Nyota MineralsTulu Kapi gold project, located in Ethiopia, has the potential of exceeding its estimated resources according to the company’s latest feeder zone drilling results, the company announced.

According to the latest resources estimate, the company expects to increase its estimate of 150 000 oz to 188 000 oz, bringing the in house resource to 1.1 Mt at a grade of 5.4 g/t Au.

The Tulu Kapi project currently consists of an opencast mine with a feeder zone extension.

The company says once it has handed over its technical data to an external consultant for its independent resource estimate to commence at the end of January, 2013 it will commission a pre-feasibility study investigating the potential for an underground mining operation to complement open pit production envisaged in the recently completed internal Tulu Kapi Feasibility Study.

Richard Chase, Nyota’s CEO, comments: “Our feeder zone drill programme has successfully demonstrated, in a matter of four months, the potential to add significant high-grade ounces to the Tulu Kapi resource inventory and to enhance the DFS economics that were based solely on the initial open-pit operation.

“Importantly, the geological model used to assist with the planning of drill holes continues to deliver positive results and based on this same model, we have an estimated minimum 300 m of strike length to target with future drilling, which we predict will demonstrate the potential to expand the feeder zone resource to a size that will have a materially positive impact on the economics of the project.

“With this in mind, it is disappointing to be having to make significant cuts in our prior budget, but we face a shortfall in working capital for the quarter ahead unless we do so. Discussions are at an advanced stage with a number of potential funding parties and we expect to be able to make a further announcement very shortly,” he concluded.

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