KEFI Gold and Copper (AIM:KEFI) says its Saudi Arabian joint venture has conditionally approved an US$87 million ($124 million) development program for the Jibal Qutman Gold Project.
The decision covers the first stage of development, known as JQ1, and remains subject to outstanding procedural requirements.
The principal condition is the granting of a mining licence by Saudi Arabia’s Minister of Industry and Mineral Resources. Development is targeted to begin during the December quarter.
JQ1 is designed as an open-pit operation treating oxide ore through conventional carbon-in-leach processing. Based on the Definitive Feasibility Study, KEFI expects the operation to recover approximately 258,000 ounces of gold over seven years.
Gold and Minerals Company (GMCO), the project owner, is 13% held by KEFI and 87% owned by Saudi industrial group ARTAR.
At least half of the initial development capital is expected to come from shareholder equity. KEFI’s initial contribution is estimated at US$6 million, while its total funding requirement could reach US$10–12 million over 24 months if contributed entirely as equity.
KEFI retains the option to participate in future equity funding or accept a proportionate dilution of its GMCO interest.
Jibal Qutman hosts a mineral resource of 37 million tonnes @ 0.76 grams per tonne gold for 902,000 ounces, including 318,000 ounces within oxide material.
KEFI is an AIM-listed gold and copper developer with interests in the Jibal Qutman and Hawiah projects in Saudi Arabia and the Tulu Kapi Gold Project in Ethiopia.
Write to France Pinzon at Mining.com.au
Main image: KEFI Gold and Copper
