Sunday , April 14 2024

Ethiopia’s Tulu Kapi gold projects gets funding

Kefi Minerlas has signed on-site funding agreement for Tulu Kapi gold project in Ethiopia.

The $135-million deal with Oryx Management to finance and operate all the on-site infrastructure follows Kefi’s signing of terms with the Ethiopian government to fund the building of all off-site infrastructure for the project.

“Kefi has selected a development funding approach considered more appropriate for start-up purposes than bank debt, owing to its longer nine-year tenor and its repayments commencing 30 months after drawdown,” said Kefi Executive Chairperson, Harry Anagnostaras-Adams.

According to the deal, Oryx would establish a special purpose vehicle to issue bonds, with the proceeds used to build and own all the on-site infrastructurefor the project, which it would then lease to the projectcompany Tulu Kapi Gold Mines.

“Ignoring historic investment of about $60-million, the project’s remaining funding requirement has now been successfully reduced from $289-million when Kefi took control in 2014 to $160-million, before overlaying the Oryx proposal, to a residual balance of about $32-million,” Harry Anagnostaras-Adams said.

The residual balance, which includes $13-million of contingency provisions, will now be further evaluated and refined, structured and sourced over the next few months, with the possibility of further reducing this amount.

“A variety of sources to finance the estimated residual requirement of $20-million to $30-million are being considered, including working capital facilities with the Development Bank of Ethiopia, project-level equity with a mining and engineering group and further equity from Kefi in the project company,”  said Anagnostaras-Adams.

It is expected that the financing from the Ethiopian government and Oryx will be provided and that development will kick off before the end of this year.

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