DFS Demonstrates Potential for 105,000oz pa

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

DFS Demonstrates Potential for 105,000oz pa Gold Mine at the Tulu Kapi Project

Nyota Minerals Limited (ASX/AIM: NYO), the AIM and ASX listed East African gold exploration and development company, is delighted to announce the results of the Definitive Feasibility Study ("DFS") of its 100% owned flagship Tulu Kapi Gold Project in Ethiopia ("Tulu Kapi" or "the Project").

OVERVIEW:

Project Economics

·; DFS report confirms a technically feasible and economically robust project with gross revenues of US$1.4 billion and net undiscounted pre-tax, post-royalty cash flow of US$421 million based on a gold price of US$1,500/oz;

·; Maiden JORC-compliant Probable Ore Reserve of 16.9 Mt grading 1.82g/t for 986 koz of contained gold;

·; Average annual gold production of 105koz steady state at an average grade of 1.82g/t with gold production of 924 koz over the proposed project life;

·; Life of mine ("LOM") operating cash cost will average US$600/oz, assuming owner-operated mining fleet (excluding silver credits, government royalty, gold marketing and transport);

·; Initial capital cost estimate of US$221 million (excluding contingency but including working capital and construction contracts);

·; DFS is based on the open pittable component of the main Tulu Kapi ore body; significant additional resource potential exists in adjacent areas;

·; The fiscal terms of the proposed mine development are subject to the Mining Licence agreement that is in the final stages of negotiation with the Government of Ethiopia;

·; The DFS shows a base case pre-tax Net Present Value ("NPV") of $253 million (using a real discount rate of 5%) and an Internal Rate of Return ("IRR") of 24% based on the prevailing legislated fiscal regime and a gold price of US$1,500/oz; and

·; Capital structure and associated investment returns will depend on the outcome of the Mining Licence negotiations.

Next Steps

·; The receipt of a mining licencewill initiate project financing that, subject to obtaining the necessary operating permits, would trigger a two year mine development plan that could result in first gold production in early 2015;

·; The experienced senior management team will be further developed, to complement the Chief Operating Officer, resident in Addis Ababa, the Resettlement and Social Manager and the Project Engineer (Civil) who have been recruited in the last 12 months;

·; There is strong interest to debt finance the Project from various internationally recognised banks and financial institutions. Indicative financing terms have been received from a number of these, providing the Company with significant options on debt financing;

·; Scope to increase the Ore Reserve through the:

o 170 koz Au in the Inferred Mineral Resource category, which although contained in the mine plan is classified as waste for the purposes of the DFS;

o Conversion of the Inferred Mineral Resource at the adjacent "UNDP" target;

o Delineation of the Feeder Zone: recent results (3 December 2012) confirmed the potential for this to provide a significant high-grade component to future mine production via an underground development; and

o Delineation of multiple targets identified within 20km of Tulu Kapi, which are highly prospective to yield additional gold.

Nyota Chief Executive Officer Richard Chase said, "This is a very significant step forward for Nyota as we advance towards our goal of becoming a gold producer. The DFS clearly demonstrates the strong economic fundamentals of the Tulu Kapi project based on the study parameters. With low cash costs, net undiscounted pre-tax, post-royalty cash flow of US$421 million and a pre-tax NPV of US$253 million (approximately 24p/share), investors will appreciate the value potential of this project in comparison with Nyota's current market capitalisation.

"Importantly the DFS does not include the deeper high grade Feeder Zone or the multiple gold targets identified in the proximity of Tulu Kapi, all of which have the capacity to markedly improve the Project economics.

"The Project can now be fast-tracked towards commercial production in 2015 pending the receipt of our mining licence and securing the required project finance. Hence our focus is on completing negotiations with the Government of Ethiopia to enable this to happen."

DEFINITIVE FEASIBILITY STUDY

Introduction

The DFS was prepared for the Company's Tulu Kapi project located in Western Ethiopia, in the Western Wellega Zone of the Oromia Region. The Tulu Kapi Exploration Licence area is about 9km south of the village of Keley, which is on the main road approximately 360km due west of the capital, Addis Ababa.

The DFS was undertaken by SENET (Pty) Ltd. ("SENET"), Golder Associates ("Golder") and Wardell Armstrong International ("WAI"). Rockbury Capital is retained by Nyota as project financial advisors and undertook the financial modelling of the DFS outputs.

SENET acted as lead consultant in the compilation of the DFS and is responsible for the metallurgical test work and plant design (including associated capital and operating costs) and the project implementation and compilation of the overall operating and capital cost estimate. WAI completed the geology, resource, reserve, mine plan and associated capital and operating costs. Golder completed the detailed design for the tailings storage facility, the access road and other earthworks (including associated capital and operating costs) and prepared the Social and Environmental Impact Assessment ('SEIA').

Key Elements of the DFS

·; Conversion of the Mineral Resource to an Ore Reserve in accordance with the guidelines of the JORC Code (2004)

·; Detailed geotechnical, engineering and hydrological studies were undertaken in order to complete a detailed mine design

·; Metallurgical test work, undertaken in Australia, to enable a process flow sheet to be developed and subsequently to be tested using variability samples representative of the deposit

·; The design of a process plant and production of initial engineering drawings so that detailed costings to an accuracy of +/-10% could be made wherever possible

·; A LIDAR survey over the project affected area to provide topographic contours at 50cm intervals and colour orthographic air photos for the detailed design and engineering of all earthworks (roads, rock dumps, tailings storage facility, etc)

·; Geotechnical logging and laboratory testwork on specially acquired PQ drill core and pits to ascertain the characteristics of the soils and rocks of the project area for the detailed design and engineering of all earthworks

·; The detailed design and engineering of the access road and initial consultation with the relevant Ethiopian authoritiesfor approval

·; An Environmental and Social Impact Assessment according to Ethiopian legislation and the IFC Performance Standards (2012)

·; A transport study covering construction and operation

·; Writing a mine development and production plan for the Project

ORE RESERVE ESTIMATE

The Ore Reserve is based on the Mineral Resource announced on 9 October 2012 (reproduced below) and represents only those Measured and Indicated Mineral Resources that have been shown to be technically and economically viable, taking into account "Modifying Factors" as required by the JORC Code (2004). These modifying factors are the subject of the DFS and include the mining methods and strategy, dilution and losses, geotechnical studies, hydrological studies and mine water management, infrastructure requirements, plant capacity, mineral recovery and costs and revenue factors.

Table 1 - Tulu Kapi Mineral Resource Estimate - In Situ Model (WAI, October 2012)

(Prepared in accordance with guidelines of the JORC Code (2004))

Note: Nyota is the operator and holds an interest of 100% in the Tulu Kapi asset

Table 2 - Tulu Kapi Mineral Resource Estimate - 0.3 m Dilution Skin Model (WAI, October 2012)

(Prepared in accordance with guidelines of the JORC Code (2004))

Note: Nyota is the operator and holds an interest of 100% in the Tulu Kapi asset

The Ore Reserve (Table 3) was estimated from the open pit contour developed using CAE Datamine NPV Scheduler™ pit optimisation software, the technical and economic parameters generated by the DFS studies (Table 4) and a detailed design using the selected optimised pit shell as guidance.

Table 3 - Tulu Kapi Ore Reserve (WAI, November 2012)

(Prepared in accordance with the guidelines of the JORC Code (2004))

Table 4 - Tulu Kapi pit optimisation parameters

Reserve Expansion

Approximately 170 koz of the current Inferred Mineral Resource is located within the designed open pit. It is expected that this will eventually convert to an Ore Reserve either through additional infill drilling or, more likely, grade control drilling prior to mining. The conversion from "waste" to "ore" will increase the amount of gold recovered, reduce the waste to ore stripping ratio and would be expected to increase the life of the Project and improve project economics.

The "UNDP" Inferred Resource situated immediately north of the planned Tulu Kapi pit is expected to be converted into an Indicated Resource in 2013, subject to drill rig capacity being available. In addition, drilling of the deeper, higher grade Feeder Zone, situated beneath the base of the DFS-designed open pit contour, has the objective of delineating a potential underground resource whose viability will be assessed by way of a pre-feasibility study in Q1 2013.

Exploration drilling of proximal deposits is also expected to establish new Mineral Resources that, subject to the appropriate modifying factors, would extend the proposed mine's life.

Silver By-product

The DFS includes an Inferred Mineral Resource estimate for the silver by-product associated with gold mineralisation at Tulu Kapi. However, because of the low level of confidence in the silver resource it has not been included in the financial analysis. Silver recovered in the process plant will form part of the gold dore (unrefined bars) and Nyota expects it to be subject to the same royalty charge as gold.

Tulu Kapi is essentially a gold deposit and due to the low unit value of silver, all exploration work and resource estimates have focussed on gold. The distribution of silver within the deposit is erratic and does not relate to any specific or obvious phase of mineralisation, structure or elevation / zone within the deposit. WAI has therefore completed a preliminary Mineral Resource estimate of the silver content for Tulu Kapi based on the available data that can only be classified as an Inferred Resource specifically due to the insufficient density of that data.

The gold resource block model was used as the volumetric basis for the estimation of the silver grades; hence the total tonnes are identical to the gold resource. An inverse distance interpolation method was used to calculate the estimated silver grade.

Table 5 - Tulu Kapi Silver Mineral Resource Estimate - In Situ Model (WAI, October 2012)

(Prepared in accordance with guidelines of the JORC Code (2004))

Note: Nyota is the operator and holds an interest of 100% in the Tulu Kapi asset

KEY PROJECT PARAMETERS

The key technical, operational and financial information is summarised in the table below.

Table 6 - Tulu Kapi key project parameters

In addition to the royalty and tax rates above, the prevailing fiscal legislation provides for:

·; A 5% government free carried equity interest in the mining company that will be issued on grant of the mining licence and a 10% dividend withholding tax on dividends paid by that company. These are not reflected in the DFS project economics;

·; The tax and duty-free import of capital goods and initial consumables; and

·; Accelerated depreciation of the capital cost over the first 4 years of production for tax purposes, thereby significantly reducing tax during this period.

Capital Costs

The capital cost estimate for the DFS is based on an open pit mine with an owner-operated mining fleet of 90t size class trucks ("CAT 777") and matched excavators designed to deliver 2 Mtpa of ore to a conventional carbon-in-leach ("CIL") gold processing and recovery plant. Further details of the six capital cost sub-divisions are provided in the operating summary that follows.

The total estimated initial capital cost of bringing the Project into production is US$ 221 million (inclusive of working capital and exclusive of contingency costs) is summarised in Table 7 below.

Additional sustaining and deferred capital costs over the Project life are shown below the construction capital. This is made up primarily of additional mining equipment and incremental increases in the tailings storage facility.

Table 7 - Capital Costs Summary

Operating Cost Estimates

Operating costs excluding royalties, marketing and transport are estimated at US$600/oz.

 Table 8 - Operating Cost Estimates

Details of the unit costs used for the open pit optimisation can be found in Table 4 of this announcement.

Economic Sensitivity Analysis

The following sensitivities have been estimated from the DFS outputs:

Project Optimisation

Nyota will continue to optimise the DFS parameters in the coming months, while negotiations in respect of the mining licence for Tulu Kapi are concluded. Immediate areas for consideration include:

·; Logistics and economics associated with heap leaching low-grade ore;

·; Identification of a contract miner/ party willing to lease the mining fleet;

·; Optimisation of mine scheduling in the early years of production through a review of the parameters used and the limiting factors applied (e.g. a run of mine stockpile of 750,000 tonnes of ore);

·; Upgrade and conversion from Inferred Resource to Indicated Resource of other zones of mineralisation within the deposit;

·; Undertaking a pre-feasibility study on the Feeder Zone; and

·; Opportunities to extend the LOM through satellite ore bodies within trucking distance of the Tulu Kapi processing plant.

Mining

The Tulu Kapi open pit will be mined using conventional open pit mining methods: drilling and blasting of the ore and waste rock and excavation and hauling using 90t size class trucks ("CAT 777") and matched excavators. The core of the proposed fleet comprises a maximum of 16 trucks and 2 ore (5m3) and 3 waste (15m3) excavators, with delivery phased over the first four years of mining. Selective mining of the ore is essential to maintain the head grade by minimising dilution; average mining dilution derived from the optimisation and mine design is 27%.

The mine design consists of a single open pit with approximate dimensions of 1,150m (north - south) by 730 m (east - west) and a maximum of 300m deep. Due to relatively poor rock stability and structural features, shallow slope angles are required which result in the stripping ratio being relatively high. The mining schedule assumes that mining capacity is reduced to 75% during the wet season.

The open pit mine designed for the DFS has a life of 10 years, with modest pre-production mining commencing twelve months ahead of processing in order to stockpile ore and to generate material for the construction of infrastructure. Conversion of Inferred Resources within the designed open pit should ensure a minimum of 10 years steady-state production.

The quantity of mine waste is large (143.7 Mt) and the mine waste dumps will occupy a significant aerial footprint. The main aim of the DFS is to avoid multiple small waste dumps which potentially could have a cumulative environmental footprint greater than a single dump structure. The mine waste, which is not considered to be acid generating, will be stacked from the base of the waste dump upwards with a toe berm and drainage measures incorporated at the base. Restoration will be progressive.

Processing

The proposed Tulu Kapi process plant has a nameplate capacity of 2 Mtpa and comprises a two stage milling circuit and proven CIL gold recovery technology. Based on a 75 µm grind size the calculated average gold recovery is 93.7%.

Metallurgical testwork, including mineralogical study, investigated the comminution requirements of the Tulu Kapi ore, the alternative process routes for the recovery of the gold and the operating parameters such as cyanide optimisation and detoxification. Optimisation studies were subsequently undertaken for the chosen process flowchart and 32 samples from various locations within the ore body were used for variability testwork.

Waste Management, Tailings Disposal and Water Management

Mine tailings consist of the residual processed ore that has passed through the processing plant. The tailings are pumped to the Tailings Storage Facility ("TSF") as slurry and deposited there in a controlled manner. The tailings solids will settle out of the slurry into the TSF and the slurry water component is pumped to the return water storage dam. The water in the return water dam is subsequently pumped back to the process plant for reuse in the plant.

The incremental build-up of the tailings storage facility accounts for nearly half of the sustaining capital.

Infrastructure & Utilities

The Tulu Kapi project location is an undeveloped mining site without any significant existing infrastructure except for the exploration camp. The proposed infrastructure will support the mining, processing and construction operations. In addition to buildings that will be built for camp and catering facilities, mining and maintenance workshops, warehousing, storage and administration buildings, the following key items of infrastructure will be required:

Roads and Access

The DFS includes the construction of an all-weather access road that will connect Tulu Kapi to the main road close to the village of Keley; a distance of 13.0 km of which approximately 9.5 km lies outside the mine licence area. This road has been designed as an unpaved public road in accordance with the Ethiopian Roads Authority's Design Manual and the recommendation of the Regional Roads Authority. The design includes a bridge constructed where the road crosses the Birbir River. The capital cost estimate for the access road is US$10.2 million with a 20% contingency included in the Project contingency number.

In addition, Northwest (2.8km) and Southern (5.4km) access bypasses will be constructed to provide connectivity to the existing 3m wide rural roads, making best use of the topography to provide acceptable gradients and minimise disruption to the local community. The bypasses will maintain existing traffic patterns and be constructed to a similar standard.

Water

The Project design envisages that process water requirements will be satisfied by the collection and storage of rain water during the rainy season, between June and September. Average annual precipitation for the district is approximately 1,800mm.

A raw water diversion dam will be constructed to both supply raw water to the process plant during operation and to divert excess run-off from entering the TSF.

Power

Electricity will be supplied by the national grid. The design, supply and construction of the power line has been included as a turnkey solution from the Ethiopia Electrical Power Corporation ("EEPCo"). All costs relating to the design (including power factor correction equipment), supply and construction (including the associated civil work) of the 132kV power line will be paid for by the mine, while EEPCo will retain ownership of the power line and be responsible for all associated maintenance.

EEPCo has confirmed that it can supply in excess of 15MW at 132kV which is more than the required steady state power requirement. Confirmation is, however, required from EEPCo to verify that the excess power availability is sufficient to meet the nameplate peak demand for plant start-up requirements. The infrastructure capital cost therefore includes US$8.4 million for the power line based on a desktop study provided by EEPCo for connectivity to the national grid at Gimbi, with a 15% contingency included in the project contingency number. The operating costs are calculated using the prevailing unit power cost supplied by EEPCo of US$0.02/kWh (two US cents per kilowatt hour).

A 3MW emergency diesel power plant will provide emergency backup power to critical process equipment in the event of a grid power failure.

Social & Environmental

A SEIA in accordance with Ethiopian law and IFC Performance Standards (2012) has been prepared to identify the social and environmental impacts of the Tulu Kapi project and associated mitigation measures. A Social and Environmental Management Plan has been prepared and will be dynamically implemented throughout the life of mine to ensure Nyota maintains its social licence to operate.

During the development of the DFS, Nyota has worked with its consultants to reduce the mine footprint area and hence the resettlement area required. The Ethiopian government, which is responsible for the provision of encumbrance free land for mineral exploitation, and Nyota, have been working with all stakeholders to facilitate a transparent and approved process. Agreement has now been reached with the Ethiopian government on the Resettlement Action Plan ("RAP") process, committees and valuation process eligibility and a moratorium has been enacted by government, linked to the completion of the Land & Asset Survey, to minimise issues such as speculation and influx management.

Resettlement of the 486 households affected by the Project will be consistent with the International Finance Corporation standards (i.e. Policy on Social and Environmental Sustainability and Performance Standard 5: Land Acquisition and Involuntary Resettlement) and in compliance with Ethiopian law.

Nyota has retained a specialist consultant to advise and work with it on the design of the RAP and its implementation following the issue of a mining licence.

Benefits to Ethiopia

The Tulu Kapi mine is expected to result in stimulation of the local economy, and offers the prospect of significant investment, direct and indirect job creation, infrastructure development and a contribution to the creation of wealth in the region.

During steady-state operations, Tulu Kapi is expected to employ up to 930 workers. During construction, the Project is expected to create significantly more temporary jobs and Nyota will seek to use local contractors and workers wherever possible. The DFS envisages that there will be fewer than ten permanent expatriate staff required to manage the mine once it is in steady state production.

Annual royalty payments based on steady state average production of 105,000 oz per annum, a gold price of US$1,500/oz and 8% royalty rate will be approximately US$12.5 million. Further fiscal benefits will accrue to the Ethiopian government including corporate taxes, dividend withholding tax and income taxes on employees' salaries.

Presentation & Interview:

The Company has produced an updated presentation that includes additional images and a Question & Answer section in respect of the DFS. The presentation can be downloaded from the website www.nyotaminerals.com.

Also posted on the website is a video interview with Richard Chase, CEO, who talks through the key aspects of the DFS.

For enquiries please contact:

Richard Chase (CEO) / Anthony Rowland (Business Development)

Nyota Minerals Limited

+44 (0) 20 7400 5740

[email protected]

NOMAD

Richard Morrison / Jen Boorer

RFC Ambrian Limited

+44 (0)20 3440 6800

FINANCIAL PR

Hugo de Salis / Susie Geliher / Elisabeth Cowell

St Brides Media & Finance Ltd

+44 (0) 20 7236 1177

BROKER

Guy Wilkes

Ocean Equities Limited

(+44) (0) 20 7786 4370

BROKER

Rory Scott

Mirabaud Securities LLP

+44 (0)20 7878 3360

Or visit: http://www.nyotaminerals.com 

Competent Persons

The information in this announcement that relates to Mineral Resources is the responsibility of Mark L Owen, BSc, MSc, CGeol, EurGeol, FGS, Technical Director for Geology and Resources. Mr Owen is a full‐time employee of Wardell Armstrong International, an independent Consultancy and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity 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 the AIM Note for Mining and Oil & Gas Companies. Mr Owen consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

The information in this announcement that relates to Ore Reserves is the responsibility of Peter Watkinson, BSc, CEng, MIMMM, FIQ, MMES, AIEMA, Associate Director for Mining. Mr Watkinson is a part‐time employee of Wardell Armstrong International, an independent Consultancy and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity 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 the AIM Note for Mining and Oil & Gas Companies. Mr Watkinson consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Forward-Looking Statements

This press release contains forward-looking statements in relation to the Company and its subsidiaries (the "Group"), including, but not limited to, the Group's proposed strategy, plans and objectives, future commercial production, sales and financial results, development, construction and production targets and timetables, mining costs and economic viability and profitability. Such statements are generally identifiable by the terminology used, such as "may", "will", "could", "should", "would", "anticipate'', "believe'', "intend", "expect", "plan", "estimate", "budget'', "outlook'' or other similar wording. By its very nature, such forward-looking information requires the Company to make assumptions that may not materialise or that may not be accurate. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Group that could cause the actual performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Furthermore, the forward-looking information contained in the press release is made as of the date of the press release and accordingly, you should not rely on any forward-looking statements and the Group accepts no obligation to disseminate any updates or revisions to such forward-looking statements. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Glossary and Technical Definitions