News blog

African Mining & Exploration / Alecto Minerals

• BY: Andrew Hore |
• POSTED: 22/08/2013 |

African Minerals & Exploration (AME) is swapping its some of its Mali exploration assets for shares in Alecto Minerals at 1.15p each, which values the assets at £1.25m.

The assets were valued at just under £1m in the June 2013 balance sheet. AME will also subscribe for £250,000 worth of shares at the same price and invest £250,000 in 12 month convertible loan notes with a 7% interest rate and convertible at 1.15p a share. That will take its stake in Alecto to 26.7% and potentially higher after conversion of the loan notes. AME is retaining a net smelter royalty of 1% on the first 300,000 ounces gold produced. 

Alecto had net assets of £3.56m at the end of 2012 and currently has exploration projects in Ethiopia and Mauritania as well as a strategic licence in Ethiopia with Centamin. It is acquiring a business with six exploration permits in Mali and will also take over deferred consideration payments to former owner Electrum. The Kossanto gold project has a JORC Inferred Resource of 107,000 ounces of gold at a cut off grade of 0.5 g/t.

The cash injection from AME will help Alecto to make progress with the assets. Alecto will receive an additional £100,000 investment in the convertible loan notes from Tamimi Investments and Mining Co.

At 1.15p a share, Alecto is currently valued at £4.12m. Alecto shareholders have to agree to the transaction.

Mark Jones will step down as chief executive and take up that role at Alecto. David Archer will become chief executive of AME. He recently announced he was investing £500,000 in the company at 2.25p a share, although one-quarter of the shares will not be issued until after a general meeting.

At 2p a share, AME is valued at £2.02m.

AME still owns the Karan gold project in southern Mali and the Diatissan project in Mali, where exploration is at an early stage.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFAugust2013_47.pdf