Tulu Kapi’s net funding requirement reduced to $130m

JOHANNESBURG (miningweekly.com) – The net funding requirement for Aim-listed Kefi Minerals’ Tulu Kapi project, in Ethiopia, has been reduced to about $130-million, from a previously anticipated $145-million, following further refinements to project contracting arrangements and project plans.

The company now envisaged a ten-year openpit plan, compared with the previous 13-year openpit plan, which resulted in the lower net funding requirement.

The revised plan would result in Tulu Kapi producing about 115 000 oz/y of gold at steady-state at an all-in sustaining cost of $746/oz.

The updated plan was expected to result in an increase in net cash generation of $58-million a year, with gold price projections of $1 250/oz indicating that $173-million would be available for debt repayment, reinvestment and dividends in the first three years of production.

The average cost of finance had also been reduced by removing a large gold stream finance facility and replacing it with alternative capital sources – a decision that was taken in consultation with the proposed lead banks and major shareholders at project and company level.

The company noted on Thursday that it remained on track to execute syndicated financing documentation by the end of the third quarter of this year.