KEFI asks all Tulu Kapi contractors to prepare to proceed at the end of this quarter
Among the many ongoing activities that are underway, property surveys for the resettlement of around 350 properties, including 130 households, are now being reviewed against strict verification standards and procedures.
The phased compensation and subsequent resettlement will be in compliance with Ethiopian Law and World Bank IFC Performance Standards.
In addition, updated tender prices for mining services are being evaluated, the construction of initial site facilities is underway, including expanded water supply and camps for construction and security.
This quarter the company aims to secure government approvals in regard to residual administrative matters, including AFC membership ratification by the Ethiopian Parliament, and independent certifications for the project's fixed price construction contracts, security, community commitments and overall schedule.
All contractors have been asked to prepare to proceed from the end of this quarter.
Operational management is also being installed at project company Tulu Kapi Gold Mines S.C. (TKGM), with Simon Cleghorn as managing director, and Theron Brand as finance director.
On the financing front, meanwhile, KEFI continues to optimise the finance syndicate at the subsidiary level.
The plan is to deploy US$300 million of capital, comprising US$240 million from secured lenders and US$60 million raised from either the sale of special US-dollar linked preference shares or the sale of a 15% stake in the company’s Saudi joint venture, or both.
"The preparations for full launch of Tulu Kapi gold project are advancing across all fronts for signing this quarter of the assembled detailed definitive documentation,” said KEFI executive chairman, Harry Anagnostaras-Adams.
“The economic metrics continue to improve, and the stakeholder support is across-the-board. Excluding the potential of the underground resources at Tulu Kapi, the business plan model projections results in over seven years of production, averaging 167,000 ounces per year, generating a net cash flow to project shareholders of between US$1.1 billion and US$1.6 billion at gold prices of between US$2,400 and US$3,000 per ounce over the life of the project."
View from Vox
The momentum looks unstoppable now. Contractors have been given a start date, the government is onside, the gold price is making the economics look compelling, and financing companies have got comfortable both with the project and with the jurisdiction. Expect plenty more news flow in the coming months.
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