Nyota Minerals (AIM & ASX: NYO) has optioned 45,000 sq km (square kilometres) of prospective ground in proximity of its flagship Tulu Kapi gold project in an area of Ethiopia which it said exhibited the same major geological structures thought to control mineralisation at Tulu Kapi and was “quickly gaining attention of a large number of exploration companies.”
The exclusive option agreements, reached with two parties with the rights to the tenement package, are for a period of 60 days and give the company the right to acquire an 80% in the tenements. Under the terms of the deal, Nyota will pay £20,000 in cash to each of the vendors for a total of £40,000 in option fees. The company can exercise one, both or neither of the options at its own discretion.
If the options are exercised, Nyota will issue 12 million shares to one vendor and 8 million shares to the other, pay £30,000 to each vendor and assume sole responsibility for funding exploration on the tenements until the production of a bankable feasibility study (NYSE:BFS). Following that, funding will be pro rata to the tenement owners’ percentage interest in the tenements.
The company would then put forward a sale and purchase agreement and a JV (joint venture) agreement, which would give it the right to acquire the remaining 20% interest in the tenements.
“We are ensuring our gold footprint in Ethiopia is significant so that as we increase our understanding of the regional geology we are best placed to capitalise on this knowledge and undertake meaningful exploration, as we have done successfully at Tulu Kapi,” said chief executive of Nyota Melissa Sturgess.
A currently ongoing drilling programme at Tulu Kapi is aimed at upgrading the maiden JORC Inferred resource of 690,000 oz of gold that was announced late last year.
Last month, the company reported positive assay results from the first 18 reverse circulation (RC) holes of an ongoing drill programme at Tulu Kapi, saying that the resource upgrade was on track for completion during Q2 2010.
Disclosure: The author holds no positions in the company