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KEFI Minerals raises final tranche for Tulu Kapi construction
KEFI Minerals on Monday saw its shares jump after it raised $30m from the sale of a stake in its local Ethiopian subsidiary, completing funding requirements for the construction of the Tulu Kapi gold mine.
The investment stems from an Ethiopian investment syndicate's acquisition of a 30% ownership in subsidiary KEFI Minerals (Ethiopia) Limited, with the syndicate set to invest $9m in August before providing the remaining balance on the close of project finance.
As such, KEFI Minerals will retain a 54% interest in Tula Kapi, with the investment syndicate and the Ethiopian government making up the remaining interest.
Harry Adams, chairman of KEFI Minerals said: "KEFI's remaining c.54% beneficial interest in the project, along the lines previously foreshadowed, gives the company an implied valuation of $66m based on these transaction metrics, whilst not including any value for the Tulu Kapi underground deposit or the exploration prospects in Ethiopia and Saudi Arabia, the largest countries within the highly prospective Arabian Nubian Shield where KEFI is focused."
AIM-traded mining firm KEFI Minerals said the recent developments reflect its commitment to "maximum feasible 'Ethiopianisation' at every level of its activities in the country," thus garnering support from federal and regional governments.
The project will directly employ and train over 1,000 people by the end of 2019 and will generate export revenues of approximately $200m, according to KEFI Minerals.
"KEFI has now assembled the proposed full project funding consortium, including contractors, equity and non-equity capital and is expected to move towards full financial close later this year by closing out the remaining Ethiopian Government processes and approvals, along with completion of due diligence and formal documentation," said Adams.
Local government has begun allocating compensation to resettled families and KEFI Minerals has committed to a "livelihood restoration program" as part of its licensing agreements.
This programme will see company site managers overseeing a social performance team and running community programmes.
As of 1045 BST, KEFI Minerals' shares were up 41.79% at 3.97p.