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Nyota Minerals surprised by Abay River alluvial mining decision

Last updated: 07:02 27 Jan 2015 GMT, First published: 08:02 27 Jan 2015 GMT

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Nyota Minerals (LON:NYO) has been surprised by the Ethiopian authorities' decision not to allow alluvial mining along the Abay River.

Nyota subsidiary Towchester Investment submitted an application for a mining licence in April 2014 having received a positive response from the Ministry of Mines to the concept, but the ministry subsequently decided against issuing any mining licences for alluvial mining along those parts of the Abay River and its tributaries that will be flooded by the Grand Ethiopian Renaissance Dam.

The ministry said the dam is set to transform the Ethiopian economy and it does not want to put that at risk.

The gold miner said it would not be appealing against the decision given the small chance of success.

The minister for the Ministry of Mines said the decision was in no way a reflection on Nyota and that the AIM-listed company would continue to receive support if it wished to identify new areas of interest, especially those areas that are sparsely populated.

The recent renewal of the Brantham and Towchester exploration licences announced on 11 December 2014 is unaffected but, as disclosed at the time, the size of these licences was affected by the imposition of an exclusion zone around the area to be flooded by the dam and this resulted in the Towchester exploration licence renewal area being further significantly reduced.

Nyota will be conducting a strategic review of activities and opportunities in Ethiopia and continues to explore opportunities outside of the country.

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