JOHANNESBURG (miningweekly.com) – Aim-listed mineral exploration company Alecto Minerals has signed a cooperation agreement with TSX-listed Desert Gold to jointly develop the Farabantourou gold permit and the Kossanto East gold project, in Mali, and bring them into production.

“With a combined estimated indicated and inferred resource of over 365 000 oz gold and falling within a 10 km 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 through the sharing of information and resources with Desert Gold marks a significant step towards achieving this goal,” Alecto CEO Mark Jones said in a statement on Monday.

The Barani East deposit fell within the Farabantourou permit area.

He added that the company had already had preliminary discussions with potential funding partners for this venture and, while discussions remained at an early stage, the initial interest had been positive.

Meanwhile, Desert Gold president and CEO Roeland van Kerckhoven commented that the 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,” he added.

AGREEMENT TERMS
The agreement would enable Alecto and Desert Gold to evaluate how capital expenditure could potentially be reduced through joint development activities, with the ultimate goal of bringing both Kossanto East and Barani East into production.

It was agreed that all options should be reviewed; from the possibility of a single processing plant to process ore from both deposits, through to further asset or project level activity.

In addition, within the same 10 km trucking radius, there were further deposits, owned by third-party companies, which could, subject to appropriate agreements being negotiated, potentially bring the total known resources for the enlarged project to over 500 000 oz.

Alecto and Desert Gold would continue discussions with third-party companies with a view to expanding the cooperation concept and potentially significantly increasing the size of their collaborative project.

Further, the agreement set out the conditions for the companies to jointly develop a scoping study for the development of Farabantourou and Kossanto East, which, if positive, would then pave the way for a more formal agreement.