Nyota Minerals completes £3.44m share subscription with World Bank’s IFC

Nyota Minerals (LON:NYO, ASX:NYO) told investors that it has completed the £3.44 million share subscription with its investment partner the International Finance Corporation - a division of the World Bank.  The IFC now holds 10% of the company’s share capital. The funds will be used to accelerate the current drilling campaign at Nyota's flagship Tulu Kapi gold project in Ethiopia.

As well as the cash injection, Nyota believes that its investment partner will add significant value to the Tulu Kapi project in terms of social and environmental matters. “We are very pleased to welcome IFC as a shareholder and a long-term supporter of the Tulu Kapi project, providing invaluable advice and assistance in social and environmental matters together with the prospect of debt funding at the production stage", Nyota chief executive Melissa Sturgess commented.

"To have concluded the investment process with IFC in such a short space of time is a fantastic achievement and one which represents an important strategic step towards creating a significant gold project at Tulu Kapi.”
Nyota has been rapidly advancing the development of its flagship gold project. Last month, Nyota doubled the JORC inferred resource at Tulu Kapi from 690,000 ounces to 1.38 million ounces. The new JORC resource estimate is based on the data from Tulu Kapi maiden resource statement, plus assay data from 25 further reverse circulation (RC) drill holes.

The new JORC resource represents a 38% increase on Nyota's previously stated objective of a 1 million ounce resource target and a 100% increase on the maiden inferred resource announced in September 2009.

The resource statement follows the compilation and technical interpretation of 4,579 metres of reverse circulation drilling by independent consultants Venmyn Rand. The recent RC drilling program focused on the NE extension of mineralisation, which is contiguous with the area over which the 690,000oz maiden resource was defined.  Nyota also completed infill drilling to increase the level of confidence attributable to earlier diamond drilling.

Nyota highlighted that the results of previous drilling demonstrate the continuity of mineralisation intersected at depth as it tracks closer towards surface, returning grades and widths that it believes demonstrate excellent potential to support a future open pit mining operation.

Through the subscription, 29.7 million shares were issued to the IFC, representing 10% of the company. Also the IFC received 22.3 million share options, which can be exercised by the new investor for £3.87m. The new shares are expected to be admitted onto AIM later this week.

Last month, Nyota also freed-up some of its resources to better focus on the Tulu Kapi project, when it transferred-out its interest in the SwaziGold Project to its joint venture partner, Savinara Company SA, in preparation for the asset’s sale. The transaction simplifies SwaziGold’s ownership structure and reduces Nyota’s expenditure and time commitments in relation to the disposal. The company retains its entitlement to 50% of the proceeds from the anticipated disposal.

Nyota had previously been funding the project on a ‘care and maintenance’ basis, and as a result of the transfer it will cease to have any further funding or operational commitment in relation to SwaziGold.