ALO.L Regulatory News (ALO)

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

9 March 2015

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

Strategic Co-operation Agreement signed with Desert Gold Ventures Inc. to develop the Kossanto East Gold Project and Farabantourou Gold Permit in Mali towards potential production

Alecto Minerals (AIM: ALO), the AIM quoted mineral exploration company focussed on West and East Africa, is pleased to announce that it has signed a co-operation agreement ('the Agreement') with Desert Gold Ventures Inc. ('Desert Gold') (TSX.V: DAU), a TSX.V quoted mineral exploration company and titleholder of the Farabantourou Gold Permit ('Farabantourou') which is situated adjacent to Alecto's Kossanto East Gold Project ('Kossanto East') in Mali, with a view to jointly developing both deposits to bring them into potential production. The Kossanto East project is comprised of two deposits shown as GRB East and GRB West in Figure 1.

Highlights:

· Delivering on Alecto's strategy to work closely with owners of similarly sized gold projects within a 10km radius of Kossanto East which can potentially be developed collectively towards production

· The companies will pool their respective resources and expertise to assess the potential for developing both deposits into production through a best endeavours and cost-efficient collaborative effort

· Combined, Farabantourou and Kossanto East have a total estimated resource of over 365,000 oz Au (at a 0.5g/t Au cut-off)

o Further to a September 2014 filing, the Barani East deposit within Farabantourou has an NI 43-101 compliant inferred resource estimate (at a 0.5g/t Au cut-off) of 73,175 oz Au grading at 2.15g/t Au and an NI 43-101 compliant indicated resource estimate (at a 0.5g/t Au cut-off) of 45,268 oz Au grading at 1.99g/t Au

· Alecto has a JORC code compliant inferred resource estimate of 247,000 oz Au grading at 1.14g/t Au at Kossanto East (at a 0.5g/t Au cut-off). Both projects fall within a potential 10km trucking radius from a central location

· Both companies have other targets within their respective permit boundaries which could provide additional tonnage for a collaborative processing plant

o Upside potential is currently recognised at Alecto's Kossanto West Gold Project ('Kossanto West'), which is immediately to the west of the Kossanto East resource

Alecto's CEO, Mark Jones, commented:

"With a combined estimated indicated and inferred resource of over 365,000 oz Au and falling within a 10km radius of each other, we believe there is significant scope to develop the Kossanto East and Barani East deposits into a commercial mining opportunity. Accordingly, working in collaboration via the sharing of information and resources with Desert Gold marks a significant step towards achieving this goal.

"We have already had preliminary discussions with potential funding partners for this venture and, whilst such discussions remain at an early stage, the initial interest has been highly positive. We look forward to working with Desert Gold during 2015 and we hope that this Agreement will lead to a strong and productive working relationship going forwards as we seek to bring both deposits into potential production."

Desert Gold's President and CEO, Roeland van Kerckhoven, commented:

"Our collaboration with Alecto should enable both companies to benefit from shared knowledge and economies of scale and thereby create shareholder value more quickly. We have already filed an NI 43-101 technical report for our Barani East deposit and it is only natural that we should now look at bulking up the resource tonnage with the concomitant lower unit processing costs. We are excited to be working alongside Alecto on this collaboration as each party brings much to the table in terms of experience, resource ounces and significant further exploration upside potential."

Further information on the Agreement

Figure 1: Map showing Alecto's Farikounda permit which contains the Kossanto East project (consisting of GRB East and GRB West) and Desert Gold's Farabantourou permit which contains the Barani East deposit

The Agreement will enable Alecto and Desert Gold to evaluate how capital expenditure can potentially be reduced via joint development activities, with the ultimate goal of bringing both Kossanto East and Barani East into production. It has been agreed that all options should be reviewed; from the possibility of a single processing plant that processes ore from each deposit through to further asset or project level activity.

Combined, the current known indicated and inferred resource estimates for Kossanto East and Farabantourou are, in aggregate, over 365,000 oz Au at a cut-off grade of 0.5g/t Au. Within the respective permits, both companies have additional exploration targets which, subject to funding, could add to the size of the existing resource and hence the size of any joint venture project. 

In addition, within the same 10km trucking radius, outlined in Figure 1, there are further deposits, owned by third party companies which could, subject to appropriate agreements being negotiated, potentially bring the total known resources for the project to over 500,000 oz Au. Alecto and Desert Gold will continue discussions with such companies with a view to expanding the co-operation concept with the potential to significantly increase the size of their collaborative project.

The Agreement sets out the conditions for the companies to jointly develop a scoping study for the development of Farabantourou and Kossanto East, which, if positive, will then pave the way for a more formal agreement. . Further announcements will be made as appropriate going forwards.

Further information on Kossanto East

Kossanto East represents approximately one-third of the Kossanto Gold Project but has been the main focus of our exploration activities. During the 2013/14 field season, Alecto increased the JORC compliant inferred resource estimate at Kossanto East by 131% to 247,000 oz Au at a cut-off grade of 0.5g/t Au (Gourbassi East: 3,080,000 tonnes @ 1.27 g/t for 126,000oz Au and Gourbassi West: 3,638,000 tonnes @ 1.03 g/t for 121,000 oz Au) since its acquisition in October 2013.

The inferred resource estimate, modelled by Wardell Armstrong International, falls within two shallow pit shells that are favourable to low-cost open cast mining. Additionally, preliminary metallurgical work indicated that the mineralisation has the potential to be amenable to cyanide leaching, which may provide for a low-cost production scenario.

Kossanto West is not currently included in the Agreement, but represents further upside potential in that, if a processing plant is established at Kossanto East then ore from any resource defined at Kossanto West could potentially be trucked to the plant with distances not exceeding 20km.

Further information on Farabantourou

Geologically, Farabantourou straddles the well-known Senegal-Mali-Shear-Zone (SMSZ) along which the Sadiola, Yatella and the Loulo-Gountoko mines are situated. The SMSZ is recognised as the principal geological feature controlling the mineralisation in West Mali.

Exploration at Farabantourou has identified several zones of mineralisation with the focus to date being on the Barani East deposit. Mineralisation at Barani East is hosted in a fault/shear zone, proximal to the SMSZ. While the Barani East deposit is presently estimated over a strike length of 400m, to a depth of 220m, the mineralisation may be open at depth.

As identified in the NI 43-101 technical report issued by Minxcon (Pty) Ltd in September 2014, there is further exploration upside at Farabantourou which could significantly increase the resource present including, inter alia:

· At Barani East there is potential to further define the resource by exploring along the strike extension of the fault, to the northeast, over a strike of approximately 3km;

· At Keniegoulou the possibility of extending the target along strike to approximately 2km exists. The first 14 lines of drilling all intersected mineralisation - a NNW trend is observed along an interpreted fault;

· At Dambamba it is possible to increase the overall target strike extent to 2.5km to the south along the interpreted fault line as it is postulated; and

· At Kousilli the current drilling in this area intersected mineralisation in only two of the four fence lines. However, if the drilling is overlain by the geochemical anomalies including the interpretation of the Induced Polarisation ('IP') and resistivity surveys, two NE trending targets may be postulated.

Review of Information

The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves has been reviewed by Michael Ware, who is the Company's consultant and a Fellow of the Australasian Institute of Mining and Metallurgy.

Michael Ware has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking and is a qualified person as defined in the AIM Rules for Companies. Michael Ware has reviewed this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which they appear.

Statements in this announcement, other than historical facts, that relate to exploration activities and mining potential are forward-looking statements. Although Desert Gold and Alecto believe that the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements should not in any way be construed as guarantees of future performance. Factors that could cause developments to differ materially from those expressed include: exploration results; technical analysis; and lack of availability of the necessary development capital. Each company is subject to the specific risks inherent in the exploration and mining business and to general economic and business conditions in the countries in which they operate.

**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 owns two prospective gold exploration licences in Ethiopia, 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.