Since our last update note on 10 March, Kefi Minerals Plc (LON:KEFI) has announced a £1.75m equity raising; confirmation that the Ethiopian government is to take an additional 20% interest in Tulu Kapi in return for a US$20m funding commitment relating to infrastructure (vs our prior expectation of 25%); a reduced capex estimate and modified funding requirement mix; and, replaced the construction contractor with market leader Lycopodium.
Capex down, funding down
In its announcement of 2 June, KEFI confirmed an initial capex estimate for Tulu Kapi of US$108.8m, which is 19.5% below that based on the definitive feasibility study of 2015 (although comparable with our more recently updated estimate of US$110.3m). As a result, the company calculates a reduced net funding requirement of US$130m vs US$145m previously. Moreover, whereas this had previously been presumed to include up to US$35-40m in streaming finance, it is now assumed to include a US$20m increase in senior secured debt (US$85m vs US$65m previously) and a subordinated convertible note of up to US$10m.
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