KEFI Minerals announced it bought out Tulu Kapi license in Ethiopia from Nyota Minerals for 1.5 Million Euro in cash and shares. KEFI had already bought 75 percent earlier and now it has acquired the rest 25%

The deal is made following the initial purchase of KEFI’s majority share last year for 4.5 Million. KEFI also announced the proceeds will be used for paying the revised feasibility study. In addition to this it will be used to fund the 750,000 Euro cash component of the deal and reactivate the mining license application.

According to the Managing Director Jeff Rayner KEFI acquired the license entirely to take full control of Tulu Kapi Project and funding flexibility. He continued, “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”.

On the other hand Nyota said the deal was made it was difficult to fund the ongoing work. It further stated it will use the cash it received to explore its Northern Block Licenses in Ethiopia, “including the potential for near term cash flow from mechanized alluvial mining”.

Meanwhile Nyota’s holding in KEFI will be distributed to its investors. The holding stands at 14.6 percent and its worth 2.29 Million Euros. Commenting on this Rayner said "The team greatly appreciates the support of our new institutional shareholders in facilitating these transactions”.

KEFI expects the Tulu Kapi to produce 1.2 Million Ounces during the open pit stage.Currently there does not seem to exist a change in the estimated all in cost of 700 US Dollars for an Ounce. On the other hand the mine plan will be refined further after the completion of the current drilling and trenching programme.

KEFI argues the new open target is still based on processing 1.2Mtpa tonnes of ore per year, but the total rise to 17mt from 12Mt previously.

Source: www.proactiveinvestors.co.uk