Ethiopia Government to Invest up to US$20m in Tulu Kapi Gold Project

Posted on : Tuesday , 17th November 2015

AIM-listed gold exploration and development company Kefi Minerals has received formal confirmation from the Government of Ethiopia of its intent to invest between US$15 and US$20 million in the Tulu Kapi gold project.
This investment will provide the government of Ethiopia with an equity interest in Kefi Minerals Ethiopia (KME), a wholly-owned subsidiary of Kefi Minerals that owns and operates the project, of approximately 20-25% based on the projected enlarged paid-up share capital of KME, including the Government’s pre-existing 5% free carried-interest.

The intended investment by the government implies a project value of approximately $75 million at its current stage of development and reflects the aggregate of equity capital invested into KME.

At a typical consensus gold price of $1,250/oz, Project NPV is $168 million, once fully funded and based on the unleveraged after tax cash flows discounted at 8%.

Monies invested by the government will be used to fund the roads, power and certain other associated infrastructure required by the project.

This formal investment decision follows last month’s appointment of African Mining Services as the preferred project contractor and supports the company’s timetable to assemble the full financing syndicate in the fourth quarter of 2015.

“Kefi Minerals is honoured to have received from the government of Ethiopia the formal confirmation of its intended equity investment into the Tulu Kapi gold project. This demonstrates their commitment to the project and confidence in our ability to deliver it,” says Kefi Minerals executive chairman Harry Anagnostaras-Adams.

“We look forward to exploring other growth opportunities within Ethiopia in full compliance with the government’s policies and regulations, and to supporting the expansion of their  minerals sector,” he added.