Nyota Minerals has entered into a conditional agreement with KEFI Minerals for the sale of 75% of the issued share capital its subsidiary that owns 100% of the Tulu Kapi Gold Project in Ethiopia.
The sale is in line with the stated strategy to identify a partner for the development of Tulu Kapi. Nyota, the ASX- and AIM-listed gold exploration and development company in East Africa, will retain a participating 25% interest in Tulu Kapi and the proximal exploration licences and a 100% interest in the Northern Block exploration properties.
The sale consideration will be satisfied as to £1 million in cash and the issue of up to 116,666,667 ordinary shares in KEFI Minerals, an AIM-quoted gold and copper exploration and development company with projects in the Kingdom of Saudi Arabia, at an agreed price of 3p per share. Nyota has full participation rights and its CEO, Richard Chase, will remain on the board of the Subsidiary to represent Nyota.
A new development and mining plan will be devised for Tulu Kapi with a view to development in 2015 based on a production plan in the order of 85,000 ounces of gold per annum. Nyota’s 25% beneficial interest in the Subsidiary remains undiluted by any further investment made by KEFI Minerals until a revised JORC-compliant resource estimate for Tulu Kapi has been approved and published – anticipated for Q1 2014.
KEFI Minerals has conditionally raised £4,500,000 via a placing of 225,000,000 new ordinary shares at a price of 2p per share (the “KEFI Placing”) to fund the cash element of the consideration of the sale and their 75% share of the corporate and technical costs of the subsidiary.
Following the KEFI Placing, the consideration shares will represent approximately 13.5% of the issued share capital of KEFI Minerals (before any adjustment for sums due to KEFI Minerals under the secured loan facility referred to below). Nyota will look to raise funding in 2014 in order to fund the Company’s share of the on-going development costs at Tulu Kapi and to carry out a focussed exploration programme to advance the Northern Blocks.
“Procuring a partner for the Tulu Kapi project has been essential to maintaining and developing the Company’s key assets in the current difficult market conditions for junior resource companies. KEFI Minerals has an excellent technical team, which was a significant factor in selecting them, and have impressed with their early engagement and “back-to-basics” approach. I will continue as a Director of Nyota Minerals (Ethiopia) Limited in order to represent our interest in the project and operations in Ethiopia will be unaffected,” said Chase.
“I believe that this agreement diversifies Nyota’s interests, and now that our capital commitments towards Tulu Kapi have been largely alleviated and the Company’s overheads significantly reduced, we have multiple opportunities for value uplift. Initially we will re-focus on the significant discoveries made on our Northern Block exploration tenements but there are also other mineral exploration opportunities that we may pursue in Ethiopia and elsewhere.
“I would like to take this opportunity to thank our shareholders for their patience and support over recent months and I look forward to providing updates going forward.”