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Nyota Minerals Limited (LSE:NYO), a gold exploration and development company in East Africa, has announced that it has concluded the strategic review, which commenced in May 2013, with the signing of two agreements with a new development partner (“Partner”) for the Tulu Kapi Gold Project in Ethiopia (“Tulu Kapi”).
The two agreements are (i) a heads of terms (“Heads”) for the sale of a majority stake in Nyota Minerals (Ethiopia) Limited (“Sale”), the subsidiary which holds Tulu Kapi and proximal exploration licences in Ethiopia; and (ii) a short term secured loan facility for up to £360,000, which the directors believe is sufficient to enable the Company and its subsidiaries to continue operating during the period required to complete the Sale. It should be noted that the Sale does not impact Nyota’s exploration licences comprising the Northern Blocks, in which it will retain a 100% interest.
The Sale will be conditional upon, amongst other things, the completion of due diligence by both parties and the Partner confirming it has sufficient funding to execute a work programme necessary to maintain the licence. This work programme is being designed by the Partner and will be jointly submitted to the Ethiopian Ministry of Mines shortly. It is the intention of both parties to complete the Sale before the end of this year. If approval is required from Nyota’s shareholders, then a circular in this respect will be posted as soon as practical.
The Loan is for up to six months, carries a coupon of 10% and is secured upon Nyota’s holding in Nyota Minerals (Bermuda) Limited, which is the holding company for Nyota Minerals (Ethiopia) Limited.
As the transaction envisaged by the Heads does not constitute a reverse takeover, the suspension of trading on AIM in the Company’s shares will be lifted as from 7.30am today, Thursday 17 October 2013. The Company’s shares will remain suspended on ASX until its report and accounts have been audited and published.
Neil Maclachlan, Chairman of Nyota, said: “We are pleased to have secured an agreement in principle with a partner who shares Nyota’s vision for and faith in the economic potential of Tulu Kapi. Whilst there are a number of conditions to be satisfied before the transaction is able to complete, discussions to date with the Partner represent a positive step forward and the board and management team are committed to ensuring the success of this transaction.”
It should be noted that the Heads are non-binding, except in granting a period of exclusivity to the Partner in which to complete the Sale. There is still considerable work to be undertaken to satisfy the various conditions attaching to the Heads and there can be no guarantee that the transaction will be finalised. However, the Board is pleased with the progress of discussions with the Partner to date and also with the joint discussions with the regulatory authorities in Ethiopia as regards the Partner’s planned review and revision of the development plan for Tulu Kapi.
