LONDON (Alliance News) - Nyota Minerals Limited Thursday said that it has signed two agreements with a new development partner for the Tulu Kapi Gold Project in Ethiopia.
The gold exploration and development company, operating in East Africa, said the first agreement is a head of terms for the sale of a majority stake in Nyota Minerals (Ethiopia) Limited which holds its flagship Tulu Kapi mine and other exploration licences in Ethiopia.
The second part of the deal is the provision of a short-term loan facility of up to GBP360,000 to keep the company and its subsidiaries operational until the completion of the sale.
Nyota said the deal does not affect its Northern Blocks in Ethiopia, in which it will retain a 100% interest.
A spokesman for Nyota declined to identify the new partner, but told Alliance News that the deal was not with Centamin PLC, which was one of the key players in discussions over Nyota's future. Centamin recently called for the removal of Nyota Chief Executive Richard Chase in an attempt to salvage a deal between the two miners.
Nyota said a number of conditions must be satisfied before the Tulu Kapi deal can go ahead. Both parties must complete due diligence, and the new partner must confirm it has sufficient funding to execute a work programme necessary to maintain the licence at Tulu Kapi.
Nyota said it is the intention of both parties to complete the sale by the end of this year, assuming approval by Nyota's shareholders.
On October 3, Nyota was temporarily suspended from trading on AIM at its own request, pending the announcement.
The company had said it would 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.
Nyota said in September that, due to the failure to develop Tula Kapi at that point, the company expects its 2013 financial report to include a non-cash impairment charge of AUD45-55 million and had put the site into care-and-maintenance until a definitive plan was agreed.
Nyota shares restarted trading Thursday and were up 19% to 1.84 pence, putting it in the top three AIM gainers in early trading.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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