Ethiopia – AIM-listed gold exploration and development company Kefi Minerals has raised US$4 million to progress the development of the Tulu Kapi gold project in Ethiopia.
Kefi has conditionally raised approximately £2.6 million, before expenses, through the issue of 877 million shares of 0.1p each at a price of 0.3p per share by way of a placing through Brandon Hill Capital, which was raised together with a subscription of 54. 8 million shares directly with the company by Ausdrill International.
Kefi is undertaking the placing to provide working capital for the implementation of its exploration and development activities in Ethiopia and Saudi Arabia, in particular the preparations for commencing the development of the Tulu Kapi gold project in western Ethiopia.
The placing proceeds are budgeted to cover expenditures pending initial drawdown of project finance and to cater for activities across the company, including development preparations in Ethiopia, preparation of the mining licence application for Jibal Qutman in Saudi Arabia, exploration activities, progressing project financing arrangements, payment of inherited VAT liabilities in Ethiopia and general corporate administration costs.
On 13 and 14 October 2015 respectively, Kefi announced the appointment of its contractors for plant construction and start-up and for mine start-up and operation. The terms agreed with the contractors indicate a capital requirement of $129 million, which is intended to be satisfied by $110 million from the aggregate of project debt and gold streaming finance and between $15-20 million from project-level equity from the Government of Ethiopia.
Now that the respective roles have been agreed with the contractors and government, Kefi can proceed to assemble the remainder of the preferred financing syndicate.
The proceeds of the placing will also provide working capital for the company while these processes continue.
“We are delighted by the faith shown by our shareholders as we move ever closer to becoming a gold producer.
“As a result of the placing, we are now able to focus on finalising financing terms with our preferred syndicate including the already-selected contractors and the Government of Ethiopia. We have begun preparations for development and remain on track to commence production in 2017,” says Kefi Minerals executive chairman Harry Anagnostaras-Adams.