LONDON (Alliance News) - Nyota Minerals Limited Thursday announced further details on its possible subsidiary sale agreement for the Tulu Kapi Gold Project in Ethiopia.
The gold exploration and development company in East Africa said that it expects the deal to be for a 75% stake of its Nyota Minerals (Ethiopia) Limited, which holds the Tulu Kapi site. Nyota will be left with a 25% stake and will be required to contribute to the funding of the subsidiary's exploration activities once an updated mineral resource statement is completed at the site.
The company said that under the agreement, its subsidiary has been valued at GBP6 million and consideration for the 75% shareholding is expected to comprise GBP1 million in cash and the balance of GBP3.5 million in shares in the partner.
Nyota said the partner has not been named to mitigate the risks of the sale, but it is a junior exploration and development company listed on a regulated stock market.
The company told Alliance News last week that the deal was not with Centamin PLC, which is a key player in discussions over Nyota's future.
Nyota said recently that it would've run out of cash by the end of September, but in a recent statement said cost cutting and careful management of its spending means it has enough to get it through to the end of October at least. Its cost cutting has included reducing fees paid to its directors by half.
The company made it clear that there is no guarantee either of the sale being completed or as to the structure or timing of the sale.
Nyota Minerals shares were down 19% to 0.750 pence, putting it atop the AIM fallers in morning trading Thursday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
Copyright 2013 Alliance News Limited. All Rights Reserved.
