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

Transcription

1 Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: Exploration & Development 23 November 2015 Alecto Minerals plc ( Alecto or the Company ) Acquisition of historic Matala & Dunrobin Gold Mines in Zambia Placing to raise approximately 0.65 million (gross) Appointment of Non-Executive Chairman Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base metal exploration and development Company, is delighted to announce that it has made a significant step in pursuit of its strategy of becoming a gold producer in the near to mid-term through the acquisition of the historic Matala and Dunrobin Gold Mines in Zambia (together the Project ). Highlights The Project has excellent potential to be developed into production in the near to mid-term - 25 year renewable mining licence covering 32km 2, associated environmental permit and advanced resources Matala and Dunrobin Gold Mines, have, in aggregate, a 760,000 oz Au JORC Code compliant resource estimate in the Measured, Indicated and Inferred categories at an average grade of 2.3g/t Au US$20 million invested in drilling and test work on the Project to date, culminating in a scoping study on the Matala deposit and a feasibility study on the Dunrobin deposit prepared by Coffey Mining Pty Ltd ( Coffey Mining ) in 2013 Updated internal scoping study by Alecto for Matala indicates the potential to generate strong cash flows and economics at an assumed gold price of US$1,150 through an initial three year open pit operation at Matala - Indicative IRR of approximately 65% - Indicative NPV (10%) of approximately US$18 million - Low initial capital cost of approximately US$18 million - Estimated C1 cash cost of approximately US$695/oz (excluding government royalties of 6%) - Positive economics reflect in part, the good regional infrastructure with site access, power and water available - Resultant surplus cash flow from such an operation could then be used to develop the Dunrobin mine Alecto has acquired the Project for an aggregate consideration of 1.54 million, to be satisfied through the issue of 943,750,000 new ordinary shares of 0.01p each in Alecto ( Ordinary Shares ), 100,000 in cash and 307,500 as deferred consideration (the Acquisition ) from C3W Limited ( C3W ) and CNG Trust ( CNG ) (together the Vendors ) Placing to raise 0.65 million (before expenses), with the net proceeds being used, inter alia, to fund the cash element of the Acquisition, to advance Matala and the Company s proposed JV project with Desert Gold in Mali and to provide near term working capital

2 Issue of US$800,000 convertible loan note by Alecto to C3W in respect of an existing Luiri Limited ( Luiri ) loan due to C3W On completion, Gerald Chapman will join the Board as Non-Executive Chairman, bringing over 30 years experience in the mining sector, with specific skills in contract mining and infrastructure build Appointment of Country Manager, Clint White, brings excellent in-country relationships and knowledge On admission, the Vendors will be interested in, in aggregate, approximately 29.9% of the Company s enlarged issued share capital The Project will be Alecto s key operational priority, although it will continue to pursue the development of Kossanto East, its proposed JV project with Desert Gold in Mali, and to seek to secure partnership opportunities for its broader portfolio, which includes ongoing discussions with a major gold producer in respect of a potential JV for Kossanto West in Mali Mark Jones, CEO of Alecto, commented: The Project has excellent potential to deliver production in the near-to-mid-term considering the presence of significant and advanced in-situ resources of 760,000 oz Au (JORC code compliant), a Mining Licence and associated environmental permit. An updated internal scoping study demonstrates the robust economics achievable through production even at today s depressed market prices, with low initial capital cost required to start generating cash flow. The Acquisition is the result of over a year of project assessments, which has seen our attention firmly focused on rationalising and monetising our existing portfolio, whilst pursuing opportunities to become a gold producer in the near to mid-term. In acquiring this Project in the stable Southern African democracy of Zambia at low cost we have, once again, taken advantage of market conditions to de-risk our portfolio and deliver significant potential upside for all stakeholders going forward. As well as completing this transaction, our team has been actively concluding the business plan to re-open the Project and begin producing gold profitably at current prices, thereby positioning Alecto positively in any prevailing market conditions. Having successfully raised 0.65 million (before expenses), we are well placed to commence work to advance Matala and I look forward to providing updates on our progress going forward. I look forward to welcoming from the Zambian operations, both Gerald Chapman as Chairman, and Clint White, as Country Manager, to the Alecto team. Having worked closely with each of them for several months, and seen first hand the respect they command on the ground, I know that we are acquiring significant intellectual and technical capability. We will continue to pursue our plans across the rest of the portfolio and seek to advance our strategy to deliver production from our 100% owned Kossanto East Gold Project in Mali through co-operation with Desert Gold. With this in mind, we hope to deliver production from two projects in the near to mid-term.

3 Overview of Acquisition Alecto has entered into an agreement with the Vendors, for the acquisition of Luiri, that owns the historic Matala and Dunrobin Gold Mines in Zambia, for an aggregate consideration of 1.54 million, to be satisfied through the issue of 943,750,000 new Ordinary Shares (the Consideration Shares ) (which have an aggregate value of 1,132,500, based on the Company s closing mid-market share price on 20 November 2015 of 0.12 pence ( Closing Share Price )), 100,000 in cash and 307,500 in deferred consideration (to be satisfied via cash or, at either parties election, through the issue of new Ordinary Shares, such number of shares to be calculated based on the Closing Share Price). Luiri is a private holding company incorporated in the Republic of Mauritius which, via its wholly owned Zambian subsidiary, Luiri Gold Mines Ltd, owns a 25 year renewable mining licence, covering two historic open pit and underground mines, Matala and Dunrobin, and satellite deposits in south-central Zambia, which contain, in aggregate, an estimated total JORC Code compliant resource of 760,000 oz Au in the Measured, Indicated and Inferred categories at an average grade of 2.3g/t Au. Luiri also holds additional rights to further gold exploration opportunities on a nearby licence covering 245km 2. For the seven month period to 31 July 2015, Luiri recorded an unaudited consolidated loss before tax of US$778,975 (approximately 509,767) and as at 31 July 2015 had unaudited gross assets of US$52,288 (approximately 33,507). As part of the Acquisition, Alecto is pleased to announce that Gerald Chapman will join the Board of Alecto as the representative of the Vendors, as Non-Executive Chairman, with effect from completion. Mr. Chapman is a qualified engineer with over 30 years experience in the mining sector. As Chairman of Digmin Group Pty Ltd ( Digmin ), a contract-mining group, Mr. Chapman has been involved in the process of reinstating the Project s mining licence and conducting ground work. He will bring invaluable mine services experience to the Company as Alecto moves into production and in this regard, the Company has entered into a non-exclusive contract with Digmin, for the provision of mining and exploration services and infrastructure development, in respect of the Project. The Company also announces that it has conditionally raised 0.65 million (before expenses) by way of a placing, via Beaufort Securities Limited ( Beaufort Securities ), as agent of the Company, of 812,500,000 new Ordinary Shares ( Placing Shares ) at a price of 0.08 pence per Placing Share (the Placing Price ), with certain new and existing investors (the Placing ). The net proceeds of the Placing will be used, inter alia, to fund the cash element of the Acquisition, to advance Matala and the Company s proposed JV project with Desert Gold in Mali, as detailed in the Company s announcement of 29 September 2015, and to provide near term working capital. The Company also announces that, pursuant to the terms of the Acquisition, Alecto has agreed to issue convertible loan notes amounting to US$800,000 to C3W, in respect of an existing loan in Luiri due to C3W. The Acquisition and Placing are conditional on admission of the Consideration Shares and Placing Shares to trading on AIM.

4 The Project Figure 1: Licence 8074-HQ-LML and adjacent exploration rights on licence HQ-LML The Project consists of two historic gold mines, Matala and Dunrobin, and a number of exploration targets, Chosa and Shadreck, within a single 32km 2 large scale 25 year renewable mining licence (licence 8074-HQ- LML) initially granted by the Ministry of Mines in Zambia in 2003 and reinstated in December 2014 (the Licence ). The Licence is located 120km west of Lusaka and 25km east of Mumbwa, with a main tar road to Lusaka located 4km from the site, abundant water and main gridpower available locally. In addition, Luiri holds rights to further gold exploration opportunities on a nearby licence (licence HQ-LML) covering 245km 2. The Licence is located in an area of south-central Zambia dominated by the Mwembeshi Shear Zone. The regionally significant structural zone defines the boundary between the late Proterozoic Katanga Supergroup basinal sediments to the north and the more intensely deformed Zambezi Metamorphic Belt terrain to the south.

5 The Licence area specifically incorporates the geologically complex Matala Dome, an elongated eastnortheast Dome parallel, or sub-parallel, to the trend of the shear. Figure 2: Project area with Matala and Dunrobin mines and satellite deposits Gold mineralisation has been identified at multiple locations across the Matala Dome, and specifically within the Licence. At Matala, gold mineralisation is characterised by strong stratigraphic deformation, shearing and the presence of quartz-dolomite-pyrite-tourmaline-albite-sericite alteration and vein stockworks. The mineralised assemblages occur in steep south-dipping stockwork. At Dunrobin, gold mineralisation occurs in two principle styles, ferruginous (hematite) gossans with dolomites and limestones with associated quartz veining, and quartz vein stockworks with quartz-mica schists of the underlying basement. The Board believes that there is additional exploration potential at both Chosa and Shadreck, which are historic mines close to Dunrobin. The near surface oxide and transitional ores display free digging, Dunrobin style mineralisation, comprising numerous outcrops and shallow gold bearing gossans. Internal resource estimates for the combined targets, based on geophysics, trenching and over 7,000 metres of resource drilling, give 1,500,000 tonnes at an average grade of 2.6 g/t Au. Both are open at depth. Extensive mineral processing and metallurgical testwork, undertaken by Peacock & Simpson, a third party consultant, in 2012, has identified that the fully oxidised resources from both Matala and Dunrobin are amenable to gravity concentration and subsequent direct cyanidation. The Matala deposit contains an estimated 568,000 oz Au JORC Code compliant resource in the Indicated and Inferred categories and was subject to limited historical underground mining during the pre-independence years in Zambia. The Dunrobin deposit contains an estimated 193,000 oz Au JORC Code compliant resource

6 in the Measured, Indicated and Inferred categories, and was subject to limited open pit and underground mining up to the beginning of the 21 st Century. Low gold prices and Zambia s predominant focus as a copper producer, meant that neither mine was developed to its full potential, although the known resource base has been expanded under the Vendors guidance. JORC Code compliant Resource Summary Cut-Off Grade Tonnes Average Grade Gold Resource (g/t Au) (000's) (g/t Au) (000's oz Au) Measured Dunrobin Deposit Indicated 1.0 1, Inferred Matala Deposit Indicated 1.0 3, Inferred 1.0 4, Measured Total Indicated 1.0 4, Inferred 1.0 5, Grand Total , Source: Coffey Mining (January and November 2012) Alecto has identified, subject to further funding, the potential to develop a low-cost, profitable, small scale 400,000 tonnes per annum open-pit mine at Matala and satellite deposits, targeting the oxide and transitional ore and using a simple crushing, milling and gravity circuit with subsequent direct cyanidation. Alecto has completed an internal scoping study for Matala, based on the historic work undertaken by Coffey Mining, and estimates that Matala has attractive economics. At an estimated initial capital cost of approximately US$18 million, a gold price of US$1,150/oz and a discount rate of 10%, Matala would have an NPV of approximately US$18 million and an indicative IRR of approximately 65% over the initial three year life of mine. With the excellent gold grades in the oxides at Matala, which are expected to average 3.1 g/t over the first two years, the initial phase will have an estimated C1 cash cost of approximately US$695/oz, excluding government royalties of 6%. Subject to an increase in the gold price, through targeting the open pit ore at Dunrobin, that was defined in the feasibility study undertaken by Coffey Mining in 2013, the Board estimates that the initial mine life can be extended to seven years, thereby further improving the Project s economics. The Board believes that considerable upside potential exists to target further high-grade underground ores, with the known resource at Matala open at depth, as well as sulphide ores at Dunrobin and Chosa, and thereby further extend the life of mine. This would require upgrades to the proposed plant, which could be financed from surplus cash flows from production. Accordingly, from the use of the net Placing proceeds, the Company will seek to advance Matala. The work plan will concentrate on the completion of geotechnical drilling and further metallurgical test work, in order to update the Project s feasibility study and Environmental Impact Assessment.

7 Figure 3: Simplified flow sheet for the initial development of Matala Relationship Agreement and Consideration Shares On completion of the Acquisition and the Placing, the Vendors will hold approximately 29.9% of the Company s enlarged share capital. Due to the size of their combined shareholding, Alecto, the Vendors and the Company s Nominated Adviser, Strand Hanson Limited, have entered into a relationship deed (the Relationship Agreement ), which sets out the terms by which the Vendors will conduct business with the Company. The provisions of the Relationship Agreement shall terminate in the event that the Vendors and their associates hold less than 20% of the Company s issued share capital. In addition, the Vendors have agreed that they shall not, during the period from the date of Admission to the first anniversary of Admission, sell, transfer or otherwise dispose of, or create any encumbrance over, any of the Consideration Shares (or any interest in them), or enter into any agreement to do so, except in certain restricted circumstances. Proposed Appointment of Non-Executive Chairman Pursuant to the Relationship Agreement, Alecto is pleased to announce that Gerald Chapman, will join the Board of Alecto, as Non-Executive Chairman and the representative of the Vendors, with effect from completion of the Acquisition. Mr. Chapman is a qualified engineer with over 30 years experience in the mining industry. Following graduation in 1986, Mr. Chapman enlisted in the South African Military School of Infantry, Oudtshoorn, and completed an officer course, becoming a Lieutenant. He then worked for various construction companies before founding Protech Projects (Pty) Ltd ( Protech ) in Over the following 21 year period, he developed Protech into one of the most successful mining services and civil contracting companies in Africa,

8 listing Protech Khuthele Holdings Pty Ltd on the Johannesburg Stock Exchange in 2007 and holding the position of CEO until his resignation in November Mr. Chapman is currently the Chairman of Digmin Group (Pty) Ltd and Managing Director of Luiri Gold Mines Limited. He brings with him detailed working knowledge of the Project having been involved in the process of reinstating the mining licence and conducting ground work. Mr. Chapman holds a BSc in Civil Engineering from the University of the Witwatersand. Under his appointment letter with the Company, Mr. Chapman shall be appointed as Non-Executive Chairman of the Company for a fee of 38,000 per annum plus the reimbursement of reasonable expenses. His appointment may be terminated by either party on three months notice in writing. Details of the Placing Alecto has conditionally raised 0.65 million (before expenses) by way of a placing, via Beaufort Securities, as agent of the Company, of 812,500,000 Placing Shares at the Placing Price, with certain new and existing investors. The Placing is conditional on admission of the Placing Shares to trading on AIM. The Placing Shares will represent, in aggregate, approximately 25.7% of the Company s enlarged share capital. In respect of the Placing, the Company and Beaufort Securities have entered into a placing agreement (the Placing Agreement ), pursuant to which Beaufort Securities will, conditional on Admission, receive certain fees and commission from the Company and the Company has granted Beaufort Securities warrants to subscribe for up to 38,750,000 new Ordinary Shares at the Placing Price, exercisable within five years from the date of Admission. Pursuant to the Placing Agreement, the Company will give customary warranties and undertakings to Beaufort Securities in relation, inter alia, to its business and the performance of its duties. In addition, the Company has agreed to indemnify Beaufort Securities in relation to certain liabilities that they may incur in undertaking the Placing. Beaufort Securities has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. The Placing is not being underwritten. In addition, warrants to subscribe for up to 6,250,000 new Ordinary Shares at the Placing Price, exercisable within five years from the date of Admission, have been issued to a broker, in respect of investors who participated in the Placing who had been procured by them. The net proceeds of the Placing will fund the cash element of the Acquisition, the advancement of Matala and the Company s proposed JV project with Desert Gold in Mali and to provide near term working capital. Application for trading on AIM and Total Voting Rights Application will be made to the London Stock Exchange plc for the Consideration Shares and the Placing Shares to be admitted to trading on AIM ( Admission ). Admission is expected to become effective and dealings in the Consideration Shares and Placing Shares to commence at 8.00 a.m. on 27 November On Admission, the Company will have in issue 3,156,313,600 Ordinary Shares. The Consideration Shares and Placing Shares will be fully paid and will rank pari passu in all respects with the Company s existing Ordinary Shares.

9 The Company does not currently hold any Ordinary Shares in treasury. Accordingly, the above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Financial Conduct Authority s Disclosure and Transparency Rules. Directors participation in the Placing Mark Jones and Dominic Doherty, Directors of the Company, have undertaken to subscribe for 10,000 and 20,000 for 12,500,000 and 25,000,000 Placing Shares, respectively, pursuant to the Placing. Following Admission, Mark Jones and Dominic Doherty will be interested in 12,500,000 and 25,000,000 Ordinary Shares representing approximately 0.4% and 0.8% of the Company s enlarged share capital respectively. Deferred Consideration, Convertible Loan Note and the City Code on Takeovers and Mergers ( City Code ) Deferred Consideration Pursuant to the terms of the Acquisition, 307,500 of the consideration has been deferred ( Deferred Consideration ) and must be settled as soon as practicable and in any event within three years. The Deferred Consideration may be satisfied through either cash or the issue of new Ordinary Shares, such number of shares to be calculated based on the Closing Share Price, at the election of either the Company or the Vendors. However, if the issue of new Ordinary Shares were to result in the Vendors aggregate interest in the capital of Alecto breaching 30%, whether individually or acting in concert with other connected parties (further information on the City Code and concert parties is set out below), then the prior consent of both the Vendors and the Company would be required to effect such issue of shares. Convertible Loan Note In addition, Alecto has agreed that an outstanding loan of US$800,000 from C3W to Luiri (the Existing Luiri Loan ), will be replaced by a convertible loan instrument from Alecto to C3W on completion of the Acquisition. Accordingly, the Existing Luiri Loan will be replaced through the issue by Alecto of 800,000 convertible loan notes of US$1 nominal value each (the Convertible Loan Notes ) to C3W, each of which carries the right to potentially convert into new Ordinary Shares during the term of the notes ( Conversion Rights ). The Convertible Loan Notes have a term of five years, will be unsecured, non-transferable and are non-interest bearing. If the Company s prevailing Ordinary Share price at the time of exercise of any of the Conversion Rights is equal to or less than the Placing Price, then the number of Ordinary Shares to be issued to C3W will be calculated based on the Company s then prevailing mid-market closing price per Ordinary Share as quoted on AIM on the date of receipt of the relevant conversion notice (the Conversion Price ). However, if the Company s prevailing Ordinary Share price at the time of exercise of any of the Conversion Rights is greater than the Placing Price, then the number of Ordinary Shares to be issued on conversion will be calculated based on the maximum of either the Placing Price or 80% of the Conversion Price. The scheduled repayment date for the Convertible Loan Notes is 20 November 2020 (the Repayment Date ) and if all or part of the Convertible Loan Notes are not converted by the Repayment Date, then the Company shall redeem any outstanding Convertible Loan Notes for cash. The Convertible Loan Notes can be redeemed for cash at any time, without penalty, prior to the Repayment Date at the election of the Company.

10 Pursuant to the Conversion Rights, all or part of the Convertible Loan Notes can be converted into new Ordinary Shares at the election of either the Company or C3W, however, if any such conversion were to result in C3W s aggregate interest in the capital of Alecto breaching 30%, whether individually or acting in concert with other connected parties (further information on the City Code and concert parties is set out below), then the prior consent of both C3W and the Company would be required to effect such conversion. City Code Under Rule 9 of the City Code (to which Alecto is subject), any person who acquires, whether by a series of transactions over a period of time or not, an interest in shares of a company which (when taken together with shares in which any person(s) acting in concert with him are interested) carry 30% or more of the voting rights of that company, or any person, together with persons acting in concert with him, who is interested in shares which, in aggregate, carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights and such person, or any other person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested, such person will normally be required to make an offer to the holders of shares in that company to acquire all of the shares in that company not held by him or persons acting in concert with him. Such an offer would have to be made in cash, or be accompanied by a cash alternative, at not less than the highest price paid for any interest in existing shares by that person or by any person acting in concert with him within the 12 months prior to the announcement of such offer. Following completion of the Acquisition, the Vendors will hold, in aggregate, approximately 29.9% of the Company s enlarged share capital and, due to Mr. Chapman s interest in, and as a beneficiary of, the Vendors, Mr. Chapman and the Vendors, which includes C3W, (the Concert Party ) are presumed to be acting in concert for the purposes of the City Code. If any of the Deferred Consideration or Convertible Loan Notes is satisfied through the issue of new Ordinary Shares, it is possible that the resulting issue of new Ordinary Shares would result in the Concert Party s shareholding (together with shares in which any other person(s) deemed by the Takeover Panel to be acting in concert (as defined in the City Code) with it are interested) being equal to or greater than 30.0% of the Company s then enlarged issued share capital and, pursuant to Rule 9 of the City Code, the Concert Party would then be obliged to make a mandatory offer in cash (or accompanied by a cash alternative) for the entire issued Ordinary Share capital not held by it (or any person(s) deemed by the Panel to be acting in concert with it) at the highest price paid by the Concert Party (or any person(s) deemed by the Panel to be acting in concert with it) for any interest in Ordinary Shares acquired in the previous 12 months. The Deferred Consideration can be satisfied through the issue of new Ordinary Shares at the option of either the Company or any of the Vendors and the Convertible Loan Notes can be converted at the election of either the Company or C3W, however, if such issue of new Ordinary Shares were to result in the Vendors, C3W s or the Concert Party s aggregate interest in Alecto breaching 30.0%, then the prior consent of both the Vendors and the Company, in respect of the issue of new Ordinary Shares to satisfy the Deferred Consideration, and C3W and the Company, in respect of the conversion of the Convertible Loan Notes, would be required to effect the respective issue of new Ordinary Shares. If the Deferred Consideration is to be settled in full through the issue of new Ordinary Shares, then based on the Closing Share Price, 256,250,000 new Ordinary Shares will be issued to the Vendors. However, the

11 number of new Ordinary Shares to be issued on exercise of the Convertible Loan Notes cannot be calculated as at the date of this announcement as it will be determined by reference to the Company s prevailing Ordinary Share price and the foreign exchange rate as at the date of exercise. However, for illustrative purposes only, if C3W were to exercise all of its Convertible Loan Notes at the Placing Price (and assuming an exchange rate of US$1.52 to 1), Alecto would issue C3W with 658,184,857 new Ordinary Shares. Accordingly, for illustrative purposes only, based on the above, ceteris paribus, the Concert Party would hold, in aggregate, 1,858,184,857 Ordinary Shares, representing approximately 45.6% of the issued share capital as enlarged by the issue of new Ordinary Shares pursuant to the satisfaction of the Deferred Consideration and the conversion of the Convertible Loan Notes and the Concert Party would be obliged to make a mandatory offer in cash as described above. Review of Information Michael Ware, who is the Company s consultant and a Fellow of the Australasian Institute of Mining and Metallurgy, has reviewed and approved the technical information contained within this announcement. 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. 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. **ENDS** For further information, please visit or contact: Alecto Minerals plc Mark Jones Tel: +44 (0) Strand Hanson Limited Richard Tulloch Matthew Chandler James Dance Tel: +44 (0) Beaufort Securities Limited Jon Belliss Tel: +44 (0) St Brides Partners Limited Elisabeth Cowell Felicity Winkles Tel: +44 (0) Additional information on the Directorate Appointment The following additional information is provided in accordance with paragraph (g) of Schedule Two of the AIM Rules for Companies: Gerald David Chapman (aged 52) Current Directorships Past Directorships (within last five years)

12 Bamboo Rock Civils and Mining Pty Ltd Bamboo Rock Construction Pty Ltd Bamboo Rock Drilling Ltd Bamboo Rock East Africa Holding Ltd Bamboo Rock Ltd BC Mining Ltd Cavetoll Properties Pty Ltd Digmin Group Pty Ltd FD Shared Office Services Pty Ltd Kwa Puleng Property Management Pty Ltd Luiri Gold Mines Ltd M kepi Game Farm Pty Ltd Advanced Digmin Pty Ltd Bamboo Rock Mining Pty Ltd Further to a board resolution on 6 October 2015, Advanced Digmin Pty Ltd entered into a business rescue procedure in the Republic of South Africa, which is similar in effect to a company administration under UK law, following which Mr. Chapman resigned as a director. Mr. Chapman was also previously a director of Big Dig Construction Pty Ltd ( Big Dig ), previously named Protech Projects Construction Pty Limited, and Capital Coal Pty Ltd which entered into voluntary liquidation and provisional liquidation respectively within 12 months of his resignation from the boards of both companies. In respect of Big Dig, the liquidation followed the advice of the legal team which assisted the company during an international arbitration case that was heard before the International Commercial Council. The rationale for the liquidation was to prevent the other party from claiming a set-off of debts by instituting a spurious counter-claim after having been ordered to pay the claims brought against it by Big Dig. All creditors of the company agreed to the voluntary liquidation and all creditors agreed on repayment terms. One creditor, Corpcapital Investments did, however, insist that the repayment terms be made an Order of Court as a means of safeguarding their right to repayment as agreed in the liquidation process. In addition, Mr. Chapman was a director of Delta Colliery (Pty) Limited and Century Carbon Limited which were liquidated by their respective board of directors. With effect from Admission, Mr. Chapman will be interested, via the Vendors, in aggregate, 943,750,000 Ordinary Shares representing approximately 29.9% of the Company s Enlarged Share Capital. There is no other information that is required to be disclosed pursuant to paragraph (g) of Schedule Two of the AIM Rules for Companies. 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, Burkina Faso and Mauritania and, upon completion of the abovementioned acquisition, Zambia. 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

13 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. Alecto also owns the Kerboulé Project, located in the highly prospective Birrimian-age Djibo gold belt in northern Burkina Faso, as well as the wholly owned Wad Amour IOCG Project in Mauritania which is at an exploration stage. Accordingly, the Company has a strong, diversified project portfolio with exciting exploration upside potential.