Name of the Project
Tulu Kapi gold project.

Location
Western Ethiopia.

Project Owner/s
London-listed Kefi Gold and Copper (formerly KEFI Minerals) will own 80% of the exploration and holding company for the government of Ethiopia, KME, which, in turn, will own 56% of Tulu Kapi Gold Mines Share Company (TKGM), thus bestowing Kefi with a 45% beneficial interest in the project.

Project Description
Tulu Kapi has an ore reserve estimate of 15.4-million tonnes at 2.1 g/t gold for 1.1-million ounces of gold.

Openpit gold production is estimated at 140 000 oz/y over a seven-year mine life.

Total life-of-mine production is estimated at 980 000 oz.

The conventional openpit mining operation will include a carbon-in-leach processing plant. The mine will be connected to Ethiopia’s electricity grid through a new, 47-km-long, 132 kV dedicated power line relatively close to the country’s major hydropower-generation source. An emergency diesel power plant will also be installed to provide emergency backup power for critical process equipment in the event of grid power failure.

A preliminary economic assessment has indicated the economic attractiveness of mining the underground deposit adjacent to the Tulu Kapi openpit after the startup of the openpit and the repaying of project debts through positive cash flows.

Potential Job Creation
The project is expected to create about 1 000 direct jobs and 5 000 to 10 000 indirect jobs, with foreign direct investment of about $500-million, including historical investment.

Net Present Value/Internal Rate of Return
At gold prices of between $3 000/oz and $5 000/oz, the net present value of Tulu Kapi at the start of construction is between $710-million and $1.6-billion.

Once in production, Tulu Kapi is set to generate between $1.9-billion and $3.6-billion of net operating capital over seven years, or between $284-million and $526-million a year. This equates to an internal rate of return of between 112% and 200%.

Capital Expenditure
Kefi expects the full development to cost $340-million. The total project cost is about $500-million after taking into account that the mining contractor finances the mining fleet of $60-million and historical expenditure is more than $100-million.

Planned Start/End Date
The company expects to commission the project in late 2027 and reach full production in 2028.

Latest Developments
Contractor Lycopodium has been awarded an engineering, supply and labour hire contract.  

This reflects that all the project physical activities and associated financing arrangements are advancing in accordance with the schedule for first gold pour in early 2028 and full production by mid-2028, Kefi has pointed out.

Kefi is pleased with the progress being made by the recently mobilised leadership teams of TKGM and all major project contractors: the Ethiopian Electric Power Company for electricity connection, the Ethiopian Roads Authority for new access roads, Lycopodium for process plant and on-site infrastructure, Dashen for house construction for the resettled community and BCM for bulk earthworks and mining.

It has also noted that the full package of interdependent project agreements has been finalised, with many of the agreements having been executed, including the loan facilities.

The remainder are expected to be executed in the next few weeks as the broader project syndicate members’ respective compliance procedures are completed, including tasks, such as notarisation where required, in the various international jurisdictions.

For the full project financing package, the company has enough capital for project development for which commitments have been received for $310-million of the $330-million approved budget as at January 1.

Kefi is making good progress in finalising the remaining finance components. 

Key Contractors, Suppliers and Consultants
Principal contractors: Lycopodium (process plant design and construction); PW Mining; the Ethiopian Electric Power Company (electricity connection); and the Ethiopian Roads Authority (new access roads); Dashen (house construction for the resettled community); and BCM (bulk earthworks and mining).

Contact Details for Project Information
Kefi Gold and Copper, tel +90 232 381 9431, fax +90 232 381 9071 or email info@kefi-minerals.com.