Exploration and development company KEFI Minerals has signed an agreement to secure $135m funding for development of its Tulu Kapi gold project in Ethiopia. 

Under the agreement, Oryx Management will operate and lease-finance all on-site infrastructure at the project.

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For this, Oryx will form a special purpose vehicle (Finance SPV) to issue bonds in order to raise funds to build the necessary infrastructure.

Under the arrangement, the company will lease infrastructure to the project company KEFI’s subsidiary Tulu Kapi Gold Mines (TKM).

KEFI Minerals executive chairman Harry Anagnostaras-Adams said: "KEFI has selected a development funding approach considered more appropriate for start-up purposes than bank debt due to its longer nine-year tenor and its repayments commencing 30 months after drawdown.

"Proceeds from the lease deal with TKM will enable Finance SPV to repay the principal and interest on its bonds."

"This project has been designed in close collaboration with the selected project contractors, Ausdrill for mining and Lycopodium for processing, and in partnership with the Ethiopian Government.”

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Proceeds from the lease deal with TKM will enable Finance SPV to repay the principal and interest on its bonds.

In addition, the financing agreement signed by KEFI includes funding finance charges during a 30-month construction and production ramp-up period. 

The Ethiopian Government will provide funding for building all project-related off-site infrastructure, while Ausdrill has been contracted to supply and operate all the mining equipment under a mine services agreement.

Development activities at the project are scheduled to start by the end of the year.

KEFI is also pursuing working capital facilities with Development Bank of Ethiopia, while it is considering project-level equity from an undisclosed mining and engineering group.