provide an operational update.
Today is election day in Ethiopia. These are widely regarded as the most important elections in the country's history. The electioneering atmosphere in the lead-up around the country has been one of vibrant, but peaceful campaigning, reflecting very positively on the reforms over recent years. Ethiopia remains amongst the highest growth countries in Africa and the world, whilst it continues to push its agenda of liberal and democratic reform.
Tulu Kapi Project Finance
The Tulu Kapi Gold Project (the "Project" or "Tulu Kapi") remains on track with previous guidance and KEFI, through its subsidiary Tulu Kapi Gold Mines Share Company ("TKGM"), has presented its Project finance syndicate and submitted its Project finance plan to the Ethiopian central bank ("National Bank of Ethiopia", or "NBE") for permission that it may proceed as outlined. This follows a long, thorough and rigorous due diligence process by the Senior Lenders.
Whilst the NBE conducts its review, the other outstanding administrative details are being progressed with the various Ethiopian Government agencies including, the Ministry of Mines and Petroleum ("MOMP"), Ministry of Finance, Ethiopian Roads Authority and Ethiopian Electricity Power Corporation. These are normal compliance procedures to enable KEFI/TKGM and its syndicate of financiers and contractors to proceed to financial closing, which includes, inter alia, execution of detailed documentation, subscription of the asset-level equity funds and triggering full development, with debt funds to be disbursed later this year in compliance with the Senior Lenders specified conditions.
These procedural matters include requests for finalising confirmations of registration of historic investment, establishment of correspondent bank account arrangements, confirmation of construction schedules for road and electricity, and various other administrative matters already agreed in principle.
Starting full development of the Project is the highest priority for KEFI and the Ethiopian Government. All key stakeholders are pushing hard to finalise preparations and the Company has undertaken to the MOMP that, upon timely receipt of these confirmations, KEFI will push to financial closing by the end of July 2021, or as near as possible thereto given the local document registration procedures and the COVID-affected limitations of syndicate parties' physical locations.
Recent Tulu Kapi Project Activities
KEFI continues to oversee the physical preparations for full development to be triggered at financial closing, such as:
Clearing of new host lands for community members to be resettled;
Overseeing the early works programme of detailed engineering and procurement, by principal construction contractor Lycopodium;
Supporting the planning and procurement programmes of mining services contractor Corica;
Overseeing the 'new access road' and 'electricity connection' works contracts; under which surveys and procurement has been completed;
Triggering compensation procedures for the first resettlers at the Tulu Kapi electrical substation site; and
Recruitment of further key personnel for the next stage of the Project.
Hawiah Gold Project
KEFI's operations in Saudi Arabia are conducted through its 34% owned joint-venture company, Gold & Minerals Ltd ("G&M"), where KEFI is the operating partner.
G&M are working to finish the Phase 4 drilling programme in Q3 2021 with the goal of reporting an expanded and upgraded Mineral Resource. With Ramadan having ended, drilling since late May 2021 has been 24/7 with three rigs on site.
The Preliminary Feasibility Study for the potential start of development of the Hawiah deposit in 2023 continues, and other recent activities have included the following:
Completion of the Environmental and Social Baseline Study;
Metallurgical testing progressing with reasonable recoveries so far being indicated for all principal metals, copper, gold, zinc and silver; and
Completion of the exploration camp construction.