Gold miner Kefi Minerals has reactivated the mining licence application (MLA) for Tulu Kapi gold project in Ethiopia, and has begun drawing financial plans for its development.
The application was suspended by the previous owner of the mine Nyota Minerals in 2013. Nyota is a 25% stakeholder in Kefi, which owns 100% of the mine.
The latest licence application proposes an open pit mining with for 11 years and establishing an underground mine beneath the open pit, where gold resources have already been found.
The company also plans to test the feasibility of heap leach processing of the lower-grade material during open pit mining.
Snowden Mining Industry Consultants previously estimated Tulu Kapi gold project have total probable ore reserves of 12.9 million tonnes at 2.41g per tonne for 1.002 million ounces of gold.
Ethiopian mines minister Tolassa Shagi Moti has confirmed the government's support for approval of the mining licence.
"Kefi has also received headline indicative terms for the financing of the project from several financial institutions," the company said in a statement.
Phase one of the project will require $10m for the initial construction work, which is scheduled to begin in the first quarter of 2015, followed by $120m to $150m for the construction of the mine, processing plant and infrastructure, which is due to start in the fourth quarter of 2015.
The second phase will require $100m of funding from senior secured debt and $30m from a non-senior debt fund in mid-2015.
Kefi chairman Harry Anagnostaras-Adams said: "The reactivation of the mining licence application for Tulu Kapi marks an inflection point in Kefi's history.
"With the recent verifications of our plans and analysis, as well as the headline indicative terms for project financing, we can see a clear path towards becoming a gold developer.
"We look forward to our MLA being granted so that we can progress to the construction phase and to delivering shareholder value."
Image: The Tulu Kapi gold project is located in Ethiopia. Photo: courtesy of Nyota Minerals.