Trenching work under way at the Tulu Kapi gold project.
(Photo: Kefi Minerals).

Kefi has been awarded a “Mining License” valid for a renewable period of 20 years, along with all major permits for the development and operation of the Tulu Kapi mine. Mining will be conventional open-pit drill and blast, load and haul, using 120-mt backhoe excavators. Mine design is based on an optimized pit shell using a $1,250/oz gold price.

Processing will be through a 1.2-millionmt/ y carbon-in-leach plant, with life-of-mine gold recoveries expected to average 91.5%. Project planning calls for ore mined above a cutoff of 0.9 g/mt gold to be processed during the first 10 years of operation, and ore grading between 0.5 g/mt and 0.9 g/mt to be stockpiled for later processing.

Tulu Kapi’s ore reserves currently are estimated at 15.4 million mt grading 2.12 g/mt gold, containing 1.05 million oz. Resources are estimated at 20.2 million mt grading 2.65 g/mt gold, containing 1.72 million oz.

Project development will require resettlement of about 260 households over a period of two years. Kefi’s targeted milestones for the remainder of 2015 include finalizing full development funding during the third quarter and commencing community resettlement and major project works during the fourth quarter. If these targets are met, plant commissioning could begin during the fourth quarter of 2016.

A main road to Addis Ababa passes within 15 km of the Tulu Kapi project site. The DFS envisages that process water requirements will be satisfied by the collection and storage of rainwater during the rainy season, between June and September. The mine will be connected to Ethiopia’s electricity grid via a new 47-km-long, 132-kV power line. A 5-MW emergency diesel power plant will provide emergency backup power to critical process equipment and infrastructure in the event of a grid power failure.

The formal Tulu Kapi mining agreement between Kefi and the Ethiopian government was executed in April and includes an undertaking by Kefi to target start of construction in late 2015 and an undertaking from the government to facilitate financing. Fiscal provisions in the agreement include a 5% government free-carried interest; a royalty of 7%; an income tax rate of 25%; historical and future capital expenditures to be tax deductible over four years; and stabilization of fiscal arrangements to protect Kefi in case of future legislative changes.

Contributors to the Tulu Kapi DFS included: Senet, assembly of the DFS and ore processing; Snowden, mineral resources and ore reserves; Epoch, tailings management; Cube Consulting, grade control and mine optimization; Golder, environmental and social impact; and Endeavour Financial, project finance advisor and arranger.

Kefi Minerals is headquartered in Nicosia, Cyprus. The company is listed on the AIM exchange in London and has a registered London office.