Final Results

30 September 2014

Nyota Minerals Limited

('Nyota' or 'the Company')

FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2014

Nyota Minerals Limited (ASX/AIM: NYO), the gold exploration company in East Africa, is pleased to report its Final Results for the Year Ended 30 June 2014.

HIGHLIGHTS

Tulu Kapi Gold Project

• KEFI Minerals plc (KEFI) purchased a 75% interest in the Tulu Kapi project on 30 December 2013 for £4.5 million in cash and KEFI shares;

• After the period end, the Company completed the sale of its remaining 25% interest in the Tulu Kapi project to KEFI for a further consideration of £750,000 in cash and 50 million ordinary KEFI shares;

• Nyota has no interest in the Tulu Kapi project as at the date of this report.

Northern Blocks

• Fieldwork re-commenced in early February 2014, focusing on the highest priority targets for subsequent drilling;

• Field work was undertaken on all of these targets during the field season but drilling was not possible;

• Discussions with the Ministry of Mines commenced concerning possible mining and processing of extensive river deposits within the licence areas that are known to carry gold;

• Annual exploration licence renewals have been made but are outstanding at the date of this report.

Corporate

• Further significant reductions in costs have been made including a final reduction in the Board size to 3 directors and the closure of the London office;

• No fundraising was undertaken during the year;

• Upon completion of the sale of the remaining 25% interest in KME, the Company completed a reduction in the issued share capital of Nyota on 17 September 2014 that was implemented by way of a pro-rata in-specie distribution of 144,823,917 KEFI shares to shareholders of the Nyota on a 1 KEFI share for every 6 Nyota shares basis.

• The Company is actively seeking new opportunities to expand its exploration portfolio.

The full audited report and accounts, including the pictures and diagrams, the remuneration report and corporate governance statement are available on the Company's website at http://www.nyotaminerals.com and the Annual Report will be posted to shareholders, as applicable, together with the notice of Annual General Meeting in due course.

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

OPERATIONS AND FINANCIAL REVIEW

Significant progress was made immediately prior to the start of the financial year with the optimisation of the Tulu Kapi project. However the Company's efforts in negotiating better fiscal and legal mining licence terms in Ethiopia had yet to come to fruition; and with no support from equity capital markets Nyota started the year with significant difficulties in retaining its rights to the Tulu Kapi project whilst trying to find a partner willing to inject the requisite additional capital.

The Board took the difficult decision to place the project on care and maintenance in October whilst completing the heads of terms for the sale of a 75% interest in Nyota Minerals (Ethiopia) Limited (since renamed KEFI Minerals (Ethiopia) Limited (KME)), the entity that holds the Tulu Kapi and proximal exploration licences, to KEFI. This transaction (the Sale) completed on 30 December 2013 for consideration of £1.3 million in cash and the issue to the Group of 107,081,158 ordinary KEFI shares.

The cash proceeds from the sale enabled Nyota to recommence exploration on the Northern Blocks and to appoint SRK Exploration to prepare a competent persons' report on them. This report is available on the Company's website. The Northern Block licences are 100% owned by wholly owned subsidiary companies of Nyota and are operated independently of KME and Tulu Kapi.

At the end of the first quarter of calendar year 2014 Nyota approached the capital equity markets for a financing. The outcome was that the funding options available were insufficient for the Company to fund its pro-rata (25%) equity interest in KME, the evaluation of the Northern Blocks and the Group's working capital requirements. Moreover, those options that were available were considered by the Board to be too dilutive to shareholders; with no significant new equity finance offered on terms that were better than the mark to market value of the KEFI Shares owned by Nyota. In addition, no significant debt finance was offered without the lender being given security over those same KEFI Shares.

The Nyota Directors therefore considered it to be in the best interests of Nyota Shareholders not to take finance on those terms and for the Group to declare itself unable to fund its 25% share of the on-going costs of Tulu Kapi for the period from KEFI's first resource update (1 April) to 30 June 2014.

From 1 July 2014 funding of the 25% interest in Tulu Kapi would have been possible, but only through the sale of the KEFI shares owned by Nyota. Given the weak equity markets for those shares this outcome would not have been in the interests of Nyota whilst potentially obstructing KEFI's ability to raise much needed finance to complete the Tulu Kapi project re-evaluation.

In light of these difficulties the Board took the decision to sell its minority interest in Tulu Kapi to KEFI and on 11 June 2014 it announced an agreement, subject to Nyota Shareholders approval, to do so. The consideration for this sale was £750,000 in cash and 50,000,000 new KEFI ordinary shares.

Shareholders gave their approval at a General Meeting on 3 September 2014 and this transaction completed on 5 September 2014.

In addition, the Directors recommended to Shareholders that its KEFI shares be distributed in-specie to Nyota shareholders via a reduction in the issued share capital of Nyota equal to the value of KEFI shares distributed. This in-specie distribution completed on 17 September 204 when Nyota shareholders received 1 Kefi share for every 6 Nyota shares held as at 10 September 2014.

TULU KAPI

At the date of this report, Nyota has no interest in the Tulu Kapi project and those Nyota shareholders that were shareholders on 10 September 2014 have benefited from a distribution of KEFI shares to them.

During the reporting period Tulu Kapi occupied a great deal of the Directors' time and therefore a summary of those activities is provided here.

Mining Licence and Legislation

Nyota first applied for a Large Scale Mining Licence with respect to the Tulu Kapi project in May 2011. In September 2011 it commissioned a feasibility study. Delineation of a sufficient JORC compliant Mineral Resource and its conversion to an Ore Reserve required significant further drilling as well as the requisite metallurgical test work, plant design and mining, hydrological, environmental and social studies. This work was completed inside twelve months and the results of feasibility study in respect to Tulu Kapi were announced in December 2012.

In January 2013 the Ministry of Mines confirmed that it had completed its review of the Feasibility Study, including the environmental and social impact assessment, and confirmed that the documents complied with all regulations and satisfied the requirements for the issuance of a large scale mining licence. Efforts to complete the Mine Development Agreement at this time resulted in partial success, with the royalty and tax rates and some of the terms for direct foreign investment the only substantive issues outstanding.

On 26 July 2013, an amendment to the Mining Income Tax Proclamation in Ethiopia was gazetted, reducing income tax from 35% to 25% for mining companies. On 19 March 2014 an amendment to the Mining Operations Proclamation was gazetted that included a reduction in gold royalty rate from 8% to 7%. These amendments enshrined in law the mutual understanding between Nyota and the Ethiopian Government as well as specific terms negotiated for the purposes of the Mine Development Agreement more than a year earlier.

Following the optimisation studies (described below) and in order to retain the project, for which the exploration licence is subject to annual renewal in accordance with the mining legislation, the Directors focused their efforts on identifying a new financial backer or a project partner that was financially and technically capable of undertaking the revisions necessary to the feasibility study. This resulted in the agreement with KEFI leading to the sale of 75% of the project in December 2013.

The Ministry of Mines confirmed the renewal of the Tulu Kapi licence in November 2013 and again at its actual anniversary in May 2014.

Technical Work

On 4 June 2013 Nyota announced the results of an optimisation programme designed to increase the returns offered by the project as defined in the Feasibility Study, focussing on three key areas:

i. An independent review of the structural geological model and controls on mineralisation to take into account the large volume of data collected but only partially assimilated and modelled in the Mineral Resource estimation of October 2012;

ii. A review of the open pit optimisation, design and mine scheduling used in the Feasibility Study, with the intention of increasing early gold production and increasing the Project's net present value; and

iii. Commencing scoping studies for an underground mine to exploit the "Feeder Zone" mineralisation.

The highlights of the results of that programme included:

· Pit optimisation showed the proposed mine development to be tolerant of a lower gold price - leading to the decision to use US$1,050/oz for the base case.

· Re-scheduling of the mining and processing could increase the grade of ore delivered to the plant to between 2.1g/t and 2.4g/t for the first five years; substantially above the 1.8g/t contained in the feasibility study.

· Potential to increase average annual gold production by up to 30% in the first five years to 133koz, peaking at 145koz.

· TheInferred Mineral Resource would contribute an additional 325,000oz of gold to the mine production at the same average grade and at the same gold price (US$1,050/oz) if it were upgraded to at least the Indicated category.

· An underground mine could contribute additional ore at an average ore grade of approximately 5.9g/t after additional capital expenditure of approximately US$43m (considered to be accurate to +/- 50% at this stage of evaluation)

Nyota stated that the next phase of optimisation would include detailed pit re-design and scheduling and a review of the operating and capital costs for inclusion in the feasibility study cash flow model, and that an update of the resource model would be required. However Nyota had insufficient funds to undertake this work.

Mineral Resource Update and Revised development strategy

KEFI bought in to the Tulu Kapi project observing, through the Feasibility Study and Optimisation undertaken by Nyota, the potential to increase the head grade and reduce the capital cost; primarily by reducing the proposed processing plant capacity from 2 million tonnes per annum (Mtpa) to 1.2Mtpa. A consequence of which is that they are targeting a reduction of the "all-In" operating costs (i.e. cash costs plus capital costs plus closure costs) by mining fewer tonnes at a higher grade and reducing waste, capex and closure costs.

KEFI announced its own Mineral Resource for the Tulu Kapi project on 31 March. This has subsequently been replaced by an independently verified, JORC (2012) Compliant Mineral Resource that KEFI announced on 18 August 2014 (Refer www.kefi-minerals.com)

THE NORTHERN BLOCKS

Following the disposal of the Company's interests in Tulu Kapi and its proximinal licences the Brantham and Towchester exploration licences, together referred to as the Northern Blocks, are the sole current exploration focus for the Company.

SRK Exploration was retained in January 2014 to prepare a report in accordance with the JORC Code (2012). Its scope included a site visit, compilation and review of exploration work and exploration results relating to the licences and an assessment of their exploration potential.

SRK's recommendations and priorities were adopted for Nyota's field work undertaken during the year. The Company was unable to commence field work until January due to financial constraints, however in the second six months of the year nearly the entire work programme, with the exception of drilling was achieved. The results of this work are summarised below.

In accordance with the Mining proclamation, an application for the renewal of the Northern Block licences was made at the end of the initial three year tenure period in July 2013. The renewals were notified by the Ministry of Mines in early 2014 and the next renewal application was submitted in July 2014. The outcome of which is pending at the date of this report.

Each renewal requires that the area of the licence be reduced by 25%. In the current year, the application proposes a reduction of 45% for the Towchester licence and 25% for the Brantham licence to reflect the respective results during the year. The Company has also proposed that it will conduct drilling of the Bendokoro and Boka West targets and will utilise some of the proceeds from the Tulu Kapi sale transaction to achieve this.

Bendokoro

The prospect area is coincident with the northwest - southeast trending linear feature that is particularly evident on regional-scale airborne magnetics and geological mapping.

Prospect scale mapping and sampling identified have two zones of interest: a large shear zone orientated sub-parallel to the regional NW-SE trend and a number of gossanous lenses to the east of the shear. The former has been delineated by geochemical sampling over an area 3.6km long and 100 to 500m wide.

A total of twenty three east-west trenches have now been excavated targeting the gold in soil anomalies, with a total combined excavated length of 1,356m. In 2012, 12 diamond drill holes, totalling 2,243m were drilled, primarily to tie-in with the trenching program. Results were announced in the quarterly report for the period ending 30 June 2012.

Three styles of gold mineralisation styles have been identified at Bendokoro: coarse, sometimes visible gold in quartz veining and silicification of host rocks; lower grade gold mineralisation (typically 0.1 - 1.0 g/t) associated with disseminated sulphides and sericite alteration; and surface gossans - the source of which could not be determined from the 2012 drill results.

During the year work focused on a possible new area of mineralisation to the east of the previous area of focus. The results from this work are pending.

The initial assessment of the 2012 drilling was that although it was clear that the Bendokoro target is gold-bearing, the economic potential is low because of the narrow widths and discontinuous nature of the gold mineralisation intercepted. Subsequent work has improved understanding and the licence renewal proposes a drill programme of 1,000m with the aim of expanding the mineralisation and testing the current hypotheses.

Boka West

Boka West lies along the same NW-SE regional linear feature as Bendokoro and was the highest ranked target by SRK Exploration.

Two styles of gold mineralisation have been identified: one consists of medium to high grade gold related to the meta-sedimentary contact between the marble and quartz-chlorite-schist; the other is related to the quartz / quartzite lenses that tend to return higher grade but narrower gold intersections. Both styles of mineralisation occur in the rock mass associated with fine grained disseminated sulphides (chalcopyire, pyrite, bornite and galena).

Field work this year focussed on defining appropriate drill targets within the 1.2km long by 200m wide gold-in-soil geochemical anomaly. This included additional trenching and sampling, detailed re-mapping on the lithological contacts and a geophysical survey (Gradient array IP / Resistivity).

Results have been consistent with previous trenching and sampling and whilst it has not been possible to delineate a continuous body of gold mineralisation, the consistent location of anomalous samples (at or close to the marble - quartz-chlorite schist) and the level of available information led Nyota to propose an initial 1,000m of drilling in the licence renewal application for the next year.

Bar and Cloen

The Bar and Cloen targets are located in the Dura Block of the Towchester licence area (Figure 3), where access is challenging and infrastructure is negligible. However, based on favourable geological setting and reconnaissance geochemical sampling in 2013, areas of approximately 9km2 at Bar and 23km2 at Cloen were mapped and sampled in 2014.

The results from both targets were less than hoped for. Cloen was the better of the two with anomalous gold mineralisation positively identified and with some continuity over modest widths (12m at 0.25g/t and 6m at 0.33g/t) and grab samples of up to 0.55g/t. However, geographical challenges combined with the exploration results mean that Nyota has not applied for the renewal of the Dura Block.

Abay River Alluvial

In the second half of the financial year Nyota commenced discussions with the Ethiopian Ministry for Mines regarding the potential for the Group to mine and treat the alluvial river gravel deposits adjacent to the Abay River, or Blue Nile, that bisects the Northern Block licences. These gravels are known to be gold-bearing and are being hand dug and panned for gold by local people at a number of localities within the licences. The areas will, within a few years, be flooded by the Grand Ethiopian Renaissance Dam; a new hydroelectric power dam being constructed on the Blue Nile. Alluvial gold deposits in Ethiopia are usually reserved for exploitation by artisanal miners. However, as the deposits will be flooded, large scale mechanised mining to maximise potential gold recovery is receiving favorable consideration from the Ethiopian government.

The flooding caused by the dam will not affect the highest priority hard rock gold exploration targets in the Northern Block licences.

CORPORATE

Tulu Kapi Project and KEFI Shareholding

On 30 December 2013, the Company completed the sale of a 75% interest in KME to KEFI. KME is the company which holds the Tulu Kapi and proximal exploration licences in Ethiopia. The sale consideration was satisfied as to £1.285 million in cash (being £1.0 million paid upon completion and £285,000 of working capital provided prior to completion) and the issue of 107,081,158 ordinary KEFI shares (subject to a lock-up provision until 1 July 2014).

On 11 June 2014 it was announced that a further agreement had been signed, subject to the approval of Nyota's Shareholders, to sell the remaining 25% interest to KEFI. The consideration for which would be £750,000 in cash and 50,000,000 new ordinary KEFI shares (Second Sale).

Shareholders gave their approval to the Second Sale at a General Meeting on 3 September 2014 and the Second Sale consideration was received on 5 September 2014.

In addition, the Nyota shareholders approved a pro-rata in-specie distribution to shareholders of 1 KEFI share for every 6 Nyota shares. This distribution was achieved via a reduction, of $3,635,080 (being the market value of 144,823,917 KEFI shares distributed), in the issued share capital of Nyota, without the cancellation of any Nyota shares. This in-specie distribution was to shareholders at the record date of 10 September 2014 and was completed on 17 September 2014.

Financial Review

No monies were raised during the financial year other than the cash component of the December 2013 Sale and the sale of 4.6 million Kefi shares in April 2014. Subsequent to the balance sheet date the sum of £750,000 was received in part consideration for the Second Sale.

Restructuring & Cost Cutting

At the AGM on 17 March, 2014 Mr. Neil Maclachlan and Mr. Norman Ling resigned from the Board as appropriate and necessary in the interests of reducing corporate overheads.

For the same reason, following the assignment of the remaining lease on the Group's London office (until 5 August 2016), all corporate activities were relocated to the Company's registered office in Perth at the end of June and the remaining staff were made redundant. The Group's administration and finance functions are now carried out from Perth.

Table 1 - Analysis of Employee Numbers

Notes:

a Nyota shares a serviced office in Perth. Senior management are contracted via service companies.

b Following Completion of the Sale, 33 Ethiopian Nationals remain employed by KME, which is no longer consolidated into the results or position of Nyota.

c Nyota contracts geologists and support staff as required to satisfy the requirements of its field work.

Competent Person's Statement

The information in this annual report that relates to exploration results for the Northern Block licences is based on information reviewed and approved by Richard Chase, Chief Executive Officer of Nyota and a Member of the Institute of Materials, Minerals and Mining and a Fellow of the Geological Society of London. Mr Chase is a full time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a qualified person under the AIM Note for Mining and Oil & Gas Companies. Mr Chase consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2014

The financial statements are presented in Australian currency.

The above consolidated statement of comprehensive income should be read in conjunction with the full notes in the audited report and accounts available on the Company's website: www.nyotaminerals.com.

CONSOLIDATED BALANCE SHEET

AS AT 30 JUNE 2014

The above consolidated balance sheet should be read in conjunction with the full notes in the audited report and accounts available on the Company's website: www.nyotaminerals.com.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2014

The above consolidated statement of changes in equity should be read in conjunction with the full notes in the audited report and accounts available on the Company's website: www.nyotaminerals.com.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2014

The above consolidated statement of cash flows should be read in conjunction with the full notes in the audited report and accounts available on the Company's website: www.nyotaminerals.com.

NOTES TO THE AUDITED REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2014

The following notes have been extracted from the full notes to the audited report and accounts available on the Company's website: www.nyotaminerals.com.

1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of Nyota Minerals Limited and its subsidiaries.

(a) Basis of preparation of financial report

This general purpose financial report has been prepared in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Nyota Minerals Limited is a for-profit entity for the purposes of preparing the financial statements.

Compliance with IFRS

The consolidated financial statements of the Nyota Minerals Limited group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.

Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Voluntary change in accounting policies -Exploration and evaluation expenditure

The financial report has been prepared on the basis of a retrospective application of a voluntary change in accounting policy relating to exploration and evaluation expenditure.

The previous accounting policy was to capitalise exploration and evaluation expenditure as an asset when rights to tenure of the area of interest are current and provided further that one of the following conditions are met:

· such costs are expected to be recouped through successful development and exploitation of the area of interest or alternatively, by its sale; or

· exploration and/or evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in relation to the area are continuing.

The new exploration and evaluation expenditure accounting policy is to expense exploration and evaluation expenditure in the period which it is incurred. Acquisition costs in relation to mining properties are accumulated in respect of each separate area of interest. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

When an area of interest is abandoned or the Directors' decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period. Amortisation is not charged on acquisition costs carried forward in respect of areas of interest in the development phase until production commences.

The new accounting policy was adopted on 1 January 2014 and has been applied retrospectively. Management judges that the change in policy will result in the financial report providing more relevant and no less reliable information because it leads to a more transparent treatment of exploration and evaluation expenditure that meets the definition of an asset and is consistent with the treatment of other assets controlled by the Group when it is probable that future economic benefits will flow to the Group and the asset has a cost that can be measured reliably. AASB 6 Exploration for and Evaluation of Mineral Resources allows both the previous and new accounting policies of the Group.

The impact of the change in accounting policy on the Consolidated statement of Comprehensive Income, Consolidated balance sheet and Consolidated statement of cashflows:

Consolidated Statement of Comprehensive Income

Consolidated balance sheet

Consolidated balance sheet

Consolidated statement of cashflows

Going concern

The Group incurred a loss from continuing operations for the year of $3.8 million (2013- $10.5 million) and operating cash outflows of $4.3 million (2013- $20.1 million). The Group had net current assets of $5.3 million (2013 - net current liabilities of $3.8 million).

Subsequent to year-end, (but prior to the date of this report), completed the sale of the Group's25% interest in KME (for consideration of £1,500,000 comprising cash of £750,000 and 50 million KEFI shares), and a capital reduction of the Company via an in-specie distribution of KEFI shares. This capital reduction prevents the Group from monetising its KEFI shares (through their sale) but was a condition of the sale. At the same time, the sale of this 25% interest in KME removes from the Group any future funding obligation for KME.

The Directors have prepared cash projections based on the current corporate overheads and the proposed minimum exploration work programme on the Northern Blocks for the renewal period to July 2015. The Group will be unable to meet its proposed minimum exploration work programme and pursue new project opportunities over the next 12 months without the Group being successful in completing a capital raising, asset sale, and/or joint venture agreement.

In the future there can be no guarantee that sufficient funds can be raised or that the funds raised will meet the Group's requirements. Failure to raise the required funds may result in the Group failing to meet its proposed exploration work programme and working capital requirements. The Directors will continue to mitigate the Group's going concern risk by minimising the Group's corporate overheads and project exploration where appropriate/possible.

These conditions indicate a continued material uncertainty that may cast significant doubt over the Group's ability to continue as a going concern and therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial statements. However the Directors believe that the Group will be successful in the above matters and accordingly have prepared the financial statements on a going concern basis. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern. 

 (b) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Nyota Minerals Limited (''Company'' or ''parent entity'') as at 30 June 2014 and the results of all subsidiaries for the year then ended. Nyota Minerals Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one‑half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de‑consolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Changes in ownership interests

When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Associates

Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where a group holds between 20% and 50% of the voting rights. In relation to the Group's 25% interest in KME the Group considers that it did not have significant influence in KME as at 30 June 2014. Accordingly this asset has been accounted for at fair value.

(c) Segment reporting

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Chief Executive Officer. 

(d) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is Nyota Minerals Limited's functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year‑end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit and loss.

(iii) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

· income and expenses for each profit and loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

· all resulting exchange differences are recognised as other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in profit and loss as part of the gain or loss on sale, where applicable.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(e) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised for the major business activities when the following specific recognition criteria is met:

Interest income

Interest income is recognised on a time proportionate basis using the effective interest rate method.

(f) Income tax

The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised in other comprehensive income or directly in equity are also recognised in other comprehensive income or directly in equity respectively.

The Australian tax consolidation regime does not apply to the company because there are no Australian incorporated subsidiaries.

(g) Leases

Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset's useful life and the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit and loss on a straight-line basis over the period of the lease.

(h) Business combinations

The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre‑existing equity interest in the subsidiary. Acquisition‑related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition‑by‑acquisition basis, the Group recognises any non‑controlling interest in the acquiree either at fair value or at the non‑controlling interest's proportionate share of the acquiree's net identifiable assets.

The excess of the consideration transferred, the amount of any non‑controlling interest in the acquiree and the acquisition‑date fair value of any previous equity interest in the acquiree over the fair value of the group's share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(i) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(j) Cash and cash equivalents

For cash flow statement and balance sheet presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 (k) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment. Trade receivables are due for settlement no more than 30 days from the date of recognition.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in profit and loss.

 (l) Investments and other financial assets

Classification

The Group classifies its investments in the following categories: loans and receivables and available‑for‑sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re‑evaluates this designation at each reporting date.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non‑current assets. Loans and receivables are included in receivables in the balance sheet.

(ii) Available‑for‑sale financial assets

Available‑for‑sale financial assets, comprising principally marketable equity securities, are non‑derivatives that are either designated in this category or not classified in any of the other categories. They are included in non‑current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Recognition and derecognition

Purchases and sales of investments are recognised on trade‑date ‑ the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Subsequent measurement

Available‑for‑sale financial assets are subsequently carried at fair value, or cost where fair value is unable to be reliably measured. Loans and receivables are carried at amortised cost using the effective interest method. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available‑for‑sale are recognised in in other comprehensive income. When securities classified as available‑for‑sale are sold or impaired, the accumulated fair value adjustments are included in the profit and loss as gains and losses from investment securities.

Fair value

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances.

Impairment

The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available‑for‑sale financial assets, the cumulative loss ‑ measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss ‑ is removed from equity and recognised in profit and loss. Impairment losses recognised as profit or loss on equity instruments classified as available-for-sale are not reversed through the profit or loss.

(m) Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit and loss during the financial period in which they are incurred.

Depreciation is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 1(i)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit and loss.

(n) Exploration and evaluation expenditure

The Company has made a voluntary change to its accounting policy for exploration and evaluation expenditure. Refer to Note 1 (a) for disclosure regarding the change.

Exploration costs are expensed as incurred. Acquisition costs are accumulated in respect of each separate area of interest. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial year. Amortisation is not charged on acquisition costs carried forward in respect of areas of interest in the development phase until production commences.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

(o) Mining properties

During the year the Company changed its policy with respect to exploration and evaluation expenditure where all such expenditure except for acquisition costs is expensed in the period in which it is incurred. Refer Note 1(n) above.

As a result mining properties will represent the acquisition costs of those mining properties.

When further development expenditure is incurred in respect of a mine property after the commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.

Amortisation is provided on a unit-of-production basis so as to write off the cost in proportion to the depletion of the proved and probable mineral resources.

(p) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(q) Provisions

Provisions are recognised when the consolidated entity has a legal or constructive obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions or other past events, it is probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the amount of the obligation.

(r) Employee benefits

Termination benefits

Termination benefits are payable when employment is terminated by the group before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits at the earlier of the following dates: (a) when the group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of AASB 137 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for accumulating sick leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.

Other long-term employee benefit obligations

The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period of government bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.

Re-measurements as a result of experience adjustments are recognised in profit or loss. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

Share‑based payments

Share‑based compensation benefits are provided to employees via the Nyota Minerals Limited Share and Option Plan. Information on these schemes is set out in note 26.

The fair value of options granted to directors/key management personnel are recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is determined using a Black‑Scholes option pricing model that takes into account the issue/exercise price, the term of the option, the impact of dilution, the non‑tradeable nature of the share/option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk‑free interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non‑market vesting conditions. Non‑market vesting conditions are included in assumptions regarding the employee loan recoverability and about the number of options that are expected to vest. At each balance sheet date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in profit and loss with a corresponding adjustment to equity.

(s) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are included in the cost of the acquisition as part of the purchase consideration.

(t) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(u) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

(v) Parent entity financial information

The financial information for the parent entity, Nyota Minerals Limited, disclosed in note 29 has been prepared on the same basis as the consolidated financial statements, except as set out below:

(i) Investments in subsidiaries and associates

Investments in subsidiaries and associates are accounted for at cost in the parent entity financial statements. Dividends received from associates are recognised in the parent entity's profit and loss, rather than being deducted from the carrying value of the investment.

(ii) Financial guarantees

Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of investment.

(w) New Accounting Standards and Interpretations

The Group has applied the following standards and amendments for first time in their annual reporting period commencing 1 July 2013:

· AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities, AASB 128 Investments in Associates and Joint Ventures, AASB 127 Separate Financial Statements and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards

· AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13

· AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011)

With the exception of AASB 119, the adoption of these new or amended accounting standards did not result in substantial changes to the accounting policies of the Group and had no material effect on the amounts reported for the current or prior financial years.

AASB 119 Employee Benefits

The revised standard has also changed the accounting for the group's annual leave obligations. As the entity does not expect all annual leave to be taken within 12 months of the respective service being provided, annual leave obligations are now classified as long-term employee benefits in their entirety.

This did change the measurement of these obligations, as the entire obligation is now measured on a discounted basis and no longer split into a short-term and a long-term portion. However, the impact of this change was immaterial since the majority of the leave is still expected to be taken within a short period after the end of the reporting period.

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2014 reporting periods and have not been early adopted by the group. The Group's and the Company's assessment of the impact of these new standards and interpretations is set out below.

AASB 9 Financial Instruments (effective from 1 January 2017)

AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities. Since December 2013, it also sets out new rules for hedge accounting. There will be no impact on the group's accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the group does not have any such liabilities. The new hedging rules align hedge accounting more closely with the group's risk management practices. As a general rule it will be easier to apply hedge accounting going forward. The new standard also introduces expanded disclosure requirements and changes in presentation. The group has not yet assessed how its own hedging arrangements would be affected by the new rules, and it has not yet decided whether to adopt any parts of AASB 9 early.

2 Financial risk management

The Group's activities expose it predominantly to credit risk, foreign exchange risk, price risk, interest rate risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.

Risk management is carried out by the Board of Directors. The Board provides principles for overall risk management, and is in the process of formalising and documenting these policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks. No derivative financial instruments have been used in the management of risk.

The Group holds the following financial instruments:

Credit risk exposures

The credit risk arises principally from cash and cash equivalents and deposits with banks and financial institutions.

The Group minimises credit risk in relation to cash and cash equivalent assets by only utilising the services of the Australian "Big 4" banks for Australian held cash assets and for international cash holdings recognised international financial institutions are used.

The Group does not have a significant credit risk in relation to trade receivables.

Market risk

(a) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity's functional currency. The Group operates internationally and is exposed to foreign exchange risk primarily arising from currency exposures to British pounds, the US dollar and the Ethiopian birr.

Exposure

The Group's exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars is:

Sensitivity

Based on the financial instruments held at 30 June 2014, had the Australian dollar weakened/strengthened by 10% against the pound (£) with all other variables held constant, the Group and parent entity's post tax loss for the year would have been $289,000 lower/higher (2013: $178,000), mainly as a result of foreign exchange gains/losses on translation of GBP denominated cash equivalents. The Group's exposure to other foreign exchange movements is not material.

(b) Price risk

As at 30 June 2014 the Group's exposure to equity securities price risk arises from the Group's investment in Kefi Minerals Limited.

The Group is not currently exposed to commodity price risk.

Sensitivity

Based on the financial instruments held at 30 June 2014, if the market value of its equity securities was plus/minus 10% higher at 30 June 2013 then all other variables held constant, the Group's total comprehensive loss for the year would have been $283,000 (2013 : $7,000) higher/lower. Equity for the Group would have been $283,000 (2013: $7,000) higher/lower.

(c) Interest rate risk

The Group is exposed to fluctuations in interest rates. Interest rate risk is managed by maintaining a mix of floating rate deposits. As at 30 June 2014 the Group had no interest bearing borrowings.

The Group holds no interest rate derivative financial instruments.

Sensitivity

At 30 June 2014, if interest rates had changed by +/- 50 basis points and all other variables were held constant, the Group's after tax loss and net equity would have been $1,500 (2013: $3,000) lower/higher as a result of higher/lower interest income on cash and cash equivalents.

(d) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are only invested in "AAA" rated financial institutions.

As at the reporting date the Group has no access to undrawn credit facilities.

The tables below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

The amounts shown in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Fair value measurement

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets (such as available‑for‑sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short term nature. The fair value of non-current financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which their fair value is observable:

· Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

· Level 3 fair value measurements are those derived from valuation techniques that included inputs for the assets or liability that are not based on observable market data (unobservable inputs).

* Refer note 11

** Refer note 12

3 Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(i) Taxes

The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgment is required in determining the worldwide provision for income taxes. There are transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

The Group is subject to other direct and indirect taxes in Ethiopia through its foreign operations. The mining industry in Ethiopia is relatively undeveloped. As a result, tax regulations relating to mining enterprises are evolving. There are transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

(ii) Exploration and evaluation expenditure

The Group's main activity is exploration and evaluation for minerals. The nature of exploration activities are such that it requires interpretation of complex and difficult geological models in order to make an assessment of the size, shape, depth and quality of resources and their anticipated recoveries. The economic, geological and technical factors used to estimate mining viability may change from period to period. In addition exploration activities by their nature are inherently uncertain. Changes in all these factors can impact exploration and evaluation asset carrying values, provisions for rehabilitation and the recognition of deferred tax assets. Refer to note 14 in relation to impairment of the Group's exploration and evaluation assets.

4 Segment information

(a) Description of segments

Segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Chief Executive Officer.

The Group considers that it has operated in three distinct segments.

* Foreign exchange gains

5 Other Revenue

6 Other income

7 Expenses

8 Income tax

9 Current assets - Cash and cash equivalents

Interest earned from cash accounts and deposits ranged from 0% to 3.5% per annum (2013: 0% - 3%).

Risk exposure

The Group's exposure to interest rate risk is discussed in Note 2. The maximum exposure to credit risk at the reporting date is the carrying amount of cash and cash equivalents noted above.

10 Current assets - Trade and other receivables

11 Current assets - Available-for-sale financial assets

Available-for-sale financial current assets include the following classes of financial assets:

(a) As at 30 June 2014 the Group held a 25% interest in KME following the sale of 75% of KME in December 2013. This interest has been valued as determined from the sale cash consideration plus the value of KEFI shares as at the date these shares were distributed in-specie to Nyota shareholders.

As noted in note 23 this interest has been sold subsequent to year end.

12 Non-current assets - Available-for-sale financial assets

Available-for-sale financial assets include the following classes of financial assets:

(a) Unlisted Securities

Unlisted securities are traded in inactive markets. Included in unlisted securities are Ethiopian Government Bonds held by the Group's subsidiary undertakings Brantham Investments Limited and Towchester Investment Company Limited. The 2013 amount included Ethiopian Government Bonds held by the Group's then subsidiary, KME, which is no longer part of the consolidated Group. These assets are shown at cost.

13 Non-current assets - Property, plant and equipment

Consolidated