Nyota Minerals sells 75% of Ethiopian unit to KEFI Minerals

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Addis Ababa, 12 December (WIC) - Nyota Minerals Ltd, which has been looking for a partner to help it develop a gold project in Ethiopia, Wednesday said it had sold a 75% stake in its Ethiopian business to KEFI Minerals PLC, which will now develop the project.
In a separate statement, KEFI said it would pay GBP1 million in cash and 116.7 million new shares for the stake.
It has raised GBP4.5 million in a placing of 225 million new shares at 2 pence each to fund the acquisition, pay for work at the Tulu Kapi gold project, as well as for work on its own Jibal Qutman project in Saudi Arabia.
KEFI said it will complete additional work at Tulu Kapi and refine the definitive feasibility study before developing the project in 2015.
"The directors of KEFI have set a development plan for Tulu Kapi aimed at reducing the anticipated capital and operating expenditure, which should allow for a lower start-up risk and a higher overall return," it said.
Nyota said the sale was in line with its strategy of finding a development partner for Tulu Kapi.
It will retain a participating 25% interest in the project and nearby exploration licenses, as well as a 100% interest in its Northern Block exploration properties.
It said the new development plan has a target of producing 85,000 ounces of gold a year at Tulu Kapi.
"Nyota has full participation rights and its CEO, Richard Chase, will remain on the board of the Subsidiary to represent Nyota," it said.
Nyota's deal with KEFI comes after several months of seeking a partner.
It rebuffed shareholder Centamin PLC in the process, after a dispute about the direction of the company that had prompted Centamin to try and have Chase removed.
That proposal was rejected by Nyota's other shareholders.
Centamin started reducing its stake when Nyota announced it had done a sales agreement with another company that it hasn't named.
Nyota Minerals shares were down 15.9% at 0.45 pence Wednesday morning, one of the biggest declines on AIM, while KEFI was down 0.5% at 2.14 pence. (London South East)

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