11 December 2013

Nyota Minerals Limited

('Nyota' or 'the Company')

SALE OF MAJORITY STAKE IN SUBSIDIARY

Nyota Minerals Limited (ASX/AIM: NYO), the gold exploration and development company in East Africa, announces that it has entered into a conditional agreement with KEFI Minerals plc ("KEFI Minerals"), an AIM-quoted gold and copper exploration and development company with projects in the Kingdom of Saudi Arabia, for the sale of 75% of the issued share capital of Nyota Minerals (Ethiopia) Limited (the "Sale"), the Company's subsidiary  which owns 100% of the Tulu Kapi Gold Project in Ethiopia ("Tulu Kapi") and the proximal exploration licences (the "Subsidiary"). 

Overview

• The sale is in line with the stated strategy to identify a partner for the development of Tulu Kapi;
• Nyota will retain a participating 25% interest in Tulu Kapi and the proximal exploration licences and a 100% interest in the Northern Block exploration properties;

• The Sale consideration will be satisfied as to ?1 million in cash and the issue of up to 116,666,667 Ordinary Shares in KEFI Minerals (the "Consideration Shares") at an agreed price of 3p per share;
• Nyota has full participation rights and its CEO, Richard Chase, will remain on the board of the Subsidiary to represent Nyota;
• A new development and mining plan will be devised for Tulu Kapi with a view to  development in 2015 based on a production plan in the order of 85,000 ounces of gold per annum;

?        Nyota's 25% beneficial interest in the Subsidiary remains undiluted by any further investment made by KEFI Minerals until a revised JORC-compliant resource estimate for Tulu Kapi has been approved and published - anticipated for Q1 2014;

?        KEFI Minerals has conditionally raised ?4,500,000 via a placing of 225,000,000 new ordinary shares at a price of 2p per share (the "KEFI Placing") to fund the cash element of the consideration of the Sale and their 75% share of the corporate and technical costs of the Subsidiary;

• Following the KEFI Placing, the Consideration Shares will represent approximately 13.5% of the issued share capital of KEFI Minerals (before any adjustment for sums due to KEFI Minerals under the secured loan facility referred to below); and
• Nyota will look to raise funding in 2014 in order to fund the Company's share of the on-going development costs at Tulu Kapi and to carry out a focussed exploration programme to advance the Northern Blocks.

Richard Chase, Chief Executive Officer, commented, "Procuring a partner for the Tulu Kapi project has been essential to maintaining and developing the Company's key assets in the current difficult market conditions for junior resource companies. KEFI Minerals has an excellent technical team, which was a significant factor in selecting them, and have impressed with their early engagement and "back-to-basics" approach. I will continue as a Director of Nyota Minerals (Ethiopia) Limited in order to represent our interest in the project and operations in Ethiopia will be unaffected.

"I believe that this agreement diversifies Nyota's interests, and now that our capital commitments towards Tulu Kapi have been largely alleviated and the Company's overheads significantly reduced, we have multiple opportunities for value uplift.  Initially we will re-focus on the significant discoveries made on our Northern Block exploration tenements but there are also other mineral exploration opportunities that we may pursue in Ethiopia and elsewhere.

"I would like to take this opportunity to thank our shareholders for their patience and support over recent months and I look forward to providing updates going forward."

Background to the Sale

Nyota announced in May 2013 that it had commenced a strategic review of its operations and was seeking a strategic partner for the further development of the Tulu Kapi gold project as well as evaluating options to raise funds to allow the Company to meet its working capital commitments beyond the end of September 2013.

Considerable initial interest in the assets was received but only in October 2013 was the Company able to announce that it had entered in to two agreements with a new development partner: a head of terms for the sale of a 75% interest in the Tulu Kapi project and a short term secured loan facility.

Since that time the Company and its new partner, KEFI Minerals, have co-operated closely to satisfy the conditions set out in the further announcement of the 24 October 2013; in particular the introduction of KEFI Minerals to the Ethiopian Ministry of Mines and the Ethiopian Revenue and Customs Authority.

Information on KEFI Minerals

KEFI Minerals (AIM: KEFI) is an AIM-quoted gold and copper exploration company with projects in the Kingdom of Saudi Arabia.

KEFI Minerals' principal asset is a 40% stake in the Gold and Minerals JV ("G&M") in the Kingdom of Saudi Arabia. G&M has 4 exploration licences and 23 exploration licence applications covering 1,600 sq km. Its partner in the joint venture is a major Saudi family construction company ("ARTAR").

The lead project is Jibal Qutman where rapid progress with exploration and drilling has delineated a JORC-compliant mineral resource containing 480,363 ounces of gold (382,870 ounces at an average grade of 0.87g/t in the Indicated Resource category and the balance in the Inferred Resource category). A pre-feasibility study is underway to evaluate the development of a mine to produce approximately 45,000 ounces of gold per annum.

To view today's announcement made by KEFI Minerals, and a copy of the Circular sent to shareholders, please visit the company's website at www.kefi-minerals.com.

Summary of the Main Terms of the Sale

Nyota has entered into a share purchase agreement with KEFI Minerals (the "Share Purchase Agreement"), pursuant to which the Company has conditionally agreed to sell 75% of the issued share capital of the Subsidiary.

The principle terms of the Sale, as set out in the Share Purchase Agreement, are as follows:

?                The consideration to be paid by KEFI Minerals will be satisfied as to ?1 million in cash and the issue of up to 116,666,667 Ordinary Shares, at an agreed price of 3p per share;

?                The number of Consideration Shares which are to be issued to the Company's subsidiary Nyota Minerals (Bermuda) Limited ('Nyota Bermuda'), the vendor of the 75% interest in the Subsidiary (or, at the option of Nyota Bermuda, another member of the Company's group) will be reduced by an amount equivalent to any sums due to KEFI Minerals under the secured loan facility referred to below;

?                Completion of the Sale is conditional on, inter alia: the satisfaction or waiver of the following conditions on or before 27 December 2013 (or such later date as the parties may agree): (i) KEFI Minerals' shareholders approving various resolutions in connection with the KEFI Placing and the Consideration Shares at the General Meeting on 27 December 2013; (ii) admission of the Consideration Shares and other ordinary shares, to be issued, in the capital of KEFI Minerals to trading on AIM ("Admission") and (iii) KEFI Minerals being satisfied in its absolute discretion of the formalisation of an agreement with the Ethiopian Ministry of Finance on payment of the Subsidiary's reverse VAT liability and such liability not exceeding 105 million Birr (approximately ?3.31 million);

?                Each of KEFI Minerals and Nyota Bermuda has given the other certain customary warranties. In addition, Nyota Bermuda has indemnified KEFI Minerals and the Subsidiary in respect of certain matters;

?                Nyota has agreed to guarantee the obligations of Nyota Bermuda under the Share Purchase Agreement; and

?                Nyota Bermuda has undertaken not to dispose of any interest in the Consideration Shares for six months following Admission, subject to certain limited exceptions or with the prior written consent of KEFI Minerals, and to an orderly market arrangement for a period of 12 months following Admission.

Joint Venture Partnership

Following completion of the Sale, the relationship between KEFI Minerals and Nyota, as respective 75:25 joint venture partners in the Subsidiary, will be governed by the terms of a shareholder's agreement (the "Shareholder's Agreement"), the principle terms of which are as follows:

?                KEFI Minerals will be the manager of the Subsidiary and senior KEFI Minerals management will be based at the field offices;

?                Nyota's remaining 25% beneficial interest in the Subsidiary is to remain undiluted by further investment made by KEFI Minerals until a revised JORC-compliant resource estimate for Tulu Kapi has been approved. KEFI Minerals currently anticipates publishing these revised estimates in Q1 2014; and

?                Nyota will guarantee the obligations of Nyota Bermuda under the Shareholder's Agreement.

The Shareholder's Agreement also contains provisions for the approval of work programmes and budgets, together with the manner of funding the Subsidiary's operations, and standard provisions concerning the transfer and issue of further shares in the Subsidiary, together with certain reserved matters requiring the approval of both parties.

Secured Loan facility

In connection with the Sale, KEFI Minerals has also provided a subsidiary of Nyota Minerals (Ethiopia) Limited with a ?360,000 secured loan facility.  As noted above, any amounts due to KEFI Minerals under this facility on completion of the Sale will reduce the number of Consideration Shares to be issued to Nyota Bermuda using the agreed sale price of 3p per Ordinary Share.  This loan is repayable on the earlier of completion of the Sale and 31 August 2014.  Interest accrues on the loan at a rate of 10 per cent. per annum.

2013 Audited Financial Statements and Annual Report

The Company's shares remain suspended on the ASX pending the publication of the audited financial statements to 30 June 2013, which the Directors expect to sign on a going concern basis shortly after KEFI Minerals' General Meeting that, as noted above, is due to be held on 27 December 2013.  It is anticipated that these accounts will be published by the end of the year.

For further information please visit www.nyotaminerals.com or contact:

Elisabeth Cowell

St Brides Media & Finance Ltd

3 St Michael's Alley, London, EC3V 9DS

www..stbridesmedia.co.uk   

Tel: 0207 236 1177   |   Mob: 07900248213   |   Twitter: @StBrides1