(MENAFN- ProactiveInvestors - UK) --- ADDS SHARE PRICE AND COMMENT---
Shares in Alecto Minerals (LON:ALO) surged 30% on the day after it struck a joint venture deal with mining giant Randgold Resources (LON:RRS) over the former's Kossanto West Gold Project in Mali which sees the major fund all costs up to and including a pre-feasibility study.
The 137 sq km project comprises the Kobokoto Est and Koussikoto exploration permits.
An initial work programme will see further mapping with potential follow up reconnaissance drilling anticipated to be undertaken by Randgold in the first 12 months.
Alecto chief Mark Jones told Proactive: "The junior mining industry is going through an enormously difficult time. Funding is almost impossible to get for exploration. We have two choices. We either joint venture with people with strong balance sheets to further exploration ground or we give it up which is not what we intend to do."
Earlier he said: "Utilising 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.
"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 main focus in the near to mid-term was to bring its Zambian gold project Matala into production.
Meanwhile Randgold completes the work at Kossanto West and partner Desert Gold helps towards development at Kossanto East.
At Matala Jones said the firm was "bullish" on the opportunity and it had enough cash on its balance sheet to take it through to its target of completing by mid-year the roadmap of how the firm is going to get into production in Zambia.
"With a diversified and exciting portfolio we look forward to updating the market on development progress throughout 2016" he said.
On today's joint venture Randgold will hold a 65% stake and Alecto will retain a 35% participating interest.
On completion of a PFS all costs will be split between the JV parties in accordance with their participating interest.
Permits will continue to be held by Alecto's Mali subsidiary Caracal until such time as the joint venture committee forms a new company (NewCo ) for the development of a mine
Caracal will then transfer the relevant permits to NewCo with the JV partners expected to hold 90% held in the same proportion as their respective interests in the JV and with the Malian Government expected to hold 10%.
Alecto shares rose almost 30% to 0.0763p.
Randgold which also posted 2015 results today added almost 12% to 5925p.
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