KEFI Minerals has issued an update on its discussions with the government of Ethiopia on various aspects involved in formalising the agreements for the development of the Tulu Kapi gold project.
It says the main points are:
- Equity investment: In October, the government of Ethiopia announced the formation of Ethiopian Mines, Petroleum and Bio-Fuel Corporation, which will be the Ethiopian investing entity.
- Development loan: Negotiations with the Development Bank of Ethiopia are at an advanced stage and now await the appointment of the selected co-lender.
The government's recent policy directive requiring a maximum 50% debt gearing policy for new projects is considered consistent with KEFI's plans because clarifications received from the National Bank of Ethiopia (the regulator) indicate that historic spend on the project of approximately US$60 million counts as equity in the calculation.
- Resettlement: The Ethiopian government experts and the project's social licence advisers are ensuring that calculations and plans comply with Ethiopian law and IFC (World Bank) principles. KEFI is playing a supporting role to the government's efforts and is committed to assist where it can.