Alecto raises capital to bring Zambia gold mine on stream

JOHANNESBURG (miningweekly.com) – Africa-focused gold and base metals exploration company Alecto Minerals has raised £665 000 through a share placement to provide the company with additional working capital to bring the 400 000 t/y openpit Matala gold project, in south-central Zambia, into low-cost production. 

The company issued 831.25-million new ordinary shares at 0.08p, which would represent about 18.64% of the company’s enlarged issued share capital. 

“We are mindful of dilution, so it was unfortunate that, despite strong news flow following our acquisition of Matala, there has not been greater traction in the share price, allowing us to raise funds at a premium to our last fundraiser in November 2015,” said Alecto CEO Mark Jones. 
   
Having delivered a feasibility study for Matala ahead of schedule, for a mine plan of four years and eight months, modelled at a gold price of $1 200/oz, Alecto signed agreements with Yantai Xinhai Machinery with respect to the mine’s construction and financing. 

In April, Alecto announced that Xinhai would arrange vendor financing to cover the plant and infrastructure costs. Further detailed planning was currently ongoing. 

The net proceeds of the share placement would enable Alecto to continue development at Matala, while ensuring that progress continued across the company’s wider portfolio. 
 
In Burkina Faso, the company recently had its exploration permits renewed at the Kerboulé gold project, which had an independent gold resource estimate of 6.2-million tons, at 1.16 g/t gold, for 230 758 oz gold.

Joint venture (JV) discussions regarding this asset were currently in progress. 
 
In Mali, Alecto continued to hold 100% of both the Kossanto East gold project, which had an inferred resource estimate of 247 000 oz gold, and the Kossanto West gold project, which was the focus of a JV agreement with Randgold Resources.