LONDON (Alliance News) - Alecto Minerals PLC shares jumped Monday morning after the company announced a partnership with major miner Randgold Resources PLC to jointly develop a gold mine in western Mali.
Alecto shares were up 23% to 0.0725 pence per share on Monday morning, whilst Randgold shares were up 3.0% to 5,459.30p after the FTSE 100 miner reported a positive set of full-year results on Monday.
Alecto said the joint venture agreement with Randgold will lead to the pair jointly developing Alecto's Kossanto West gold project in Mali.
Under the deal, Randgold will fully fund the costs of the project until a pre-feasibility study has been completed, acquiring a 65% stake in the project to leave Alecto with a 35% participating interest.
Once the pre-feasibility study has been completed, the cost of the project will be split to match each companies' stake.
The initial work programme, which includes further geological and mapping of Kossanto West with potential follow-up pitting and trenching and reconnaissance drilling, is expected to be undertaken by Randgold in the first 12 months.
Kossanto East, where Alecto is hoping to develop another operation with Desert Gold Inc, is not included in the venture with Randgold.
Randgold did not release a statement concerning the joint venture on Monday, but did report "one of the best years in the company's history" despite recording a large drop in profit in 2015 as lower gold prices hit. However, it provided a very positive outlook and also upped its dividend by 10%.
Randgold is expecting a large ramp-up in production during 2016, mainly driven by its three main mines based in Mali and the Democratic Republic of Congo.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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