JOHANNESBURG (miningweekly.com) – The International Finance Corporation (IFC) has invested £3,4-million in Nyota Minerals to support a gold project in Ethiopia.

The Aim- and ASX-listed Nyota, which explorers for gold and nickel, would use the IFC's investment to advance its Tulu Kapi project.

"We expect [the] IFC's involvement to add significant value as our Tulu Kapi project develops, both in terms of ongoing assistance in relation to social and environmental matters and in terms of the company's ability to have access to potential IFC debt capital as we move towards production," Nyota CEO Melissa Sturgess said.

IFC global head for mining William Bulmer commented in a statement that the investment through Nyota was the organisation's first mining investment in Ethiopia.

"This investment continues our strategy of supporting early-stage exploration companies with financing and advice."

The World Bank private sector lender said that Ethiopia was seeking to diversify its economy and increase private sector participation in its mining sector, and that Nyota was one of the few foreign companies with an exploration project in the country.

"The success of the Tulu Kapi project will help promote good environmental and social standards and future foreign direct investment in the country," it stated.

The IFC would take a 10% shareholding in Nyota at an aggregate subscription cost of £3,44-million, as well as receive unlisted options in capital of the company, which, if exercised in full, would provide a further £3,87-million worth of funding.

Nyota explained that the IFC would have the right to participate in any fundraising in the four years following its initial investment.