TIDMKEFI
RNS Number : 3720A
KEFI Minerals plc
07 June 2016
7 June 2016
KEFI Minerals plc
("KEFI" or the "Company")
LYCOPODIUM APPOINTED PREFERRED EPC CONTRACTOR
FOR PROCESS PLANT CONSTRUCTION AND START-UP OPERATIONAL
SUPPORT
KEFI Minerals (AIM: KEFI), the gold exploration and development
company with projects in the Kingdom of Saudi Arabia and the
Federal Democratic Republic of Ethiopia, announces that the
previously preferred Engineering, Procurement and Construction
("EPC") contractor has been replaced with market-leader Lycopodium
Ltd resulting in better proposed financial terms and an unchanged
timetable.
Mr Harry Anagnostaras-Adams, Executive Chairman, said: "The
Board is always mindful of costs and continues to look for every
opportunity to de-risk the Tulu Kapi project whilst keeping the
project on track. We are fortunate that Lycopodium's proposal not
only makes the financial terms better but they have committed to
adhere to the current timetable. They have an excellent track
record in building gold plants in Africa and their appointment is
welcomed by the other syndicate members."
Lycopodium is the clear market leader for taking this project to
the next stage, with a track record of success in building gold
plants in many African countries for over 20 years, and also in its
home country, Australia, and elsewhere. Its terms of engagement as
the preferred EPC contractor are reflected within KEFI's most
recently reported cost estimates for construction of the processing
facilities (see announcement of 2 June 2016). Lycopodium has
started work, within the previously-outlined project timetable, and
is on track for construction to start Q4-16.
It is KEFI's and Lycopodium's intention that Lycopodium become a
shareholder in the Company alongside Ausdrill Ltd, which is the
mining contractor through its subsidiary African Mining Services.
Subject to full legal documentation and completion of the finance
syndication, both of these major project contractors would then
stand with significant shareholdings in KEFI of under 10% each.
Lycopodium has granted KEFI the discretion to pay for the first
US$2.5 million of its programme of works in KEFI shares, at market
price.
ENQUIRIES
KEFI Minerals plc
Harry Anagnostaras-Adams (Executive
Chairman) +357 99457843
John Leach (Finance Director) +357 99208130
SP Angel Corporate Finance
LLP (Nominated Adviser)
Ewan Leggat, Jeff Keating +44 20 3470 0470
Brandon Hill Capital Ltd (Joint
Broker)
Oliver Stansfield, Alex Walker,
Jonathan Evans +44 20 7936 5200
Beaufort Securities Ltd (Joint
Broker)
Elliot Hance +44 20 7382 8300
Luther Pendragon Ltd (Financial
PR)
Harry Chathli, Claire Norbury,
Ana Ribeiro +44 20 7618 9100
Further information can be viewed on KEFI's website at
www.kefi-minerals.com
NOTES TO EDITOR
KEFI Minerals plc
KEFI is the operator of two advanced gold development projects
within the highly prospective Arabian-Nubian Shield, with an
attributable 1.93Moz (100% of Tulu Kapi's 1.72Moz and 40% of Jibal
Qutman's 0.73Moz) gold Mineral Resources (JORC 2012) plus
significant resource growth potential. KEFI targets that production
at these projects generates cash flows for further exploration and
expansion as warranted, recoupment of development costs and, when
appropriate, dividends to shareholders.
KEFI Minerals in Ethiopia
The Tulu Kapi gold project in Western Ethiopia is being rapidly
progressed towards development, with the Mining Licence granted in
April 2015.
KEFI's Definitive Feasibility Study was then completed and the
Company is now refining contractual terms for project construction
and operation. Latest estimates for annual gold production are c.
100,000oz pa for a 10-year period and All-in Sustaining Costs
(including operating, sustaining capital and closure) of
approximately US$724/oz to US$752/oz at a gold price range of
US$1,000/oz to US$1,400/oz. Tulu Kapi's Ore Reserve estimate totals
15.4Mt at 2.12g/t gold, containing 1.05Moz. The eight core
production years of the open pit are estimated to yield an average
of 115,000oz pa.
All aspects of the Tulu Kapi (open pit) gold project have been
reported in compliance with the JORC Code (2012) and subjected to
reviews by appropriate independent experts. These plans now also
reflect the agreed construction and operating terms with project
contractors, and have been independently reviewed by experts
appointed for the project finance syndicate.
A Preliminary Economic Assessment has been published that
indicates the economic attractiveness of mining the underground
deposit adjacent to the Tulu Kapi open pit, after the start-up of
the open pit and after positive cash flows have begun to repay
project debts.
At a gold price of US$1,250/oz, the projected cash flows
indicate a cash build-up in the first three production years of
US$173 million, which would be sufficient to repay all project
debts, fund the development of the underground mine and commence
paying dividends to shareholders.
KEFI Minerals in the Kingdom of Saudi Arabia
In 2009, KEFI formed G&M in Saudi Arabia with local Saudi
partner, Abdul Rahman Saad Al-Rashid & Sons Company Limited
("ARTAR"), to explore for gold and associated metals in the
Arabian-Nubian Shield. KEFI has a 40% interest in G&M and is
the operating partner. To date, G&M has conducted preliminary
regional reconnaissance and has had five exploration licences
("ELs") granted, including Jibal Qutman and the more recently
granted Hawiah EL that contains over 6km strike length of
outcropping gossans developed on altered and mineralised rocks with
all the hallmarks of a copper-gold-zinc VHMS deposit.
At Jibal Qutman, G&M's flagship project, Mineral Resources
are estimated to total 28.4Mt at 0.80g/t gold for 733,045 contained
ounces. The shallow oxide portion of this resource is being
evaluated as a low capital expenditure heap-leach mine
development.
ARTAR, on behalf of G&M, holds 23 EL applications that cover
an area of approximately 1,303km(2) . ELs are renewable for up to
three years and bestow the exclusive right to explore and to obtain
a 30-year exploitation (mining) lease within the area.
The Kingdom of Saudi Arabia has instituted policies to encourage
minerals exploration and development, and KEFI Minerals supports
this priority by serving as the technical partner within G&M.
ARTAR also serves this government policy as the major partner in
G&M, which is one of the early movers in the modern resurgence
of the Kingdom's minerals sector.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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