AIM-listed Alecto Minerals. which is focused on gold and base metals in Africa, says the Kossanto project has a JORC-code compliant mineral resource estimate of 247 000 oz gold with significant further upside potential.
The LOI envisages Ashanti having the right to earn-in for a 65 % interest in the project by completing a preliminary feasibility study (PFS) within a period of 36 months.
Should Ashanti not complete the PFS within the period, it may instead elect to pay, in cash, US$4 million to Alecto within 90 days of the end of the option period in order to satisfy the earn-in requirement.
Ashanti will be the operator of the project’s exploration and development programmes during the option period.
Upon completion of the earn-in, Ashanti and Alecto will form a joint venture and contribute proportionally to the project’s continuing exploration and development.
If either party’s interest falls below 10% then that party’s interest will convert to a 1.5% net smelter return royalty (NSR).
The other party shall then have the right, for a period of one year thereafter, to purchase the NSR by paying $100 000 for each 0.1% (up to a maximum of $1.5 million).
Moreover, entering into a binding agreement in due course will mark the completion of Alecto’s strategy to continue to participate in its exciting exploration portfolio in Mali.
Although, without further funding contributions in the medium term, the company would continue concentrate on its primary goal of becoming a gold producer in southern Africa.
Mark Jones, Alecto’s CEO, comments: “We are delighted to announce such a positive step to potentially expand the exploration and resource potential at our Kossanto East gold project in western Mali.”
“Kossanto East was the exploration focus for our field teams throughout the 2013-2015 work seasons, which culminated in the establishment of a JORC-code compliant mineral resource estimate of 247 000 oz gold,” he says.
In the prevailing gold price environment it is clear that there is a renewed interest in gold exploration, and the company’s proposed partnership with Ashanti will enable it to realise the full potential of Kossanto East.
With Alecto’s Gourbassi deposits open along strike and some excellent initial results from exploration targets such as Berola (15 m at 1.18 g/t Agold from surface) the company is confident that together with Ashant it will be able to build a larger mining play at this very exciting project area. In addition, the option remains to work with Desert Gold, should it serve the interests of all parties.
“This complements perfectly our existing joint venture with Randgold Resources at the neighbouring Kossanto West project, and our joint venture with Kola Gold at Karan in southern Mali. While these continue to create value, we will focus on bringing the Matala and Dunrobin gold projects in Zambia into production.”