KEFI Minerals LON:KEFI signs shareholder agreement with Government of Ethiopia for Tulu Kapi Gold Mines Share Company Limited
— Government of Ethiopia and KEFI formalise the creation of Tulu Kapi Gold Mines Share Company Limited (“TKM”)
— KEFI will own c. 75% of TKM and the remaining c. 25% will be owned by the Government of Ethiopia
— Government of Ethiopia’s shareholding is based on receiving 20% of the equity in return for its US$20m investment in the project with the additional 5% being free carry in accordance with agreement between the Company and the Government
KEFI Minerals (AIM: KEFI), the gold exploration and development company with projects in the Kingdom of Saudi Arabia and the Federal Democratic Republic of Ethiopia, today announces that its wholly-owned subsidiary KEFI Minerals (Ethiopia) Limited (“KME”) and the Federal Democratic Republic of Ethiopia have signed the shareholders’ agreement (the “Shareholders’ Agreement”) and other foundation documentation for the incorporation, ownership and operation of Tulu Kapi Gold Mines Share Company Limited, which will result in TKM owning 100% of the Tulu Kapi Gold Project. The exploration projects outside the Tulu Kapi Mining Lease area are not part of TKM and remain 100% owned by KEFI.
The Shareholders’ Agreement sets out the parties’ respective commitments to invest equity capital in TKM and the mechanisms for control of the development and operation of the Tulu Kapi Gold Project.
Based on the latest project cost estimates, KEFI (via KME) will own circa 75% of the share capital of TKM and the Government of Ethiopia will own circa 25% (circa 20% for its investment of US$20 million for infrastructure required for the project and an additional 5% free carry).
The composition of TKM’s Board of Directors and its corporate governance mechanisms reflect the respective ownership levels of KEFI and the Ethiopian Government.
Today’s step represents an important initial formality within the timetable allowing the Company to start development activities in H2-17. This will follow financing and community resettlement, both of which the Company is actively implementing and will report progress as other milestones are met.
