TIDMALO
RNS Number : 9856X
Alecto Minerals PLC
12 May 2016
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Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Mining
12 May 2016
Alecto Minerals plc ('Alecto' or the 'Company')
Joint Venture with Cora Gold for the
Advancement of the Karan Gold Project in Southern Mali
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base
metal exploration and development company, is delighted to announce
that its wholly owned subsidiary, Newmines Holdings Limited
('Newmines'), has entered into an option and joint venture
agreement (the 'Joint Venture' or 'JV') with Cora Gold Limited
('Cora Gold') for the exploration and development of the group's
250 km(2) Karan Gold Project in southern Mali ('Karan'). Cora Gold
is a wholly owned subsidiary of Kola Gold Limited ('Kola Gold'), an
exploration and development company, which has an existing
portfolio of gold projects in Mali and the Republic of Congo,
including certain gold permits which are contiguous to Karan.
Highlights:
-- The Joint Venture is in line with Alecto's strategy to retain
exposure to potential upside generated from its African gold
exploration portfolio whilst minimising expenditure
-- Cora Gold will solely fund all exploration and development
costs up to and including the completion initially of a scoping
study ('Scoping Study') and ultimately a Bankable Feasibility Study
('BFS')
-- Cora Gold will earn an interest of 65% in the Karan JV by
solely funding exploration expenditure until completion of a
Scoping Study and will earn a further 15% interest by solely
funding exploration expenditure until completion of a BFS
-- Accordingly, following completion of the BFS, Cora Gold will
have earned, in aggregate, an 80% interest in the Karan JV, at
which point Alecto may elect to either participate in future
funding on a pro rata basis and retain its 20% interest, or decline
the right to provide future funding and relinquish its remaining
interest, such that Cora would then own 100% of the Karan JV
-- Alecto will retain a 2% Net Smelter Return ('NSR') interest
from any commercial production from the Karan permit area
-- During the first 5 years of commercial production, Cora Gold
will have the right to purchase the 2% NSR from Alecto for the sum
of US$3m in cash
-- The Karan permit will continue to be held by Newmines until
such time as a new Joint Venture operating company ('NewCo') is
established, at which point the parties will agree a mutually
acceptable shareholders agreement
-- On formation of NewCo, Newmines will transfer the then
relevant permit(s) to NewCo, with the JV partners holding 90%, held
in the same proportion as their respective interests in the JV, and
the Malian Government expected to hold 10% in accordance with the
convention de recherché in respect of Karan
-- An initial work programme, led by the Cora Gold team, has
already begun at Karan and includes geochemical and termite mound
sampling, mapping of recently discovered gold occurrences and
compilation of a substantial historical exploration database that
includes approximately 12,000 metres of reverse circulation ('RC')
and rotary air blast ('RAB') drilling, trenching and pitting
Alecto's CEO, Mark Jones, commented:
"This JV agreement with Cora Gold, in respect of our expansive
250 km(2) Karan permit in Mali, sees us deliver on our promise to
shareholders to maintain exposure to any significant discoveries
made across our West African gold exploration portfolio, whilst
minimising the impact on our balance sheet, such that we can
concentrate our efforts on bringing the group's Matala gold project
in Zambia into commercial production at the earliest
opportunity.
"Cora Gold is a natural JV partner for Alecto, owning adjoining
permits to the south of the Karan permit. Cora Gold's management
and technical staff have significant experience in finding and
developing successful gold projects, both in Mali and across the
wider region, and we look forward to them contributing their
expertise on the ground at Karan."
Figure 1: Regional map showing the Karan Permit and proximity to
other major gold projects (Please see PDF)
Principal terms of the Joint Venture
Alecto, through its wholly owned subsidiary Newmines, and Cora
Gold have entered into an option and joint venture agreement (the
'Joint Venture Agreement') in respect of the group's Karan permit
in Mali.
Under the terms of the Joint Venture Agreement, Cora Gold will
be solely responsible for funding exploration and development
activities on the Karan permit up to the completion of initially a
Scoping Study and ultimately a BFS. Cora Gold will earn-in for an
interest of 65% by funding activities up to and including the
completion of a Scoping Study, and will subsequently earn an
additional 15% interest on completion of a BFS, taking Cora Gold's
total potential interest to, in aggregate, 80%.
On completion of a future BFS, all costs will thereafter be
split between the JV parties in accordance with their respective
interests in the JV. Should Alecto elect not to contribute any
future funding at that point, it will then relinquish its remaining
20% interest to Cora Gold and Alecto will retain no interest in
Karan save for a 2% NSR from future commercial production. Cora
Gold has been granted, for the first five year period of commercial
production, an option to purchase, for cash, the 2% NSR for a sum
of US$3m.
Cora Gold shall be appointed as Manager of the JV, with overall
management responsibility for operations during the earn-in
period.
Further information on Karan
The Karan exploration permit covers 250 km(2) and is located in
the southern Mali Birimian greenstone belt, two hours south-west of
the capital Bamako, in the Siguiri Basin.
The permit geology comprises a thick sequence of thinly bedded
and weakly metamorphosed Birimian rocks of green schist facies,
argillite, siltstone and sandstone. The local structural framework
has been interpreted from aerial magnetic survey data (ECL-Kevron,
2002) (see figure 2). Interpretation of the historical survey data
highlights a north-westerly oriented structure striking diagonally
across the centre of the permit. This feature is intersected by
northeast-trending and cross-cutting east-west faults.
More recent exploration work on the project has included RC and
RAB drilling by African Mining & Exploration plc, lag, bulk
leach extractable gold ('BLEG') and stream sediment sampling by
Newmont Mining Corporation and various regional mapping and
geochemical sampling campaigns. Several vast areas of historical
and active artisanal mining activity parallel to the north-westerly
oriented structure, and new areas of mineralisation proving
economic for artisanal miners are constantly being discovered.
Figure 2: Karan Permit aerial magnetic survey showing artisanal
mining locations and interpreted north-westerly oriented structure
(Please see PDF)
The Cora exploration team has already completed a short
programme of detailed (1:2,000) mapping around the peripheries of
the artisanal mining sites, and collected circa 500 termite samples
for analysis to provide an indication of the distribution of
possible primary sources at the south-east end of the principal
structure. The Company will provide further updates on exploration
activities and results from the JV as and when appropriate.
About Cora Gold
Cora Gold is a wholly owned subsidiary of Kola Gold, a
privately-owned, Africa-focused exploration and development
company, whose objective is to acquire gold exploration projects in
the highly prospective gold belts of west and central Africa and
use its exploration and development experience to generate
substantial stakeholder value through greenfield discoveries. The
focus of Kola Gold, through its various subsidiaries, is on
developing a diversified portfolio of gold projects in the highly
prospective Birimian belts in Mali and the essentially unexplored
Mayombe Gold Belt in the Republic of Congo (Brazzaville).
**S**
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 focused, 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 historic 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 East project 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. This
is under a co-operation agreement with ASX listed Desert Gold Inc.
to evaluate the potential to jointly develop each company's
neighbouring projects into production. The Kossanto West Project is
under a joint venture with Randgold Resources 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.
END
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