ALO.L Regulatory News (ALO)

Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: Exploration & Development

18 December 2014

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

Operational update

Alecto Minerals (AIM: ALO), the AIM quoted mineral exploration company focussed on West and East Africa, is pleased to provide an update on its operational, exploration and corporate activities.

Alecto is a gold and base metals exploration company with a focus on Africa. It currently operates in four countries across the continent with projects at varying levels of the exploration-development pipeline. (See figure 1.)

Highlights:

· Alecto's in-house exploration team is currently focussed on the recently acquired Kerboulé Gold Project ('Kerboulé') in Burkina Faso where the Company believes it can rapidly enhance value at low cost

· Management is in early stage discussions regarding a potential joint venture for the advancement of the Kossanto West Gold Project in west Mali. Whilst these discussions are on-going, the Company will not undertake further exploration activities at Kossanto

· Preliminary project assessment commenced for the collaborative development of Alecto's 247,000 oz Au Kossanto East resource area within a larger zone which hosts, in aggregate, a >500,000 oz Au resource

· Recent fieldwork has led to numerous new discoveries at the Karan Project in southern Mali, which has seen a large-scale increase in artisanal mining activities

- Significant gold mineralisation has been identified along lithological contacts outside of the areas drill tested by the project's previous owners

· In Ethiopia, scout drilling, mapping, stream sediment, soil sampling and trenching by Centamin continues to meet the joint venture targets and enhance the understanding of these expansive high-potential projects

· A 9 km long gold-in-soil anomaly that tracks the Babizenda shear zone has been discovered at Aysid-Metekel in Ethiopia

Further information

The Company continues to be focused on establishing joint ventures for the advancement or early monetisation of opportunities across its portfolio where appropriate. This strategy is being executed whilst acquiring new projects, such as Kerboulé, where the Company believes it can rapidly enhance value at low cost. Alecto's rationale for this strategy is that whilst market conditions remain difficult, the responsible approach is to establish effective working relationships with mining companies that have both strong balance sheets and the necessary expertise to manage these types of projects. Effective joint ventures provide shareholders with exploration upside without financial exposure.

Key to creating JV opportunities is the acquisition and advancement of projects to a position where a compelling and cogent case can be made to prospective partners that the potential can meet internal hurdle rates necessary for investment. Alecto has shown that it has such a capability; in-house exploration teams with reverse air blast ('RAB') and auger drilling capacity at the Kossanto Project in west Mali have demonstrated that Alecto can advance projects at low cost. The 2013/14 work programme, including RAB and reverse circulation ('RC') drilling, increased the JORC code compliant inferred resource for Kossanto East at a direct drill cost of less than US$5.00 per ounce.

Accordingly, the Board continues to be focused on developing its assets through the roll out of the joint venture model across its portfolio where appropriate together with raising further funds, inter alia, to finance ongoing exploration work, including the 2014/15 field season.

Mali - Kossanto Project

The Kossanto Project was the main operational focus for the 2013/14 season which saw resource drilling at Kossanto East, and scout drilling, soil sampling and mapping at the more expansive Kossanto West area.

Kossanto East

The aim of the 2013/14 drilling season at Kossanto East was to expand on the pre-existing independent JORC code compliant inferred resource estimate, which the Company successfully increased by 131% to 247,000 oz Au following its acquisition in October 2013. The Inferred resource, modelled by Wardell Armstrong International, falls within a shallow pit shell which is favourable to low-cost open cast mining. Additionally, preliminary metallurgical work indicated that the gold has the potential to be amenable to cyanide leaching, which further enhances the potential for a low-cost and economically viable production scenario.

The immediate area around Kossanto East is host to a number of relatively small shallow gold deposits with clean metallurgy that are typically between 100,000 - 150,000 oz Au each with grades between 1.3 and 1.7 g/t Au. At current gold prices these individual deposits are not large enough to attract investment for further development, however, their close proximity, being within a 10km radius of Kossanto East, mean that together they present an opportunity to mine a resource of over 500,000 oz Au and a preliminary project assessment at this level presents attractive economics. During the break in fieldwork, due to the rainy season, the Company initiated discussions with the permit holders that neighbour Kossanto East.

In the near term the Company intends to continue discussions with owners of the neighbouring permits to investigate the feasibility of bringing the larger resource area into production either through a collaborative approach or through potential corporate activity.

Kossanto West

At Kossanto West the Company identified numerous zones of high-grade gold mineralisation across a vast and relatively unexplored area to the west of its tenement. Initially indicated by a gold-rush involving several thousand artisanal miners, RC scout drilling intercepted quartz veins that yielded up to 2 metres @ 13.54 g/t Au from 7 metres and wider halos including 23 metres @ 1.35 g/t Au from 34 metres. Elsewhere grab and channel sampling, of large open pits crudely mined by artisanal workers, returned values of 26 metres @ 1.43 g/t Au and 20 metres @ 1.89 g/t Au, and included 2 metres @ 7.18 g/t Au and 1.5 metres @ 6.66 g/t Au. Towards the end of the 2013/14 field season Alecto's own RAB rig intercepted 6 metres @ 4.23 g/t Au from 9 metres, 12 metres @ 3.34 g/t Au from 6 metres and 6 metres @ 7.84 g/t Au from 24 metres.

Following the successful 2013/14 field season and the highly encouraging results achieved, Alecto received a number of direct approaches from mid-tier and major mining companies interested in pursuing joint venture opportunities for the development of Kossanto West. Following such expressions of interest and in accordance with the Company's strategy, the Company is in early stage discussions with regards to a potential joint venture for the advancement of Kosasanto West as the Board believes that this would secure shareholder's interest in what has the potential to be a multi-million ounce discovery without the burden of financing further early-stage exploration. There can be no certainty that these discussions will be successful and whilst discussions are on-going there will be a pause in field operations at Kossanto.

Mali - Karan Project

The 250 sq. km. Karan gold project in southern Mali was acquired from Savannah Resources plc in March 2014 and permit renewals were received in September 2014. The project area has been the focus of substantial increased artisanal mining activity over recent months and the Company has recently focused on identifying and mapping the source of the mined gold.

Recent fieldwork, including mapping and grab sampling, has confirmed that there has been significant gold recovery along the lithological contacts at Karan and significantly these are areas that were never drill tested by the previous owners of the permit. Channel sampling of the hanging wall is planned and further pit sampling in the newly identified areas is expected to provide valuable information about the continuation of mineralisation at depth. Field observations confirm the presence of coarse gold, which has the potential to provide positive economics for low-cost gravity recovery.

Ethiopia

Centamin plc ('Centamin') has completed 25 diamond drill scouting holes at Wayu Boda and continue to conduct surface sampling, mapping and trenching across the Wayu Boda and Aysid-Metekel licences. Initial positive results led Centamin to reconfirm their funding commitments for both licences during 2014 and work is continuing.

Wayu Boda

Whilst the diamond drilling at Wayu Boda has not yet returned significant assay results to report, Centamin has completed extensive additional trenching, sampling, and mapping leading them to commit to funding further detailed exploration work in order to refine future drilling targets.

Aysid-Metekel

Mapping, stream sediment sampling, soil and rock chip sampling across 1,464 sq. km. licence area has been completed leading to the identification and enhanced understanding of the prospective Babidzena shear zone in the west and the Gorshi shear zone in the east. MIDROC, a private company who own and operate the Lega Dembi gold mine in Ethiopia, are currently conducting a feasibility study on their 1M oz Au discovery on the Metekel Exploration licence in the Gorshi shear zone close to Alecto's Aysid Metekel licence.

Two NW striking gold anomalies have been identified with gold showing in relationship with arsenic and tellurium. A 9 km long gold-in-soil anomaly (>50 ppb) that tracks the Babizenda shear zone is currently open to the east.

Given the expansive nature of the two licences Alecto does not expect significant results until at least the next phase of prospecting work is complete.

Mauritania - Wad Amour

The Company has been active in seeking a joint venture partner for its Wad Amour iron oxide copper gold ('IOCG') project in Mauritania. The Wad Amour and Chegar permits were renewed in August 2014 and Alecto has received a number of requests for further information about the project. The Board believes that the joint venture model is the most suitable and cost-effective way to progress this expansive project. A positive outlook for copper provides the Company with the opportunity to find the best possible partner.

Burkina Faso - Kerboulé Gold Project

Alecto completed the acquisition of the 399.5 sq. km. Kerboulé Gold Project located in the highly prospective Birrimian-age Djibo gold belt in northern Burkina Faso from Kaizen Discovery Inc. in November 2014 and since completion, has been active compiling and analysing the substantial database for the project. In addition to Kerboulé the Company acquired a well equipped camp and core shed, an office in Ouagadougou, a fleet of vehicles and an auger drilling rig together with new data from previously unpublished geochemical investigations and geophysics surveys.

Kerboulé is now the main operational focus for Alecto in part due to its advanced nature and given the on-going discussions with partners for developing the other projects in the portfolio.

The aim of the current work programme is to rapidly model an internal resource estimate (non-JORC) based on existing drill data and the definition of further targets for drilling, subject to funding, in 2015 with the aim of expanding on this resource. Geochemical investigations have indicated that extensions to the known areas of mineralisation exist that were not drill-tested by the previous owners of the project and this approach will give the best opportunity for a JORC code compliant resource in H1 2015. Additionally, the Company is reviewing metallurgical test work to establish a timeline for potential production scenarios at Kerboulé as well as other opportunities for developing the project.

**ENDS**

For further information, please visit www.alectominerals.com or contact:

Notes to editors:

Alecto Minerals plc is an African focussed, gold and base metal exploration and development company quoted on AIM with exploration projects in Mali, Ethiopia, Mauritania and Burkina Faso.

In Mali, the Kossanto Project has a current independent inferred JORC code compliant resource estimate of 6.72Mt grading at 1.14g/t Au for an aggregate of 247,000 oz Au with a cut-off grade of 0.5g/t Au at Kossanto East. The Kossanto Project is located in the centre of the Kenieba inlier in western Mali. The Kenieba inlier is a block of ancient greenstones and granites hosting many significant gold deposits in Senegal and Mali, making it one of the most important gold regions in Africa.

The Kerboulé Project, located in the highly prospective Birrimian-age Djibo gold belt in northern Burkina Faso, is ideally positioned for the definition of a preliminary JORC resource estimate, as well as on-going resource expansion, and accordingly is the near term focus of the Company to provide the basis for commencing a preliminary economic assessment.

Alecto also has a joint venture with Centamin plc over two prospective gold exploration licences in Ethiopia which sees Alecto retain exposure to these assets with no capital expenditure obligations, as well as the wholly owned Wad Amour IOCG Project in Mauritania which is at an exploration stage.

Combined, these projects provide the Company with a strong, diversified portfolio with exciting exploration upside potential.