Nyota Minerals (LON:NYO, ASX:NYO) is to raise nearly £10 million through a share placing backed by fellow gold group Centamin (LON:CEY).
Centamin is to take 67 million of the 161 million new shares to be issued and when added to its existing holding it will own 14.08 per cent of Nyota.
East Africa-focused Nyota said the £9.66 million raised would enable it to develop the Tulu Kapi gold project in Ethiopia between completion of the definitive feasibility study and before project finance.
Nyota added it would also be able to continue exploration on its Northern Block properties with the extra cash.
Richard Chase, Nyota’s chief executive, said he was delighted with the response from large shareholders to the cash call and also with Centamin’s involvement.
“The backing of an industry peer is encouraging, both for the prospects for Tulu Kapi and wider exploration within our Ethiopian assets and we greatly look forward to Centamin's ongoing support of our efforts in Ethiopia.”
He also said he expects there to a number of cash calls from other exploration companies in the next four months and Nyota had to ensure it had enough money to carry out its objectives beyond this year.
The shares to be issued represent 25.19 per cent of the existing share capital.
About 147 million will be issued to UK investors at 6p each, with the remaining 14 million sold Australian investors at A$0.089.