KEFI Minerals plc (LON: KEFI) are pondering their current options on how to finance their Tulu Kapi project on Monday afternoon.
Shares in KEFI Minerals crashed 7.99% on Monday to 1.46p. 25/11/19 13:04BST.
Earlier this month, KEFI saw their shares rally 55.11% after conflicts were resolved with regard to internal internal administrative arrangements in Ethiopia.
The fact that this dispute was resolved gave KEFI the green light to pursue operations in the Tulu Kapi project, and now seniority are planning the funding arrangements.
Outlines of the project and the brand were provided at the UK Investor Magazine Summer Investor Event on July 18th.
Nicosia, Cyprus-based KEFI now has two options: a long-standing bond-lease based package or a conventional bank-project finance proposal from African banks.
The firm said the company operating the project, Tulu Kapi Gold Mines Share Co, has recently been offered a bank-based project finance proposal, which would be an alternative to bond-based financing.
The emergence of this alternative funding reflects the improved outlook for Ethiopia and of the project in light of progress on the ground. The two proposals (bond-based and bank-based) have their own relative merits,” said KEFI.
A decision will be made shortly, the company said.
The Ethiopian government has pledged to invest $20 million into the project, and KEFI’s partner firm ANS Mining Share Co will invest $38 million.
These initial investments, KEFI said, are now subject to the normal administrative requirements. They also rely on off-site infrastructure being completed and independent assessments being updated.
Harry Anagnostaras-Adams, executive chair of both KEFI and TKGM, said: “I am delighted the project has reached this stage, after so many delays and setbacks as the country and the sector were going through quite an amazing change. We have shared the frustrations of our shareholders and our partners, but I now believe the project has encouraging momentum.
“As first mover for modern mining in Ethiopia, we have done the heavy lifting with the authorities and the community and we can now all share the benefits as we advance. It is especially pleasing to see the strengthening of capital market interest and support from capital providers both inside and outside the Ethiopia for the project.”
Many firms such as Bluejay Mining (LON: JAY) and Amur Minerals (LON: AMC) have resorted to share placing plans in order to drum up funds to expand operations.
Additionally, Thor Mining (LON: THR) and Hochschild Mining (LON: HOC) have seen their share price become volatile after mixed trading updates.