Nyota Minerals Ltd NYO Quarterly Report for the period ended 30 June 2012

  Nyota Minerals Ltd (NYO) - Quarterly Report for the period ended 30 June
  2012

RNS Number : 9225I
Nyota Minerals Limited
31 July 2012
 



 

31 July 2012

                                       

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

                       Quarterly Report to 30 June 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 June 2012.

HIGHLIGHTS                                                                                            

Tulu Kapi Project, Ethiopia

·     The Definitive Feasibility Study ("DFS")  is progressing well and is  on 
schedule for completion in the third  quarter of 2012.  Technical elements  of 
the ongoing DFS were submitted to  the Ethiopian Ministry of Mines ("MoM")  in 
July to support Nyota's application for a Mining Licence;

·     14,650m  infill  drilling  programme initiated  with  Wardell  Armstrong 
International ("WAI"),  aimed  at  converting  a  further  260,000  ounces  of 
Inferred Resources  to Indicated  status by  the  end of  Q4 2012  to  support 
project finance is now 90% complete;

·     Geological  modelling of  UNDP Target,  adjacent to  the main  resource, 
demonstrates good continuity and highlights opportunity for further extensions
to mineralisation and scope for an increase in the resource estimation  before 
year end;

·     Peak drill assay intercept in the  Tulu Kapi Feeder Zone of 6.11 g/t  Au 
over 17m  reaffirms the  Feeder Zone's  potential to  provide the  significant 
high-grade component to future mine production;

Proximal and Satellite zones

·     A 2.5km^2 gold-in-soil geochemical  anomaly with coincidental rock  chip 
samples of up to 7.2g/t and historical hard-rock mining has been identified at
the Buneya North prospect, close to Tulu Kapi;

·     Positive results from the Guji Saprolite drill programme;

Regional exploration

·     First  phase  drilling  at  the  Bendokoro  Prospect  indicates  limited 
economic potential, but  the presence  of visible  coarse gold  and low  grade 
background gold mineralisation in  host rocks has led  to the commencement  of 
further soil  sampling and  mapping  along the  interpreted extension  of  the 
structure;

·     A detailed fieldwork schedule is being planned for October 2012 to  June 
2013 based on results to date  and previous airborne geophysical and  regional 
soil geochemical  sampling,  in order  to  comprehensively explore  the  whole 
Brantham and Towchester licence areas ahead of further drilling;

Corporate

·     Cash on Balance Sheet at end of quarter: A$14.4m;

·     This represents a reduction of A$8.1m from the end of the prior  quarter 
and excludes the GBP1.3m proceeds of the subscription by International Finance
Corporation received in July 2012, and

·     Norman Ling was appointed as Non-executive on 21 June 2012.  Mr Ling has
held a series of appointments at the  UK Foreign and Commonwealth Office in  a 
career spanning  more than 30  years.   Mr Ling's  last  post was  as  British 
Ambassador to Ethiopia, Djibouti and the African Union from 2008 to 2011, when
he retired from government service.

 

Richard Chase,  Chief  Executive  Officer commented,  "The  last  quarter  has 
continued  to  be  exceptionally  busy  for  Nyota  as  we  work  towards  the 
finalisation of  the DFS  on our  Tulu Kapi  gold Project.  The in-fill  drill 
programme has progressed quicker than we  anticipated, which is a huge  credit 
to our team and to the contractor.

 

Tulu Kapi  remains  the  greatest call  on  our  resources and  our  cash  but 
following the completion of the DFS  this will be significantly reduced  until 
such time as the mining license is issued."

 

TULU KAPI PROJECT

Mining Licence Application

Following extensive work during the 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 will 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, are finalised. 

The JORC-Compliant  Mineral  Resource  announced  in  March  2012,  comprising 
0.83Moz of Indicated Resource and 0.84Moz of Inferred Resource, will form  the 
basis of the DFS to be  submitted to the MoM in  the third quarter of 2012  in 
support of the Company's Mining Licence application. 

The Board believes  that negotiations with  the MoM have  progressed well  and 
remains expectant of  securing a Mining  Licence for Tulu  Kapi in the  second 
half of 2012 and of achieving its current development timetable aimed at first
gold production in the fourth quarter of 2014.

Resource Infill Drilling

As Inferred Resources cannot be converted to Mineable Reserves under the  JORC 
code and in  parallel with the  DFS drilling, Nyota  has commissioned  Wardell 
Armstrong International  ("WAI")  to  produce  an  infill  drilling  programme 
designed to upgrade the most  significant areas of Inferred Mineral  Resources 
to "Indicated" status. These areas are located up to a depth of up to 200m and
found within the existing conceptual open pit outline.  This should result  in 
significant upside to the DFS  and confirm an initial  mine life of around  10 
years; ahead of project financing.  It should be noted that drilling has  also 
identified mineralisation beyond  this pit  outline which may  be included  in 
subsequent resource estimations.

The infill drilling programme comprises 130  vertical drill holes for a  total 
of 14,650m and is aimed at converting  an estimated 260,000 ounces of gold  to 
an Indicated Resource status.  The drilling programme is now 90% complete  and 
assay results will be  used in an updated  Mineral Resource statement and  the 
Ore Reserve statement before the end of 2012.

UNDP Target

The UNDP  target is  located  north of  and adjacent  to  the main  Tulu  Kapi 
resource. Mineralisation is contained in a NE-SW trending corridor dipping  at 
25-30 degrees to the northwest and  similar in morphology to the shallow  Tulu 
Kapi lodes.

An updated  geological model  demonstrates good  continuity and  provides  the 
evidence necessary to warrant further  drilling to test the strike  extensions 
to the deposit. At the same time the  model has been submitted to WAI for  its 
consideration in the next resource estimation  and to confirm an infill  drill 
programme to upgrade  the resource from  an Inferred to  an Indicated  status. 
 This drilling will be scheduled for some time in Q4.

Feeder Zone

As part of the  DFS, the diamond  drill hole TKMT-001 was  drilled to a  final 
depth of 468.57m to  provide core for metallurgical  testing, and at depth  to 
test the  continuity of  the  deep high  grade  mineralisation which  has  not 
previously been defined in  this part of the  deposit. The drilling and  assay 
results confirm the strike continuity of the deep high grade mineralisation by
60m to the SW and  40m (up dip) SE of  previously intersected deep high  grade 
mineralisation.

Only mineralisation  in  the  Feeder  Zone was  processed  at  Tulu  Kapi  and 
dispatched for gold assay as the balance  of the drill core was sent  directly 
to independent  laboratory  for  metallurgical  test  work.   Two  mineralised 
intercepts were identified, the  first returning a peak  grade of 6.11 g/t  au 
over 17m and the second deeper zone returning a peak grade of 1.38 g/t au over
8.54 m.

The evidence of further extensions  of mineralisation over substantial  widths 
and at grades exceeding  6g/t Au reaffirm the  Company's view that  ultimately 
the Feeder  Zone  has  the  potential  to  provide  a  significant  high-grade 
component to future mine production.

Shareholders are aware  that drill rigs  were reallocated to  DFS drilling  in 
order to support the application for the conversion of the current Exploration
Licence to a Mining Licence but  this recent high-grade drill result  supports 
the Company's  intent to  assign at  least one  diamond drill  rig to  further 
Feeder Zone drilling in Q4.

PROXIMAL AND SATELLITE TARGETS

Despite the focus on Tulu  Kapi, good progress has  been made this quarter  on 
the Proximal and Satellite  exploration areas. However,  there are some  major 
targets that still require investigation.

The selection of targets  for follow-up during the  period has been driven  by 
the need to plan the final locations of key elements of infrastructure for the
Tulu Kapi mine, including the processing plant, tailings storage facility  and 
access roads.  As a result, additional close-spaced gold in soil sampling  has 
been completed  and  some  limited  sterilisation  drilling  undertaken  where 
targets are located "under" preferred  infrastructure sites (Guji Getere  Tulu 
Kapi; Ankore).  One  of these  holes exhibits  10m of  albitized syenite  with 
pyrite and  quartz veins  that  will be  followed-up  if the  samples  contain 
anomalous gold.

Thereafter the emphasis remains the  completion of sufficient exploration  and 
preliminary evaluation to demonstrate to shareholders that the targets  within 
the  Company's  Proximal  and  Satellite  exploration  licences  have  obvious 
potential to provide for  an extension of  mine life well  beyond the 10  year 
initial programme planned for Tulu Kapi.

 The Tulu Kapi Trend

The Tulu Kapi trend comprises a chain of topographic highs formed by a  series 
of granitoids (mainly  sericitised syenite),  many of which  are anomalous  in 
gold.  In addition to the Tulu Kapi and UNDP resources, these targets  include 
Kelley and Chalti.

830 soil samples and 119 grab samples have been taken during the quarter  and, 
combined with historical  data, have  highlighted 7  targets areas  warranting 
detailed follow-up.

Kelley Syenite

A mafic-rich syenite  with numerous  quartz vein and  pervasive alteration.  A 
campaign of rock chip sampling and trenching has been undertaken.

Chalti Syenite

A geophysical survey and  reappraisal of the  available data, including  drill 
core, was  undertaken at  the end  of  2011 /  start of  2012. This  has  been 
followed by detailed soil sampling over the weathered ground southeast of  the 
main Chalti massif.  Some additional  fences of  vertical reverse  circulation 
drillholes are planned to test the target further.

The Ankore Trend

The Ankore Trend  is defined based  on the regional  geophysical surveys as  a 
northwest trending series of magnetic highs  and lows running parallel to  the 
Tulu Kapi trend of granitoids.

Buneya North and Extension

In-fill  soil  sampling  has  defined   an  anomaly  of  greater  than   45ppb 
gold-in-soil covering an area of approximately 2.5km^2 (peaking at 9.3g/t gold
in  soil)  underlain  by  diorite,  granite  and  meta-sediment,  subject   to 
shear-type deformation and intense alteration.

Rock chip samples  containing a peak  of 7.2g/t gold  plus anomalous zinc  and 
copper were collected proximal to a site of historical small scale exploratory
hard-rock mining over an area of 200 meters by 400 meters.  Gold is associated
with quartz veining  and pyrite mineralization  in sericitised and  silicified 
sheared host rocks.  Mechanical trenching  and an initial drill programme  are 
planned.

An initial diamond drilling programme is planned for late 2012 or early  2013. 
 

The Guji-Komto Trend

As reported in the  quarterly report to 31  March 2012, the Guji  gold-bearing 
saprolite is  a  small  portion  of  a  larger,  2.5km  -  2.8km  long  linear 
geochemical anomaly, extending from  Komto in the south  to Guji in the  north 
coincidental  with   a  meta-sedimentary   /  meta-volcanic   belt   including 
mineralized ferruginous  schists  and  limonitic quartz  breccia.  The  gossan 
bodies are lenticular, typically 100m wide and several hundred meters long.

Guji Saprolite

The first phase Guji drill programme is complete, with 64 holes drilled for  a 
total of  5,381m.  Sample  assays from  nine  of the  64 holes  are  pending.  
Drilling thus far covers only a 600m portion of the Guji gold-in-soil anomaly,
with the anomaly open for 700m to the north, and 800m to the south.

This initial drill programme was designed  specifically to test the scope  for 
the quick and low-cost development  of additional easily accessible  resources 
to feed  into  the  future  Tulu  Kapi  plant  from  mineralisation  found  in 
near-surface  saprolitic  mineralisation.  The  programme  has  concluded  the 
following:

·     economic  intersections of  mineralised saprolite  exist (as  previously 
announced on 11 June 2012);

·     mineralisation is  found where  gold in soil  geochemical anomalies  are 
coincident with  ground  geophysical  targets  generated  by  the  resistivity 
geophysical survey completed in late 2011; and

·     anomalous gold  in soil  geochemistry occurs for  a further  approximate 
800m south and  700m north of  the current  drill zone  which  is expected  to 
return further mineralised gold intersections once drilled.

A second phase of  shallow reverse circulation drilling  is being planned  for 
late 2012, after  the rainy season,  aimed specifically at  the extensions  to 
mineralisation defined by the geophysical and geochemical surveys.  

Komto

A  road  has  been  constructed   to  the  Komto  meta-sediment  target,   the 
southernmost  extension  of  the  prospective  Guji-Komto  Trend.  Subject  to 
trenching, reverse  circulation  drilling  to  confirm  the  depth  extent  of 
mineralization is planned and the  drill pads prepared.  Drilling expected  to 
be undertkane in before the end of 2012.

 

REGIONAL EXPLORATION - NORTHERN BLOCKS

Very limited field work  is possible during the  rainy season so the  emphasis 
has turned to data compilation and desktop studies.

Bendokoro

As previously  reported,  12 holes  (2,244m)  were drilled  at  the  Bendokoro 
prospect in  the  first phase  of  drilling  targeting rock  chip  and  trench 
intersections coincidental with a complex but distinct NW-SE lineation evident
from the airborne geophysical survey conducted by Nyota in late 2010.

All sample assays have been received and the results analysed.

Two distinct  styles  of  gold  mineralisation  are  observed:  the  first  is 
associated with  pyrite  and  rare chalcopyrite  sulphide  mineralisation  and 
sericite alteration  of  the  meta-volcanic  and  schist  host  rocks  and  is 
typically in the range of 0.1 - 1.0 g/t (for example BKBH008: 9.5m at 0.45g/t;
BKBH009: 5.0m at 0.54g/t; BKBH10: 2.0m at 0.41g/t;BKBH001: 5.4m @ 0.44g/t) and
the second is associated  with silicification and  quartz veining. The  latter 
includes the visible gold noted in borehole BKBH-003 (Bendokoro West) (assayed
at 2.15g/t Au over 7m,  including a peak of  11.65g/t Au at 153m-154m  depth)  
and borehole  BKBH-005,  drilled  to  intersect the  depth  extension  of  the 
Bendokoro East  target, assayed at 100 g/t over 0.64 m.

In addition, elevated  silver values  have been  noted in  samples taken  from 
boreholes on the eastern anomaly.

The origins ("protolith") of  the Bendokoro East gossan,  which assayed up  to 
10.2g/t in rock chip, was not obvious in the boreholes drilled beneath it  and 
therefore remains enigmatic.

It  is  clear  from  the  2011/12  fieldwork  that  the  Bendokoro  target  is 
gold-bearing and that mineralisation is associated with epithermal  alteration 
of preferential host rocks proximal to a regional shear zone. Drilling results
from the central section are encouraging but narrow widths and poor continuity
indicates low economic potential.

However, as the target area is "pregnant" with gold the potential exists along
shear extensions  for more  significant  accumulations follow-field  work  has 
therefore already  commenced. This  comprises detailed  soil sampling  to  the 
north and south  of the  main Bendokoro gold-in-soil  geochemical anomaly  and 
outcrop,  mapping  and  sampling  focusing  on  the  western  fault  zone  and 
associated silica alteration and sulphide mineralisation; a strike extent over
more than 1km.  In addition, the  Bendokoro model will be extended to  similar 
volcano-sedimentary terranes and  structures elsewhere in  the Northern  Block 
licenses.

CORPORATE

Corporate Governance

The Company took another large step  forward in terms of corporate  governance 
with the appointment of Norman  Ling as independent Non-Executive Director  on 
21 June 2012.  

 

Mr Ling has held a series of  appointments at the UK Foreign and  Commonwealth 
Office in a career spanning  more than 30 years.  Mr  Ling's last post was  as 
British Ambassador to Ethiopia,  Djibouti and the African  Union from 2008  to 
2011, when he retired from government service.

   

The Board  believes  that  the  wealth of  diplomatic  and  relevant  regional 
experience that Mr  Ling brings  with him, most  recently in  East Africa  and 
Ethiopia, should serve Nyota well in building on its good working relationship
with the Ethiopian government and in moving towards full-scale development  of 
the Tulu Kapi mine. 

 

During  the  quarter  the  Company  cancelled  the  following  option   series 
previously issued to directors and senior management:

·     3,933,334 options exercisable at 42 cents on or before 31 December 2015,
and

·     3,933,332 options exercisable at 50 cents on or before 31 December 2015.

 

These options were  cancelled for  no consideration.  There  are no  remaining 
options on issue with the above terms and conditions.

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").

 

The placing announced by Nyota on  3 February 2012 (the "Placing") was  closed 
prior to  IFC completing  their investment  approval process.    Approval  was 
received to undertake the  Subscription on the same  terms as those  investors 
that participated in the Placing, in accordance with the agreement signed  and 
announced at the time of IFC's original investment in Nyota.

 

Following the Subscription, IFC now hold  13.2% of the Company's issued  share 
Capital.

 

Cash

Nyota had cash of A$14.4 at the 30^th June.

The high rate of spending during  the quarter is directly attributable to  the 
work required for the  DFS, and in particular  the drilling of in-fill  holes, 
which because  they are  in-filling between  existing holes  can typically  be 
achieved more quickly than  when drilling virgin areas,  and the more  careful 
and costly  work  required  for geotechnical  and  hydrological  investigation 
holes.

In-fill drilling and DFS work continued  throughout July but the rate of  cash 
burn should  fall thereafter  and the  general focus  in Q3  is on  completing 
desktop studies and analysis and advancing the mining license application. 

Health and Safety

Nyota recognizes that the health and safety of its personnel is fundamental to
the success of its operations.  During the last quarter, with the pressure  on 
drilling activities at the Tulu Kapi project, several lost time injuries  were 
recorded.  The  Company is  committed  to learning  from these  incidents  and 
adapting operational  methods  appropriately.  Nyota  strives  to  continually 
improve the health and safety of its personnel.

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

http://www.rns-pdf.londonstockexchange.com/rns/9225I_-2012-7-31.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

BROKER

Guy Wilkes

Ocean Equities Limited

(+44) (0) 20 7786 4370

 

BROKER

Rory Scott

Mirabaud Securities LLP

(+44) (0)20 7878 3360

 

FINANCIAL PR

Jos Simson / Emily Fenton

Tavistock Communications

(+44) (0)20 7920 3150

 

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,  2009. 
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.

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
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DRLWGURPMUPPGUG -0- Jul/31/2012 10:40 GMT