ADDIS ABABA- KEFI Minerals on Thursday said it has secured additional $18 million or about 800 million birr from shareholders for developmental projects including the launch of Tulu Kapi in Ethiopia.
In addition to the Tulu Kapi, the company said the fund will also be allocated for its two other development projects in Saudi Arabia, Hawaii Copper & Gold and Jibal Qutman Gold.
The announcement came a month after the Ministry of Mines of Ethiopia reportedly gave KEFI Minerals a final chance to perform its obligations in a letter written last month. It gives the Tulu Kapi Gold Mine S.C. or TKGM has until January 31, 2022 to procure the necessary finances to carry out operations.
In a statement today, KEFI Gold and Copper plc, the parent company of TKGM and KEFI Minerals Ethiopia Ltd said KEFI shareholders on Wednesday agreed to allocate an additional $18 million (or 800 million Birr) for developmental projects including the launch of Tulu Kapi.
The company said the fund is a small two-stage capital raising from its 5,000 shareholders on the London Stock Exchange of £13 million or $18 million.
“KEFI Directors and management themselves invested over US$2 million which is approximately 100 million Ethiopian Birr in today’s capital raising in London,” said Dr Kebede Belete, Chairman of KEFI Minerals Ethiopia Ltd.
“By this investment, combined with their shareholding of more than 10% in KEFI, this highly experienced senior team which has also managed some of the world’s largest mining companies demonstrates its full commitment to the development plans of the company, starting with Tulu Kapi,” said Kebede, who is also Deputy Chairman of TKGM.
According to the chairman, KEFI subsidiary KEFI Minerals Ethiopia Ltd has already invested over US$70 million into Tulu Kapi Gold Mines S.C.
It also “plans to further invest over $300 million or 13 Billion Ethiopian Birr for Tulu-Kapi project development, financed by its already assembled consortium which includes Africa’s leading gold plant designer Lycopodium,” Kebede added.
The Tulu Kapi Gold Project will generate direct employment for approximately 1,000 people from West Wolega and indirect employment for upto 10 times that number of people.
According to the chairman, the modern discovery of the industrial scale gold deposit at Tulu Kapi was approximately 15 years ago and KEFI was invited to take control in 2014 to introduce the latest international standards to the project.
KEFI said it has since then updated the mine design and successfully worked hard with Government regulators in assisting with policy initiatives like international bank accounts, market-based interest rates, the right to use gold price insurance or hedging, 70/30 capital ratio in recognition of the capital intensity of industrial-scale mining and the encouragement of Ethiopian country membership for multilateral development banks which allocate capital to African countries in particular.
The Tulu Kapi Gold Project consortium includes major African multilateral development banks East African Trade and Development Bank and African Finance Corporation.
As part of the Tulu Kapi Project Consortium, the banks signed their initial deal terms sheets two years ago.
“Since then they have completed independent experts due diligence reports and now await security and other normal requirements like detailed documentation and insurances to be satisfied to support the launch of the project,” the company said.