Gold exploration firm on verge of losing license

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Harry Anagnostaras, executive chairman of KEFI

KEFI Gold & Copper PLC, of the Tulu Kapi Gold Mine project opposes the decision of Ministry of Mines in the termination of its license. Takele Uma, Minister of Mines announced on Wednesday, June 15, that the Ministry has revoked 972 licenses of which the Tulu Kapi Gold mining project has fallen victim.
“The government is applying lots of pressure to proceed, and we can understand that, however, we have been a bit shocked to hear the news of the termination on media to which we had no knowledge about. We did not receive any notification whatsoever which is shocking and disappointing,” said Harry Anagnostaras, executive chairman of KEFI, indicating that KEFI applies conventional industry project finance structures for the development funding.
“These companies did not comply with the terms of their exploration and production licenses despite the repeated warnings given to them,” Takele said.
“KEFI is processing debt from Africa development banks, TDB and AFC, and is capable of demonstrating full funding plans and capacity whenever requested by the government,” said the chairman adding that, “We are spending a lot of money preparing the procurement, and with hard work and diligence too. I think we are the only company working like that especially in the current status of the country.
“So far we have invested 80 million dollars and have made a good discovery and established a world class plant,” said the chairman, adding, “We were prepping for the full project launch for each project as soon all conditions were met in terms of the security situation in the country as it improves. We were planning to start construction in the dry season around October.”
Authorities from the ministry argued that the main issue with KEFI was the finance, to which they did not start their operation on time, in addition to not showing the capability to finance the project and not showing visible progress. “We have been giving them notices for several times and six month ago the ministry gave them the last warning to submit their financial status and ability,” stated the Mines Ministry.
Based on the notice, the Ministry had given KEFI up until the end of July 8. But since the Ministry foresaw that the company would not fulfill its conditions within a few days, they went through with the revocation. However KEFI argues that it is in good condition to fulfill its request
KEFI says it has maintained the full funding syndicate for the project. It plans to sign the funding “Umbrella Agreement” during the month June to demonstrate the full funding commitment, especially to the Ethiopian Ministry of Mines.
“The Ministry did not volunteer to have discussions with us,” explained the exploration firm.
After Wednesday’s announcement, according to sources the Ministry had sent a letter to KEFI to submit their financial report until June 30, indicating that if not adhered to, the termination will continue.
Kefi Gold & Copper PLC – Cyprus-based gold and copper exploration and development-company has projects in Ethiopia and Saudi Arabia.
With a Probable Ore Reserve of 1.05 million ounces and Mineral Resources totaling 1.72 million ounces of gold, KEFI is advancing the Tulu Kapi Gold Project in Western Ethiopia towards development.
The Tulu Kapi Mining Agreement between the Ethiopian Government and KEFI was formalized in April 2015. The terms include a 20-year Mining License, a 5% Government free-carried interest and full permits for the development and operation of Tulu Kapi.
The government became entitled to a 5% free-carry interest in Tulu Kapi upon granting of the Mining License in April 2015. The Exploration Licenses held by KEFI Minerals (Ethiopia) Limited cover an area of approximately 200 square kilometers over and near the Tulu Kapi deposit.