Quarterly Report

30 January 2015

Nyota Minerals Limited

('Nyota' or 'the Company')

QUARTERLY REPORT

Nyota Minerals Limited (ASX/AIM: NYO) provides its Quarterly Report for the three months ended 31 December 2014. The Company owns 100% of the Northern Block exploration licences, namely Brantham and Towchester, in Western Ethiopia ('Northern Blocks').

HIGHLIGHTS

· Fieldwork re-commenced promptly in early January 2015 following the renewal of the Northern Blocks in early December 2014

· The Company has commenced a strategic review of opportunities and investment in Ethiopia following a Government decision against issuing it a mining licence for mechanised alluvial mining along the Abay River

· Management is actively evaluating new opportunities both within Ethiopia and beyond

· Cash of A$0.71m at the period end

Richard Chase, Chief Executive Officer, said "During the quarter we focussed on Nyota's future, both inside and outside of Ethiopia. However, with the mining licence application for the alluvial deposits along the Abay River rejected a few days ago, our strategy has had to change, particularly given that the Company is not to be self-sustaining in terms of cash flow in the short term based on its current assets. Therefore the new opportunities being evaluated become all the more important and, although we have stabilised our costs at a very low level, we plan to act rapidly to define our future."

NORTHERN BLOCKS

100% owned by Nyota

The Brantham and Towchester exploration licence renewals were received in early December (see Summary of Tenements, below).

These exploration licences are unaffected by the Ethiopian government's decision on alluvial mining (see Alluvial Mining Licence Application, below) and shareholders are reminded that the application was to convert a small portion of the Towchester exploration licence to a large scale mining licence, leaving the remainder as a valid exploration licence for hard rock gold mineralisation. At the time of their renewal, both the Brantham and Towchester exploration licences were reduced in size by the Ministry of Mines through the imposition of an exclusion zone encompassing the whole area to be flooded by the Grand Ethiopian Renaissance Dam. Therefore, what has been renewed can be considered to be outside of the affected area.

The field camp was re-opened in late December 2014 and the requisite rents paid to the Regional authority. Field visits were conducted in November and December 2014 which covered both the exploration tenements and included a review of the planned work programme.

Fieldwork recommenced in January 2015 after the Ethiopian Christmas holiday and is initially focusing on the possible extension to the Bendokoro mineralisation to the north and south west. However drill testing of the Boka West gold anomaly (as previously reported in the Operational Update; 24 September 2014) remains an objective subject to the strategic review and funding (see below).

Nyota has two full-time Ethiopia geologists plus a contract senior geologist and the Ethiopian General Manager working on the projects.

ALLUVIAL MINING LICENCE APPLICATION

As reported in the quarterly report for the period ending 30 September 2014, Nyota was advised by the Minister for the Ministry of Mines of the Government of the Federal Democratic Republic of Ethiopia ("the Ministry of Mines") that the alluvial licence application had his full support and that in order to proceed the area under application be reduced. This Nyota did and during the quarter under review several visits were made to the application area and plans were set for project implementation. This included engaging a local development partner and supplier of earth moving equipment, starting discussions with potential sources of finance, a visit by a prospective project manager and working with plant equipment suppliers in South Africa.

After the period end, Nyota has been informed by the Ministry of Mines that it has decided against issuing any mining licences for alluvial mining along those parts of the Abay River and its tributaries that will be flooded by the Grand Ethiopian Renaissance Dam.

The Group's mining licence application has therefore been rejected by the Ministry of Mines. Investors are directed to the full announcement of 27 January 2015.

Having considered its position and in the light of the rationale it has been given, the Board has decided that an appeal, which is allowed for under the relevant legislation, would be a non-productive use of resources given the negligible chance of success.

STRATEGIC REVIEW

The rejection of the alluvial mining licence application has precipitated a strategic review of the Group's activities.

The rationale for the decision by the government of Ethiopia is that the success of the new dam and its intended transformation of the Ethiopian economy is so much in the national interest that the risk of any negative impacts arising from any mining activities outweigh the potential economic gains from gold royalties and taxes during the period that those activities might take place before flooding.

Whilst this is a unique situation and the Directors understand the rationale, the Company has been subject to inconsistent communication from the Ministry of Mines and the Directors are generally frustrated by the Ministry's its handling of the mining licence application process. In particular, despite affirmations of support and of intent to issue a licence, most clearly in September 2014 when the company agreed to reduce the area under application and to the term of the licence being "five years or when flooding occurs, whichever is the sooner", it appears that a thorough evaluation of the proposal and canvassing of other government ministries and agencies was not done until after that time.

The Minister for the Ministry of Mines has made clear that the decision is in no way a reflection of the application or the applicant and Nyota has been invited to identify alternative areas that have the potential for alluvial mining and to submit applications for these instead; which the Minister has stated would be looked upon favourably so long as there was little or no requirement for residents to be resettled.

While the Directors will consider this invitation seriously, the Board will make future decisions in the light of the Minister's comments on resettlement, the competitiveness of the investment climate and the timing and manner in which applications are generally being dealt with.

In the meantime a number of alternative opportunities are being considered, with site visits and due diligence conducted as appropriate. The Board anticipates that further announcements will be made in due course.

It is, however, not possible to now expect the Company to become self-sustaining in terms of cash flow in the short term based on its existing assets.

 CORPORATE AND FINANCE

Finance

At the end of the quarter Nyota had cash of A$0.71m. Cash outlays during the quarter included some transaction costs related to the September 2014 sale of the Group's remaining 25% interest in Tulu Kapi and the costs associated with the capital distribution of Kefi Minerals shares to shareholders at the end of the last quarter.

Administration costs are significantly lower than in previous years and exploration will be managed according to the available resources.

Change of NOMAD

The Company appointed Beaumont Cornish Limited as its Nominated Advisor ("NOMAD") in early December. This appointment is a requirement of the AIM Rules for Companies and ensures compliance with the AIM listing requirements.

Summary of Tenements (ASX Listing Rule 5.3.3)

As at 31 December 2014, the Group held the following interests in exploration tenements:

The Brantham and Towchester licences were renewed for 12 months in early December with an effective date of 30 July 2014 (refer to announcement 11 December 2014). 

The licences are now in their 5th year and the current Brantham license area is 717 km2 (reduced from 1,346 km2 in the 4th year) and the current Towchester licence area is 48 km2 (reduced from 1,002 km2 in the 4th year).

To view the Appendix 5B form, please follow this link:

http://www.rns-pdf.londonstockexchange.com/rns/5829D_1-2015-1-30.pdf 

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

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

ENDS

Competent Person

The technical exploration information contained in this announcement has been reviewed and approved by Mr R. Chase, Chief Executive Officer of Nyota Minerals Limited. Mr Chase has sufficient experience which is relevant to the activities and results that he is reviewing to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results and as a qualified person under the AIM Note for Mining, Oil and Gas Companies. Mr. Chase is an employee of Nyota Minerals Limited and is a Member of the Institute of Materials, Minerals and Mining and a Fellow of the Geological Society of London. Mr Chase consents to the inclusion in this announcement of such information in the form and context in which it appears.