By Cecilia Jamasmie
Canadian junior Ashanti Gold (CVE:AGZ) has signed a non-binding letter of intent (LOI) with Alecto Minerals (AIM:ALO), which will allow it to earn a 65% in the Africa-focused firm’s Kassanto gold project in western Mali.
As part of the deal, Ashanti will become the operator of the project during a 36-month option period in which it would have to complete a preliminary feasibility study (PFS).
Should Ashanti not finish the PFS within the period, it may instead elect to pay, in cash, $4 million to Alecto within 90 days of the end of three-year-period in order to satisfy the earn-in requirement, Alecto said in a statement.
After the option period, and on completion of the earn-in agreement, both firms will form a joint venture (JV), contributing proportionally to Kassanto’s continuing exploration and development.
Alecto had originally planned to work with Desert Gold, the owner of the tenement adjacent to Kossanto East, to develop a new mining district in Mali. But the company’s chief executive Mark Jones said that plan has been postponed for now.