Grand opening of the first mine in Ethiopia in the last 30 years approaches

Tulu Kapi Gold Project

Kefi Gold and Copper partnered with the Ethiopian government to develop the Tulu Kapi Gold Project. Tulu Kapi is placed in the Oromia Region, approximately 360km west of Addis Ababa. The planned Tulu Kapi operation is an open pit gold mine and processing which will apply standard technology and the latest industry practices.

Figure 1. Tulu Kapi Gold Deposits. Source: Kefi Gold and Copper Official

It is estimated that the ore reserve of Tulu Kapi is ca. of 1.05 million ounces and mineral resources totaling 1.7 million ounces. It is expected that that the planned gold production will be ca of. 140 000 oz/y. The all-in-sustaining cost is calculated at $950/oz.

Legal and financial blueprint

In April Kefi Gold signed the agreement which informed about the roles of all syndicates, finance conditions, and conditions precedent to final formal approval being granted. The agreement provided a blueprint of development for Tulu Kapi deposit through 2023 which was laid out for the Ethiopian Ministry of Mines.

The proposed project financing of about $320m, exclusive $70 mln for the mining equipment (provided by PWM), now provides for an up to $245m package from the co-lenders. The remaining project finance will consist of both debt-risk capital (includes senior and subordinated debt – $190 mln). Additionally, there will be equity-risk capital amounting to $130 mln.

In the past few weeks, a high-level meeting between syndicate lender and company representatives was organized in Addis Ababa. It aimed to approve the final funding proposal and syndicate, under the final umbrella agreement with the National Bank of Ethiopia. On August 14th the new NBE directive which is combined with project details was publicized. According to KEFI Gold and Copper, this was one of the final action points that enabled to complete the Tulu Kapi financing package.

Project starts

On October 5th KEFI Gold and Copper received formal confirmation from the National Bank of Ethiopia. From this day Tula Kapi project is fully permitted and only procedural administrative confirmations are remaining.

During the project realization, Harry Anagnostaras-Adams explicated: “We move forward successfully despite the complexities of such syndications and, in particular, being the first to do so against the backdrop of a fast-changing Ethiopia. It is heartening to witness Ethiopia proactively working to regain its position as one of the highest-growth countries globally. We thank the new FDRE Ministry of Mines, H.E Habtamu Tegegn, and his team for their energetic leadership and his commitment to rapidly advancing the mining sector in Ethiopia.”

KEFI Gold and Copper have also signed agreements with project contractors, PW Mining International Ltd and Australian project management company Lycopodium. PW Mining International Ltd will provide mining services and Lycopodium will provide all organized services including construction management supply and labor hire services.

The project launch will be in Q4 2023.