TIDMALO
RNS Number : 1796J
Alecto Minerals PLC
16 December 2015
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Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Exploration & Development
16 December 2015
Alecto Minerals plc ('Alecto' or the 'Company')
Contract awarded to finalise project design, source vendor
financing and provide EPC management for Matala Gold Mine,
Zambia
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base
metal exploration and development Company, is pleased to announce
that, following the Company's recent exciting acquisition of the
historic Matala and Dunrobin gold mines in Zambia and as part of
the Board's determination to move quickly towards becoming a gold
producer, Alecto has entered into an agreement with PenMin Ltd
('PenMin'), a South African based consultancy group which has
extensive knowledge of Matala and Dunrobin, to assist in delivering
the next stage of Alecto's Matala Gold project ('Matala' or the
'Project').
Pursuant to the agreement, PenMin will, inter alia, assist the
Company in:
-- Updating and finalising the historic Definitive Feasibility
Study ('DFS') prepared by Coffey Mining and a works programme for
Matala, in order to secure the two main contracts required to bring
Matala into future production; namely the mining contract and the
contract for the supply and operation of the plant;
-- Preparing the Design Build and Operate (DBO) contract (to
FIDIC Gold Book standards) for the Project. This will exclude the
mining elements of the Project, but will include the supply of
process plant and mining infrastructure components such as
workshops, wellfield, earthworks and roads etc;
-- Preparing the mining contract to secure a mining contractor.
Engagement of a mining contractor, who will finance the cost of
supplying and operating the mine fleet, will serve to reduce the
initial capital required to commence mining operations at
Matala;
-- Seeking to secure vendor financing for the supply of the
processing plant, a major capex requirement for bringing the
Project in to production;
-- Ensuring that all the relevant permits and approvals are in
place to commence production, which will include securing the
relevant insurance for the Project; and
-- Management of the master schedule for Matala.
Subject to successfully completing the above workstreams and on
the commencement of operations, PenMin will then adopt a client
representative project management role, which will include
oversight of all aspects of the Project except for the Company's
responsibilities of geology/resource management and mine planning,
government interaction, environmental and social management,
security management and financial controls.
Mark Jones, CEO of Alecto, commented:
"Following the completion of the acquisition of Matala and
Dunrobin, Alecto has got off to a flying start in preparing the
Project. In partnership with PenMin and our largest shareholder,
who via Digmin Group Pty Ltd provides experienced mining and
infrastructure build contracting services, we have developed a
clear roadmap of how we can rapidly move the Matala Project into
production. Utilising the skills of our partners and leveraging the
in-house experience of Alecto's Board and personnel, we have a
clear opportunity to deliver ahead of our initial expectations.
"We will continue to pursue our plans across the rest of
Alecto's portfolio, in particular the advancement of our strategy
to deliver production from our 100% owned Kossanto East Gold
Project in Mali through co-operation with Desert Gold. Accordingly,
we hope to be able to deliver production from two projects in the
near to mid-term.
"This is an exciting time for Alecto and I truly hope that the
value potential that can be created, even in these difficult times,
will begin to be recognised by the market."
Information on Matala and Dunrobin
The Matala and Dunrobin gold mines are located in a licence area
of south-central Zambia dominated by the Mwembeshi Shear Zone,
which incorporates the geologically complex Matala Dome, an
elongated east-northeast Dome parallel, or sub-parallel, to the
trend of the shear. The single 32km(2) 25 year renewable mining
licence (licence 8074-HQ-LML) was granted by the Ministry of Mines
in Zambia in 2003 and reinstated in December 2014 (the
'Licence').
Gold mineralisation has been identified at multiple locations
across the Matala Dome, and specifically within the Licence. At
Matala, gold mineralisation is characterised by strong
stratigraphic deformation, shearing and the presence of
quartz-dolomite-pyrite-tourmaline-albite-sericite alteration and
vein stockworks. The mineralised assemblages occur in steep
south-dipping stockwork.
The Matala deposit contains an estimated 568,000 oz Au JORC Code
compliant resource in the Indicated and Inferred categories and was
subject to limited historical underground mining during the
pre-independence years in Zambia.
Alecto has identified, subject to further funding, the potential
to develop a low-cost, profitable, small-scale 400,000 tonnes per
annum open-pit mine at Matala and satellite deposits, targeting the
oxide and transitional ore and using a simple crushing, milling and
gravity circuit with subsequent direct cyanidation.
Alecto has completed an internal scoping study for Matala, based
on the historic work undertaken by Coffey Mining, and estimates
that Matala has attractive economics. At an estimated initial
capital cost of approximately US$18 million, a gold price of
US$1,150/oz and a discount rate of 10%, Matala would have an NPV of
approximately US$18 million and an indicative IRR of approximately
65% over the initial three-year life of mine. With the excellent
gold grades in the oxides at Matala, which are expected to average
3.1g/t Au over the first two years, the initial phase will have an
estimated C1 cash cost of approximately US$695/oz, excluding
government royalties of 6%.
**ENDS**
For further information, please visit www.alectominerals.com or
contact:
Alecto Minerals plc Tel: +44 (0)20 3137 8862
Mark Jones
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Richard Tulloch
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
Felicity Winkles
Notes to editors:
Alecto Minerals plc is an African focussed, gold and base metal
exploration and development company quoted on AIM with gold
exploration projects in Zambia, Mali, Burkina Faso and
Mauritania.
In Zambia, the 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 seeking to bring Matala
into low-cost production in the near to mid-term
In Mali, the Kossanto 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 Kossanto 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 exciting exploration upside potential.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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