Kossanto East has been the exploration focus of Alecto Minerals since its acquisition in 2013.  The project has an independent inferred resource estimate of 6.72Mt grading at 1.14 g/t for an aggregate of 247,000 ounces Au (at a cut-off grade of 0.5 g/t Au), reported in accordance with the guidelines of the JORC Code (2012) by Wardell Armstrong International in June 2013.  This has been delineated across the Gourbassi East and West targets within this project.

Several other projects of a similar nature have been identified within 10km of the Kossanto East project area.  By developing Kossanto East in conjunction with other deposits, the Company believes that it can deliver production faster and more economically, thereby delivering an important cash generative backbone to its businesses.  With this in mind, in March 2013, the Company signed a cooperation agreement with Desert Gold Ventures (TSX.V: DAU) to explore the economics of bringing the Kossanto East project into production in collaboration with Desert’s Farabantourou project.

In September 2015, a Scoping Study was completed which demonstrated the robust economics and low costs achievable for developing a heap leach project under joint venture with Desert Gold.  Together, the two companies identified a potentially mineable resource of 1.2Mt at a grade of 2.1 g/t Au for a total of 81,308 ounces Au within shallow pit shells (<60 metres from surface) across Alecto’s Gourbassi East and West deposits and Desert Gold’s Barani East deposit.  The highlights of the internal study are as follows:

  • • Scoping Study suggests that a c. 27,000 ounces of gold (‘Au’) per annum operation will generate US$97.5m in gross revenue over a life of mine of just over 3 years
  • • Cash costs estimated at US$582 per ounce over the life of mine
  • • Low total capital cost of US$14.3m with payback anticipated in 12 months of initial gold production
  • • Project NPV (10%) of US$27.4m with an IRR of 107% at a gold price of US$1,200 per troy ounce
  • • Significant exploration and brownfields expansion potential to be funded from project cash flow

The Scoping Study is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.  Mineral Resources are not reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility study.

As a result of the extremely positive economics demonstrated in the Scoping Study, Alecto and Desert Gold have begun discussions for the development of a joint venture operation.  It is the intention of the parties to form a joint venture group to make a single application for a mining licence across the Farikounda Permit (Kossanto East) and Farabantourou Permit. 



Kossanto East Mineral Resource Report


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