🕐22.05.12 - 11:27 Uhr

FOX DAVIES NOTE: ALECTO MINERALS: RAISES £1.5M FROM NEW CORNERSTONE INVESTOR, SPEC BUY



Hi there Please find a note from Fox Davies below on the back of Alectos news yesterday that it has raised �1.473 million from a new cornerstone investor, Mr Al-Tamimi, a highly successful businessman who is the founder and owner of a substantial diversified business group with its head offices in Riyadh, Saudi Arabia. Fox Davies describes the news as a cracking result for Alecto particularly in these current markets where many juniors are struggling to raise significant amounts of cash.

The funds raised will be used to unlock some of the potential Alecto has in its prospective exploration assets, in particular the Licence 223 bauxite tenement in Guinea, currently subject to due diligence.

The Company will also advance exploration programmes at its Mauritanian IOCG and Ethiopian gold assets.

The price moved significantly on the back of the news yesterday. Best Lizzie
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Alecto Minerals (ALO LN)
SPECULATIVE BUY Current Price: 1.7p
Target Price: -
Market Cap (M): �3.7 EV (M): �2.3
Alecto raises �1.5M from new cornerstone investor
Event
Alecto Minerals plc ("Alecto") announced that it has raised �1.473 M by way of a placing of 95 M new ordinary shares at 1.55 p per share.

The funds raised will be used for exploration on its Mauritania and Ethiopian exploration assets, and in Guinea if the bauxite deal is finalised.
Comments What a cracking result for Alecto! It is currently very difficult for junior exploration companies to raise any significant amounts of cash in this challenging market, so this fund raising removes the short term funding concerns that were overshadowing the Company. Perhaps more importantly, the injection of cash will allow Alecto to unlock some of the potential it has in its prospective exploration assets, in particular the Licence 223 bauxite tenement in Guinea, currently subject to due diligence.

The cash can be used for an intensive drilling programme in order to progress the project to a JORC compliant resource and the commencement of scoping studies.

The funds will also allow Alecto to proceed with the scout drilling programme for the Wad Amour licence in Mauritania, planned back in January. The cornerstone investor, Mr Al-Tamimi is taking a significant portion of the Company (29.9%) which is just under the Takeover Codes rules which would force him to take 100% of the Company.

Also, he has the ability to nominate a Director and maintain his 29.9% stake, therefore indicating an intention to further participate in the Alecto story as the assets are explored and developed. Overall, this is a very good result for Alecto and we look forward to seeing the portfolio materially developed through the placing proceeds.
Recommendation
We maintain a SPECULATIVE BUY recommendation on the Company.
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