KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) said the costs of the Tulu Kapi gold project in Ethiopia have risen by 7%, though its financing partners are willing to up their investment to cover the additional capex, it added.
Estimates of the capital spending required – excluding the mining fleet provided by the contractor – are now US$320mln from US$300mln previously.
KEFI said cost inflation that companies have been widely experiencing across the world was the reason.
Harry Adams, executive chairman, added: "The fact that there have been increases to the ultimate capex figure required to first production should come as little surprise given the inflationary factors witnessed across the globe.
“That certain partners within the financing syndicate are looking to increase their participation to address this increase shows the spirit and goodwill within the financing syndicate to close on the funding.”
The final proposed project finance plan has been circulated for sign-off by all syndicate members and approval of the final finance plan is expected to be completed in mid-November rather than this month.
Tulu Kapi is anticipated to be Ethiopia’s showcase mining project, Adams said.
Shares were changing hands 2.1% higher at 0.59p following the news.