An Ethiopian investment syndicate has signed a deal to acquire a 30% ownership in KEFI Minerals (Ethiopia) (KME), which holds an interest in the Tulu Kapi Gold Mines (TKGM).

In exchange for the acquisition, the syndicate will invest $30m towards project funding for the Tulu Kapi mine.

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From the total amount, $9m of the investment will be made in August, while the remainder will be issued upon closing of project finance.

Once the project finance is closed, the ownership of the Tulu Kapi gold project would be split between the Ethiopian Government (23%) and KME (77%).

KEFI will hold a 70% interest in KME and the Ethiopian investment syndicate will own the remaining 30%.

“The project has probable ore reserves of 1.05 million ounces and mineral resources totalling 1.72 million ounces of gold.”

KEFI Minerals chairman Harry Adams said: “We are delighted to have agreed terms with the Ethiopian investment syndicate, which further strengthens our alignment with local stakeholders for our Tulu Kapi project.

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“Their investment on roughly the same terms as the Ethiopian Government means that around 46% of the project equity will now be held by the Ethiopian Government and local investors to complement the other benefits.”

The company has now assembled the proposed full project funding and expects to move towards full financial close later this year.

It is focused on securing the remaining Ethiopian Government processes and approvals, as well as completion of due diligence.

Located in Western Ethiopia, the project has probable ore reserve of 1.05 million ounces (oz) and mineral resources totalling 1.72 million ounces of gold.

KEFI expects to achieve average gold production of 140,000oz per annum from the project.