PREPARATIONS FOR USD320-M ETHIOPIAN TULU KAPI GOLD PROJECT START
• PROJECTS AND EXPLORATION
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PREPARATIONS FOR USD320-M ETHIOPIAN TULU KAPI GOLD PROJECT START
Location : Ethiopia Phase : Development Resource : Gold
On the 13 February 2024 , KEFI the gold and copper exploration and development company , provided an update on project launch preparation activities at the high-grade Tulu Kapi Gold Project in Ethiopia following several days of meetings with senior representatives of the Tulu Kapi stakeholders at Mining Indaba 2024 in Cape Town , South Africa .
The three critical conditions precedent set by the project lenders were formally achieved in October 2023 . This led to final credit committee approval by the lead-lender . All the other parties in the funding syndicate had advised they would go to their respective committees in the month of February to approve the proposed transaction .
The Ethiopian Federal Government also attended and reaffirmed its equity capital investment had been fully documented , committed and already partly invested . The contractors in the syndicate had all reaffirmed their intention and readiness to enter into the already drafted definitive documentation to enable full project launch in H1 2024 .
The company said it was pleased with the long-standing collaboration with all parties involved and the current intensification of effort flowing from the government ’ s key positive actions towards the end of 2023 . The priority is to continue demonstrating safety whilst implementing the remaining – mainly administrative – tasks , which are expected to be swiftly completed .
Preparations Whilst the drawdown of the USD320-million project funding is awaited , KEFI has started the requisite low-cost launchpreparations to enable the project to move forward safely and efficiently . These include :
• Personnel being dispatched into the field to brief the community and carry out required site works ;
• Dismantling the old exploration camp ( on the planned open pit ) and installing new communication and staging bases along the transport route as part of the upgrading of safety systems ; and
• Works by contractors , including :
◦ process-plant contractor completing front end engineering and design ;
◦ mining contractor establishing its local corporate entity and clearing its work rosters with the department of labour ;
◦ electricity contractor procuring all ( and taking delivery of most ) of the equipment required for connection to the mains grid ; and
◦ road contractor completing upgrades to some bridges on existing routes , as well as the surveys of the new additional all-weather access road .
Project and subsidiary financing The long-agreed USD320-million financing plan ( excluding the mining fleet provided by the contractor and excluding historical expenditures of approximately USD100-million ) has been refined as follows :
• the debt portion of USD190-million remains from lead-lender Southern and Eastern Africa Trade and Development Bank and co-lender Africa Finance Corporation ;
• the USD40-million from share issues by KEFI subsidiaries remains from the Federal and Regional Government ;
• the USD70-million Equity Risk Notes remain largely from local subsidiaries of multinational corporations who have been given government permission to invest local currency and be repaid in hard currency , repayable in cash or equity at KEFI ’ s election as from year four at then market prices ; and
• having received the recent clarifications , the subsidiary-level equity-ranking product-linked funding piece of USD20- million can now also be finalised . Discussions have already commenced with well-known industry-specialist financiers . The company deliberately withheld commitments here until the rest of the funding package was clear .
The principal project contractors are Lycopodium Limited ( process plant design and construction ), PW Mining ( mining services ), Ethiopian Electric Power Company and Ethiopian Roads Authority .
Executive chair , Harry Anagnostaras-Adams , commented : “ This ramp-up of activities by all stakeholders coincides with a take-off of mineral sector activities in Ethiopia and in our other host country , Saudi Arabia .
“ Whilst Tulu Kapi will be the first internationally financed bankable project development in Ethiopia , many other projects ’ exploration and related activities are now being remobilised in the country , including Allied Gold , SunPeak , Akobo Gold and privately-owned conglomerate Midroc , which is now drilling-out its proposed second mine , already being the operator of the Lege Dembe Mine developed by the Ethiopian Government in the 1980 ’ s .”
Source : Supplied by KEFI
Tulu Kapi will be the first internationally financed bankable project development in Ethiopia .
10 • African Mining • April 2024 www . africanmining . co . za