KEFI Minerals (KEFI) shares surged after it selected a bank-based proposal as its preferred mode of project infrastructure financing for the Tulu Kapi Gold Project in Ethiopia.
KEFI said the proposal was ‘financially more attractive and more straightforward’ to than its long-standing alternative bond-and-lease based debt financing proposal.
KEFI said it received the loan based proposal from ‘two leading African banks’ as underwriters and co-lenders, and told investors that a preliminary term sheet has been signed and is subject to credit approval.
The AIM-listed miner reiterated its Definitive Feasibility Study NPV estimate which attributed a project NPV of US$245 million for Tulu Kapi.
KEFI Minerals highlighted to investors in a press release its “45% beneficial interest in the project is US$130 million (approximately £101 million), about eight times the current market capitalisation of the Company”.
Shares in KEFI were trading 49.53% higher at 1.895p on Monday morning
KEFI Finance Director, Mr John Leach, commented, "We have been very well supported by the bond-lease proposal and now we also have an attractive bank-loan based alternative because capital market support for our Project has recently improved markedly, both inside and outside Ethiopia.”
He added: “The expected savings from the preferred bank-based infrastructure finance proposal provide our Project subsidiary, TKGM, with the opportunity to develop and further explore the underground Tulu Kapi deposit and significantly increase value for shareholders, without reducing net cash flows available for other purposes."
The Tulu Kapi gold development project is estimated to provide open pit gold production of 140,000 ounces per year for 7 years, with ASICS of $800 per ounce.
Gold prices were $1,456.25 on Monday morning.
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