13th Apr 2016 07:29
LONDON (Alliance News) - Alecto Minerals PLC on Wednesday said it signed an agreement for the proposed construction and financing of mining operations at its Matala gold project in Zambia.
The AIM-listed company, which is working with Yantai Xinhai Machinery Co Ltd and PenMin (Pty) Ltd on construction and financing, said the move is in line with its aim of producing gold from the project as soon as possible.
The agreement with Xinhai and PenMin follows positive results from a feasibility study of the gold project. PenMin delivered the feasibility study, which demonstrated "positive economics" for a 400,000 tonnes per annum oxide and transitional open-pit operation with a mine life of about four years and eight months at USD1,200 per ounce of gold.
PenMin's study included an estimated capital cost for plant and infrastructure of USD14.4 million, a project net present value of USD28.6 million at an 8% discount rate, and an unlevered project internal rate of return of 52%.
"In recent months, we have developed a strong relationship with both PenMin and Xinhai that has provided Alecto with the confidence we need to partner with them in both the development and operational phases of the project," Alecto Chief Executive Officer Mark Jones said in a statement.
"There remains a lot of hard work to be done before we can commence development on the ground, but considering how far we have come since the acquisition was completed just five months ago, I am confident that we will deliver further progress in the months ahead," he said.
Shares in Alecto were up 56% at 0.16 pence on Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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