LONDON (Alliance News) - Nyota Minerals Ltd Wednesday reported a large pretax loss for its last financial year, as the company booked a significant impairment charge as it moved towards the sale of a 75% stake in its flagship Tulu Kapi project in December.
The gold exploration and development company posted a pretax loss of AUD55.9 million for the twelve months ended June 30, 2013, compared with a loss of AUD7.9 million the previous year.
The company's income during the period totalled AUD248,000, compared with AUD628,000 the year before, but the majority of its losses came from a AUD49.4 million impairment charge related to its failure to progress the development of its major asset and a subsequent carrying value reduction.
Nyota ran into trouble in 2013 regarding its Tulu Kapi project in Ethiopia when, despite announcing its first ore reserve of 16.9 million tonnes at 1.82 grams per tonne for 1 million ounces of gold earlier in the year, the gold price decline and the company's balance sheet meant that it struggled to find a joint venture partner to develop the site further.
In December, the company completed its sale of a 75% stake in the Tulu Kapi site to KEFI Minerals PLC for cash and the issue of KEFI shares to Nyota, leaving the company with a 25% direct interest and roughly a 34% beneficial interest in the project, taking into account its holding in KEFI shares.
However, the company said on Wednesday that despite receiving GBP1.3 million in cash as part of the consideration for the sale, it will need to raise additional funds in 2014 if it is to meet its financial obligations, maintain its 25% interest in Tulu Kapi, and fund further exploration.
The company holds a group of northern exploration licences unaffected by the KEFI Minerals deal, and said that fieldwork will re-commence in early February at the blocks, focusing on the highest priority targets for subsequent drilling.
Nyota said its objective now is to re-create shareholder value through exploration in Ethiopia and elsewhere whilst participating in the upside at Tulu Kapi.
The company had been suspended from AIM since it completed the deal with KEFI, but restarted trading Wednesday.
Nyota Minerals shares were up 33.3% to 0.500 pence, putting them in the top three AIM movers Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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