The final umbrella agreement outlines the roles of all syndicates, finance conditions, and conditions precedent to final formal approval being granted, and directs the development sequence for Tulu Kapi through this year


Tulu Kapi Gold Project is located in Western Ethiopia. (Credit: Jean photosstock from Pixabay)

London-listed exploration and development company KEFI Gold and Copper has signed the final umbrella agreement for project financing of the Tulu Kapi gold project in Ethiopia.

The agreement outlines the roles of all syndicates, finance conditions, and conditions precedent to final formal approval being granted.

It confirms the update in project costs and financial contributions, along with technical and legal due diligence, definitive agreements and necessary government actions.

The agreement addresses the development sequence for Tulu Kapi through 2023, as formally laid out for the Ethiopian Ministry of Mines.

KEFI has also signed agreements with project contractors, Ghana-based mining company PW Mining (PWM) and Australian project management company Lycopodium.

PWM will provide mining services and Lycopodium will provide engineering, procurement, and construction management supply and labour hire services.

KEFI executive chairman Harry Anagnostaras-Adams said: “We move forward successfully despite the complexities of such syndications and, in particular, being the first to do so against the backdrop of a fast-changing Ethiopia.

“It is heartening to witness Ethiopia proactively working to regain its position as one of the highest growth countries globally.

“We thank the new Minister for Mines, H.E Habtamu Tegegn, and his team for their energetic leadership and his commitment to rapidly advancing the mining sector in Ethiopia.”

KEFI said that the signing of the final umbrella agreement follows the further refining of its project financing plans with the principal bankers.

The company has amended the financing terms with Eastern and Southern African Trade and Development Bank (TDB), and co-lender Africa Finance Corporation (AFC).

The proposed project financing of about $320m, exclusive of the mining fleet provided by PWM, now provides for an up to $245m package from the co-lenders.

It includes $140m senior debt, $50m mezzanine debt and up to $55m equity-risk ranking notes.

The mining company intends to host a general meeting of its shareholders in June this year, to approve the final funding proposal and syndicate, pursuant to the final umbrella agreement.

Harry added: “We push for construction in Q4 2023 following procurement and community preparations. In the meantime, we await progress from Government on the remaining financial regulatory, security and community preparations and to which we lend our unwavering support.

“The Tulu Kapi Gold Project will be delivered to the highest international standards including World Bank IFC Performance Principles.”