- KEFI Minerals reports announce another quarter of solid progress, in particular with the Tulu Kapi project in Ethiopia where it has made significant advances towards becoming a gold producer.

It says that since acquiring Tulu Kapi in December 2013, it has reduced the planned capital expenditure (including working capital) from c. US$289 million to US$120 million by expanding the resource base and introducing semi-selective mine plans via contract mining.

Over the same period, KEFI's estimate of total capital requirement has remained at c. US$145 million, after adding financing costs and cost-overrun facilities to the capital expenditure.

Highlights of the quarter include:

- Project finance syndication continues towards formal approval from the finance syndicate and shareholders being obtained in Q2-16. This will be followed by financial settlement in Q3-16, subject to the satisfaction of typical conditions precedent including full inter-creditor arrangements being approved by the National Bank of Ethiopia.

- Procurement and detailed engineering conducted with the EPC contractor has kept the project on track for construction of the process plant to start in Q4-16. Mine contractor mobilisation is not required until 2017 as there is negligible waste pre-stripping required to start mining ore. Production commissioning remains scheduled for H2-17.

Project front end engineering and design was delivered in February, which KEFI has been refining with the contractor. Detailed engineering and procurement has commenced.

Executive chairman Harry Anagnostaras-Adams said: "Despite the tough mining capital markets, we successfully completed a placing with continued support from our key shareholders. Projected cash flows are robust, with the first three years of open pit production targeted to repay all debts, commence the payment of dividends and fund growth in the highly prospective Arabian-Nubian Shield. We look forward to soon finalising the project's integrated syndication package and proceeding with development."

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