Ethiopia gold mining secures 1.5 billion Birr investment

The shareholders of KEFI today agreed to invest an additional 1.5 billion Birr investment in the Tulu Kapi Gold Mines S.C that has been engaged in gold exploration in Ethiopia.

“Today KEFI’s shareholders committed to inject approximately ETB1.5 billion into KEFI to reinforce the rapid advancement of our three advanced projects in Ethiopia and Saudi Arabia,” said Harry Anagnostaras Adams, Chairman of KEFI Gold and Copper and of Tulu Kapi Gold Mines S.C (TKGM).

This is designed not only to complete the last piece of the planned Tulu Kapi project financing package of approximately ETB17 billion (US$356 million), but also build on the ongoing success we are seeing in our exploration programs in Saudi Arabia. We also stand ready to invest further in Ethiopian exploration, subject to Government permission,” he said.

“In Ethiopia our subsidiary has historically invested approximately ETB3.5 billion (at today’s exchange rates, being historically US$70 million over some 15 years) in the Tulu Kapi project and we are now at the exciting stage to increase development and also exploration activities, as allowed by the Government authorities”

“This determination is to demonstrate both our good faith and to also show that security is appropriate for full project launch from mid-2022. This is very important as we have now conditionally lined up all the equity and debt funds required for full development project financing and the finance syndicate is keen to work very closely with the Government to ensure security and all regulatory clearances are in order. We are absolutely committed to launching as soon as possible.”

“The proposed timing for Tulu Kapi financial close remains the end of Q2 2022 with all being parties to be asked to sign up to the normal binding commitments and the associated conditions and sequence for disbursement of funds for a transaction of this nature.”

Theron Brand, Managing Director of Tulu Kapi Gold Mines S.C (TKGM) commented: “Tulu Kapi is expected to employ approximately 1,000 people directly, many more indirectly – and nearly all to be recruited and trained from the local district.”

“Tulu Kapi is also expected to generate +$250 million export revenue per annum the largest recipient of which will be the suppliers, service providers and personnel who conduct operations – nearly all of them locals. Local people and organizations will have preferential status to be involved subject of course to arm’s length terms. Many policy initiatives have been made by the Ethiopian Government agencies involved including the Ministry of Mines, Ministry of Finance, National Bank of Ethiopia and others.”

“Without these innovative and forward-looking policy initiatives, modern mining projects could not proceed and we are deeply grateful for the Government’s support and patience. Few Government clearances remain and, of course, security is being collaboratively tightened up by all concerned so as to clear the way for project launch as from mid-2022. Safety is everyone’s first priority.”

“We are ready to start as soon as we safely and physically can and to do so in a manner that meets 21st century standards for social and environmental performance,” said Theron Brand.

The Tulu Kapi project syndicate assembled by KEFI mainly comprises leading African development banks, prominent international mining industry specialist financiers and contractors and Government.

TKGM was formed in 2017 to facilitate this development in accordance with the Mining Proclamation and is supported by KEFI, which has given formal commitments to the Government and its other syndicate partners to provide the human and financial resources required to make Tulu Kapi a showcase industrial development in accordance with the latest international standards for social and environmental performance.