TIDMALO
RNS Number : 7297H
Alecto Minerals PLC
22 August 2016
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Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Mining
22 August 2016
Alecto Minerals plc ('Alecto' or the 'Company')
Letter of Intent for Earn-in Agreement for Kossanto East Gold
Project
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base
metal exploration and development company, is delighted to announce
that it has signed a non-binding letter of intent ('LOI') with
Ashanti Gold Corp. ('Ashanti'), a Toronto Venture Exchange listed
public company (TSX: AGZ.V), for Ashanti to earn an interest in the
Company's Kossanto East Gold Project (the 'Project') in western
Mali, which has a JORC-Code compliant mineral resource estimate of
247,000 oz Au and significant further upside potential.
Highlights:
-- LOI envisages Ashanti having the right to earn-in for a 65
per cent. interest in the Project (the 'Earn-In') by completing a
Preliminary Feasibility Study ('PFS') within a period of 36 months
(the 'Option Period')
-- Should Ashanti not complete the PFS within the Option Period,
it may instead elect to pay, in cash, US$4 million to Alecto within
90 days of the end of the Option Period in order to satisfy the
Earn-In requirement
-- Ashanti will be the operator of the Project's exploration and
development programmes during the Option Period
-- Upon completion of the Earn-In, Ashanti and Alecto will form a joint venture and contribute proportionally to the Project's continuing exploration and development
-- 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 return
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)
-- Entering into a binding agreement in due course will mark the
completion of Alecto's strategy to continue to participate in its
exciting exploration portfolio in Mali, without further funding
contributions in the medium term, thereby allowing the Company to
concentrate on its primary goal of becoming a gold producer in
Southern Africa
A further announcement in respect of the Earn-In will be made at
the appropriate time on agreement of and entering into definitive
legally binding documentation.
Mark Jones, Alecto's CEO, commented:
"We are delighted to announce such a positive step to
potentially expand the exploration and resource potential at our
Kossanto East Gold Project in western Mali. Kossanto East was the
exploration focus for our field teams throughout the 2013-2015 work
seasons, which culminated in the establishment of a JORC-Code
compliant mineral resource estimate of 247,000 oz Au.
"Field work to expand this resource across well-defined
exploration targets was curtailed in 2015 when global funding
sources for such exploration activities effectively dried up.
During the 2015 field season we worked closely with neighbouring
Desert Gold Ventures Inc. to complete an internal scoping study for
potential joint small scale production. Whilst the economics were
positive, it was clear that both company's projects would benefit
from additional exploration in order to maximise the potential for
future production.
"In the prevailing gold price environment it is clear that there
is a renewed interest in gold exploration, and our proposed
partnership with Ashanti will enable us to realise the full
potential of Kossanto East. With the Gourbassi deposits open along
strike and some excellent initial results from exploration targets
such as Berola (15 metres @ 1.18 g/t Au from surface) we are
confident that together we will be able to build a larger mining
play at this very exciting project area. In addition, the option
remains to work with Desert Gold, should it serve the interests of
all parties. This complements perfectly our existing joint venture
with Randgold Resources Limited at the neighbouring Kossanto West
project, and our joint venture with Kola Gold Limited at Karan in
southern Mali. While these continue to create value, we will focus
on bringing the Matala and Dunrobin Gold Projects in Zambia into
production."
About Kossanto East
The Kossanto East Project comprises a 66.41 km(2) licence area
located in the felsic volcanic rocks in between two major regional
structures, the Main Transcurrent Shear Zone ('MTZ') and the
Senegal-Malian Fault ('SMF'), that host all of the major gold
deposits in the Birrimian-age rocks of the Kedougou-Kenieba inlier
in western Mali. Alecto announced an independent JORC-Code
compliant inferred mineral resource estimate of 6.72Mt grading at
1.14 g/t for an aggregate of 247,000 oz Au (at a cut-off grade of
0.5 g/t) in June 2014, completed by Wardell-Armstrong
International. Alecto has a well established exploration camp on
the property and will be making available to the joint venture its
full complement of exploration equipment, including a Rotary Air
Blast ('RAB') drilling rig, an auger rig, geophysical and
geochemical sampling equipment and its established office in
Bamako.
Figure 1. Location of Kossanto East Gold Project, western Mali
(Please click on link for the PDF document)
Figure 2. Location of Kossanto East Gold Project targets (Please
click on link for the PDF document)
Alecto's Exploration Projects in Mali
The Kossanto East Gold Project also lies adjacent to the
Company's Kossanto West Gold Project which is subject to a joint
venture agreement with Randgold Resources (Mali) Limited, a wholly
owned subsidiary of FTSE-100 Randgold Resources Limited (LSE: RRS)
('Randgold'). Randgold began working on the Kossanto West project
in Q2 2016 and recently published positive results from its initial
exploration activities.
Located in a different geological environment to Kossanto East,
Randgold confirmed soil anomalies that had been previously
identified by Alecto's geology team, and announced that they had
identified the NW-SE striking lithologies in the area and several
major geological domains that are interpreted as basal sediments
and clastic rocks intruded by a range of different plutonic rocks
in the east and a mélange of volcano-sedimentary rocks in the
west.
Randgold is conducting exploration activities at Kossanto West
to potentially earn in a 65 per cent. interest in the two licences
that comprise the Kossanto West Project, namely Kobokoto East and
Koussikoto.
Further south, as announced on 12 May 2016, Alecto has entered
into a joint venture with Cora Gold Limited ('Cora Gold'), a wholly
owned subsidiary of Kola Gold Limited, in respect of the Company's
250 km(2) Karan Gold Project. This significant greenfield
exploration project is part of a substantial land package
concentrating on the gold mineralisation potential of the Siguiri
basin rocks in southern Mali. Pursuant to the joint venture
arrangement, Cora Gold has agreed to solely fund exploration
activities through to completion of a Scoping Study in order to
achieve a 65 per cent. interest in the Karan permit, followed by a
further 15 per cent. interest to Cora Gold on completion of a
Bankable Feasibility Study.
All field work in Mali will resume after the rainy season
(expected to be in November 2016).
This announcement contains inside information.
**ENDS**
For further information please visit www.alectominerals.com,
follow us on Twitter @AlectoMinerals, 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 Limited Tel: +44 (0)20 7236 1177
Elisabeth Cowell
Charlotte Heap
Notes to editors:
Alecto Minerals plc is an African focussed, gold and base metal
exploration and development company quoted on AIM with exploration
projects in Mali, Burkina Faso and Mauritania and, a development
project with near-term gold production in Zambia.
In Zambia, the historical Matala and Dunrobin gold mines have,
in aggregate, a 760,000 oz Au JORC Code compliant resource estimate
in the Measured, Indicated and Inferred categories at an average
grade of 2.3g/t Au. The Company is focused on bringing Matala into
low-cost production in the near to mid-term.
In Mali, the Kossanto East project has a current independent
inferred JORC Code compliant resource estimate of 6.72Mt grading at
1.14g/t Au for an aggregate of 247,000 oz Au with a cut-off grade
of 0.5g/t Au at Kossanto East. The project is located in the centre
of the Kenieba inlier in western Mali. The Kenieba inlier is a
block of ancient greenstones and granites hosting many significant
gold deposits in Senegal and Mali, making it one of the most
important gold regions in Africa.
Alecto also owns the Kerboulé Project, located in the highly
prospective Birrimian-age Djibo gold belt in northern Burkina Faso,
as well as the wholly owned Wad Amour IOCG Project in Mauritania
which is at an exploration stage.
Accordingly, the Company has a strong, diversified project
portfolio with planned near-term production and exciting
exploration upside potential.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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