Alecto, Randgold enter joint venture to advance Mali's Kossanto West Gold Project
Two exploration permits, Kobokoto Est and Koussikoto, have already been secured for the project; Randgold will hold 65 percent of the permit interests and Alecto will hold 35 percent.
The agreement mandates the formation of a new company for the joint venture. Once that company is formed, all permits will be transferred to it. The new company's partners will then hold 90 percent of the interest in the project and 10 percent interest will be given to the Malian government.
"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," Mark Jones, Alecto CEO said. "Utilizing Randgold's 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."
Under the terms of the agreement, Randgold will be responsible for all funding of the project, including a pre-feasibility study. Afterward, further costs will be shared equally by Randgold and Alecto.
The first steps in the joint venture will include the mapping of Kossanto West, which may justify pitting, trenching and reconnaissance drilling.
"By bringing in such intellectual capital, and with Alecto not having to fund exploration work, the company has been placed in a strong position to rapidly move its other projects towards development," Jones said. "The company's main focus in the near to mid-term is to bring our Zambian gold project, Matala, into production while Randgold completes the work at Kossanto West and Desert Gold helps us move towards development at Kossanto East. With a diversified and exciting portfolio, we look forward to updating the market on development progress throughout 2016."
The initial year of work at the site is expected to cost about $1 million. Officials anticipate the feasibility study commencing during the second phase of the project and being completed during the third phase.
"Randgold Resources' exploration teams are arguably the most experienced and knowledgeable in identifying and developing significant resources in within the Kenieba Inlier in Mali which hosts Kossanto West," Jones said. "The structured work program going forward will enable the joint venture to more rapidly identify an economic opportunity which we hope will propel the company forward to yet another development project."