KEFI Gold and Copper, the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, announced the signing of the Final Umbrella Agreement for the project financing of its Tulu Kapi Gold Project, which is held by Tulu Kapi Gold Mines Share Company.
The Agreement, which was signed by project contractors PW Mining and Lycopodium and officially put out for the Ethiopian Ministry of Mines, outlines the development sequence for Tulu Kapi over the duration until 2023. Under the terms of its life-of-mine mining services arrangement, PWM will offer mining services, while Lycopodium’s contracts provide engineering, procurement, and construction management supply and labour hire services for processing infrastructure.
Following further revisions of the Project financing strategies with the Project’s key bankers, including Eastern and Southern African Trade and Development Bank, the Agreement was signed. The Initial Umbrella Agreement was executed in June 2022. After AFC reached an agreement with the Ethiopian government in March 2023 for Ethiopian country membership, the Agreement was ratified. This gave both co-lenders the same local rights and protections.
The planned USD 320 million Project development financing currently includes an up to USD 245 million package from the co-lenders, which consists of up to USD 55 million in equity-risk ranking notes, up to USD 140 million in senior debt, and USD 50 million in mezzanine loans.
KEFI’s has already contributed historical equity investment of USD 95 million to the Project’s up to this point. The remaining USD 75 million in project equity financing will be provided by KEFI and its local partners through share subscriptions in TKGM. The Federal and Regional Governments are the major local stakeholders in TKGM, each contributing USD 28 million.
The Agreement was signed in the presence of several senior members of the Ethiopian government, the trade representative of the British Prime Minister, the Australian and British ambassadors to Ethiopia, as well as representatives of the Project’s participants and financial backers.