Nyota Minerals Regulatory News (NYO)

This replaces the announcement issued at 10.20am on 31/10/12 under RNS number 9471P. The following announcement now includes the associated PDF link.

All other details remain the same.

Nyota Minerals Limited ('Nyota' or the 'Company')

Quarterly Report to 30 September 2012

Nyota Minerals Limited (ASX/AIM: NYO), the gold exploration and development company in East Africa, is pleased to announce its Quarterly Report for the period ended 30 September 2012.

HIGHLIGHTS

Tulu Kapi Project, Ethiopia

·; Technical elements of the ongoing Definitive Feasibility Study ("DFS") were submitted to the Ethiopian Ministry of Mines ("MoM") with further documents lodged in August to support Nyota's application for a large-scale Mining Licence;

·; Capacity constraints within the MoM and the unforeseen need for leadership transition in Ethiopia meant that the 30 September target for the issue of a mining licence was not met. Nyota has subsequently received written confirmation from the Minister for the MoM that Nyota is in good standing with the Government of Ethiopia ("Government") and efforts on both sides to process the application for a mining licence will be increased;

·; The Company has been negotiating terms of engagement with commercial banks and development finance institutions who have expressed an interest in financing the project. Nyota expects to mandate the debt financiers when there is clarity on the mining licence award;

·; The infill drilling programme, aimed at upgrading Inferred Resources to an Indicated status, was successfully completed in the quarter and a new Mineral Resource was announced at the start of October;

o New Total In-Situ Mineral Resource estimate (Indicated + Inferred) for Tulu Kapi of 24.90 million tonnes @ 2.34g/t gold containing 1,872,000 ounces of gold using a cut-off grade of 0.3g/t gold;

o Comprising an upgrade and increase in the Indicated category of 33 per cent to 1,108,000 ounces of gold @ 2.36g/t gold; and

o An Inferred Resource of 764,000ounces of gold @ 2.30g/t gold.

·; Two drill rigs commenced a new drilling programme targeting the higher grade "Feeder Zone" gold mineralisation at the end of the Quarter, with initial results expected in the December Quarter;

Exploration

·; Six targets defined at Boka West for immediate follow-up based on the collection of 181 heavy mineral concentrate, 101 rock chip and 296 stream sediment samples together with detailed geological mapping and some limited trenching;

·; At Bendokoro North work focussed on planning and establishing soil sample grids over the main target area and on the southern extension aimed at improving resolution. Soil samples for the southern grid have been submitted to the Nyota laboratory for sample preparation prior to dispatch for analysis;

Corporate

·; Cash on Balance Sheet at end of quarter: A$10.9m; and

·; Includes the subscription monies of GBP1.3 million (US$2m) received from International Finance Corporation ("IFC") in July in consideration for 21,727,650 new ordinary shares ("Shares") in the Company at 6 pence per ordinary share, further to the announcement of the subscription made on 21 June 2012.

Richard Chase, Chief Executive Officer commented, "This quarter has seen mixed fortunes. The efficiency with which the in-fill drilling was completed, with a new record meterage drilled in a single month, clearly demonstrates our technical and operational ability in Ethiopia. However, being the first mover in a country does not mean that everything goes to plan, and while both the Government and Nyota were both working towards a target of 30 September for the issue of a mining licence capacity constraints in the MoM and factors outside both our control have meant this was not possible.

"At the end of the period our review of the proposed DFS capital costs and a new mine schedule and development plan to incorporate the new Mineral Resource were on-going and we expect to be able to announce the main outcomes of the study before the end of the current quarter. We have also received a letter of comfort from the Ministry of Mines and agreed with them to increase efforts to complete processing our application as quickly as possible; the tangible results of which we are starting to see."

OPERATIONS OVERVIEW

As summarised in the table below, drilling in the Quarter was focussed on Tulu Kapi and completion of the infill drilling programme to convert Inferred category ounces to Indicated and July saw a total of 6,528m drilled by five rigs, being the highest monthly total ever drilled at Tulu Kapi. The Infill Drilling programme was largely completed in August and towards the end of that month and into September, drill rig capacity was freed to investigate the SW Extension of Tulu Kapi and the Feeder Zone. 

The results of the Infill Drilling Programme were included in the Mineral Resource update announced at the start of October and the assay results from the subsequent drilling will start to become available in the current quarter.

As highlighted in the Mineral Resource Update announced on 9 October, given the significantly higher grades intersected in the Feeder Zone to date, two drill rigs have commenced a new programme targeting this deep mineralisation. The three other drill rigs that have been contracted by Nyota for the past two years have been stood down while negotiations continue for the Mining Licence for Tulu Kapi.

TULU KAPI PROJECT

Definitive Feasibility Study

Technical elements of the ongoing Definitive Feasibility Study ("DFS") were submitted to the Ethiopian Ministry of Mines ("MoM") and announced on 6 July 2012. Further submissions were made in August to support Nyota's application for a large-scale Mining Licence and an updated pit design and mine plan is currently being undertaken for the new mineral resource so as to finalise the development plan for the proposed gold mine.

Since August we have undertaken a programme of optimisation of the DFS assumptions by using the experience and expertise in the country. Examples include:

·; Submissions have been made to the Regional Roads Authority and discussions held as to the relevant construction standard and classification of the 12.9km access road from the main road to the project location. With this confirmed and the route finalised the design has been refined and will be costed;

·; Due to the topography, a major cost component of project construction is earthworks. The location, design and construction of site infrastructure has been reviewed and, where appropriate, moved to maximise the utility of earth works and to reduce capital expenditure; and

·; Power availability for the purpose of the DFS was originally limited to 10MW. Submissions and discussions with the Ethiopian Electrical Power Company ("EEPCo"), however, have confirmed the availability of 15MW subject to Nyota constructing a 47km, 132kv power line. The proposed route for the power line has been agreed and quotes from EEPCo and a foreign contractor for erection have been received; although the detailed route survey will need to be completed before construction can commence.

Elsewhere Nyota and its consultants have had to balance the absence of a mining sector in Ethiopia with the need to design a mine to acceptable standards for project finance. A good example of this has been the presumption that Nyota will have to owner-operate its mining equipment, rather than contract mining to a third party. This has significant implications for the capital cost of the project and places demands elsewhere for the reduction of capital expenditure.

In late September a two day workshop was facilitated by Nyota's land access and resettlement consultants, which brought together the Company and all levels of government (federal, regional, central and local) to reach agreement on the actions and responsibilities for this very important element of the Project. The workshop was considered a success by all attendees and results have been included in the Social and Environmental Impact Assessment ("SEIA") as well as the resettlement action plan that will be an essential precursor to mine development. All environmental and social work in support of the SEIA for the Mining Licence application has been completed and Nyota has responded to subsequent information requests from the MoM. Formal acceptance of the SEIA from the MoM is now awaited.

The DFS is expected to be finalised before the end of 2012.

Mining Licence Application

Following extensive work in the previous quarter, Nyota announced on 6 July that it had submitted the technical elements of the on-going DFS to the Ethiopian Ministry of Mines ("MoM"). The documents submitted to the MoM were intended to enable it to commence its technical review of the Tulu Kapi project, which is a pre-requisite for the terms of the Mining Licence to be agreed, while the economic parameters for the DFS, which should support the issue of a Mining Licence, were finalised. 

During the quarter a number of meetings were held with the Minister for the Ministry of Mines and the licensing committee established under her auspices. Unfortunately, the capacity of the committee was reduced by the departure of two senior officials, one directly to the private sector, and this constraint remains an issue for the review of Nyota's technical submissions. 

Both Nyota and the MoM worked in good faith towards the granting of a Mining Licence by the end of September. However it has not been possible to achieve this timetable: a fact that manifested itself after the untimely death of the Prime Minster.

After the period end, the Company received written confirmation from the Minister for the MoM that it was in good standing with the government and that it was agreed that efforts on both sides to process the application for a mining licence would be increased.

The Directors believe, based on the strong and open relationship which the Company has developed with the Ethiopian Government that a Mining Licence will be secured but that it would be misleading to provide market guidance as to when this will happen.

Updated Mineral Resource

Subsequent to the end of the Quarter, on 9 October 2012, Nyota announced a new Mineral Resource for Tulu Kapi, incorporating the results from the in-fill drill programme completed during the Quarter and calculated using a new cut-off grade that reflects the indicative economic parameters obtained for the DFS.

A new Total In-Situ Mineral Resource (Indicated + Inferred) was estimated for Tulu Kapi of 24.90 million tonnes @ 2.34g/t gold containing 1,872,000 ounces of gold using a cut-off grade of 0.3g/t gold. This comprised an upgrade and increase in the Indicated category of 33 per cent to 1,108,000 ounces of gold @ 2.36g/t gold; and an Inferred Resource of 764,000 ounces of gold @ 2.30g/t gold. The increase in Indicated Resource on a like-for-like basis, using the previous cut-off grade, is 30%. This is the correct measure of the success of the In-fill Drilling Programme as it excludes the effect of lowering the cut-off grade.

The resource estimation was undertaken using Ordinary Kriging interpolation, a standardised method for assigning values from samples to ore blocks that minimizes the estimation error. A cut-off grade of 0.3g/t was used to define the mineralisation for both the saprolite and fresh material. This cut-off grade is lower than that used in the Mineral Resource estimate of March 2012 (where cut-off grades of 0.4g/t and 0.5g/t were used for saprolite and fresh material, respectively).

Note:  Nyota holds an interest of 100% in the Tulu Kapi asset

A major part of a definitive feasibility study is to conduct detailed trade‐off studies based upon the costs estimated by the study to establish the most appropriate cut‐off grade, mine plan and process plant design to maximize the value of the ore body.

The new resource estimate employs a 0.3g/t cut-off because the initial indicative costs for operating a 2 million tonne per annum gold mine at Tulu Kapi show that the economic cut-off is likely to be between 0.3g/t and 0.4g/t. Hence in order to maximise the recoverable gold and to ensure that the optimisation of the net present value ("NPV") of the project considers the whole range of mining scenarios it is necessary to have a Mineral Resource whose cut-off is either equal to or less than the calculated economic cut-off.

Diluted Resource Estimate

In keeping with previous resource estimate announcements, the table below shows how the In‐Situ Mineral Resource Estimate model ("In‐Situ") changes when a potential mining dilution is imposed upon it. The purpose to this exercise is to gain a better understanding of the likely tonnes and grade that will be treated by the process plant, as opposed to the tonnes and grade that is present "in‐situ" in the ground.

Previous resource estimates have been based upon diluting to a geometrical mine plan comprising of 2.5m high benches. The current diluted resource estimate is based upon a dilutant skin of 30cm on the hanging wall and footwall of each ore lens. This results in a more appropriate diluted tonnage and grade estimate for thinner ore lenses, and is based on an estimated selective mining resolution of 30cm ("0.3m Edge Dilution") as envisaged in the DFS.

The gold in the upper parts of the Tulu Kapi ore body is contained predominantly in sub‐horizontal and shallow dipping lenses in zones of alteration. Therefore, the effect of using regularly sized rectangular blocks to model it as one would mine it (and when all other factors are left unchanged) is to force the inclusion of low grade material and internal waste that must be removed along with the ore. As a result, the gold metal contained in the resource estimate remains almost unchanged but the number of tonnes increases and the average grade of those tonnes decreases.

Further Resource Potential

Drilling with the objective of delineating resources for the Feasibility Study has been completed. However, opportunities remain for the delineation of additional resources immediately adjacent and proximal to the Tulu Kapi deposit including the UNDP, SW Extension and the Feeder Zone. These targets are defined by a combination of airborne and ground geophysics, soil geochemical survey, trenching and initial drilling.

Given the significantly higher grades intersected in the Feeder Zone to date, two drill rigs have commenced a new programme targeting this deep mineralisation. The programme comprises initially of 17 holes for a total of 7,700m and drilling is expected to continue until the end of the year.

EXPLORATION

Satellite & Proximal

The Company focussed the majority of its geological team on the Tulu Kapi infill programme and the limited field work undertaken on Satellite & Proximal Targets was largely confined to completion of regional and target specific sampling programmes.

With the onset of the wet season, when meaningful field-based exploration is difficult, work commenced on consolidating all historic exploration data and report writing. The Company expects to have a suite of targets for further detailed follow-up by the end of the year.

Regional

Excellent progress was made during the Quarter in the Northern Blocks. New satellite imagery was used to map major geological units of interest and alluvial cover. Emphasis has been placed on the Boka West and Bendokoro Extension North target areas.

·; At Boka West, a total of six targets have been defined for immediate follow-up based on the collection of 181 heavy mineral concentrate, 101 rock chip and 296 stream sediment samples together with detailed geological mapping and some limited trenching. Three targets were generated based on a combination of heavy mineral concentrates and rock chip sampling. The results are sufficiently compelling and reliable to warrant soil grid sampling. A plan has been implemented to establish grids over the three targets with lines spaced at 200m intervals and samples taken at 50m intervals. An estimated 700 to 800 soil samples will be collected. The remaining three targets have yet to be defined with a degree of confidence. This will be achieved through additional heavy mineral concentrate sampling. An estimated 20 to 30 samples will be collected.

·; At Bendokoro North, the target was based on a combination of heavy mineral concentrate, rock chip and soil sampling followed up with 20 trenches and 12 test drillholes. Exploration identified gold and base metals associated with quartz veins in felsic porphyry and metavolcanic rocks in association with a NNW trending shear. The geological environment is obviously gold bearing based on historic trench and drill results and recent exploration has focussed on the planning and establishment of soil sample grids over the main target area and on the southern extension aimed at improving resolution together with a planned soil grid over the northern extension. Soil samples for the southern grid have been submitted to the Nyota laboratory for sample preparation prior to dispatch for analysis;

At the same time as the more detailed exploration was taking place, work continued to identify and prioritise other targets for follow-up using aerial photography, satellite imagery and airborne geophysical data as fieldwork was curtailed in the wet season.

CORPORATE

Placing

The Company announced on 21 June that International Finance Corporation ("IFC") had subscribed for 21,727,650 new ordinary shares in the Company at 6 pence per ordinary share (the "Subscription"). GBP1.3 million was received from IFC on 12 July 2012, and as a result of the Subscription, IFC now holds 13.2% of the Company's issued share Capital.

Cash

Nyota had cash of A$10.9 million at the 30th September.

Cash outflows of A$5.6m were below that forecast at the end of the prior period, primarily as a result of administration costs being reduced by A$0.7m. 

As noted for the same period in the prior year, activity in the period July to September is reduced by the rainy season and picks up again in the subsequent quarter. This year the pick-up is more muted as drilling programmes for the feasibility study have been completed and only two rigs will be working from now on. On the other hand, completion of the feasibility study itself will crystallise certain one-off expenses (demobilisation of drill rigs for example) and all creditors associated with the study.

Beyond this, and excluding the two drill rigs that will continue to work across all of Nyota's projects in Ethiopia, future cash flow will be determined to a large extent by the progress with the mining licence application and the Company's ability to move forwards with project finance and the development of the project.

TO VIEW THE ASX APPENDIX 5B, PLEASE CLICK ON THE FOLLOWING LINK:

http://www.rns-pdf.londonstockexchange.com/rns/9738P_1-2012-10-31.pdf 

For further information please visit: http://www.nyotaminerals.com or enquire to:

Richard Chase (CEO) / Anthony Rowland (Business Development)

Nyota Minerals Limited

+44 (0) 20 7400 5740

 info@nyotaminerals.com

NOMAD

Richard Morrison / Jen Boorer

RFC Ambrian Limited

+44 (0)20 3440 6800

FINANCIAL PR

Jos Simson / Emily Fenton

Tavistock Communications

+44 (0)20 7920 3150

BROKER

Guy Wilkes

Ocean Equities Limited

+44 (0)20 7786 4370

BROKER

Rory Scott

Mirabaud Securities LLP

+44 (0)20 7878 3360

Competent Persons

The technical exploration and mining information contained in this Announcement has been reviewed and approved by Mr D Hage Pr.Sci.Nat, Chief Geologist for Nyota Minerals Limited. Mr Hage has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and as a qualified person under the AIM Note for Mining and Oil & Gas Companies. Mr. Hage is an employee of Nyota Minerals Limited and is a Member of the South African Council for Natural Scientific Professions (SACNASP). Mr Hage consents to the inclusion in this Announcement of such information in the form and context in which it appears.

The Resource Statement is the responsibility of Principal Geologist Mark Owen BSc MSc MCSM CGeol FGS EurGeol. Mark Owen is a full‐time employee of Wardell Armstrong International, an independent Consultancy and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and in the AIM Note for Mining and Oil & Gas Companies. Mark Owen consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.