ALO.L Regulatory News (ALO)

Alecto Energy plc / EPIC: ALO / Market: AIM / Sector: General Financial

21 April 2011

Alecto Energy plc ('Alecto' or 'the Company')

Award of Ghana Gold Licence

Alecto Energy plc, the AIM listed resource company, is pleased to announce that it has signed a Share Purchase Agreement ('the Agreement') with Eric Akwasi Appiah to acquire, by staged acquisition, 80% of the share capital of Rancho Ghana Limited ('the Target') which holds a 191.1 sq km gold exploration licence ('the Licence') in the highly prospective Ashanti Gold Belt in Ghana. 

Highlights

·; Acquisition is in line with Alecto's strategy to become a multi-commodity exploration and development company in West Africa

·; Preliminary work by independent consultants has highlighted multiple targets deemed worthy of further exploration

·; Ghana offers the Company a well established and prospective environment in which to operate

·; The Licence is located in close proximity to large producing mining majors Golden Star and Gold Fields

·; Intention to conduct preliminary exploratory work to delineate targets for further development

Alecto Executive Director Damian Conboy said, "The acquisition of this gold and base metal licence in Ghana is a significant step for Alecto as we focus on developing the Company as a multi-commodity exploration and development play in West Africa. Preliminary work at the Licence highlights the presence of five prospective targets that are worthy of further exploratory work and we look forward to developing our knowledge of the site over the coming months.

"With positive results from initial exploratory work at our Mauritanian gold and base metal licences, we are excited to be moving into Ghana, which is endowed with substantial mineral resources with a particular emphasis on gold, which accounts for approximately 95% of the country's total mining contribution at present. With this in mind, we are confident that the Licence provides us with exposure to a well established and increasingly active mining industry."

Under the terms of the Agreement, Alecto has agreed to acquire the Target for an initial consideration of £480,000 to be satisfied by a cash payment of £120,000 and the allotment of 9,917,355 new ordinary Alecto shares, equal to £360,000 at a volume weighted average share price of 3.63p for the 30 days ended 19 April 2011 ('the Initial Consideration Shares'). Following the completion of certain milestones, the Company will pay an additional £720,000 to be satisfied by a cash payment of £180,000 and the allotment of such number of new ordinary Alecto shares equal to £540,000 by reference to a volume weighted average share price for the 30 days prior to 10 November 2011. 

Application will be made for the Initial Consideration Shares, which will rank pari passu with the Company's existing ordinary shares in issue, to be admitted to trading on AIM. It is expected that admission will be effective and that dealings in the Initial Consideration Shares will commence on 23 May 2011.

The Licence, located 120 km from Accra, was identified following extensive field work and sampling by Via Mex Pty Ltd, an independent commercial consultancy with over 35 years experience in the sector. To date, five highly prospective initial targets have been identified, primarily in the southern part of the licence area. 

Area 1 appears prospective with meta sediments, consolidated gravels within the host rock and generational quartz veins at fracture/alteration zones. There is light cover, adjacent river light sand alluvial to 500mm and heavy wet gravels below containing quartz detritus. Importantly, Areas 2 and 3 have the same qualities as Area 1 confirming the consistency and extent of the strike. At Area 3, there is a minor increase in cover and surface expression is slightly more visible along approximately 7 km of strike.

Previous workings to date at Area 4, which is a stand alone prospect, highlight the area as being very prospective and with high probability. Although Area 4 has heavy cover and no visible surface expression, extensive pitting/shaft/costeaning to five metres deep was carried out in the 1980s by German prospectors. Ore body has been cut and driven and drift developed into the hill. The shafts are in good condition and are integrally safe with correct basic equipment although extensive clearing, identification and reopening of previous workings is required.

Area 5 is in the rainforest, heavily forested with deep cover and is therefore of low interest at this stage.

Importantly, Alecto's licences are located 70 km from substantial producing gold mines operated by mining majors Goldfields and Gold Star. Goldfields produced a total of 928,100 ounces ('oz') gold from its Ghanaian Tarkwa and Damang gold projects during 2010. Across the two prospects, the company has a Mineral Reserve of 12Moz. TSX listed Golden Star owns the Bogoso/Prestea mine that consists of mining and exploration concessions along the Ashanti Trend. In total the Bogoso/Prestea project covers a strike length of approximately 85 km. The total Proven Mineral Reserves at the project is 13.2Mt for a total of 2.67g/t for 1.14 Moz.

Alecto intends to develop and undertake an exploration programme at the Licence to include soil and rock chip sampling and some augering to strengthen the Company's understanding of the mineralisation and to delineate the most prospective targets worth of exploration.

**ENDS**

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