KEFI Minerals Shares Spiked 9% on Tulu Kapi Financing Update

The KEFI Minerals Plc (LON: KEFI) share price spiked 8.97% higher after issuing an update about securing funding for its Tulu Kapi project in Ethiopia. However, KEFI shares later gave up all their gains and were in negative territory at writing.

Investors cheered the announcement, indicating that all project funders had agreed to the funding terms and that contractors had issued their final pricing for the project’s construction. Still, the shares gave up their gains after it emerged that the remaining part depended on how fast the company could get government approvals.

Most governments are known to take their time approving such large projects, which is why many were disappointed that the remaining part of the pre-construction phase was entirely reliant on the government completing specific processes, given the typical delays. 

Some of the report’s highlights included that KEFI has secured firm commitments for the US$320 million funding needed to construct the Tulu Kapi project. US$190 million would be in the form of debt financing from the Africa Finance Corporation (AFC) and the Eastern and Southern African Trade and Development Bank (TDB). 

KEFI has secured the remaining US$130 million in equity finance from the Ethiopian Ministry of Finance and the Oromia Regional Government. The Ethiopian private sector has also taken an equity stake in the project. The equity investment is a crucial element of the project since it aligns the interests of the corporates and the community in its execution. 

The Ethiopian government is currency clarifying the outstanding regulatory matters. It is reorganising its systems to support the project, including resettling the community and upgrading the security infrastructure around the project. 

Luckily the government is fully invested in ensuring the project’s successful implementation given the significant economic income it could have on the region’s and country’s economy. The Tulu Kpai project is expected to start producing gold in 2025, with an expected production target of nearly 200,000 oz per annum a few years later. 

KEFI has an 80% beneficial interest in the project, translating into 160,000 oz annually.

*This is not investment advice. 

KEFI gold share price. 

The KEFI Minerals share price spiked 8.97% to trade at 0.85p, from Friday’s closing price of 0.78p.