Nyota Minerals' Tulu Kapi project looks viable for open pit mining with current resource

Nyota Minerals (AIM: NYO) said results of the Tulu Kapi gold project's pre-scoping study indicates that the project is economically viable, concluding that open pit mining would be most likely and Nyota’s ‘Big Pit’ scenario looks feasible. Nyota added that evidence to date points to the existence of a much larger goldfield within the greater licence area and 2010’s drilling may potentially improve Tulu Kapi’s attractiveness even further.

“Nyota has ownership of a robust asset which can be expanded and developed with a high level of confidence.  Whilst it is not our intention to commence mining until the resource has been significantly increased in size, this study clearly shows that a mining operation even at the current resource levels could be viable and confirms that the drillout and development of the asset is warranted," CEO Melissa Sturgess said.

The study assumed sustained gold prices above US$950 per ounce and allowed for a discount of approximately 15% to the current gold price. The study’s economically viable open-pit mining scenario is based on Tulu Kapi’s current mineral resource, which Nyota expects to increase significantly with further project development. The study’s financial assessment demonstrated that potential cash flows could result in a payback of capital within 4-5 years from the date of first production at the Ethiopian project.

The initial open-pit scenario, based on the current resource, considered a single pit design based on Ordinary Kriging Block Model data. Production was planned at 100,000 tonnes per month to the gold processing plant. The construction phase would be completed in years one to two, first production occurring during year three and steady state production would be achieved in year five. The total project life, including the construction period, is estimated at 12 years.

The big pit scenario investigated the design of an enlarged pit shell and used a conceptual model describing probable mineralisation trends into the north-eastern extension of the currently known resource area. With similar operational ramp-up parameters and based on a production rate of 100,000tpm, the total operational life of the big pit scenario was extended to 20 years. Under the third scenario, the study concluded that there was no immediate case for an underground mining operation given the current knowledge of the resources.

According to Venmyn Rand Ltd, the independent consultants who carried out the pre-scoping study, the immediate exploration focus of the project should be in the upgrading of the current mineral resource model. Venmyn identified the up-plunge area of mineralisation to the North-East of recent drilling as a particular target for future drilling to focus on. Regionally, the evidence to date suggests the existence of a much larger goldfield within the greater Tulu Kapi/Ankore licence area, with other satellite exploration targets identified on the current exploration licence areas having the potential to be developed into future open pit and underground mining areas.

Nyota announced last week that its ongoing drilling campaign at Tulu Kapi is set to move up a gear, as the company mobilized an additional RC (reverse circulation) rig to Ethiopia. The ongoing programme is designed to test the Northern Extension target at Tulu Kapi, while preparations are currently underway to drill four diamond drill holes at Guji, the second of the two new targets adjacent to the existing 0.69 Moz JORC compliant inferred resource. The results so far received have already been dispatched for sampling and assay, with results expected during the current quarter.