TIDMALO
RNS Number : 2193Q
Alecto Minerals PLC
28 November 2016
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Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Mining
28 November 2016
Alecto Minerals plc ('Alecto' or the 'Company')
Signing of Binding Option Agreement for Kossanto East
Update on other Joint Ventures and Operational Activities
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base
metal exploration and development company, is pleased to announce
that it has agreed the final terms of its joint venture partnership
with Ashanti Gold Corp. ('Ashanti') with respect to its Kossanto
East Gold Project ('Kossanto East' or the 'Project') in western
Mali having signed a binding option agreement (the 'Option
Agreement'). This agreement concludes the proposals originally set
out in the non-binding Letter of Intent ('LOI') announced on 22
August 2016.
In addition, the Company is pleased to provide an update in
respect of its other joint ventures in western Mali, which have
been secured in-line with its strategy to retain exposure to the
value in its African gold exploration portfolio for little or no
cost, and its pre-production Matala Gold Project ('Matala') in
Zambia.
Highlights:
-- The terms of the Option Agreement are substantially the same as those highlighted in the LOI:
o Ashanti has the exclusive right to earn-in for a 65 per cent.
interest in the Project (58.5 per cent. effective interest after
allowing for the 10 per cent. carried interest of the Government of
Mali) (the 'Earn-In') by completing a preliminary feasibility study
('PFS') within a period of 36 months (the 'Option Period'). Ashanti
will be required to maintain and keep the Project's licence in good
standing during the Option Period
o If an extension to the Option Period is required, beyond the
initial 36-months, then Ashanti has the option to pay to Alecto
US$140,000 for each 6-month extension, up to a maximum of 12
additional months in total, to complete the PFS
o Should Ashanti not complete the PFS within the Option Period,
then it may elect to pay to Alecto US$4 million in cash to satisfy
the Earn-In requirement
o If either party's interest falls below 10 per cent., then that
party's interest will convert to a 1.5 per cent. net smelter
royalty ('NSR'). The other party shall then have the right, for a
period of one year thereafter, to purchase the NSR by paying
US$100,000 for each 0.1 per cent. (up to a maximum of US$1.5
million)
o Additionally, Ashanti shall contract from Alecto certain
management and corporate services in order to cost effectively
commence works on the ground and ensure that monies spent go
directly towards exploration
-- Randgold Resources' exploration teams have commenced their
new field season activities at Kossanto West:
o Pitting to check regolith profile and test further anomalous
zones
o Generation of regional targets that present potential
structure (alteration, lithology and mineralisation) for a
multimillion ounce discovery
-- Kola Gold and Alecto are applying for the extension of the
Karan exploration permit in southern Mali
o Further surface sampling taking place concurrent with the
licence extension application
o Potential for follow-up reconnaissance drilling this season -
depending on the surface sampling results
-- Matala pre-development activities have begun:
o five families relocated from an area where the proposed
process plant will be constructed and resettled in a new location
safely away from mining activities
o Commencement of ground clearance for the process plant
area
o Fencing and security gate construction underway to secure the
area
Mark Jones, Alecto's CEO, commented:
"We are delighted that the completion of Ashanti's legal and
technical due diligence has brought us to the point of finalising
the Option Agreement for Kossanto East, and we now look forward to
assisting them to commence work on the ground. Alecto and Ashanti's
geologists have been on site and reviewed core and rock chip
samples, surveyed the known resource area and have begun planning
for the next phase of work.
"With our partners Randgold Resources also now active on the
ground at the neighbouring Kossanto West project, we are delighted
to secure high levels of exploration activity at our projects in
western Mali without the burden of funding such critical
exploration work.
"Whilst these very exciting exploration projects are at an early
stage, there is every opportunity for a significant discovery and
we are confident that we have partnered with the best in the
business to realise this potential. Our primary focus now is on
finalising funding and delivering production at Matala and, in the
interim, we must allow time for our partners to complete their
planned exploration work, analyse the results and update us as they
progress and we look forward to receiving the results in due
course."
Ashanti Option
Ashanti is now the operator of the Kossanto East gold project in
western Mali, and will fund all exploration and development works
up to and including the production of a PFS. Kossanto East
comprises a single exploration permit covering 66.41 km(2) located
in the felsic volcanic rocks between the two major regional
structures, the Main Transcurrent Shear Zone ('MTZ') and the
Senegal-Malian Fault ('SMF'). The Project already has an
independent JORC-code compliant inferred mineral resource estimate
of 6.72 Mt grading at 1.14 g/t for an aggregate of 247,000 oz Au
(at a cut-off grade of 0.5 g/t).
Figure 1 - location of Kossanto East JV project with Ashanti -
See PDF
Future work by Ashanti will focus on extensions of the known
mineralised bodies at Gourbassi East and Gourbassi West, which are
both open along strike, and exploration targets in parallel
structures. Several large and advanced exploration targets were
discovered by Alecto in 2014 using Rotary Air Blast ('RAB')
drilling, including the Berola target which delivered 15 metres @
1.18 g/t Au from surface. Details of the planned work programmes
will be released once further planning has been completed.
Randgold Resources JV
Randgold Resources (Mali) Limited's ('Randgold Resources')
geological staff recently resumed activities at the Kossanto West
joint venture project, having reoccupied their new Kerekoto
Exploration Camp to the north of the Kobokoto permit. During the
last field season Randgold Resources completed intensive
lithosampling and soil anomalism validation over the main priority
areas (Fig. 2). Completing 157 selective soil samples and 585
lithosamples, the results highlighted the mineralised zones (0.12
g/t to 2.5 g/t Au) and confirmed the anomalies identified by
Alecto's geologists.
Figure 2 - Randgold JV Mapping Priority Targets over Regional
Soil Grid - See PDF
During the rainy season Randgold Resources' staff continued to
analyse the results to build up a more detailed geological model
and structural interpretation of the project area (Fig. 3).
Figure 3 - Randgold Resources JV Structural Interpretation Model
- See PDF
This season will see a programme of regional pits being sunk and
sampled to check the regolith profile and to further test
anomalies. Generation of regional targets presenting potential
structure (alteration, lithology and mineralisation) for a
multimillion ounce discovery will be the focus.
We will update the market during the field season (which runs
from November to June) as and when appropriate.
Matala Pre-development Activities
As announced in September 2016, essential pre-development
activities have commenced at our Matala Gold Project ('Matala') in
south central Zambia. To date, five families have been relocated
from the area of the planned future process plant to new homes in a
safe location away from all mining activities. The families were
assisted financially by the Company and the re-settlement was by
mutual consent and with the approval of His Royal Highness Senior
Chief Shakumbila.
Additionally, clearance activities for the process plant site
and construction of the perimeter fences and gates has commenced by
Alecto's ground team, who are working rapidly to secure the area
and prepare it for civil works to begin.
Completion of these pre-development activities serves two
purposes: firstly, it ensures that the Company is in compliance
with its Environmental Permit for the mine construction, and
secondly it will allow a more rapid start to development once the
financing package for Matala is complete.
Figure 4 - Zambian Process Plant Pre-development Activities at
Matala October 2016 - See PDF
Figure 5 - Zambian Process Plant Ground Clearance and Fencing -
See PDF
**ENDS**
For further information, please visit www.alectominerals.com or
contact:
Alecto Minerals plc Tel: +44 (0)20 7499 5881
Mark Jones
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Andrew Emmott
Matthew Chandler
James Dance
Beaufort Securities Limited Tel: +44 (0)20 7382 8300
Jon Belliss
St Brides Partners Ltd Tel: +44 (0)20 7236 1177
Elisabeth Cowell
Charlotte Page
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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