TIDMALO
RNS Number : 1168O
Alecto Minerals PLC
08 February 2016
Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Exploration & Development
8 February 2016
Alecto Minerals plc ('Alecto' or the 'Company')
Joint Venture with Randgold Resources for the Advancement of
Kossanto West Gold Project in Western Mali
Alecto Minerals plc, the Africa-focused gold and base metal
exploration and development company, is delighted to announce that
Caracal Gold Mali SARL ('Caracal'), its wholly owned subsidiary,
has entered into a joint venture agreement (the 'Joint Venture' or
'JV') with Randgold Resources (Mali) Limited ('Randgold') for the
exploration and development of Alecto's 137 km(2) Kossanto West
Gold Project in western Mali ('Kossanto West' or the 'Project')
comprising the Kobokoto Est and Koussikoto exploration permits (the
'Permits').
Highlights
-- Joint Venture, for the exploration and development of
Kossanto West, is in line with Alecto's strategy to retain exposure
to its African gold exploration portfolio and upside generated
whilst minimising exploration and development spend
-- On completion of the Joint Venture:
- Randgold to fund all costs up to and including the completion
of a pre-feasibility study on the Project ('PFS')
- Randgold will hold a 65% and Alecto will retain a 35% participating interest in the Permits
- On completion of a PFS, all costs will be split between the JV parties in accordance with their participating interest
- Permits will continue to be held by Caracal, until such time
as the JV Committee forms a new company ('NewCo') for the
development of a mine
- On formation of NewCo, Caracal will transfer the relevant
Permits to NewCo, with the JV partners expected to hold 90%, held
in the same proportion as their respective interests in the JV, and
with the Malian Government expected to hold 10%
-- Initial work programme, includes further geological and
mapping of Kossanto West with potential follow up pitting and
trenching and reconnaissance drilling, anticipated to be undertaken
by Randgold in the first 12 months.
-- Kossanto East, where Alecto has reported positive economics
from an internal Scoping Study, with the project subject to a
collaboration agreement with Desert Gold Inc. ('Desert Gold'), is
not included in the Joint Venture and remains wholly owned and
operated by Alecto
Mark Jones, CEO of Alecto, commented:
"We are delighted to announce this important milestone agreement
with Randgold, who are the market leaders in the establishment of
world class gold projects in West Africa. Utilising Randgold's
expertise and financial muscle to unlock any opportunity allows us
to retain exposure to the significant value we believe is available
across our African gold exploration tenements, with minimal impact
on our balance sheet.
"By bringing in such intellectual capital, and with Alecto not
having to fund exploration work, the Company has been placed in a
strong position to rapidly move its other projects towards
development. The Company's main focus in the near to mid-term is to
bring our Zambian gold project, Matala, into production whilst
Randgold completes the work at Kossanto West and Desert Gold helps
us move towards development at Kossanto East. With a diversified
and exciting portfolio, we look forward to updating the market on
development progress throughout 2016."
The Joint Venture
Caracal, Alecto's wholly owned subsidiary, and Randgold, a
wholly owned subsidiary of Randgold Resources Limited ('Randgold
Resources'), have entered into the Joint Venture in respect of the
advancement of Kossanto West.
On completion of the JV, Randgold will hold a 65% participating
interest in the Permits with Alecto retaining a 35% interest and
Randgold will be responsible for undertaking all exploration work
over the Permits and funding all costs up to and including the
completion of a PFS. On completion of a PFS, all costs will be
split between the JV parties in accordance with their participating
interest.
A joint venture committee ('JV Committee') will be formed on
completion, comprising three representatives from Randgold and one
from Alecto, to manage the JV and to approve, inter alia, the work
to be undertaken and budgets for the Project, approval of a PFS and
any decision to proceed with the development of a mine. The JV
Committee will also be responsible for the decision to establish
NewCo, at which point the relevant Permits will be transferred from
Caracal to NewCo, with the Malian Government likely to be issued
10% of NewCo (being a free carried interest or such other holding
as may be prescribed by Malian Law) and the JV partners expected to
hold 90%. This will be held in the same proportion as each
company's respective interests in the JV, resulting in Randgold
expected to hold 58.5% and Alecto expected to hold 31.5%
respectively of NewCo, assuming that Randgold and Alecto maintain
their respective participating interests at the same level
subsequent to the completion of the PFS and the Malian Government
being issued with 10% of NewCo. Alecto has guaranteed the due and
punctual performance by Caracal of Caracal's duties and obligations
to Randgold under the Joint Venture agreement. Each party has
pre-emption rights in the event the other party wishes to dispose
of its participating interest in the Joint Venture.
The Joint Venture is conditional on certain matters that are in
the ordinary course and are expected to have been satisfied by the
end of February 2016.
Kossanto West
Figure 1: Regional setting of Kossanto West and proximal mines
and significant deposits
http://www.rns-pdf.londonstockexchange.com/rns/1168O_-2016-2-4.pdf
Kossanto West comprises the Kobokoto Est and Koussikoto
exploration permits which cover 137 km(2) in western Mali, some
40km north-west of Randgold Resources 10Moz Au Loulo/Gounkoto
complex and approximately 50km north-east of their 3m oz Au Massawa
project in Senegal.
Kossanto West was part of the larger Kossanto Gold Project and
was split from Kossanto East for geological reasons. At Kossanto
East, Alecto has defined a JORC code compliant resource of 247,000
oz Au and recently completed an internal scoping study which
returned very positive economics for a small-scale, low-cost,
development. Kossanto East is not part of the Joint Venture and
remains 100% owned by Alecto. As previously announced, work
continues to assess the potential for jointly developing Kossanto
East alongside Desert Gold's neighbouring gold deposit, Barani
East.
It is interpreted that a major structural event occurred within
the permit boundaries of Kossanto West. The regionally significant
Main Transcurrent Shear Zone ('MTZ') appears to change its strike
direction from NNE to NNW, and exploration work completed by Alecto
identified numerous high-grade gold targets coincident with this
change of the MTZ. Initial scouting results reported in 2014 (see
Operational Update 18 December 2014). Figure 2 below summarises
some of the key results from Alecto's previous exploration work at
Kossanto West.
Figure 2: Kossanto West, comprising the Kobokoto Est and
Koussikoto exploration permits, showing interpreted MTZ and key
exploration results from 2013/15 field work by Alecto (Please see
PDF)
http://www.rns-pdf.londonstockexchange.com/rns/1168O_-2016-2-4.pdf
As at 31 October 2015, Kossanto West had gross assets of GBP0.6
million.
The Joint Venture Work Programme
With numerous gold occurrences having already been identified by
Alecto as set out in Figure 2 above, Randgold is proposing to
return to first principles in the Phase 1 work programme. This will
include the completion of geological and regolith mapping, soil
geochemistry, follow-up pitting and trenching, and detailed ground
magnetic surveys, in order to more fully understand how these
occurrences link up and to identify further targets. If results
justify it, reconnaissance drilling will follow with either diamond
core or RC drilling. It is expected that this work could be
completed in the first 12 months of the Joint Venture at a cost of
approximately US$1 million. The Phase 2 work programme will focus
on completion of works to produce a PFS, with Phase 3 focused on
undertaking works to enable the completion of a feasibility
study.
Commenting on the work programme, Mark Jones added, "Randgold
Resources' exploration teams are arguably the most experienced and
knowledgeable in identifying and developing significant resources
in within the Kenieba Inlier in Mali which hosts Kossanto West. The
structured work programme going forward will enable the JV to more
rapidly identify an economic opportunity which we hope will propel
the Company forward to yet another development project."
About Randgold Resources
Randgold Resources is a FTSE-100 and NASDAQ listed African
focused gold mining and exploration company. It is focused on
creating value for all its stakeholders through the discovery of
world class orebodies within the major greenstone belts of West and
Central Africa. Its exploration is managed through the resource
triangle as an integrated business tool and it defines economic
deposits as 3Moz of mineable gold with a minimal internal rate of
return of 20% at a long term gold price of $1000/oz.
Randgold Resources has developed and operates five world class
gold mines - with all but one developed on deposits discovered by
its own geologists. Loulo, Gounkoto and Morila in Mali; Tongon in
Côte d'Ivoire and Kibali in the Democratic Republic of the Congo.
It attaches importance to the process of discovery, evaluation and
eventual development in order to create value. Randgold is also
committed to creating lasting benefit for its host countries and
the communities around their operations ensuring that the lives of
stakeholders are improved.
**ENDS**
(MORE TO FOLLOW) Dow Jones Newswires
February 08, 2016 02:00 ET (07:00 GMT)
Cradle Arc (LSE:CRA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Cradle Arc (LSE:CRA)
Historical Stock Chart
From Apr 2023 to Apr 2024
