Big picture - Why invest in Alecto Minerals PLC
Alecto Minerals PLC Snapshot
The Company has a clear vision: to rapidly become a gold producer in Africa. With this in mind, it is focused on capitalising on the near-to-mid-term production potential at the Matala and Durnobin Gold Mines in Zambia which combined hold advanced in-situ resources of 760,000 oz Au. The presence of a renewable 25 year Mining Licence and associated environmental permit is highly beneficial towards this goal.
The Zambian project is poised to generate cash flow, enabling the funding of the feasibility study of the Company’s wholly owned Kossanto East Gold project in Mali, which it plans to develop jointly with owners of neighbouring assets to deliver rapid production whilst benefitting from cost efficiencies.
In respect to the rest of its portfolio, which includes the 100% owned Kossanto West Gold Project in Mali and the Kerboulé Gold Project in Burkina Faso, the Company is currently holding discussions in respect to securing joint venture partners.
Kossanto East has been the exploration focus of Alecto Minerals since its acquisition in 2013. The project has an independent inferred resource estimate of 6.72Mt grading at 1.14 g/t for an aggregate of 247,000 ounces Au (at a cut-off grade of 0.5 g/t Au), reported in accordance with the guidelines of the JORC Code (2012) by Wardell Armstrong International in June 2013. This has been delineated across the Gourbassi East and West targets within this project.
Several other projects of a similar nature have been identified within 10km of the Kossanto East project area. By developing Kossanto East in conjunction with other deposits, the Company believes that it can deliver production faster and more economically, thereby delivering an important cash generative backbone to its businesses. With this in mind, in March 2013, the Company signed a cooperation agreement with Desert Gold Ventures (TSX.V: DAU) to explore the economics of bringing the Kossanto East project into production in collaboration with Desert’s Farabantourou project.
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Adjacent to the Kossanto East project is Alecto’s wholly owned 137 km2 Kossanto West exploration project, comprising the permits of Kobokoto East and Koussikoto. This expansive project area has recently undergone permit consolidation and renewals in order to maximise the exploration potential at what is considered to be one of the most prospective terrains in western Mali, allowing for exploration activities to continue to 2022.
Kossanto West has been subject to soil geochemical sampling, pitting, trenching and scout drilling since Alecto acquired the project in 2013 and the results have been extremely encouraging, demonstrating high-grade gold mineralisation (peak intercepts shown in Figure 1 below) over a significant area of the regionally significant Main Transcurrent Shear Zone (MTZ). The MTZ is considered to be one of the major controls on gold mineralisation in western Mali and eastern Senegal, and an important control at several major gold deposits such as Sabodala (3Moz - Teranga Gold), Massawa (3Moz - Randgold), Makabingui (1Moz - Bassari Resources), and Sadiola and Yatela. The area has been a centre for significant artisanal mining activity that has uncovered some previously unknown gold occurrences that also highlight the areas potential.
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The 399.5 sq. km. Kerboulé Gold Project is located in the highly prospective Birrimian-age Djibo gold belt in northern Burkina Faso. Kerboulé comprises two contiguous exploration permits, “Arae” and “Gassel-Manere” across the Djibo belt which are cross-cut by two known mineralised trends (the Inata and the Souma Trends). The permits are located 20-km along strike from Avocet’s Inata mine and their Souma deposit.
An advanced exploration project, the permits have been subject to extensive reconnaissance work and drilling. These activities, and artisanal mining, at Kerboulé have highlighted the presence of wide gold mineralisation with high grade shoots across the tenure as highlighted by long intercepts including 26 metres @ 2.37 g/t Au, 20 metres @ 2.39 g/t Au and 40 metres @ 1.94 g/t Au at Kerboulé South, and 38 metres @ 3.95 g/t Au, 29 metres @ 4.0 g/t Au and 5 metres @ 3.74 g/t Au at Kerboulé North. Drill results, including 1 metre @ 188.11 g/t Au, 2 metres @ 29.12 g/t Au, 1 metre @ 93.49 g/t Au and 1 metre @ 86.48 g/t Au, provide evidence of the bonanza grades present across the high-grade shoots.
On 27 April 2015 the Company announced the results of an independent internal resource estimate, completed by Wardell Armstrong International, within the Kerboulé-Yalema corridor (KY Trend) of 6.2Mt grading at 1.16 g/t Au for 230,758 oz Au (using a cut-off grade of 0.5 g/t). With mineralisation from surface and approximately 70% of the mineralisation contained within the oxide and transitional layers, this confirmed the potential of the project.
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The 250 km2 Karan gold project is situated in southern Mali, approximately 90 km from the Malian capital of Bamako. Situated close to the Niger River, the Karan permit has been host to significant artisanal mining activity in hard rock, eluvial and alluvial placers. Mineralised structures are associated with a major regional shear zone and the permit has the potential to host several deposits of various types of gold mineralisation. Work to date includes soil geochemistry, pitting, trenching and drilling, which have defined 8 large target areas, two of which are drill ready.
A Scoping Study for trial mining of alluvial gravels has been completed indicating that significant gold recovery could be achieved on the Karan permit which has the potential to advance exploration without recourse to the public markets.
Due to the expansive nature of the exploration project and the Company’s current focus on advancing nearer term production opportunities, the Board is inviting interested parties to discuss potential joint venture or partnership opportunities (for both hard rock exploration and potential alluvial production). A comprehensive database of previous exploration work is available, as well as advanced studies for the potential monetisation of the alluvial opportunity.
MATALA AND DUNROBIN
Alecto Minerals owns 100% of two historic gold mines, Matala and Dunrobin, and a number of exploration targets, Chosa and Shadreck, within a single 32km2 large scale 25 year renewable mining licence.
The Project, which is located in Zambia, has excellent potential to be developed into production in the near to mid term considering the presence of a renewable mining licence, an associated environmental permit, and an advanced JORC Code compliant resource estimate in the Measured, Indicated and Inferred categories resources of, in aggregate, 760,000 oz Au at an average grade of 2.3g/t Au. The Board believes that there is additional exploration potential at both Chosa and Shadreck, which are historic mines close to Dunrobin. Internal resource estimates for the combined targets, based on geophysics, trenching and over 7,000 metres of resource drilling, give 1,500,000 tonnes at an average grade of 2.6 g/t Au. Both are open at depth.
US$20 million has been invested previously in drilling and test work to date, culminating in a scoping study at the Matala deposit and a feasibility study on the Dunrobin deposit by Coffey Mining Pty Ltd in 2013.
Alecto has identified 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. An updated scoping study for Matala, completed by Alecto, indicates the potential to generate cash flows and strong economics at an assumed gold price of US$1,150 and a discount rate of 10 through an initial three year open pit operation at Matala. A summary of the findings follows:
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Alecto owns the 1,369 sq. km. Wad Amour IOCG Project in Mauritania. The Company completed a range of reconnaissance work including trenching, soil geochemistry and geophysical surveys, which have revealed significant potential for a high-grade Guelb Moghrein style iron oxide copper gold (‘IOCG’) deposit. The Company has defined two initial priority target areas comprising Chiron, where rock chip sampling has returned grades of up to 5.79% copper at surface, and Oued Amour, which has an 800m Cu anomaly and grab samples up to 1.2% Cu. In addition, two secondary targets, Tamourt and Gadel, have also been identified. The Board considers the Wad Amour project to be outside of its current focus, of near-term gold production, and is consequently inviting interested parties to tender their interest in acquiring or partnering on this project. A comprehensive database of historical exploration work is available.
In September 2015, Alecto disposed of its interest in the two Ethiopian exploration permits, Wayu Boda and Aysid Metekel, to Wame, a private Ethiopian mineral development company (see announcement dated 30 September 2015) on a deferred consideration basis.
Under the terms of the agreements, Wame will pay Alecto a deferred consideration in the form of a royalty [into perpetuity] of US$3 per JORC resource ounce of gold or gold equivalent discovered up to a maximum of US$1.0 million in respect of each of the licences. Accordingly, the maximum aggregate deferred consideration that could be receivable by the Company is US$2.0 million. Any deferred consideration ultimately received will be used to strengthen the Company’s then prevailing balance sheet.
The prospectivity of the Wayu Boda and Aysid Metekel licences was highlighted by the interest shown by Centamin Plc when they entered into an exploration joint venture agreement with Alecto in October 2013. The joint venture ended in February 2015 in accordance with the change in focus of Centamin outside of Ethiopia, and the Company believes that earnings on a deferred basis on JORC resource ounces discovered has the potential to deliver significant value to shareholders in the future.
Alecto Minerals owns and operates a Rotary Air Blast (RAB) drilling rig and a Landcruiser mounted auger-drilling rig in West Africa. It has been able to complete exploration activities at extremely low cost by maintaining the capability to complete scout drilling and detailed geochemical sampling at well below commercial rates, which has led to considerable exploration success with resource ounces added at its Malian assets at less than US$5 per ounce.
With the Company’s change in focus from grassroots exploration to gold production, Alecto is able to provide scout-drilling services to other companies in the region at very competitive rates. For further information or a quote for exploration services please contact [email protected]
Gerald Chapman is a qualified engineer with over 30 years’ experience in the mining sector with specific skills in contract mining and infrastructure build. As a Chairman of Digmin Gro Pty Ltd, a contract-mining group, Mr Chapman was involved in the process of reinstating the Matala and Dunrobin Project’s mining licence and conducting ground work over the last five years.
Chief Executive Officer
A graduate of the Camborne School of Mines, Mark is a mining engineer with over 30 years’ experience in mining production and associated businesses, 20 years of which have been spent in Africa. He has specific expertise in gold and base metals in Africa, Europe and the FSU. In his previous role as CEO of African Mining and Exploration plc, Mark oversaw the development of Kossanto and his strong understanding of the project, and the broader resource arena, is highly beneficial to the Company as it focusses on significantly increasing the existing JORC resource at the project. Previous positions also include CEO of Aurum Mining plc and Expert Explosives Ltd and Mark is currently a non-executive director of Tulpar Gold plc and Antracor Mining Ltd.
Dominic was awarded a Queen's commission from the Royal Military Academy Sandhurst, and served 8 years as a Regular Officer in the British Army retiring as a Captain. During a distinguished Army career he was involved in combat and service operations throughout the world, including Europe, North America, West Africa and the Middle East.
He is professionally trained in information and intelligence gathering and analysis and academically trained as a lawyer with a degree in Law from The University of Exeter. For over 15 years Dominic has worked throughout West Africa where he has forged strong bonds and close relationships. As one of the founding partners of Roc Resources, Dominic developed an alluvial gold opportunity in Mali which he managed for 2 years.
Prior to working in Mali, Dominic was Head of Business Development for the Government of Dubai, and took a leading role interfacing with African Producers for the UAE Government's "Masterplan for Diamonds" and enabling the Kimberley Process in Africa and the Middle East. Most recently as Country Manager for African Mining and Exploration (now Savannah Resources) Dominic progressed the Malian gold assets, including the Kossanto Gold Project, before they were vended to Alecto Minerals. Having spent 5 years living in Mali he has a thorough knowledge of the country and the opportunities it presents.
Toby Howell began his career in the Equities division at UBS Warburg in London and went on to help manage the investment division of Internet Business Group plc. Since then he has specialised in smaller companies’ corporate finance, undertaking transactions on the Official List and AIM as well as private equity transactions. He is a director of Blomfield Corporate Finance Limited, a subsidiary of Religare Hichens, Harrison Co. Toby David Howell is an officer in the Territorial Army and served on operations in Iraq during 2004.
Heytesbury Corporate is an independent financial consulting and corporate management firm based in London which provides company secretarial services to numerous AIM listed companies.
Mr. Ware has a B.Sc Geology from the University of New South Wales and has been instrumental in identifying, acquiring and developing mineral and resource assets across Asia, Africa, Middle East, South America, Australia and the Pacific. This has provided him with significant experience in numerous geological settings. Additionally, his strong experience covers a range of commodities including gold, platinum, base metals and industrial minerals and gemstones. Michael is a Fellow of the AusIMM and is a ‘Competent Person’ under the internationally recognised JORC code for reporting and publishing Exploration Results, Mineral Resource and Ore Reserve.
Shareholder Analysis as at 22nd July 2016.
Issued and Fully Paid Share Capital
4,459,814,850 ordinary shares of 0.01p each
Securities not in public hands
The percentage of securities not in public hands is 22%
% of issued
Paternoster Resources plc
Savannah Resources plc
*Gerald Chapman, Non-executive Chairman, is interested in 21.60% of the Company’s issued share capital as a result of his interests in CNG Trust and C3W Limited.
47 Charles Street,
Tel: +44 (0) 20 7907 9328
Fax: +44 (0) 20 7681 3861
Company Secretary and Registered office
Heytesbury Corporate LLP
47 Charles Street, London W1J 5EL
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
Beaufort Securities Limited
131 Finsbury Pavement
Solicitors to the Company
55 Gower Street
Auditors and Reporting Accountants
PKF Littlejohn LLP
1 Westferry Circus
London E14 4HD
Share Registrars Limited
Suite E, First Floor
9 Lion and Lamb Yard
Telephone: +44 1252 821390
Facsimile: +44 1252 719232
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