JOHANNESBURG (miningweekly.com) – Aim-listed Alecto Minerals has agreed the final terms of its joint venture (JV) partnership with Ashanti Gold around its Kossanto East gold project, in western Mali.
The two parties have signed a binding option agreement, which concludes the proposals originally set out in a nonbinding letter of intent, allowing Ashanti to earn a 65% interest in the project by completing a preliminary feasibility study (PFS) within a period of 36 months.
The miner will also be required to maintain and keep the project’s licence in good standing during the option period and, if an extension to the option period is required beyond the initial 36 months, Ashanti has the option to pay Alecto $140 000 for each six-month extension, up to a maximum of 12 additional months, to complete the PFS.
Should Ashanti not complete the PFS within the option period, it may elect to pay Alecto $4-million in cash to satisfy the earn-in requirement. If either party’s interest falls below 10% then that party’s interest will convert to a 1.5% net smelter royalty (NSR).
The other party will then have the right, for a period of one year thereafter, to buy the NSR for $100 000 for each 0.1%, up to a maximum of $1.5-million.
Additionally, Ashanti will contract from Alecto certain management and corporate services to cost-effectively start works on the ground and ensure that monies spent go directly towards exploration.
“We are delighted that the completion of Ashanti’s legal and technical due diligence has brought us to the point of finalising the option agreement for Kossanto East, and we now look forward to assisting them to commence work on the ground.
“Alecto and Ashanti’s geologists have been on site and reviewed core and rock-chip samples, surveyed the known resource area and have begun planning for the next phase of work,” Alecto CEO Mark Jones said.
Meanwhile, Alecto’s JV with Randgold Resources is also progressing according to plan, with Randgold’s exploration teams starting their new field season activities at Kossanto West.
“With our partners Randgold Resources also now active on the ground at the neighbouring Kossanto West project, we are delighted to secure high levels of exploration activity at our projects in western Mali without the burden of funding such critical exploration work,” Jones added.
Kola Gold and Alecto are applying for the extension of the Karan exploration permit in southern Mali, with further surface sampling taking place concurrent with the licence extension application. The company noted that there is potential for follow-up reconnaissance drilling this season – depending on the surface sampling results.
Predevelopment activities at its Matala gold project have also started, with five families relocated from an area where the proposed process plant will be built and resettled in a new location safely away from mining activities. Ground clearance for the process plant area has started and fencing and security gate construction is also under way.
“While these very exciting exploration projects are at an early stage, there is every opportunity for a significant discovery and we are confident that we have partnered with the best in the business to realise this potential.
“Our primary focus now is on finalising funding and delivering production at Matala and, in the interim, we must allow time for our partners to complete their planned exploration work, analyse the results and update us as they progress; and we look forward to receiving the results in due course,” Jones highlighted.