TIDMKEFI
RNS Number : 0711D
Kefi Gold and Copper PLC
19 June 2023
19 June 2023
KEFI Gold and Copper plc
("KEFI" or the "Company")
All Major Financing Conditions Precedent Now Met for Tulu
Kapi
Strong Support from Ethiopian Government
KEFI Gold and Copper plc (AIM: KEFI), is pleased to report that
all outstanding major financing conditions precedent requiring
Ethiopian government input in relation to the Company's Tulu Kapi
Gold Project ("Tulu Kapi" or the "Project") have now been met.
This significant development enables the Tulu Kapi individual
syndicate members to now proceed to final committee and board
reviews and approvals for the US$390 million Project finance
package as set out in the Final Umbrella Agreement described in the
Company's announcement of 27 April 2023.
US$370 million of this package has already been covered by
arrangements at the Project and subsidiary level with first-tier
banks, contractors and investors including the Ethiopian Government
itself at both the Federal and the Regional levels. The final US$20
million of the financing package has also now been allocated to a
specific set of parties, with a view to it being finalised and
structured over the next few months as all the standard procedural
conditions precedent are completed to enable funds flow, in
particular the Government's formalisation of the details of the
agreements we have now reached and of the compensation packages for
the individual households being resettled, in accordance with the
strict requirements of the law and World Bank IFC Performance
Standards.
Previously Outstanding Conditions Precedent
KEFI has now resolved all major conditions precedent that were
remaining with the Ethiopian Government for the Project financing.
Accordingly, details are now being checked by advisers to each
syndicate member ahead of the signing of detailed binding
definitive documentation in the near term.
The first major condition precedent was for the two banks in the
funding syndicate to receive the same rights and protections in
Ethiopia. This was achieved in March 2023 when Ethiopia granted
African Finance Corporation country membership, a strategic
initiative for Ethiopia and for the bank.
The second was the establishment of a permanent security force
around Tulu Kapi to ensure that construction and the Project
generally could proceed unhindered. This was achieved in April 2023
with the triggering of escalated security in Tulu Kapi's
surrounding areas by the relevant Government agencies.
The final material condition precedent was for clarification by
the Ethiopian Central Bank of specific procedures for the Project,
agreeing rights to international bank accounts. This was clarified
last week.
These three critical recent breakthroughs in as many months will
now be built into the syndicate's detailed definitive
documentation. The boards and committees of the Government agencies
and the Project finance syndicate of banks, contractors and
investors are now being updated on all details so that they may
formally consider final approvals for Project launch.
Further Support from Ethiopian Government
The Ethiopian Government and its agencies have continued to show
their support for the development of Tulu Kapi above and beyond
meeting the afore-mentioned conditions precedent by undertaking
several further recent initiatives:
-- The Ethiopian Electricity Production Corporation has procured
the major components for the Project's connection to the main power
grid to ensure compliance with scheduled commissioning of the plant
in 2025;
-- The Ethiopian Roads Authority has reaffirmed the delivery
schedule for the new all-weather access road;
-- An MOU has been signed with the Regional Government to
increase the aggregate Government equity investment in the Project,
from US$20 million to US$30 million, as the Government is keen to
preserve an equity interest of c. 25% alongside KEFI's c. 75%;
and
-- The Minister of Mines has circulated, for stakeholder
comment, draft legislative reforms to encourage exploration and
mining in Ethiopia. KEFI is actively involved in the various
industry associations and is assisting where it can.
Harry Anagnostaras-Adams, Executive Chairman of KEFI,
commented:
" Today's announced progress with the Ethiopian central bank is
the third significant breakthrough in as many months. This set of
supportive Government initiatives clears the way for the launch of
Tulu Kapi and reinforces the recent turnaround of the working
environment in Ethiopia.
"KEFI has assembled a first-class international project finance
syndicate which is now focused on final definitive documentation
for this US$390 million transaction.
"Our take-off in Ethiopia coincides with that in Saudi Arabia.
These are the two largest jurisdictions in the highly prospective
Arabian Nubian Shield. Both countries are now proactively
supportive and these continuing positive developments help to
vindicate our longstanding focus there since 2008 and our tenacity
to have successfully assembled three advanced projects and a
world-class pipeline for future exploration.
"Also, having just effected a capital raising to extinguish all
liabilities, we have cleared the way for us to implement the US$390
million project finance package for our shovel ready 140,000 oz pa
Ethiopian gold project."
Enquiries
KEFI Gold and Copper plc
Harry Anagnostaras-Adams (Executive Chairman) +357 994 57843
John Leach (Finance Director) +357 992 08130
SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker) +44 (0) 20 3470 0470
Jeff Keating, Adam Cowl
Tavira Financial Limited (Joint Broker) +44 (0) 20 7100 5100
Oliver Stansfield, Jonathan Evans
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe, Florence Chandler
Further information can be viewed at
https://www.kefi-goldandcopper.com
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