LONDON (Alliance News) – Nyota Minerals Ltd, the gold exploration and development company in East Africa, said Monday that it has completed the sale of a 75% majority stake in its Ethiopia operations to KEFI Minerals PLC, its new partner in the subsidiary.
Nyota Minerals sold a 75% stake in its wholly-owned Ethiopian operations, the Tulu Kapi Gold Project in Ethiopia and the proximal exploration licences.
KEFI Minerals is an AIM-quoted gold and copper exploration and development company with projects in Saudi Arabia.
As part of the sale, Nyota received GBP1 million in cash, and just under 107.1 million new Kefi Minerals shares, worth about GBP2.1 million and representing approximately a 12.5% interest in the company. The new KEFI shares started trading on Monday.
Nyota said that its remaining 25% interest in the subsidiary, Nyota Minerals (Ethiopia) Ltd, is to remain undiluted by further investment made by KEFI Minerals, until a revised JORC-compliant resource estimate for Tulu Kapi has been approved.
Nyota Minerals said that it will look to raise funding in 2014 in order to fund its share of the on-going development costs at Tulu Kapi, and to carry out a focused exploration programme to advance its Northern Block exploration properties in western Ethiopia.
KEFI said it has devised an alternative approach to the development of Tulu Kapi, which is expected to reduce capital and operating spending. It said it already has a team on site, with the aim of producing a revised mineral resources estimate during the first quarter of 2014. The two partners hope to re-activate the suspended mining lease by the end of 2014.
Nyota shares were the biggest gainer on AIM Monday morning, trading 17% higher at 0.450 pence per share. Shares in KEFI Minerals were down 0.3% at 1.92 pence per share.