StockMarketWire.com - KEFI Minerals' [LON:KEFI] shares were up in late trading after revealing positive results of the preliminary economic assessment of the underground mining potential at the Tulu Kapi gold project underneath the planned open pit.

KEFI says there is the potential to increase annual Tulu Kapi gold production to 150,000oz from the open pit and underground .

As stated previously, KEFI's board continues to pursue its growth strategy of maintaining exploration activities in the Arabian-Nubian Shield focused on identifying the company's next value-adding stages beyond the construction and start-up of the Tulu Kapi open pit.

This PEA, which is a study of the resource potential at Tulu Kapi beneath the open pit mine, is the first stage in the implementation of that strategy. KEFI anticipates commencing development of the underground mine after Tulu Kapi has begun generating positive cash flows from the open pit mine and repaying its development finance, with a view to introducing underground production around the third year of the open pit operation.

This assessment indicates that the total production of Tulu Kapi (combining the open pit mine and underground mine) could approximate 150,000oz pa. This production capacity would result in aggregate net operating cash flow of c. US$100 million pa and KEFI's share of the estimated project NPV being USD150 million (GBP100 million) assuming a gold price of US$1,250/oz, an 8% discount rate applied against after tax cash flows and KEFI's beneficial ownership being 75%.

The estimated Tulu Kapi open pit cash flows (based on a gold price of USD1,250/oz), as confirmed by the independent technical experts for the Company's finance lenders for Tulu Kapi, project a cash build-up during the first three production years of USD135 million, which would be sufficient for the full repayment of project loans as well as the provision of returns to shareholders and the funding of the underground development (assuming it is triggered during that period).

Exploration director Jeff Rayner said: "As we continue to make excellent progress on financing and preparing for the development of the Tulu Kapi open pit mine, we are pleased with the positive results of our preliminary economic assessment for the underground mine potential. When combined, the estimated total annual gold production increases to approximately 150,000oz. We expect the development of the underground mine to commence after the open pit has begun generating cash flow and repayment of development finance, and so it will increase the net operating cash flow of the project, thereby strengthening the economic potential of Tulu Kapi. We look forward to reporting progress on this, and other exploration targets that stand to leverage the Tulu Kapi infrastructure, in due course."

* * *

Tertiary Minerals [LON:TYM] said that on March 7 the directors of Sunrise Resources [LON:SRES] resolved to issue 49.3m new shares of 0.1p each in settlement of management fees of GBP86,272.21 due for the six months to Dec. 31, 2015.

Since the formation of Sunrise, Tertiary has provided, and continues to provide, Sunrise with office facilities and company and project management services at cost. This cost sharing arrangement works to the benefit of both companies and enables them to be run with reduced overheads.

Following the issue of the New Shares, Tertiary will hold 102,234,999 ordinary shares of Sunrise, representing an interest of approximately 13.70% of the enlarged issued capital of Sunrise.

* * *

Gem Diamonds [LON:GEMD] will announce its full year results for the period ending 31 December on 15 March.

* * *

Coal of Africa Limited [LON:CZA] will dispute a notice from Rio Tinto Minerals Development and Kwezi Mining Proprietary alleging a breach of obligations under the agreement for acquiring interests in Chapudi Coal Pty Ltd and Kwezi Mining Exploration Pty Ltd.

The notice alleges that CoAL and its subsidiary, MbeuYashu Proprietary Limited, are in breach of an obligation under which MbeuYashu acquired interests in Chapudi Coal Pty Ltd and Kwezi Mining Exploration Pty Ltd, and therefore all amounts owed by CoAL and MbeuYashu are now due for payment.

These interests relate to assets within the Greater Soutpansberg project.

On legal advice, CoAL will dispute the validity of the notice.

If Rio Tinto and Kwezi pursue the matter, CoAL and MbeuYashu will defend it vigorously.

The original amount owed by CoAL and MbeuYashu to Rio Tinto and Kwezi was USD75 million of which USD56 million has already been paid (which equals 75% of the original acquisition price) and an amount of USD19m is still owing.

Payments to Rio Tinto and Kwezi are due finally by 15 June 2017. CoAL and MbeuYashu have met, and will continue to meet all of their payment obligations to Rio Tinto and Kwezi.







At 3:54pm:

[LON:AQP] Aquarius Platinum Ltd share price was -0.12p at 13.13p

[LON:BEM] Beowulf Mining PLC share price was -0.28p at 4.15p

[LON:BKY] Berkeley Energia Ltd share price was 0p at 23.25p

[LON:CEY] Centamin PLC share price was -1.7p at 94.25p

[LON:CHL] Churchill Mining PLC share price was +0.01p at 15.38p

[LON:CZA] Coal of Africa Ltd share price was -0.17p at 1.96p

[LON:FDI] Firestone Diamonds PLC share price was 0p at 20.13p

[LON:FRES] Fresnillo PLC share price was -36p at 915.5p

[LON:GEMD] Gem Diamonds Ltd share price was -0.75p at 107.25p

[LON:HOC] Hochschild Mining PLC share price was -2.5p at 88p

[LON:KEFI] KEFI Minerals PLC share price was +0.05p at 0.41p

[LON:KMR] Kenmare Resources PLC share price was -0.14p at 0.96p

[LON:SRES] Sunrise Resources PLC share price was 0p at 0.18p

[LON:TYM] Tertiary Minerals PLC share price was +0.05p at 1.2p

[LON:VED] Vedanta Resources PLC share price was -55.4p at 325.8p



Story provided by StockMarketWire.com