Alecto Minerals joins up with Randgold in Mali

Alecto Minerals announced a new joint venture with FTSE 100 gold giant Randgold on Monday - through its wholly-owned subsidiary Caracal Gold Mali - for the exploration and development of its Kossanto West Gold Project.

It confirmed the Kobokoto Est and Koussikoto permits formed the 137 square kilometre project in western Mali.

The AIM-traded gold and base metal company said the joint-venture was part of its strategy to retain exposure to its African gold portfolio, whilst minimising spend on exploration and development.

On completion of the joint venture, Randgold would fund all costs up to and including the completion of a pre-feasibility study on the project, and would hold a 65% interest in the permits. Alecto would retain 35%.

Once the pre-feasibility study was complete, all costs would be split between the two firms as per their participating interests.

A new company would be formed as part of the venture, at which point Caracal would transfer the relevants permits to it. The joint venture partners were expected to hold 90% of the permits with the Malian government retaining 10%.

"We are delighted to announce this important milestone agreement with Randgold, who are the market leaders in the establishment of world-class gold projects in West Africa", said Alecto CEO Mark Jones.

"Utilising Randgold' expertise and financial muscle to unlock any opportunity allows us to retain exposure to the significant value we believe is available across our African gold exploration tenements, with minimal impact on our balance sheet", he added.

The venture's initial work programme would include further geological work and mapping of Kossanto West, with potential follow-up pitting and trenching and reconnaissance drilling, likely to be undertaken by Randgold in the first 12 months.

Kossanto East, where Alecto had previously reported positive economics from an internal scoping study, was subject to a collaboration agreement with Desert Gold and was not included in the joint venture.