KEFI Gold and Copper plc has taken a significant step forward in its flagship Tulu Kapi Gold Project in Ethiopia by bringing on board BCM Group as a key syndicate member. This strategic partnership not only bolsters the project’s financial foundation but also underscores KEFI’s commitment to advancing its operations in the Arabian-Nubian Shield.
KEFI Gold and Copper plc (AIM: KEFI) has announced the inclusion of BCM Group, a seasoned mining services provider, as the ‘Preferred Mining Contractor’ for the Tulu Kapi Gold Project. BCM’s appointment is contingent upon the completion of reciprocal due diligence and approvals. The company has expressed its intention to contribute approximately US$23 million towards pre-production costs through Equity Risk Notes (ERNs), which are repayable in cash or convertible into KEFI shares post-production commencement.
This collaboration ensures that the project’s development budget, estimated at US$320 million, is now fully covered by conditional equity and debt commitments. The inclusion of BCM in the project syndicate alleviates the need for KEFI to consider divesting its interests in Saudi Arabia, allowing the company to focus on maximizing value from its existing assets.
BCM’s commitment extends beyond financial investment. The company plans to proceed with the procurement of mining equipment and has shown interest in bidding for civil works contracts, further solidifying its role in the project’s development.
With the project’s financing structure in place, KEFI is poised to finalize cost updates and definitive agreements within the current quarter. This progress paves the way for the launch of major works, anticipated to commence shortly thereafter. The Ethiopian government and other formal processes, including AFC country membership, are aligned with this timeline, ensuring a coordinated approach to project execution.
In Saudi Arabia, KEFI’s joint venture, Gold and Minerals Company Limited (GMCO), continues to advance the development of the Jibal Qutman Gold and Hawiah Copper and Gold Projects. The company has received significant interest in its Saudi portfolio and will continue discussions to determine the most beneficial outcome for stakeholders.
KEFI’s Executive Chairman, Harry Anagnostaras-Adams, emphasized the project’s potential, stating that at a gold price of US$3,000 per ounce, the net operating cash flow after royalties and taxes for the first year of production is estimated at approximately US$304 million, with US$240 million allocated to repay project debt.
