MAJOR FINANCING CONDITIONS PRECEDENT NOW MET FOR TULU KAPI
PROJECTS AND EXPLORATION •
generally could proceed unhindered . This was achieved in April 2023 with the triggering of escalated security in Tulu Kapi ’ s surrounding areas by the relevant government agencies .
The final material condition precedent was for clarification by the Ethiopian Central Bank of specific procedures for the project , agreeing rights to international bank accounts .
MAJOR FINANCING CONDITIONS PRECEDENT NOW MET FOR TULU KAPI
Location : Ethiopia Phase : Exploration Resource : Gold
KEFI Gold and Copper plc , reported on 19 June that all outstanding major financing conditions precedent requiring Ethiopian government input in relation to the company ’ s Tulu Kapi Gold Project have now been met .
This significant development enables the Tulu Kapi individual syndicate members to now proceed to final committee and board reviews and approvals for the USD390-million project finance package as set out in the Final Umbrella Agreement described in the company ’ s announcement of 27 April 2023 .
USD370-million of this package has already been covered by arrangements at the project and subsidiary level with firsttier banks , contractors and investors including the Ethiopian government itself at both the federal and the regional levels . The final USD20-million of the financing package has also now been allocated to a specific set of parties , with a view to it being finalised and structured over the following months as all the standard procedural conditions precedent are completed to enable funds flow , in particular the government ’ s formalisation of the details of the agreements now reached and of the compensation packages for the individual households being resettled , in accordance with the strict requirements of the law and World Bank IFC Performance Standards .
Previously outstanding conditions precedent KEFI has now resolved all major conditions precedent that were remaining with the Ethiopian government for the Project financing . Accordingly , details are now being checked by advisers to each syndicate member ahead of the signing of detailed binding definitive documentation in the near term .
The first major condition precedent was for the two banks in the funding syndicate to receive the same rights and protections in Ethiopia . This was achieved in March 2023 when Ethiopia granted African Finance Corporation country membership , a strategic initiative for Ethiopia and for the bank .
The second was the establishment of a permanent security force around Tulu Kapi to ensure that construction and the project
These three critical recent breakthroughs in as many months will now be built into the syndicate ’ s detailed definitive documentation . The boards and committees of the government agencies and the project finance syndicate of banks , contractors and investors are now being updated on all details so that they may formally consider final approvals for project launch .
Further support from Ethiopian government The Ethiopian government and its agencies have continued to show their support for the development of Tulu Kapi above and beyond meeting the afore-mentioned conditions precedent by undertaking several further recent initiatives :
• The Ethiopian Electricity Production Corporation has procured the major components for the project ’ s connection to the main power grid to ensure compliance with scheduled commissioning of the plant in 2025 ;
• The Ethiopian Roads Authority has reaffirmed the delivery schedule for the new all-weather access road ;
• An MOU has been signed with the regional government to increase the aggregate government equity investment in the Project , from USD20-million to USD30-million , as the government is keen to preserve an equity interest of c . 25 % alongside KEFI ’ s c . 75 %; and
• The minister of mines has circulated , for stakeholder comment , draft legislative reforms to encourage exploration and mining in Ethiopia . KEFI is actively involved in the various industry associations and is assisting where it can .
Harry Anagnostaras-Adams , executive chair of KEFI , commented : “ Today ’ s announced progress with the Ethiopian central bank is the third significant breakthrough in as many months . This set of supportive government initiatives clears the way for the launch of Tulu Kapi and reinforces the recent turnaround of the working environment in Ethiopia .
“ Our take-off in Ethiopia coincides with that in Saudi Arabia . These are the two largest jurisdictions in the highly prospective Arabian Nubian Shield . Both countries are now proactively supportive , and these continuing positive developments help to vindicate our longstanding focus there since 2008 and our tenacity to have successfully assembled three advanced projects and a world-class pipeline for future exploration .
“ Also , having just effected a capital raising to extinguish all liabilities , we have cleared the way for us to implement the USD390-million project finance package for our shovel-ready 140 000 oz pa Ethiopian gold project .” •
The Ethiopian government and its agencies have continued to show their support .
www . africanmining . co . za African Mining Publication African Mining African Mining • September 2023 • 13