Award of Mauritania uranium licences

Alecto Energy plc / EPIC: ALO / Market: AIM / Sector: General Financial

29 October 2010

Alecto Energy plc ("Alecto" or the "Company")

Award of Mauritania uranium licences

Alecto Energy plc, the AIM listed resource investment company, is pleased to announce that its wholly owned subsidiary, Alecto Holdings International Limited, has been granted two uranium licences in the prospective Mauritanide mobile belt of Mauritania by the Mauritanian Ministry of Industry and Mines (the "Licences"). 

This transaction, which is in line with the Company's strategy to secure exploration interests in the natural resource and energy sectors, follows the grant of three gold and base metal development licences in Mauritania as announced on 22 October 2010 and further strengthens the Company's portfolio.

The two uranium licences, Mreiti (888 sq km) and Wad Mourkba (704 sq km,) are new acquisitions and span an internal WSW-ESE contact within the Achaean shield, and close to its edge with the younger rocks of the Taoudenu Sedimentary Basin. They were identified by the Board following extensive fieldwork and analysis of historic data conducted by the Company's consulting partner, O'Connor International Ltd ("O'Connor"), in conjunction with SRK Exploration Services ("SRK ES"). 

As outlined in previous announcements, the Alecto Board believes Mauritania to hold a number of potentially under-explored resource opportunities and, although Mauritania has an established mining industry, with significant mining majors such as Red Back Mining Inc. and First Quantum Minerals operating in the area, with a principal focus on the iron-ore and gold sectors, the Board considers that much of the country is under-explored.

Additional Information

The Licences were acquired for a total cash consideration of €32,000. In order to facilitate the application for the Exploration Licences in Mauritania, the Company signed a consultancy agreement with O'Connor (further details of which appear in the announcement dated 22 October 2010) (the "Agreement").

Under the terms of the Agreement, O'Connor will be paid €50,000 per licence to be settled by the issue of 2,222,222 new Ordinary Shares (the "Uranium Shares"). A further €50,000 will be paid to O'Connor on completion of a positive bankable feasibility study with a positive conclusion and will be settled by the issue of 2,222,222 new Ordinary Shares. Following the commencement of production at the sites covered by the Licences, Alecto will pay O'Connor a cash royalty on revenue from uranium sales based on the total pounds of uranium sold equal to US$0.40 for every pound sold will be paid to O'Connor. 

When issued, the Uranium Shares will represent 4.17% of the Company's enlarged issued share capital (excluding the Gold Shares (as defined below)) which, when combined with the 5,777,778 new ordinary shares in the Company per share per copper/gold licence (further details of which are contained in the announcement dated 22 October 2010) (the "Gold Shares"), will result in O'Connor holding 17.58% of the Company's enlarged issued share capital. O'Connor has agreed to enter into a lock-in agreement in respect of the Gold Shares and the Uranium Shares for a period of six months following their issue.

**ENDS**

For further information, please visit www.alectoenergy.com or contact: