London-listed gold-focused exploration/development company KEFI Minerals (AIM: KEFI) with its principal projects located on the Arabian/Nubian Shield, which is highly prospective for gold, has announced a resource update for its Tulu Kapi project in Ethiopia.
Tulu Kapi, where KEFI acquired 75% from Nyota Minerals last year, and has an agreement in place to acquire the remaining 25%, is located in western Ethiopia and has had a considerable amount of work undertaken on it over the past few years. Former owner, Nyota, effectively ran out of funds to progress the project and KEFI purchased the 75% interest in the project last December for £4.5 million.
The Tulu Kapi gold deposit was discovered and mined on a small scale by an Italian consortium in the 1930’s. Nyota Minera acquired the licences in 2009 and then 
undertook extensive exploration and drilling which culminated in an initial DFS in December 2012 based on a 2.0 million tonne/year processing plant and would have required a capital expenditure outlay of some $290 million.
In December 2013, KEFI Minerals acquired 75% of Tulu Kapi for £4.5 million. This acquisition cost equates to only $10 per reserve ounce and provides the information collected from historical expenditure of more than $50 million. KEFI is revising the DFS to reduce capital expenditure to approximately $143 million for a 1.2 million tonne/year processing plant and introduce more selective mining to increase mined gold grade.
On grant of a Mining Licence, the Ethiopian government will be entitled to a 5% free carry interest in Tulu Kapi.
Tulu Kapi is located approximately 360km due west of Ethiopia’s capital, Addis Ababa. A main road to Addis Ababa is within 12km of Tulu Kapi and is being sealed with asphalt during 2014. Power lines on the main electricity grid are within 40km of the project.
Nyota had defined an indicated and inferred resource of 1.9 million ounces back in 2012 and KEFI had initially updated this initial figure to 2.05 million ounces in March 
this year but has now come up with a further independently verified updated JORC compliant mineral resource slightly downgrading total indicated and inferred resource size to 23.7 million tonnes at 2.51 g/t gold for 1.9 million ounce. But what this does is give KEFI improved confidence in the figures – and with plenty of additional exploration potential around and below the current resource there should be plenty of scope for extensions in due course should a mine be built
KEFI has also defined, a resource within the planned open pit area of 22.0 million tonnes at 2.27 g/t gold for 1.60 million ounces with further high grade mineralisation of 1.62 million tonnes at 5.81 g/t gold for 303,000 oz as underground potential, immediately below the planned open pit.
The company is working on re-evaluating the original Nyota DFS and revising it as a slightly smaller scale operation requiring less capital to bring to production. With some improvement in the perception – and stock prices – for junior explorer/developers of late KEFI will be hoping that it will find the necessary capital raising easier than Nyota before it, provided that its revised DFS continues to see Tulu Kapi as a robust project at a sensible gold price level.
KEFI’s Managing Director, Jeff Rayner, commented on the latest figures thus: “We are 
pleased that the independent review of the Tulu Kapi Resource and JORC compliant reporting validates our belief that we have an attractive open pit project and underground mining potential. This review gives us the correct internal resource dilution to accurately plan Tulu Kapi’s development and production.
The next step of producing the estimate of Probable Reserves is already advanced following which the independent reviews of our plans for project, community and finance will occur in quick succession. As a result, we are on track to lodge the mining licence application during Q4 2014, and, at the same time, expand project documentation for the planned project financing. All this gives the Board confidence that development will commence in 2015.”
Bailey Hudson is a creative content writer from Texas USA. He graduated in 2012 at the Hult University with a degree in Mass Communication. He created Bailey Doest Bark in 2015 and is currently the managing editor of the online portal.
