Nyota Minerals says resource upgrade for Tulu Kapi gold project on track for Q2

Nyota Minerals (AIM, ASX: NYO) has reported positive assay results from the first 18 reverse circulation (RC) holes of an ongoing drill programme at the Tulu Kapi gold project in Ethiopia. The company said that an update and upgrade of the existing Tulu Kapi Inferred Resource of 690,000oz remains on track for completion during the second quarter of 2010.

"We are very encouraged by the quality of the drilling results to date.  I feel that we are now starting to understand the orebody and its potential”, said Nyota chief executive Melissa Sturgess. “Work on the Tulu Kapi Project is gaining momentum and we look forward to reporting the upgraded resource estimate to shareholders next Quarter".

The company described the first set of results as very encouraging, with the most notable results showing 16 intersections above 8.9 grams per tonne (gpt) gold ranging between 1m and 8m, 11 of are in excess 11gpt. The three highest grading results were 22.7gpt gold over 1m, 21.1gpt over 1m and 19.8gpt over 2m.

According to Nyota, the accumulation of assay data is ongoing and, due to the significant number of high-grade intersections, repeat assay and verification will be required to confirm gold grades.

In the recent drilling programme at Tulu Kapi, 35 RC holes totalling approximately 7,000m have been completed over the Up-Dip Extension. To date the Phase 1 and Phase 2 RC drilling shows that gold bearing lodes extend north-east beyond the known limits of the Inferred Resource, the existence of mineralised structures are stacked beneath the previously identified lodes and that gold grades are increasing with depth.

Nyota said it will continue to accumulate assay data before handing over the geological interpretation and results to independent consultants to prepare an updated resource estimation.

Tulu Kapi is Nyota’s flagship project, the company is looking to increase the current JORC resource of 0.69 Moz (million ounces) of gold to 1 Moz and upgrading part of that resource to the measured and indicated category. Since closing the sale of its stake in Philippine Daguma coal project in February, all Nyota’s assets are now based in Africa. The company owns the Tulu Kapi gold project, a 51% stake in Yubdo Platinum and other exploration projects in Ethiopia. Nyota also owns the Muremera nickel project in Burundi and a 45% indirect interest in a gold project in Swaziland.

In a letter to investors in February, Melissa Sturgess emphasised the company’s progress made by both Nyota and the wider prospects for Ethiopia’s mining industry. Nyota’s CEO noted that Ethiopia is set to gain international recognition as an attractive destination for mining opportunities, as it develops into a confident economy in its own right. “We have found the operating environment to be very good in terms of the ease of doing business, proactive attitude of the government and general friendliness of the people”, Sturgess concluded.

Also in February a pre-scoping study, conducted by Venmyn Rand, indicated that Tulu Kapi is economically viable and concluded that open pit mining would be most likely. The study was based on Tulu Kapi’s current mineral resource and a flat gold price of $950 per ounce. The study calculated payback of capital within 4-5 years from the date of first production.

http://www.proactiveinvestors.co.uk/companies/news/14795/nyota-minerals-says-resource-upgrade-for-tulu-kapi-gold-project-on-track-for-q2-14795.html