Aim listed Nyota Minerals is focused on the rapid development of a gold project in Ethiopia.
Nyota believes that its Tulu Kapi gold project in Ethiopia offers the potential for near term production. Having acquired the project in August 2009 from Minerva Resources, which was working on it but ran out of funds, Nyota Minerals has a maiden inferred JORC resource of 690,000 ounces of gold at a cut off grade of 0.5 g/t. This resource is contained in 13.5 million tonnes at a grade of 1.58 g/t of gold.
This resource covers only a 400 by 500 metre block of a 1,200 metre gold soil anomaly at Tulu Kapi, and the current inferred resource remains open at depth, up-dip and along strike. Subsequently, Nyota launched a 12 month drilling programme to increase the resource toward one million ounces, upgrade the existing inferred resource to the indicated category and generate new inferred resources by drilling previously identified extensions. In December 2009, Nyota raised further funds to accelerate its drilling programme.
The company’s joint broker, Ocean Equities, says it believes Nyota can establish a resource of one million ounces within six months, and believes the company could ultimately establish a resource base of three million ounces.
Ethiopia already hosts the operating gold mine of Lege Dembi, which produces some 100,000 ounces of gold a year. Tulu Kapi is located in the Wellega province in western Ethiopia and overall Nyota holds three gold exploration licences in the area covering 510 km2. The site is accessible by tar road from Addis Ababa and is 16 km from the 130 kVA national grid supply line, as well as three kilometres from the Birbir River.
Nyota’s three licences, the Tulu Kapi–Ankore, Bila Gulliso and Yubdo exploration licences are held for gold exploration. A platinum mining licence acquired as part of the takeover of Minerva has recently been relinquished. Alluvial gold is widespread throughout the area and various hard rock and eluvial deposits have been worked historically.
Tulu Kapi is by some margin the most advanced of Nyota’s gold prospects. The approximately 12 km2 exploration licence centres on a historic small scale mine that was operated by an Italian company in the 1930s. This company broke the top of a hill and the ore was washed down to the base where a water body was panned for gold. Some 60 kg of gold was recovered in this manner. There has been no mining on the site since 1939, and this includes an absence of artisanal activity. This is attributed to the fact that people are busy ten months of the year farming and the area of interest is arid terrain where the topsoil was removed in the 1930s.
Following the Italian activity Tulu Kapi was later explored by the UN in the 1970s and by Tan Range Exploration in the 1990s. After a reinterpretation of the structural controls of mineralisation in 2006, a phased drill programme comprising 34 diamond drill holes was completed. This has led to the existing maiden JORC resource.
The reverse circulation and diamond drilling Nyota is undertaking is considered a low risk exercise because soil geochemical anomalies of the same order of magnitude as those coincident with the first 600 m of the target already drilled extend a further 600 m south. In addition, the up-dip extensions of gold bearing lodes intersected in drilling have yet to be intersected and the dip direction of these lodes indicates the likely presence of further mineralisation east of the current grid limits. Three holes are being drilled to test the depth extension. Other more regional targets have been identified within the Tulu Kapi–Ankore licence.
Tulu Kapi is nine kilometres south of Keley, a small village on the main Gimbi to Dembi Dolo road, 500 km west of Addis Ababa. The area is surrounded by the Yubdo exploration licence area.
Three priority targets have been identified within the Yubdo licence; Guji, Gudeya Guji and Dina. The most promising of these targets to date is Guji, where recent ground geophysical surveys were sufficiently encouraging to suggest this particular target is drill ready and may be scheduled in the current drilling campaign.
Nyota has a team of seven Ethiopian and two British geologists and in addition to the three drill rigs operating it has established its own sample preparation facility on site. This sample preparation lab on site, which is managed by ALS Chemex on behalf of Nyota, will save the costs of having to send the samples to Johannesburg for processing.
Nyota CEO Melissa Sturgess says that a preliminary scoping study for the development of the Tulu Kapi gold project done by Venmyn Rand demonstrated Tulu Kapi’s potential as a viable gold mine based on current resources. The study was based on a gold price of US$950 an ounce. Mining would take place from a single pit, where grade control would be easy due to the clear demarcation of the top and bottom contacts of the orebody. The study calculated payback of capital within four to five years from the date of first production.
She says that results of initial metallurgical test work indicate up to 96% of gold recovery is possible. According to Sturgess metallurgical results to date have not only exceeded the figures from the Venmyn study, but the apparent ease with which the gold can be separated suggests that capital and operating costs could also be lower than originally estimated. A possibility might be a gravity flow option, allowing the upside of a smaller plant.
At Tulu Kapi, the ongoing programme is achieving drilling rates of approximately 160 metres a day, in line with Nyota’s expectations. For its campaign, the company has planned for 30,000 metres of drilling to have been done by the end of the second quarter of 2010, and Sturgess says she hopes that once the results of this campaign are known the resource base will achieve the projected 1.0 million ounces.
Nyota’s goal is a 100,000 ounce a year mine, and if an inferred resource of 1.5 million ounces is achieved then such a project could be viable. Sturgess hopes that a mine could be in production within three years.