KEFI Minerals takes full control of Ethiopia gold project in £1.5mln deal
June 11 2014, 7:41am
Diamond drilling takes place on Tulu Kapi.
KEFI Minerals (LON:KEFI) has announced it is acquiring the 25% of the Tulu Kapi licence in Ethiopia it doesn’t already own from Nyota Minerals(LON:NYO) for £1.5mln in cash and shares.
The deal follows the initial purchase of its majority stake last year for £4.5mln. Kefi also announced plans for a share placing at 1.5p a share to raise just over £2.1mln.
The proceeds will be used to fund the £750,000 cash component of the deal as well as pay for the revised feasibility study and to reactivate the mining licence application.
Managing director Jeff Rayner said: "We have taken the opportunity to take full control over the Tulu KapiProject
and funding flexibility.
and funding flexibility.
“This is important as our work since the acquisition of our controlling 75% interest indicates that the project will be bigger and last longer than had initially been assumed.
indicates that the project will be bigger and last longer than had initially been assumed.
"The team greatly appreciates the support of our new institutional shareholders in facilitating these transactions.
“We also appreciate Nyota's agreement to distribute its KEFI shareholding to its own shareholders.”
Nyota said it agreed the deal as it would be difficult to fund the ongoing work.
It will use the cash it receives to carry out exploration on its Northern Block Licences in Ethiopia, “including the potential for near term cash flow from mechanised alluvial mining”.
Its holding in KEFI, which will stand at 14.6% worth £2.29mln, will be distributed to its investors.
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Kefi Minerals
London-listed company KEFI Minerals plc (AIM: KEFI) is an exploration and development company focussed on gold and copper deposits, primarily in the highly prospective Arabian-Nubian Shield.
KEFI Minerals is currently progressing feasibility studies on two gold projects:
- 75%-owned Tulu Kapi project in Ethiopia with a Probable Reserve of 1.0 million ounces and Mineral Resources totalling 2.05 million ounces; and
- 40%-owned Jibal Qutman project in Saudi Arabia with Mineral Resources totalling 0.5 million ounces.
As the operator of these joint-venture projects, KEFI Minerals is well positioned to develop these projects prudently while continuing to add value through further exploration.
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