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Highlights

  • KEFI is in the final stages of securing a $320 million funding package for the Tulu Kapi gold project in Ethiopia.

  • Tulu Kapi expected to generate up to $304 million in net operating cash flow in its first year at $3,000/oz gold price.

  • KEFI trims Saudi stake to focus on Ethiopia, where construction is expected to begin soon, targeting full production by late 2027.

KEFI Gold and Copper PLC (LSE: KEFI) is close to securing a long-anticipated $320 million financing package for its flagship Tulu Kapi gold project in Ethiopia, clearing the path for construction to begin and aiming for full production by late 2027.

The financing syndicate—comprising two African development banks, project contractors, and local investors—has reached the final stages of approval. Once completed, this will represent Ethiopia’s first internationally project-financed mining venture.

Tulu Kapi is projected to deliver robust financial returns. Based on a gold price of $3,000 per ounce, the mine could yield net operating cash flow of up to $304 million in its first full year of production—comfortably surpassing the anticipated $240 million in debt repayments.

Over its initial operating life, the open-pit mine is forecast to produce approximately 164,000 ounces of gold annually, with net cash flow to shareholders potentially reaching $1.6 billion. KEFI aims to retain an 80% interest in the project.

Designed to international operational and environmental standards, Tulu Kapi is located in a stable rural region of Ethiopia, with strong local community and government backing. In addition to the surface operation, KEFI has early-stage assessments underway for underground development, which suggest the presence of high-grade gold zones.

Meanwhile, KEFI has refocused its strategic priorities, scaling down its stake in its Saudi Arabian joint venture GMCO from 25% to 15%. The decision follows the high costs associated with maintaining its position via equity issuance. KEFI is currently conducting a strategic review of its Saudi assets, with offers under consideration for both the Hawiah and Jibal Qutman projects.

Financially, KEFI reported a reduced full-year loss of £5.2 million for 2024, compared to £7.9 million in 2023. The company maintains that its internal valuation of the Tulu Kapi project exceeds £800 million, significantly above its current market capitalisation of approximately £55 million.