Nyota Minerals (LON:NYO, ASX:NYO) is raising £4mln to help it complete a review the ‘Feeder Zone’ of the Tulu Kapi gold project in Ethiopia.
The money will also support optimisation work on the project’s bankable feasibility study, and provide working capital as it continues to advance its negotiations with the Ethiopian government over a mining licence.
"Raising money in the current financial market is a challenge for many exploration and development companies.
“This experience has been particularly evident in the lead up to the formal granting of our mining licence, which we believe will significantly de-risk the onward development of the Tulu Kapi Gold Project in Ethiopia.
“We intend to preserve our cash reserves whilst focusing on realising the value identified during 2012.
"Having already highlighted the viability of developing an open pit project at Tulu Kapi through the DFS we are now focused on achieving a mining licence, completing preliminary studies on the Feeder Zone and undertaking an overall review of the implementation of the Tulu Kapi project including the Feeder Zone, which we anticipate will provide considerable further value to the economic fundamentals."
Nyota is issuing 200mln new shares – the issuance of 105mln share will have to be approved by shareholders – with each share being priced at 2p.
Major shareholder Centamin (LON:CEY) is participating in the placing, subscribing for 81mln new shares to increase its stake to 19.9% from 13.6%.
On AIM this morning Nyota shares strengthened 4.5% to trade at 2.3p each.