By: Creamer media

This is a key final part of the $340-million financing package for the company’s high-grade, high-recovery Tulu Kapi gold project, in Ethiopia, it points out.

Kefi says this has been “creatively structured”, with Chancery Royalty to be an equity-risk ranking royalty, and is payable alongside distributions made by TKGM to its shareholders.

A residual $30-million of equity-risk capital is also in the process of being fully signed up this month.

This comprises $10-million of costs to be incurred during the two-year development programme and settled in Kefi shares at the then market price when applicable costs fall due during this period, and the balance of $20-million as additional equity-risk ranking TKGM gold royalties issued to two other royalty investors on the same terms as the Chancery Royalty.

That will formally complete the $340-million project finance package in an optimal manner, Kefi avers.

Therefore, the project finance package is now effectively covered and the company is triggering implementation on all fronts in the field.

Field teams and contractors have been mobilised and a ‘ground breaking ceremony’ organised.

As a separate and optional matter, consideration continues to be given to the raising of capital in excess of the project development requirements in the form of Ethiopian BIRR-denominated non-convertible, redeemable preference shares to be issued by the company’s wholly-owned KME Holdings, Kefi informs.

“It is an exciting time to launch Tulu Kapi, one of Africa's highest margin new gold mine developments. Already bank-backed, Tulu Kapi has been engineered both physically and financially to be robust for the long-term – it is designed to pay all costs and service all debt at an all-in-breakeven-gold price of circa $1 400/oz,” Kefi founder and executive chairperson Harry Anagnostaras-Adams says.

“In addition, we have successfully raised significant equity capital at the subsidiary level in a manner which has minimised ownership dilution for the shareholders of TKGM and Kefi and has not increased Tulu Kapi's already low all-in breakeven point gold price of just $1 400/oz.

“At $3 000/oz to 5 000/oz gold, average earnings before interest, taxes, depreciation and amortisation for the first three years is estimated at $345-million to $683-million per annum, both of which significantly exceed Kefi’s current market capitalisation,” he highlights.

“It is my great pleasure to have been given the opportunity to introduce Chancery Royalty into Kefi’s syndicate of world class backers for the high-grade/high-recovery Tulu Kapi gold project. Chancery Royalty is focused on partnering with groups that boast world class gold projects and Tulu Kapi is undoubtedly the best undeveloped gold mine in Africa.

“Kefi has been the exemplar of long-term commitment and discipline for applying industry best practice. They have done a great job and we are here to support for the long term,” says Chancery Royalty founder and MD Jeremy Gray.