AIM-listed East African gold exploration and development company Nyota Minerals has reported that more than 100,000 ounces of gold could be produced at its Tuli Kapi project annually, in its preliminary results for the six months ended December 31st.

The group reported that a definitive feasibility study had been conducted for Tulu Kapi project in Western Ethiopia, which confirmed "a technically feasible and economic project with average annual gold production of 105,000 ounces steady state from an open pit".

Significant additional resource potential was found to exist in adjacent areas, providing scope to improve the project economics, the results stated.

The group said that it had also undertaken nine separate visits to Ethiopia to engage with the government on the subject of the mining licence for Tulu Kapi and said that written confirmation was received in January showing that the definitive feasibility study complied with all regulations and satisfied the requirements for the issuance of a large scale mining licence.

The consolidated statement of comprehensive income showed that revenue was $20,000 compared to $83,000 in the corresponding six month period one year earlier.

The total comprehensive loss for the half year was $2.8m, compared to a loss of $3.8m in the corresponding period a year earlier.

Total assets were valued at $64.8m compared to $65.7m on June 30th.

CEO: Potential to produce 105K ounces gold annually at Tuli Kapi

Richard Chase, the Chief Executive Officer of Nyota Minerals, said: "A great deal of progress was made with the Tulu Kapi Gold Project during the six months under review. Most importantly the delivery of the definitive feasibility study completed 12 months of work and shows the potential for developing an open pit operation producing in excess of 105,000 ounces of gold per annum.

He added: "However, there is much still to be done and the coming months will focus on securing a mining licence, following-up on the consistently good results coming from our work programme at the feeder zone and on ways of improving the project economics and delivering shareholder value."

He added that since the end of the period under review, the company had conditionally raised £4.0m with the support of its major shareholders.

Operating cost-cutting initiative in Ethiopia

During the course of the equity raise, chase reported that the group's key investors made it clear that the lack of a mining licence was a cause for concern whilst recognising the project's potential and said they echoed the board's opinion that optimisation of the returns offered by the project should be a priority.

"The funds raised will provide the company with the funding necessary to allow it to focus on a work programme aimed specifically at addressing these concerns to improve the overall economics of the Tulu Kapi Project.

"At the same time, in light of the company's financial position, initiatives have been taken to significantly cut corporate overheads and operating costs in Ethiopia," he added.

The Definitive Feasibility Study, which is only based on the initial open pit component of the wider Tulu Kapi Gold Project, confirmed that annual gold production of 105,000 ounces of gold at an average grade of 1.82 grams per tonne (g/t), was achievable, equating to total gold production of 924,000 ounces over the proposed 10-year project life.

The study concluded that Tulu Kapi would benefit from low operating cash costs before royalties ($600/oz), with a net undiscounted pre-tax, post-royalty cash flow of $421m and a pre-tax net present value of $253m.

Nyota Minerals' share price was down 5% to 1.90p at 11:59 on Thursday.

MF

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