KEFI Minerals PLC (LON:KEFI) said it had received formal confirmation that the Ethiopian government will plough $20mln into the company’s Tulu Kapi gold mine in the country.
For that the authorities will receive a 20 percent stake, which, added to the current carried investment, takes their holding to a quarter of the project.
The deal puts Tulu Kapi’s worth at US$100mln, compared with an estimated net present value of double that figure.
The operation requires a further US$100mln of funding, which should be concluded by the third quarter of this year.
Construction is expected to get underway sometime in the final three months of 2016, while plant commissioning should take place in Q4 2017.
Chairman Harry Anagnostaras-Adams said: “KEFI is delighted to have received this confirmation from the Government of Ethiopia of its commitment to invest US$20 million in the Tulu Kapi Gold Project.
“This represents an important step towards formalising the finance syndicate, which remains on track for settlement in the third-quarter, and we are honoured that the government is choosing to partner with KEFI.”
House broker SP Angel added: ” The financial support of the Ethiopian Government provides concrete evidence of its support for the development of Tulu Kapi and a guide to project value.”
Shares rose 6 percent to 0.54p.
KEFI expects Ethiopia financing deal by June