LONDON (Alliance News) - Nyota Minerals Ltd Tuesday said its pretax loss narrowed significantly in its last financial year, as it cut costs sharply after selling its main asset to concentrate on exploration.
The company reported a pretax loss of USD3.8 million for the year to June 30, compared with the USD10.5 million loss it reported a year earlier, as its administration costs were more than halved and asset impairments fell to USD1 million, from USD4.7 million. It revenue is currently very small.
Nyota sold its Tulu Kapi gold project in Ethiopia during the year to KEFI Minerals, after it couldn't raise the funds to continue developing its itself. The cash funds from the sale of that asset allowed it to re-start exploration on other gold exploration blocks it has in the west of the country, to the north of Tulu Kapi.
It has also cut costs, reducing its board to three members and closing its London office. It is now looking for new opportunities to expand its exploration portfolio.
The company's so-called northern blocks total 2,300 square kilometres, but it is focused on two targets within the blocks: Bendokoro and Boka Sirba.
In a separate operational update, the company said it had made "solid progress" in advancing the mining licence application to rapidly exploit the Abay River, or Blue Nile, gravel terraces through the development of a mechanised mining and processing operation.
The Abay River transects the northern blocks, and the water level in the river will rise significantly when the Grand Ethiopian Renaissance Dam is complete. Nyota wants to recover as much gold as possible from the area that will be flooded beforehand.
"If successful, we will have highlighted a low cost opportunity to rapidly generate cash flow in the immediate future. We have also prioritised our hard rock gold targets across the tenures through full analysis of exploration work," Nyota Chief Executive Richard Chase said in a statement.
The company expects to restart field work in the northern blocks in the fourth quarter, although the rate of progress will be influenced by the pending renewal of the licenses and the outcome of talks with the Ethiopian Ministry of Mines concerning the alluvial mining licence.
"Nyota has received positive indications from the Ministry of Mines and broad agreement appears to have been reached on how the project would proceed. This includes the term of the licence, which would be for an initial term of five years and subject to the extent of the flooding that occurs during the time," the company said.
"As a result of which a revised proposal has been submitted that includes a reduction in the licence area to an amount practically mineable in that period and for which access and logistics are the most straight-forward," it added.
Nyota Minerals shares were up 52.4% at 0.160 pence Tuesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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