Alecto Minerals has entered into a binding agreement to sell its interest in its non-core Kossanto East gold project in western Mali to Ashanti Gold Corp for C$1 million.

Following completion of the sale, Ashanti will acquire full ownership of Kossanto East and Alecto Minerals, which is focused on gold exploration and base metals development, will retain a 1.5% net smelter return (NSR).

Ashanti will have the right to purchase the NSR, in whole or in part, by paying US$100 000 for each 0.1% (up to a maximum of $1.5 million) to Alecto.

Ashanti currently holds an option to acquire a 65% interest in Kossanto East, as part of the joint venture partnership finalised with Alecto Minerals in November 2016. This joint venture agreement will be terminated upon completion of the current sale agreement.

The funds raised from this disposal will be used to support Alecto Minerals’ planned acquisition of the Mowana copper mine in Botswana by providing working capital to continue operations at the mine and for the company’s general corporate purposes.

The board remains committed to completing the acquisition of the Mowana copper mine and seeking re-admission of the enlarged group to trading on AIM.

“Our primary focus is on acquiring the Mowana copper mine in Botswana, which is a highly valuable and commercially attractive asset that has the potential to transform Alecto into cash generative mining company,” says Alecto Minerals CEO Mark Jones.

“Accordingly, we are delighted to have agreed this sale agreement of Kossanto East to Ashanti, which serves to strengthen our current cash position and support the acquisition of Mowana whilst also retaining exposure to potential further upside from our 1.5% NSR option.”

“We look forward to following Ashanti’s progress as they continue to prove up the resource potential of Kossanto East and will continue to keep our shareholders updated with developments relating to our planned acquisition of Mowana and subsequent re-listing on AIM.”