- KEFI Minerals says its Tulu Kapi gold project in Ethiopia remains on track for financing mid-2016 and production end-2017.

Operational Progress: - FEED (Front-End Engineering and Design) has been delivered on schedule, this month, by the Engineering, Procurement and Construction contractor (via a fixed-price, lump-sum arrangement).

- KEFI's expanded Social Performance Team has refined the plans for livelihood restoration of community members to be resettled and for the community development foundation. The Company now also plans to build an airstrip, which will provide advantages operationally for KEFI and for the community.

- KEFI has significantly expanded the proposed exploration activity to occur in the vicinity of the planned Tulu Kapi ore processing facility, with the aim of increasing production and extending project life by expanding Ore Reserves.

Finance Plan and Syndication:

- Capital estimate remains at c. US$120 million (including working capital) and c. US$130 million after adding transaction, financing and insurance costs.

- All targeted syndicate members are engaging along the foreshadowed lines as follows:

* US$60 million senior secured debt with average tenor of 6 years

* US$30 million equity, either already invested or to be invested for project level equity

* The balance of capital requirements to be sourced from product-linked gold finance plus a 100,000oz hedge facility (from Ore Reserves of 1Moz) and cost-overrun facilities

* Final specifics will need to cater for the gold price prevailing in mid-2016, which is presently higher than what was prevailing when the syndicate's plan was first designed

- KEFI has advised all planned financiers of their preferred status and role within the base case financing syndicate. However, whilst due diligence continues, alternative proposals will remain under consideration. Formal syndicate commitment is scheduled for mid-2016 and debt drawdown towards the end of 2016.

- Stress testing of the financial projections re-affirm robust cash flows for coverage of all planned commitments. The focus is now on refinement and independent review of cost-overrun facilities designed to complement the proposed terms of engagement with the project contractors.

- The project equity contributions are to be made prior to debt drawdown towards the end of 2016:

* More than US$60 million of equity capital will have been invested before debt drawdown from the financing syndicate, including more than US$5 million of the start-up capital estimate of US$130 million that will have been spent during 2016.

* Legal documentation is being prepared with the Government of Ethiopia for a proposed US$20 million project equity investment.

* KEFI maintains dialogue with parties interested in equity investment at the project level as well as with the Company's major shareholders.

* Directors intend to present the finalised plan to shareholders for approval at the Company's Annual General Meeting, which is expected to be held in June.

Finance director John Leach said: "We are pleased that we remain on track to complete financing in mid-2016, which will be transformational for the Company, and commence production at the end of 2017. The assembly of an international financing syndicate always requires intense activity, which is especially challenging in the prevailing weak capital market conditions for the mining sector. It is, therefore, gratifying that we continue to progress with the syndicate that we had targeted from the outset - all leaders in their field.

"This is a testament to the excellent work completed by our team and contractors, which has transformed Tulu Kapi into a robust project, and also to the commitment demonstrated by the Government of Ethiopia to the development of the mining sector - commencing with Tulu Kapi as the first international-financed mine development project. As such, the fundamentals of the project remain strong, and we look forward to generating value for all shareholders and other stakeholders."

At 8:15am: [LON:KEFI] KEFI Minerals PLC share price was -0.02p at 0.32p

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