Tulu KapiLocation The Tulu Kapi Project (the "Project") is located in western Ethiopia in Oromia Regional State. The current Tulu Kapi resource is located within the 8.44km2 Tulu Kapi - Ankore Exploration Licence held by Nyota Minerals (Ethiopia) Limited. The Project is located 28 km east of the town of Ayra-Gulliso and 510 km from Addis Ababa, Ethiopia's capital. The journey from Addis Ababa to Tulu Kapi takes approximately 12 hours on mostly good paved roads until the last 18 km which is dirt road. A charterd flight to Nyota's airstrip in Ayra takes 1.5 hours, from which there is a 1.5 hour drive to Tulu Kapi. History During the 1930's, an Italian mining company (SAPIE) undertook commercial scale hydro-mining of gold-bearing saprolite over the Tulu Kapi deposit. The earliest detailed exploration of the Tulu Kapi area took place in the 1970's under the guidance of the United Nations Development Project (UNDP). The work was largely reconnaissance and regionally biased but detailed geological mapping, soil geochemical programmes, geophysical surveys and diamond drilling were included in the programme. Data generated by the UNDP was passed to the Ethiopian authorities. During the period of the programme the UNDP did not hold tenure over any ground. Copies of original UNDP data are available but original maps and plans cannot be sourced. Therefore, whilst the UNDP work provides an excellent background to regional exploration, it has not been possible to utilise any detailed work in exploring the Tulu Kapi and surrounding licences. The Tulu Kapi & Ankore exploration licence was granted to Nyota Ethiopia on May 27th 2005. Prior to the acquisition of Tulu Kapi by Nyota in August 2009, detailed geological mapping, trenching, geophysics and diamond drilling was conducted within the licence. Between 1996 and 1998, TREC, a Canadian exploration company, acquired an exploration licence over an area that incorporated the current Tulu Kapi licence. Exploration by TREC between 1996 and 1998 comprised detailed geochemical soil sampling, mobile metal ion (MMI) soil geochemistry and an induced polarisation survey. Five diamond drill holes totalling 366 metres and targeted on coincident geochemical soil and IP anomalies, were drilled in a 200m by 200m area immediately north of the old SAPIE mining area over Tulu Kapi. Data generated by TREC specifically detailing grid soil sampling, geochemical metallic ion mobilization soil surveys, ground geophysics and drilling over the Tulu Kapi deposit was adopted subsequently by GPMC after geo-referencing the data to UTM coordinates from local grids. GPMC also undertook trenching at Tulu-Kapi in 2006 (2 trenches), and excavated a further 14 trenches in 2009 after being acquired by Nyota. The Tulu Kapi & Ankore exploration licence has been mapped at a scale of 1:5,000 and the Tulu-Kapi resource area has been mapped at a scale of 1:2,000. GPMC conducted IP-Resistivity surveys (2 profiles aligned along NE-SW direction with a gradient survey) covering an area of 400m by 400m in May 2009. GPMC also undertook additional gradient IP-Resistivity work covering an area of 800m by 400m and ground magnetic survey covering 2.5km by 1.2km. Phase 1 to Phase 4 drilling undertaken by GPMC focused exclusively over a 400m x 400m area coincident with peak gold in soil geochemistry over the Tulu Kapi deposit and consisted solely of 34 angled diamond drill holes to a maximum depth of 200m. Land The area is characterized by prominent hills and deeply incised valleys. The Tulu Kapi deposit is hosted within a discrete rounded hill composed of syenite and surrounded by other prominent hills composed variably of syenite, diorite and granodiorite. The typical greenstone type geology of the region also gives rise to lower lying areas hosted by metasediments and metavolcanic rocks dominated by mafic and sericite schists. The area is cut by a reticulate drainage system feeding a number of larger perennial rivers including the Birbir River which is a tributary of the Baro and the White Nile. The maximum altitude recorded at Tulu Kapi is between 1,600m and 1,765m above sea level. The bulk of the Tulu Kapi and adjacent licences held by Nyota are covered by cultivated land although the topography and geology do influence the growing environment which also allows for cultivation of cash crops and cattle grazing. The main crops grown include wheat, maize and beans. Most homesteads have small plots of land producing a range of vegetables for domestic consumption. The steep incised valleys are generally filled with mature secondary trees and vegetation that provide the dense shade required to cultivate coffee. Coffee is the major cash crop, supplemented by the harvesting of fast-growing eucalyptus used mainly for building materials and firewood. Large tracts of land are used for general grazing of cattle. Locally, these areas are called "bad lands", a reflection of their low fertility, although they generally produce sufficient grass for grazing. The poor quality of this land reflects either the presence of an anomalously high sulphide content of the soil (induced by outcropping of sulphide bearing rocks) or by the previous removal of topsoil by Italian small-scale miners in the 1930's who used rudimentary hydro-mining techniques to excavate gold-bearing top soil with the subsequent panning and sluicing of heavy concentrates to recover coarse gold. The climate, particularly in the Highlands close to Tulu Kapi is temperate. Annual temperatures range from 350C to 00C with peak temperatures occurring during the middle of the dry season between October and April. The weather is usually sunny and dry with a short wet season between February-April and a main wet season running from June to October (peak rainfall between July and September). At Tulu Kapi, rainfall ranges from 1,400mm to 1,550mm per annum. Whilst some aspects of fieldwork must be suspended during wet weather, Nyota has been able to continue exploration including both diamond and reverse circulation drilling throughout the wet season safely and without incident. Geology The region lies within the Arabian-Nubian Shield which consists of Upper Proterozoic rocks (more than 800Ma) and is best described as a granite-greenstone terrain. Additional weakly metamorphosed volcano-sedimentary successions of late Proterozoic age (more than 570 Ma) occur within the terrain. The area has been extensively folded, faulted and intruded by Pan-African aged granites (500 Ma) and lesser mafic to ultramafic intrusives and hosts a number of gold occurrences/deposits. These rocks outcrop in the north, west and south of Ethiopia and also underlie most of Eritrea. The western Ethiopian Shield, in which the Tulu Kapi deposit is found lies in the volcano-sedimentary sequence dominated by up to 70% of meta-intrusive rocks, ranging from granite, diorite to gabbro in compositions. Most of the gold indications in western Ethiopia are hosted in sheared meta-intrusive rocks. A major north-northeast oriented shear passes through the Tulu Kapi area and tracks north for more than 100km where it horsetails to form a series of smaller shears, the majority of which host gold shows previously recorded by the UNDP in the 1970's. The Tulu Kapi deposit in southwestern Ethiopia is situated in the northern sector of the Arabian-Nubian Shield and is hosted by Upper Proterozoic age intrusive rocks. These intrusions cut through a volcano-sedimentary sequence which has been transformed to mafic and sericite schists. Gold mineralisation at Tulu Kapi is hosted by a coarse-grained syenite pluton and associated intrusions of porphyritic syenite, diorite and dolerite. The geology associated with Tulu Kapi consists of rocks ranging from Precambrian to Tertiary in age. The Precambrian rocks consist of gneisses, low-grade volcano-sedimentary rocks with associated mafic to ultramafic intrusions and meta-intrusive rocks. The southern limit of Tulu Kapi is defined by a N400E oriented, steeply dipping to sub-horizontal shear zone, ranging from 20 to 60m in width and associated with mafic schists and conspicuous milky white quartz veins. The eastern boundary of the deposit is defined predominantly by a diorite intrusive with minor felsic syenite xenoliths. It has been assumed that the boundary away from the major shear zone is gradational and closer to the shear has transformed the syenite to sericite schist and the diorite to mafic schist. The western limit of the deposit is at present defined by a zone of barren syenite and a discontinuous NNE -- SSW oriented fault. This fault is interpreted to have a westerly dip and the barren syenite may simply represent an un-mineralised section of the deposit similar to the barren zone occurring between the base of the broadly defined Zone 1 mineralisation and the upper contact of the Zone 2 mineralisation. At present, the northern boundary of the deposit is marked by a NNE oriented fault that strikes sub-parallel to the main shear zone to the south. This structure has truncated the northern extension of mineralisation in the Tulu Kapi deposit and offset the continuation of mineralisation approximately 300m to the NNE in an area referred to as the UNDP Target area. Gold mineralization is hosted in a syenitic batholith that includes coarse- and fine-grained phases as well as crosscutting dykes/sills of dolerite. Mineralization is associated with zones of albitization which host narrow quartz veins and overprinting of sulphide veins. The syenite is mainly a medium- to coarse-grained rock composed of 60-70% pink to white alkali feldspar, 20-25% plagioclase, 10-15% ferromagnesian minerals and minor interstitial quartz. The ferromagnesian minerals appear to consist mainly of biotite with minor amphibole and magnetite. The mafic rocks (dolerite) representing dykes and/or sills within the syenite range up to 10m scale in terms of core intercepts. The dolerites range from fine-grained to porphyritic and some of the mafic bodies have a deformation fabric that varies between weakly developed to intense. The rocks are logged as mafic dyke, mafic schist and mylonite. The syenite adjacent to the strongly deformed basic intrusions commonly appears to be undeformed. This would suggest that the mafic rocks are earlier than the syenite and are present as xenoliths or that strain was preferentially partitioned into the mafic bodies during post-intrusion ductile deformation. In holes at the southern end of the grid the syenite is also strongly deformed, suggesting strain partitioning as the likely explanation. Mineralisation The Tulu Kapi deposit comprises a series of stacked sub-horizontal to shallowly dipping gold-bearing quartz -- carbonate veins, veinlets and stockwork intimately associated with albite alteration. A minimum of three lens-like zones of broad mineralisation have been defined to date. Mineralised veins and associated albite alteration is hosted by a syenite pluton into which a swarm of dolerite dykes and sills have been intruded. The vein zones which were provisionally called lode structures are generally hosted by undeformed syenite with very little evidence of ductile fabric and deformation save for that noted in dolerite dykes and sills. These observations have led to the view that mineralisation of the Tulu Kapi mesothermal "lode" type gold deposit is pluton-related rather than from an orogenic origin. However, consensus is that the syenite is unlikely to be the source of the gold-bearing fluids and exploration efforts are continuing to locate a suitable intrusion that acted as the mineraliser. The current view relating to emplacement considers that the shear zone represents a structure created by reactivation of a former vein -- fault zone and that this reactivation caused the brittle syenite intrusion to itself shear, forming a series of low angle faults that provided the conduit for both the swarm of dolerite sills and mineralising fluids. On drill traverse Line 240S, drill core provides evidence of mineralisation being buckled and boudinaged where it encounters the shear zone which eliminates the possibility of the deformation being related genetically to the vein zone development. The shear zone does not appear to have caused any significant offset of the mineralised zones as Zone 2 mineralisation can be seen occurring in diorite that is in contact with the shear and the upper Zone 1 mineralisation has been intersected to the southeast beyond the shear itself. The style of mineralisation is typical of that which forms economic bulk-tonnage gold deposits in other parts of the Arabian-Nubian Shield and similar greenstone belts in both West and East Africa. Mineralisation occurs as discrete stacked bodies of highly variable thickness with quartz and sulphide veins almost exclusively associated with albite alteration. During preliminary interpretation of the deposit geology, it was apparent that two principal broad load structures existed, separated by a wide area of barren syenite (+/_60m) within which were located multiple sub-horizontal mineralised structures. As the Nyota drilling programme continued, deeper holes were drilled that intersected other lode structures at depth. To date, two further definable structures, named Lodes 3 and 4 have been identified. It should be noted that whereas Lodes 1 and 2 are characterised by a simple mineralogy comprising gold, pyrite and minor sphalerite and galena, Lodes 3 and 4 are characterised by more intense base metal sulphide mineralisation with significant presence of sphalerite, galena and minor arsenopyrite and chalcopyrite along with gold and pyrite. The syenite has been overprinted by a multistage hydrothermal system that appears to have been controlled mainly by fractures and minor breccia zones with gold mineralisation being associated with veins, crackle zones and breccias. The general paragenesis consists of (early to late) quartz veins - quartz, albite, biotite, muscovite, carbonate, epidote, sulphides - gold as infill of veins and minor breccia zones - muscovite veins and alteration - pyrite veins (minor) -- late quartz veins -- and finally quartz, albite, biotite, muscovite, carbonate, epidote, sulphides and gold. In terms of an overall structural framework, it remains the view that the syenite host formed a brittle body that fractured and sheared during movement of the adjacent major shear zone resulting in low angle fault planes developing through the pluton which in turn acted as conduits for mineralising fluids. Late stage post compressional release of tension possibly caused the development orthogonal fractures between the major NNE -- SSW oriented structures further dissecting mineralisation into discrete blocks. A detailed understanding of the structure of the Tulu Kapi deposit and a conversion of the resource to a mineable reserve will in all likelihood require further diamond infill drilling before the structure is fully understood. 
TechnicalA JORC Compliant Resource of 15.96 mt at 2.84 g/t Au containing 1.46 Moz Au (combined Indicated and Inferred) was reported at the end of July 2011 located within the 8.44 km2 Tulu Kapi Licence. This resource update was accompanied by the construction of a new geological model confirming the presence of shallow dipping stacked lensoid gold mineralisation bounded within broad envelopes of albite alteration underpinned by a highgrade Feeder Zone style massive sulphide body located at depth. Preliminary mine design envisages ore extraction via a combination of both open pit and underground development. Subject to detailed evaluation, the Company expects underground sub-level open stoping with access via a decline to operate in parallel with open pit mining thereby providing highgrade feed (In-situ grade >5.50 g/t Au) to the processing plant during the early years of production. The Tulu Kapi drill programme is continuing to add further gold ounces by testing open pit extensions to mineralisation (NE & NW Extensions), cross-cutting high-grade structures as well as further extension to the high-grade Feeder Zone at depth and a new resource update is provisionally scheduled for early 2012.Metallurgical testwork indicates ore is amenable to standard carbon in leach processing. Engineering, hydro-geological and geotechnical studies are well-advanced ahead of Definitive Feasibility Studies scheduled to commence in Q4, 2011 once the Ministry of Mines has awarded a mining licence.
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