LONDON (Alliance News) - Alecto Minerals PLC on Monday said it has struck a deal to acquire the Matala and Dunrobin Gold Mines in Zambia in cash and shares and said it will launch a GBP650,000 placing.
Alecto said the gold mines acquired have good potential to be developed to production in the near to medium term. The two mines have an aggregate 760,000 ounces of gold in place, according to resource estimates, at an average grade of 2.3 grams per tonne.
It will pay a total of GBP1.5 million to acquire the assets, to be covered by the issue of 943.8 million shares, GBP100,000 in cash and a deferred consideration of GBP307,500.
In addition, Alecto will raise GBP650,000 via a placing to fund the cash element of the acquisition and back work at the projects, plus its proposed joint venture in Mali. It has issued 812.5 million shares at 0.08 pence per share. Shares in Alecto were down 29% to 0.0849p on Monday morning, one of the worst performers in the AIM All-Share.
Alecto added that, after completion of the deal, Gerald Chapman will become non-executive chairman of the company.
"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," said Mark Jones, Alecto's chief executive.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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