Ethiopia – AIM-listed gold exploration and development company Kefi Minerals has appointed African Mining Services (AMS) as preferred contractor for mine establishment and operation at the Tulu Kapi gold project in Ethiopia.
Tulu Kapi is located within the highly prospective Arabian-Nubian Shield and has an attributable gold mineral resource of 1.72Moz plus significant resource growth potential.
AMS, which is a wholly-owned subsidiary of Ausdrill, has strong African operational skills and a successful track record, having been appointed open the pit mining services contractor for Perseus Mining’s Edikan gold mine in Ghana.
The appointment of industry stalwart Ausdrill/AMS as preferred mining contractor is a profoundly important step forward in setting up Tulu Kapi both for development and for long term operation, says KEFI Minerals COO Wayne Nicoletto.
Executive chairman Harry Anagnostaras-Adams said KEFI is pleased to have joined forces with Ausdrill and its long-standing African subsidiary, AMS, which have a record second to none. KEFI greatly appreciates the support and commitment, and looks forward to starting the work on the ground.
The project scope of work covers certain pre-mining earthworks as well as the life-of-open-pit mining operation, with the contractual payment rate to be based on per cubic metre delivered.
The contract is on condition of direct purchases by KEFI of certain key input costs such as explosives and fuel.
The next step is for Kefi and AMS to jointly optimise the detailed operating plan for the benefit of the project and to prepare matching detailed contractual documentation.
Tulu Kapi’s financial projections are re-affirmed an all-in-sustaining costs of US$760/oz, with a peak funding requirements of $120 million. Funding will be sourced from a combination of debt and gold streaming of $100 million along with project-level equity of $20 million.
The provisions for cost overrun and finance charges will be checked and allocated between the funding/contracting syndicate as part of finalising inter-creditor arrangements.
KEFI is targeting production at Tulu Kapi and Jibal Qutman in Saudi Arabia to generate cash flows for further exploration and expansion as warranted.
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