Kefi Minerals outlines plans for Tulu Kapi to analysts

By Giles Gwinnett

(Proactive Investors)A reworked mine plan for Tulu Kapi in Ethiopia should mean KEFI Minerals (LON:KEFI) gets quick mining approval for the gold project.

That’s the view of City broker SP Angel, which currently has an analyst on site.

Kefi owns 75% of the project, having bought the stake in the project from Nyota Minerals (LON:NYO) last year. Nyota retains 25%.

Tulu Kapi has a JORC-compliant inferred and indicated resource of 1.9mln ounces of gold, with a probable reserve of 1mln ounces
Tulu Kapi has a JORC-compliant inferred and indicated resource of 1.9mln ounces of gold, with a probable reserve of 1mln ounces

Kefi has been outlining to analysts how it is revising the feasibility study using a smaller start-up mine and more selective mining to improve feed grades and cost control.

“This should result in a marked improvement in value and IRR [internal rate of return] in the project,” reckons the broker.

“We reckon the capital costs of the project should approximately halve with potential for mine financing this time next year.”

First mined in the 1930s, Tulu Kapi has a JORC-compliant inferred and indicated resource of 1.9mln ounces of gold, with a probable reserve of 1mln ounces.

Kefi aims to spend around US$143mln in capex to bring Tulu Kapi to production, compared with a figure of US$289mln in the original DFS.
“The team are working on a new interpretation of the ore-body and are already engaged with the DFS consultants and the community,” said SP Angel, which also highlighted that Kefi planned to update the resource this quarter.

“There is reasonable potential to increase the gold grade in the open pit design selective mining,” it added.

New tarred roads are now being built, which will better connect the mine site.

“Kefi have stepped in to rework the Tulu Kapi project in Ethiopia. It looks like the reworking will add significant value to enable its potential financing and start of construction next year.

“The government were ready to issue the mining licence last year and were disappointed the project did not proceed last summer.

“We expect an updated project to receive quick approval from the mines department as Ethiopia’s first privately funded gold mine for many years.”

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