KEFI Gold & Copper (KEFI)  has signed up US$240 million in project debt funding for its Tulu Kapi gold project in Ethiopia. 

The deal has been signed by both co-lenders and by KEFI on behalf of its group of companies.

The focus now turns to the closing of the equity-risk capital, for which commitments and proposals received for investment at the project level have already exceeded the required US$100 million. These commitments have primarily come from local investors and African specialist funds.

Meanwhile, various construction projects are already underway funded by working capital and facilities, all as part of the current launch of the full US$340 million development project.

Among other ongoing work, the housing contractor for resettling households has been mobilised to construct the replacement housing selected for the local community, the Ethiopian Roads Authority is installing new all-weather site access roads which will more than halve travel time from the highway, and the Ethiopian Electric Power Company is connecting the site to the mains grid generation facilities at the Grand Ethiopian Renaissance Dam. 

This dam is the largest hydro-electric scheme in Africa. Tulu Kapi is the closest industrial-scale electricity consumer of the GERD.

The process plant contractor and the mining contractors have been at site planning security, logistics, and mining operations. 

First production is expected in 2027. 

KEFI will convene a general meeting in November 2025 to approve elements of the Tulu Kapi project finance package requiring shareholder approval, such as the debt package requiring approval under the various articles of association.  

Shares in KEFI rose by nearly 7% on the news, as investors weighed the recent increase in the gold price to over US$4,200 per ounce.

 All-in-sustaining costs at Tulu Kapi are likely to be between US$1,000 and US$1,200 an ounce, and the internal rate of return now runs in a punchy range, between 95% and 161%.

Net cashflow over seven years could be as high as US$3.5 billion.

"We are delighted that the Tulu Kapi debt offering has now been signed by all the relevant parties,” said KEFI executive chairman, Harry Anagnostaras-Adams.

"This has triggered further activity at site as part of the launch of full project development this month and is allowing the remaining equity proposals to be finalised amongst the assembled local and specialist investors. I extend my sincere thanks to everyone involved in this international syndicate, spanning hundreds of people across public and private organisations at Tulu Kapi, in nearby regional centres, in Addis Ababa, and across multiple locations worldwide. With the gold price at a record high, this is the perfect time to be launching Tulu Kapi."

 

View from Vox

 

KEFI is one of only a handful of mid-tier companies that have a sizeable gold project going into the construction phase. That’s one reason why the market has bid the shares up so significantly in the past few months. But really, it’s all about the soaring gold price, which has meant that the Tulu Kapi margins suddenly look huge. And don’t forget the company also has a compelling suite of assets in Saudi Arabia. There is much to look forward to here