LONDON (Alliance News) - Alecto Minerals PLC said Friday it has enhanced its existing gold portfolio in Mali with the acquisition of the total issued share capital of Savannah Resources PLC subsidiary, NewMines Holdings Limited.
Aletco's existing gold portfolio is Mali includes its flagship Kossanto Gold Project, with the latest acquisition forming part of the company's strategy to boost its prospective African gold projects which have the potential to deliver shareholder value through exploration.
Savannah Resources' NewMines controls, through its wholly-owned subsidiary Tobon Tondo s.u.a.r.l., the prospective 250 square kilometre Karan gold project and the 16 square kilometre Diatissan gold project in western Mali.
The Karan Project is located in a proven gold producing region, in close proximity to significant gold resources, and both historical and current extensive artisanal mining activities underpin the likelihood of the presence of gold within the project's licence area. The project is at an advanced stage, with two of eight currently defined target areas, drill ready. Alecto has identified that Rotary Air Blast drilling would be ideal to advance its understanding of these target areas.
The purchase price of GBP250,000 is to be satisfied by the issue of 20,000,000 new shares in Alecto at 0.01 pence each at a price of 1.25 pence per share, increasing Savannah's effective shareholding in Alecto to 17.9%.
"The acquisition of the Karan Project bolsters our existing African gold portfolio... Our existing knowledge of the area, obtained from the management team's previous role in its development, will be highly beneficial and we have identified that RAB drilling, utilising our in-house equipment will best uncover the Karan Project's wider potential. In light of Mali having put its recent political challenges behind it, interest in Malian gold assets is now growing and JV opportunities on greenfield projects are improving," said Mark Jones, CEO at Alecto.
Savannah Resources said Alecto has an established operational capability in Mali, and is well positioned to evaluate the Projects, with the firms' Chief Executive David Archer adding, "The sale of these legacy assets streamlines our portfolio whilst providing us with an indirect interest in their potential upside. Alecto is very well placed to add value to these projects on the back of its in-country capabilities."
Savannah will now focus on progressing its prospective Jangamo Project. With a 1,812m drilling programme completed, a scoping review is currently underway to assess the potential scale and grade of the project.
Shares in Alecto were trading 2.61% higher Friday morning at 1.18 pence per share. Savannah shares were trading 12.09% lower at 6.80 pence per share.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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