Zambia – Alecto Minerals, the AIM-listed gold and base metals exploration company focused on West and East Africa, has acquired the historic Matala and Dunrobin gold mines in Zambia from owner Luiri, which represents a significant step in pursuit of its strategy of becoming a gold producer in the near to mid-term.
In addition to Matala and Dunrobin, the project also holds exploration targets, Chosa and Shadreck, within a single 32km2 large scale 25 year renewable mining licence initially granted by the Ministry of Mines in Zambia in 2003 and reinstated in December 2014.
Alecto has acquired the project for an aggregate consideration of £1.54 million, to be satisfied through the issue of 943.75 million new ordinary shares of 0.01p each in Alecto, £100 000 in cash and £307 500 as deferred consideration to the vendors C3W and CNG Trust.
Alecto has conditionally raised £650 000 through a placing with the net proceeds being used to fund the cash element of the acquisition, to advance Matala and the company’s proposed joint venture project with Desert Gold, in Mali, and to provide near term working capital.
Pursuant to the terms of the acquisition, Alecto has agreed to issue of $800 000 in convertible loan notes to C3W in respect of an existing Luiri loan due to C3W.
“The project has excellent potential to deliver production in the near-to-mid-term considering the presence of significant and advanced in-situ JORC-compliant resources of 760 000 oz of gold, a mining licence and associated environmental permit,” says Alecto CEO Mark Jones.
“An updated internal scoping study demonstrates the robust economics achievable through production even at today’s depressed market prices, with low initial capital cost required to start generating cash flow.
“The acquisition is the result of over a year of project assessments, which has seen our attention firmly focused on rationalising and monetising our existing portfolio, whilst pursuing opportunities to become a gold producer in the near to mid-term,” says Jones.