News

October 30, 2008

Kefi Is Endorsed By Centerra In Turkey

By Rob Davies

Exploration can be a lonely business. There are huge attractions in keeping full ownership of a property and proving the validity of your geological model. On the other hand it is helpful to get technical and scientific endorsement from other operators, especially when they have a proven track record and can bring in lots of cash. And today’s difficult economic environment makes those factors even more appealing. So the decision by Kefi Minerals to accept an offer from Centerra to become a joint venture partner on its promising Artvin property is easily understandable. Centerra’s two operating mines at Kumtor in the Kyrgyz Republic and Boroo in Mongolia produce over half a million ounces of gold a year and generate over US$10 million of cash a quarter at today’s prices. That allows it to spend US $25million a year on exploration.

The deal with Kefi commits Centerra to spending US$3 million over three years to earn a 50 per cent stake with the option to spend a further US$3 million to earn an additional 20 per cent. While that does dilute Kefi, it will also allow it to progress exploration at a much faster rate. The Artvin property lies in north-eastern Turkey, where the 15 tenements cover 254 square kilometres. Jeff Rayner, managing director of Kefi, says the small size of the tenements released by the government does...