TIDMALO
RNS Number : 9269E
Alecto Minerals PLC
12 May 2017
Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Mining
12 May 2017
Alecto Minerals plc ("Alecto" or the "Company")
Full Time Production at Mowana Copper Mine, Mine Plan, and
Publication of CPR
Alecto Minerals plc (AIM: ALO), the African-focused gold and
copper exploration and development company, is pleased to announce
that production is now ongoing on a full-time basis at the Mowana
Copper Mine in Botswana ("Mowana" or the "Project") following
completion of the first blast on 29 April 2017 and a successful
trial period, which saw the Company produce saleable concentrate up
to 28% copper ("Cu"). To date, over 1,900 tonnes of copper
concentrate has been produced, which is being sold to Alecto's
offtake partner Fujax Minerals and Energy Limited ("Fujax"). To
view a video of the operation, please use the following link:
http://www.alectominerals.com/investors/media.html
The Company continues to advance the acquisition of the Project
by way of a reverse takeover and is pleased to report that the
Competent Persons Report ("CPR") on Alecto's African assets and the
producing Mowana mine has now been completed by Wardell Armstrong
International, representing an important milestone towards the
publication of the admission document required to enable Alecto to
recommence trading on AIM.
The CPR reports a current resource of circa 172Mt at 0.84% Cu,
of which 26Mt sits within two existing pre-stripped 350 metre-deep
pits. These pits represent the main areas of current operation.
Allowing for an element of overlap in the original modelling on
which the CPR is based, the Company estimates the resource at 162Mt
at 0.84% Cu (equating to 481kt Cu in the Measured and Indicated
categories and a732 kt Cu in the Inferred). The Company intends to
ramp up to an annualised rate of 12,000 tonnes Cu in Q3 2017.
Production costs are expected to average US$1.5/ lb over the mine
life based on an average metallurgical recovery of 91%. The CPR
reports an NPV of US$87.5 million for the initial 12,000 tonnes Cu
production scenario based on an average copper price of US$2.8/ lb
at a discount rate of 10%.
In tandem with its current mining activities, the Company
intends to undertake additional test work over the coming months to
finalise its decision on the installation of a Dense Media
Separation ("DMS") unit at the Project. If pursued, this technology
is anticipated to facilitate a <100% increase in throughput to
2.6Mtpa for 23,000 tonnes Cu by Q3 2018, which will dramatically
enhance the mine economics and increase the Project's NPV to US$245
million. As announced in December, the Company has conditional
funding for a DMS with Fujax and NHI of US$20m. Additional upside
potentially exists by developing an underground operation in the
future, subject to studies, to access the rest of the resource,
which is located down dip and along strike from the open pits
currently being mined. An underground operation has the potential
to increase the life of mine to 20 years.
The full CPR is available to view via the Company's website
at:
http://www.alectominerals.com/investors/documents.html
The Company's current expectations are that an admission
document will be published in early June 2017, which would mean a
target date for the general meeting and completion before the end
of June 2017.
Mark Jones, CEO of Alecto, commented, "Mowana is now a full-time
copper production operation and we look forward to gaining
ownership of the Project subject to shareholder approval at which
point, we believe, our company will benefit from a significant
value re-rating. Once effected, we will have taken control of a
significant asset which has been subject to more than US$150
million of investment in the past for an acquisition price of
approximately US$10 million.
"We are delighted that the CPR demonstrates the compelling
economics of our project even without the installation of a DMS,
now that the asset is unencumbered by debt. Even better is that it
starts to show the tremendous potential upside available using
modern techniques identified by our experienced industry partners.
As shareholders can see from our video, there is a hive of activity
on site, and having already delivered on our stated operation
objective, we look forward to providing further updates in the
coming weeks."
Competent Persons Statement
The information in this announcement that relates to the CPR is
based on information compiled by Dr Phil Newall, Managing Director
of Wardell Armstrong International, who is a Fellow of the
Institute of Materials, Minerals and Mining and Chartered
Engineer.
Dr. Newall has sufficient experience, relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking, to qualify as a Competent Person
as defined in the Note for Mining and Oil & Gas Companies which
form part of the AIM Rules for Companies. Dr. Newall has reviewed
this announcement and consents to the inclusion in the announcement
of the matters based on his information in the form and context in
which it appears.
**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 Page
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014.
Notes to editors:
Alecto Minerals plc is an African focused, copper and gold
exploration and development company quoted on AIM, with a
prospective copper project in Botswana in production, gold
exploration projects in Mali, Burkina Faso and Mauritania and a
development project with near-term gold production in Zambia.
In Botswana, the Company is, subject , inter alia, to funding
and shareholder approval, looking to acquire a 60% interest in the
Mowana Copper Mine, a producing copper mine and plant. Alecto has
also agreed a 10-year management contract for Mowana with its
partners and will receive management fees equal to 1.5% of
revenue.
In Zambia, the historical Matala and Dunrobin gold mines have,
in aggregate, a 760,000oz 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 Company has secured a number of joint-venture
agreements, in-line with its strategy to retain exposure to the
value in its African gold exploration portfolio for little or no
cost; the Kossanto East project, which has an 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, is
under a joint venture agreement with Ashanti Gold Corp; the
Kossanto West Project is under a joint venture with Randgold
Resources Limited; and the 250 sq. km. Karan gold project in
southern Mali is under joint venture with Cora Gold Limited.
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
UPDDMGMKKMFGNZM
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May 12, 2017 02:00 ET (06:00 GMT)
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