LONDON (Alliance News) - Nyota Minerals Ltd Friday said its pretax loss narrowed in the first half of its financial year as administrative expenses dropped significantly, but said it needs to raise new funds in the first half of 2014 for the development of its projects.
The gold exploration and development company said its pretax loss narrowed to USD3.1 million for the six months ended December 31, from USD3.4 million the previous year, after it restructed and sold a majority stake in its major gold-rich asset Tulu Kapi in Ethiopia to KEFI Minerals PLC in December.
The company said its administrative expenses fell 36% to USD2.1 million, from USD3.3 million in 2012, as the company cut costs ahead of the restructuring. It is targeting a corporate run rate of less than USD100,000 per month from the second quarter onwards.
Nyota said that although it was yet to produce from the Tulu Kapi site, it did post a revenue figure of USD5,000 and said that during the period it made an overall USD959,000 loss on the disposal of its interest in the site.
The company also remains the holder of interests in Northern Blocks at the Tulu Kapi site which it plans to drill and prove up. Nyota said that, subject to financing, it hopes to be in a position to drill its prioritised targets in 2014 and noted that joint venture opportunities for the Northern Blocks will also be considered.
Nyota said it will need to raise funds in the first half of 2014 in order to pay for ongoing costs at Tulu Kapi and to continue its exploration programme. It said it may decide not to fund its pro-rata share of Tulu Kapi, but will suffer dilution of its shareholding as a result.
"We may drop off our 25% interest in Tulu Kapi moving forward to focus on the Northern Blocks and other assets, but it definitely will not be for twelve months because I'll be giving away too much value," Chief Executive Richard Chase told Alliance News on Thursday. "At this point we are not out to sell KEFI stock and I think we'll have an idea of our funding plans in the next few weeks."
The company ran into trouble in 2013 regarding its Tulu Kapi project. It announced its first ore reserve of 16.9 million tonnes at 1.82 grams per tonne for 1 million ounces of gold early in the year, but the gold price declined and the company's balance sheet meant that it struggled to find a joint venture partner to develop the site.
In December, the company sold 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 a roughly 34% beneficial interest in the project, taking into account its holding in KEFI shares.
Nyota shares were down 13.2% to 0.460 pence, putting it in the biggest AIM fallers Friday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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