🕐30.05.14 - 08:27 Uhr

ALECTO MINERALS - FINAL RESULTS - YEAR CHARACTERISED BY ACQUISITION, JV AND THE
ACHIEVEMENT OF OPERATIONAL MILESTONES.



Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: Exploration & Development 30 May 2014 Alecto Minerals plc (‘Alecto’ or the ‘Company’) Final Results for the Year Ended 31 December 2013 Notice of AGM
Alecto Minerals plc (AIM: ALO), the AIM quoted mineral exploration company focussed on West and East Africa, is pleased to announce its audited final results for the year ended 31 December 2013.

In addition the Company’s Annual General Meeting will be held at the Washington Mayfair Hotel, 5 Curzon Street, London W1J 5HE on 24 June 2014 at 11:00 a.m.

The Company’s Annual Report and Accounts will be posted to shareholders shortly and will be available to view and download on the Company’s website at www.alectominerals.com. Highlights: · Acquisition of the Kossanto Gold Project in western Mali (‘the Kossanto Project’) and associated regional projects, located in a proven gold hosting region · Implementation of resource upgrade drilling programme for the Kossanto Project, resulting in an approximate 80% increase in the pre-existing JORC Code compliant inferred resource estimate to 193,000 ounces of gold (‘Au’) across two target areas * Further rotary air blast (‘RAB’) drilling ongoing at Gourbassi target · New gold discoveries at multiple areas across the Massakama target, in the western part of the Kossanto Project licence area - sampling results from mineralised quartz veins up to 31.5 g/t Au indicate a strong upside potential · Work on-going to strengthen the geological model across all three target areas of the Kossanto Project · Joint venture agreement (the ‘Joint Venture’) entered into with mid-tier gold miner Centamin plc (‘Centamin’) to pursue certain mining project opportunities identified by Alecto and Centamin in the Federal Democratic Republic of Ethiopia (‘Ethiopia’) · Both of Alecto’s existing gold projects in Ethiopia, Wayu Boda and Aysid-Metekel, have been designated as Joint Venture projects - Centamin to fund exploration activities over the next two years in order for it to farm-in for up to a 70% interest in the projects · Mark Jones appointed as CEO in tandem with the Companys acquisition of the Kossanto Project – strong understanding and experience of the Kossanto Project and gold exploration in Africa to spearhead the Groups future development · Successfully raised, in aggregate, £1.6 million (before expenses) during the year together with a further £1.5 million (before expenses) raised in January 2014 to fund the Groups 2014 exploration campaigns and to provide general working capital
Mark Jones, CEO of Alecto, commented: “This has been a period of notable progress for Alecto characterised by an acquisition, joint venture and, most importantly, the achievement of operational milestones.

As a junior explorer, I am cognisant of the need for the Company’s strong advancement year on year.

With this in mind, since I joined the Board in October 2013, the Company has focussed on rapidly implementing value accretive exploration programmes across its asset portfolio, and particularly at the Kossanto Project, in order to generate detailed information to facilitate their future growth and development.

A substantial 80% upgrade in the JORC Code compliant inferred resource estimate for Gourbassi within the Kossanto Project area in April 2014 was particularly pleasing following the recent drilling programme, and we continue to build on our knowledge of the geological model for the project through, inter alia, our low cost in-house RAB drilling.

Work is also underway at our Ethiopian projects and accordingly, I am confident that by the end of this current financial year, our position as an African focused AIM quoted exploration company will be considerably enhanced.”
For further information, please visit www.alectominerals.com or contact: Alecto Minerals plc Mark Jones Tel: 020 3137 8862
Strand Hanson Limited Richard Tulloch Matthew Chandler James Dance Tel: 020 7409 3494
Hume Capital Securities plc Jon Belliss Abigail Wayne Tel: 020 3693 1470
St Brides Media & Finance Ltd Elisabeth Cowell Felicity Edwards Tel: 020 7236 1177
Chairman’s Statement 2013 has been an exciting year for Alecto.

Firstly, we entered into a joint venture agreement with Centamin, which will result in exploration across our two Ethiopian gold projects being funded for the next two years by Centamin with possible future joint venture projects to be added going forwards, and secondly, we acquired an exciting Malian gold portfolio which includes the Kossanto Gold Project, located in the Kenieba inlier in western Mali which hosts several major producing gold mines. In addition to the operational advances made during and post year end, we have also strengthened the Board and senior management team with the appointment of Mark Jones as CEO following the acquisition of the Kossanto Project.

Mark and our technical team have extensive pre-existing knowledge of the Kossanto Project and experience of exploration in Africa, ideally qualifying them to implement our active work programmes and build on the inherent growth prospects evident across our prospective African gold and base metal portfolio. We are strongly committed to unlocking and building significant value across our portfolio year on year through both operational and corporate activity.

The momentum experienced during the reporting period has continued into 2014 with drilling activity making good progress at the Kossanto Project.

As a result, we were delighted to increase the Kossanto Project’s pre-existing JORC Code compliant inferred resource estimate by 80%, to 193,000 ounces of gold (“oz Au”) in early April 2014, with the results of recent drilling demonstrating the potential to increase this yet further.

At our wholly owned Wad Amour IOCG Project in Mauritania, the maiden drill campaign originally scheduled for commencement in April, has been delayed, due to circumstances outside our control, and drilling will commence as soon as practicable.

Core drilling commenced in March 2014 at our Wayu Boda JV Gold Project in southern Ethiopia. We had a robust cash position of approximately £1.2 million as at 29 May 2014 and with our joint venture in Ethiopia alleviating costs for this area of our portfolio, which has excellent upside potential, we are well positioned to achieve further exploration progress in 2014. Malian Gold Projects In October 2013, we acquired the Kossanto Project, a gold exploration project in western Mali, through the acquisition of AME West Africa Limited (“AME”) from AIM quoted Savannah Resources plc (“Savannah”), previously named African Mining & Exploration plc. The Kossanto Project has a number of attractive qualities.

Importantly, it is located in the centre of the Kenieba inlier in western Mali, which is a block of ancient greenstones and granites hosting many significant gold deposits in Senegal and Mali, making it one of the most important gold regions in Africa.

Major projects in the region include AngloGold Ashanti Limited’s 13.0 million ounces (“Moz”) Sadiola and 4.5Moz Yatela gold mines, Randgold Resources Limited’s 12.5Moz Loulo gold mine and Teranga Gold Corporation’s 3.0Moz Sabodala gold mine in neighbouring Senegal.

Crucially, the geology of the Kossanto Project appears consistent with these major gold producing mines, comprising a mix of basic and acidic volcanics with turbidites, and pervasive shearing and fracturing. Another feature of the Kossanto Project was its pre-existing maiden JORC Code compliant inferred resource estimate of 107,000 oz Au for the Gourbassi East (“GRBE”) target.

With three target areas delineated in total, namely GRBE, Gourbassi West (“GRBW”) (together “Gourbassi”) and Massakama, the potential to add further substantial resources through exploration across the licence area was evident and following completion of the transaction, we have sought to implement a resource expansion drill programme across both Gourbassi and Massakama. We commenced drilling in December 2013 and following the completion of 1,908m of reverse circulation (“RC”) holes and 921m of diamond drill (“DD”) holes at GRBE and 997m of RC holes and 200m of DD holes at GRBW, the Company announced on 2 April 2014 an updated independent JORC Code compliant inferred resource estimate for Gourbassi (the “Updated Inferred Resource”), completed by Wardell Armstrong International, of, in aggregate, 5.04 million tonnes (“Mt”) at 1.19 grammes per tonne of gold (“g/t Au”) for an aggregate 193,000 oz Au, with a cut-off grade of 0.5g/t Au.

The Updated Inferred Resource represented an approximate 80% increase on the previously published inferred resource estimate for Gourbassi announced by Savannah in June 2013. The Updated Inferred Resource included a maiden JORC Code compliant inferred resource estimate for GRBW and defined gold in two zones.

This target is only 3.7km away from the original resource area at GRBE and accordingly, from a practical mining perspective, can be viewed as a single project.

The combined resource for Gourbassi is near surface (with the bulk of the resource less than 100m deep) and preliminary metallurgical work at GRBE has highlighted the potential amenability to low-cost recovery by cyanide leach processing but further metallurgical tests and analysis is required to be undertaken to test this concept.

Importantly, the recent resource increase at Gourbassi does not account for potential future exploration upside at our highly prospective Massakama prospect to the west of the tenure. Our work to date has been focussed on progressing the Kossanto Project towards the realisation of a mining opportunity.

As well as focusing our operational efforts towards this, we have been actively seeking to identify further targets within the Kossanto Project area, using a mix of remote sensing and ground sampling techniques, and it is currently anticipated that some of these new prospects will be drill ready for next season. As noted above, there remains significant additional upside potential across the Kossanto Project, and since completing our initial phase of the campaign to upgrade the resource estimate, we have been directing our resources to uncover this. RAB drilling has been undertaken with this in mind at Gourbassi, utilising the Company’s in-house truck-mounted RAB rig.

RAB drilling provides the Company with a very effective scouting technique as it offers a low cost drilling capability that can rapidly define targets for later DD and RC work.

We await results from our RAB drilling at GRBE but have received results from drilling undertaken at GRBW, which consists of two proven zones of mineralisation.

The results from the GRBW RAB drilling programme were highly encouraging and we subsequently completed further RC drilling, totalling six holes for 864m, to infill the central section of the GRBW target and to test for a possible northern extension to the mineralisation.

All the holes intercepted shallow gold mineralisation, demonstrating the opportunity to build on the current inferred resource estimate.

Importantly, the northern-most hole, GRC081, exhibited robust mineralisation thereby underpinning the Boards belief that the mineralisation remains open to the north.

Accordingly, a further RAB drilling programme is now underway to test 1.8km of the total strike length as well as soil and rock chip geochemistry to test the northern extension of GRBW.

This should then enable a single, larger, target zone at Gourbassi to be defined with increased tonnage and resource opportunity. At Massakama, extensive historical and new artisanal activity has been discovered in multiple areas (The "Big Pit”, Goureba and Toukwata) close to the original target, highlighting the expansive potential of the Kossanto Project.

Encouraging initial sampling returned results of up to 31.5 g/t Au from mineralised quartz veins and a number of scouting holes have been completed so far this year.

The results of recent RC drilling at Massakama are expected shortly. In summary, we are delighted to have delivered on our objective of producing the Updated Inferred Resource for Gourbassi.

Following completion of the recent RC drilling, a total of 17 RC holes for a total of 1,861m, two DD holes for a total of 200m and 2,247m of RAB drilling have now been completed at GRBW and a total of 13 RC holes for a total of 1,908m, 6 DD holes for a total of 921m and RAB scout drilling have now been completed at GRBE during this seasons drilling programme.

As highlighted above, we have completed an extensive amount of work and this continues with the aim of strengthening our resource and building a commercial asset. Following the year end, in respect of the acquisition of AME the Company paid deferred consideration of £1.25 million to Electrum Ltd, the previous owners of the Kossanto Project, through the issue of new ordinary shares in the Company.

In addition, in line with the Company’s strategy to build on its existing portfolio of prospective African gold projects with the potential to deliver shareholder value through exploration, the Company enhanced its Malian gold portfolio through the acquisition of the prospective 250 sq.

km.

Karan gold project (the “Karan Project”) and the 16 sq.

km.

Diatissan gold project in western Mali from Savannah for £250,000 which was again satisfied through the issue of new ordinary shares in the Company.

The Company has established that RAB drilling would be ideal to advance its understanding of these target areas and proposes to undertake a targeted programme in H2 2014. Ethiopian Gold Properties Alecto holds two gold exploration licences in Ethiopia: the 945 sq.

km.

Wayu Boda Project in south-west Ethiopia and the 1,954 sq.

km.

Aysid-Metekel Gold Project in north-west Ethiopia. In October 2013, we were pleased to announce a joint venture with Centamin, the Arabian-Nubian Shield focused mineral exploration, development and mining company, to pursue opportunities offered by certain mining projects identified by Alecto and Centamin within Ethiopia.

Both Wayu Boda and Aysid-Metekel have been designated as joint venture projects, which will result in exploration activities at both properties being funded by Centamin over the next two years in order for it to farm-in for up to a 70% interest in these projects.

Accordingly, we retain exposure to the upside at these greenfield projects with no capital expenditure for the duration of the two year earn-in period. At Wayu Boda, Centamin is required to fund US$1.8 million of exploration work to maintain an initial 51% interest in the project.

Centamin then has the option to fund up to a further US$6 million of work to increase its interest to 70%.

Centamin commenced drilling at the project in March 2014.

Further details of the work programme will be provided when the Company receives a formal report, and we look forward to monitoring the advancement of this promising asset, where grades of up to 47.4 g/t Au have been previously reported from rock chip sampling and trenching. At Aysid-Meketel, Centamin is required to fund US$1.2 million of exploration work to maintain an initial 51% interest, and has the option to fund up to a further US$5 million of work to increase its interest to 70%.

Work commenced in March with the emphasis on mapping, rock chip sampling and stream and soil sampling.

The results of this work will contribute towards generating future drill targets. Looking further ahead, both parties will participate in selecting future targets through a joint venture committee, thereby enabling us to build on the Companys work at the start of this year which generated five high priority target areas for follow up evaluation. Wad Amour Project, Mauritania Alecto also owns the 1,369 sq.

km.

Wad Amour Project in Mauritania, where we have been active since 2011.

We have conducted a range of reconnaissance work since then, including trenching, soil geochemistry and geophysics surveys, which have revealed significant potential for a high-grade Guelb Moghrein style iron oxide copper gold (“IOCG”) deposit.

We have defined two initial priority target areas comprising Chiron, where rock chip sampling has previously returned grades of up to 5.79% copper (“Cu”) at surface, and Oued Amour, which has an 800m Cu anomaly and grab samples up to 1.2% Cu.

In addition, two secondary targets, Tamourt and Gadel, have also been identified.

The full historic trenching results were set out in the Companys announcement of 30 January 2013. In the first half of 2013 the Group completed an extensive trench sampling campaign at Wad Amour.

The results of the sampling campaign together with historical exploration work led to the Group commissioning a 1,500 metre drill programme at Wad Amour in January 2014 to test the copper and gold potential at depth, which was due to commence in April 2014.

Unfortunately, due to circumstances outside the control of the Group, the drill contractor was not able to proceed with the drill programme and accordingly this has now been deferred until a later date. Financial Review During the period, the Company successfully raised £1,150,000 (before expenses) by way of placings, £450,000 through the issue of convertible loan notes, of which £100,000 converted during the period.

In January 2014, a further £1,500,000 (before expenses) was raised.

As a result, Alecto currently has cash of £1.2 million as at 29 May 2014 and is well positioned to pursue exploration opportunities at the Kossanto Project through utilising the Company’s RAB drill whilst work on the Ethiopian properties is currently being funded by Centamin. The loss before taxation for the Group for the year ended 31 December 2013 amounted to £1,242,540 (31 December 2012: £1,101,495).

The Group’s cash position at 31 December 2013 was £624,155 (31 December 2012: £848,059). Outlook As evidenced by our swift progress at the Kossanto Project since its acquisition in October 2013, we are focussed on rapidly delivering results across our portfolio of African gold and base metal projects in order to better position ourselves to make value accretive operational and corporate decisions to maximise value for our shareholders.

We have an array of continuous work programmes on-going which will produce results over the remainder of 2014.

In light of the breadth of our existing portfolio, which consists of both core and non-core projects, we will continue to assess possible transactions and joint venture opportunities in order to maximise the value from our work in the field. I would like to take this opportunity to thank our Board, shareholders and advisers for their continued support and look forward to delivering further progress in the coming months.
Michael Johnson Chairman 29 May 2014 STATEMENT OF FINANCIAL POSITION As at 31 December 2013  
Group
Company
Note 2013 £ 2012 £
2013 £ 2012 £ Non-Current Assets
Property, plant and equipment 6 223,616 47,859
2,364 5,322 Intangible assets 7 5,964,192 3,241,917
- - Investment in subsidiaries 8 - -
6,547,238 3,314,499 Trade and other receivables 10 20,192 36,389
- - Available-for-sale financial assets 9 21,000 50,000
21,000 50,000
6,229,000 3,376,165
6,570,602 3,369,821 Current Assets
Trade and other receivables 10 124,273 53,525
122,937 43,022 Derivative financial instruments 11 250,000 -
250,000 - Cash and cash equivalents 12 624,155 848,059
561,229 831,633
998,428 901,584
934,166 874,655 Total Assets
7,227,428 4,277,749
7,504,768 4,244,476 Equity attributable to the Owners of Parent Company
Share capital 16 4,157,432 2,509,388
4,157,432 2,509,388 Share premium 16 7,509,266 6,717,310
7,509,266 6,717,310 Share option reserve 16 47,316 40,322
47,316 40,322 Available-for-sale financial asset reserve 9 (29,000) -
(29,000) - Translation reserve
9,049 (121,264)
- - Retained losses
(6,824,423) (5,582,036)
(5,907,757) (5,121,522) Total Equity
4,869,640 3,563,720
5,777,257 4,145,498 Current Liabilities
Trade and other payables 13 1,393,008 99,249
1,377,511 98,978 Borrowings 14 350,000 -
350,000 -
1,743,008 99,249
1,727,511 98,978 Non-current liabilities
Deferred income tax liabilities 15 614,780 614,780
- -
614,780 614,780
- - Total Liabilities
2,357,788 714,029
1,727,511 98,978 Total Equity and Liabilities
7,227,428 4,277,749
7,504,768 4,244,476
CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2013
Continued operations Note 2013 £ 2012 £ Revenue
- - Cost of sales
- - Gross profit
- - Administration expenses 18 (789,213) (961,053) Impairment of intangible assets 7 (337,398) (137,111) Loss on foreign exchange
(116,482) (5,030) Operating Loss
(1,243,093) (1,103,194) Finance income 21 553 1,699 Loss Before Income Tax
(1,242,540) (1,101,495) Income tax expense 22 - - Loss for the Year
(1,242,540) (1,101,495) Attributable to Owners of the Parent
(1,242,540) (1,101,495) Earnings Per Share Attributable to Owners of the Parent During the Year
Basic and Diluted Earnings Per Share (pence) 23 (0.306) p (0.368) p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2013
Note 2013 £ 2012 £ Loss for the year
(1,242,540) (1,101,495) Other Comprehensive Income: Items that may be reclassified subsequently to profit or loss
Currency translation differences
130,313 (121,103) Available-for-sale financial assets 9 (29,000) - Total Comprehensive Income for the Year Attributable to Owners of the Parent, net of tax from Continuing Activities
(1,141,227) (1,222,598) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2013
Attributable to owners of the parent
Share capital Share premium Share option reserve Available-for-sale financial asset reserve Translation reserve Retained losses Total equity
£ £ £ £ £ £ £ As at 1 January 2012 1,365,957 5,351,686 179,086 - (161) (4,631,974) 2,264,594 Loss for the year - - - - - (1,101,495) (1,101,495) Other comprehensive income
Currency translation differences - - - - (121,103) - (121,103) Total comprehensive income for the year - - - - (121,103) (1,101,495) (1,222,598) Proceeds from share issue 1,143,431 1,474,009 - - - - 2,617,440 Issue costs - (108,385) 12,669 - - - (95,716) Expired options - - (151,433) - - 151,433 - Transactions with owners, recognised directly in equity 1,143,431 1,365,624 (138,764) - - 151,433 2,521,724 As at 31 December 2012 2,509,388 6,717,310 40,322 - (121,264) (5,582,036) 3,563,720
As at 1 January 2013 2,509,388 6,717,310 40,322 - (121,264) (5,582,036) 3,563,720 Loss for the year - - - - - (1,242,540) (1,242,540) Other comprehensive income
Currency translation differences - - - - 130,313 - 130,313 Available-for-sale financial assets - - - (29,000) - - (29,000) Total comprehensive income for the year - - - (29,000) 130,313 (1,242,540) (1,141,227) Proceeds from share issue 791,304 358,696 - - - - 1,150,000 Issue costs - (110,000) - - - - (110,000) Loan note conversion 60,870 39,130 - - - - 100,000 Share based payments 795,870 504,130 7,147 - - - 1,307,147 Expired options - - (153) - - 153 - Transactions with owners, recognised directly in equity 1,648,044 791,956 6,994 - - 153 2,447,147 As at 31 December 2013 4,157,432 7,509,266 47,316 (29,000) 9,049 (6,824,423) 4,869,640
COMPANY STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2013
Attributable to equity shareholders
Share capital Share premium Share option reserve Available-for-sale investments Retained losses Total equity
£ £ £ £ £ £
As at 1 January 2012 1,365,957 5,351,686 179,086 - (4,520,089) 2,376,640
Loss for the year - - - - (752,866) (752,866)
Total comprehensive income for the year - - - - (752,866) (752,866)
Proceeds from share issue 1,143,431 1,474,009 - - - 2,617,440
Issue costs - (108,385) 12,669 - - (95,716)
Expired options - - (151,433) - 151,433 -
Transaction with owners 1,143,431 1,365,624 (138,764) - 151,433 2,521,724
As at 31 December 2012 2,509,388 6,717,310 40,322 - (5,121,522) 4,145,498
As at 1 January 2013 2,509,388 6,717,310 40,322 - (5,121,522) 4,145,498
Loss for the year - - - - (786,388) (786,388)
Other comprehensive income
Available-for-sale financial assets - - - (29,000) - (29,000)
Total comprehensive income for the year - - - (29,000) (786,388) (815,388)
Proceeds from share issue 791,304 358,696 - - - 1,150,000
Issue costs - (110,000) - - - (110,000)
Loan note conversion 60,870 39,130 - - - 100,000
Share based payments 795,870 504,130 7,147 - - 1,307,147
Expired options - - (153) - 153 -
Transaction with owners 1,648,044 791,956 6,994 - 153 2,447,147
As at 31 December 2013 4,157,432 7,509,266 47,316 (29,000) (5,907,757) 5,777,257
CASH FLOW STATEMENTS For the year ended 31 December 2013
Group
Company
Note 2013 £ 2012 £
2013 £ 2012 £ Cash flows from operating activities
Loss before taxation
(1,242,540) (1,101,495)
(786,388) (752,866) Adjustments for:
Interest received
(553) (1,699)
(553) (1,699) Depreciation 6 27,403 6,963
4,645 1,830 Impairment of exploration assets 7 337,398 137,111
- - Share options expense
7,147 -
7,148 - Introducer fees
- (12,960)
- (12,960) Share based payments
50,000 -
50,000 - Increase in trade and other receivables
(70,748) (24,645)
(79,915) (14,143) Increase in trade and other payables
43,759 39,944
28,530 42,612 Foreign exchange
287,485 6,336
- - Net cash used in operations
(560,649) (950,445)
(776,533) (737,226) Cash flows from investing activities
Interest received
553 1,699
553 1,699 Acquisition of subsidiaries (net of cash acquired) 25 22,887 (129,600)
- (129,600) Loans granted to subsidiary undertakings
- -
(732,739) (721,784) Purchase of intangible assets 7 (885,886) (485,977)
- - Purchase of property, plant and equipment 6 (34,117) (46,799)
(1,687) (7,153) Net cash used in investing activities
(896,563) (660,677)
(733,873) (856,838) Cash flows from financing activities
Proceeds from issue of share capital
1,000,000 1,836,000
1,000,000 1,836,000 Transaction costs of share issues
(110,000) (95,717)
(110,000) (95,717) Proceeds from borrowings
350,000 -
350,000 - Net cash generated from financing activities
1,240,000 1,740,283
1,240,000 1,740,283 Net (decrease)/increase in cash and cash equivalents
(217,212) 129,161
(270,406) 146,219 Cash and cash equivalents at beginning of year
848,059 715,153
831,633 685,414 Exchange gains on cash and cash equivalents
(6,692) 3,745
- - Cash and cash equivalents at end of year 12 624,155 848,059
561,227 831,633
Major non-cash transactions On 4 October 2013 the Company issued 108,695,652 ordinary shares of 0.7 pence each fully paid at 1.15 pence per share as consideration for business acquisitions.

See Note 25. On 6 November 2013 the Company issued 3,000,000 warrants exercisable for three years from the date of grant at a price of 1 pence. On 22 November 2013 the Company issued 5,000,000 ordinary shares of 0.7 pence each fully paid at 1 pence per share as consideration for financing fees. At 31 December 2013, £13,771 of exploration and evaluation additions remained outstanding and unpaid. NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2013 1.

General information The principal activity of Alecto Minerals plc (“the Company”) and its subsidiaries (together “the Group”) is the exploration and development of precious and base metals.

The Company’s shares are quoted on the AIM market of the London Stock Exchange plc.

The Company is incorporated and domiciled in the UK. The address of its registered office is 47 Charles Street, London, W1J 5EL. 2.

Summary of Significant Accounting Policies The principal Accounting Policies applied in the preparation of these Financial Statements are set out below.

These Policies have been consistently applied to all the periods presented, unless otherwise stated. 2.1 Basis of Preparation of Financial Statements The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the parts of the Companies Act 2006 that applies to companies reporting under IFRS.

The Consolidated Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets. The Financial Statements are presented in UK Pounds Sterling rounded to the nearest pound. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates.

It also requires management to exercise its judgement in the process of applying the Group’s Accounting Policies.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 4. 2.2 Basis of Consolidation The Consolidated Financial Statements consolidate the Financial Statements of the Company and the audited management accounts of all of its subsidiary undertakings made up to 31 December 2013. Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than half the voting rights.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

They are de-consolidated from the date that control ceases. The Group applies the acquisition method of accounting to account for business combinations.

The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group.

The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values at the acquisition date. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the identifiable net assets acquired and liabilities assumed.

If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss in the Income Statement. Investments in subsidiaries are accounted for at cost less impairment. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

All intercompany transactions and balances between Group enterprises are eliminated on consolidation. 2.3 Going Concern The Group’s business activities together with the factors likely to affect its future development, performance and position are set out in the Chairman’s Statement on pages 3 to 5.

In addition, Note 3 to the Financial Statements include the Group’s objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and its exposure to credit and liquidity risk. The Financial Statements have been prepared on a going concern basis.

Although the Group’s assets are not generating revenues and an operating loss has been reported, the Directors believe that the Group has sufficient funds to undertake its committed expenditure over the next 12 months, and are confident that additional funding will be forthcoming to continue its current exploration programme as well as additional works. The Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future.

Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. 2.4 New and Amended Standards (a) New and amended standards mandatory for the first time for the financial year beginning 1 January 2013 The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period.

The following new standards, interpretations and amendments to published standards effective in the year have been adopted by the Group: Standard Impact on initial application Effective date IAS 12 (amendment) Deferred tax: Recovery of underlying assets 1 January 2012*1 IAS 1 (amendment) Presentation of items of other comprehensive income 1 July 2012 IFRS 13 Fair value measurement 1 January 2013 IAS 19 (amendment) Employee benefits 1 January 2013 IFRIC 20 Stripping costs in the production phase of surface mine 1 January 2013 IFRS 1 (amendment) Government loans 1 January 2013 IFRS 7 (amendment) (annual improvements 2009-2011) Disclosures: Offsetting financial assets and financial liabilities 1 January 2013 IFRS 1 (amendment) (annual improvements 2009-2011) First time adoption of International Financial Reporting Standards 1 January 2013 IAS 1 (amendment) (annual improvements 2009-2011) Presentation of financial statements 1 January 2013 IAS 16 (amendment) (annual improvements 2009-2011) Property, plant and equipment 1 January 2013 IAS 32 (amendment) (annual improvements 2009-2011) Financial instruments – presentation 1 January 2013 IAS 34 (amendment) (annual improvements 2009-2011) Interim financial reporting 1 January 2013
*1 Effective date 1 January 2013 for the EU (b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted The following new standards, amendments to standards and interpretations have been issued but are not effective or not yet endorsed for the financial year beginning 1 January 2013 and have not been early adopted: Standard Impact on initial application Effective date IAS 19 (amendment) Defined benefit plans: employee contributions 1 January 2014*1 IAS 27 (amendment) Separate financial statements – Investment entities 1 January 2014 IAS 28 Investments in associates and joint ventures 1 January 2014 IAS 32 (amendment) Offsetting financial assets and financial liabilities 1 January 2014 IAS 36 (amendment) Impairment of assets – Recoverable amount disclosures for non-financial assets 1 January 2014 IAS 39 (amendment) Novation of derivatives and continuation of hedge accounting 1 January 2014 IAS 39 (amendment November 2013) Financial instruments No mandatory effective date IFRS 7 (amendment November 2013) Financial instruments No mandatory effective date IFRS 9 Financial instruments 1 January 2014*1 IFRS 10 Consolidated financial statements 1 January 2014 IFRS 10 (amendment) Consolidated financial statements – Investment entities 1 January 2014 IFRS 10 (amendment) Consolidated financial statements – transition relief 1 January 2014 IFRS 11 Joint arrangements 1 January 2014 IFRS 11 (amendment) Joint arrangements – transition relief 1 January 2014 IFRS 12 Disclosure of interests in other entities 1 January 2014 IFRS 12 (amendment) Disclosure of interests in other entities – Investment entities 1 January 2014 IFRS 10 (amendment) Disclosure of interests in other entities – transition relief 1 January 2014 IFRIC 21 Levies 1 January 2014*1 IFRS 2 (amendment) (annual improvements 2010-2012) Share-based payment – Definition of ‘vesting condition’ 1 July 2014*1 IFRS 3 (amendment) (annual improvements 2010-2012) Business combinations – Accounting for contingent consideration in a business combination 1 July 2014*1 IFRS 8 (amendment) (annual improvements 2010-2012) Operating segments – Aggregation of operating segments and Reconciliation of the total of the reportable segments’ assets to the entity’s assets 1 July 2014*1 IFRS 13 (amendment) (annual improvements 2010-2012) Fair value measurement – Short-term receivables and payables 1 July 2014*1 IAS 16 (amendment) (annual improvements 2010-2012) Property, plant and equipment – Revaluation method – proportionate restatement of accumulated depreciation 1 July 2014*1 IAS 24 (amendment) (annual improvements 2010-2012) Related party disclosures – Key management personnel 1 July 2014*1 IAS 38 (amendment) (annual improvements 2010-2012) Intangible assets – Revaluation method – proportionate restatement of accumulated amortisation 1 July 2014*1 IFRS 1 (amendment) (annual improvements 2011-2013) First time adoption of International Financial Reporting Standards – Meaning of effective IFRSs 1 July 2014*1 IFRS 3 (amendment) (annual improvements 2011-2013) Business Combinations – Scope of exception for joint ventures 1 July 2014*1 IFRS 13 (amendment) (annual improvements 2011-2013) Fair value measurement – Scope of paragraph 52 (portfolio exception) 1 July 2014*1 IAS 40 (amendment) (annual improvements 2011-2013) Investment property – Clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property 1 July 2014*1
*1 Not yet endorsed by the EU The Group is evaluating the impact of the new or amended standards above.

The new or amended standards are not expected to have a material impact on the Group’s results or shareholders’ funds. 2.5 Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions. 2.6 Foreign Currencies (a) Functional and presentation currency Items included in the Financial Statements of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”).

The functional currency of the UK parent entity is Pounds Sterling and the functional currency of the BVI subsidiary is US Dollars.

The currency of Mauritania is the Mauritanian Ouguiya; however all material contracts with the Mauritanian subsidiary are denominated in Euros which is, therefore, its functional currency.

The currency of Ethiopia is the Ethiopian Birr, which is therefore the functional currency of the Ethiopian subsidiaries.

The currency of Mali is the Central African Franc, therefore the functional currency of the Malian subsidiary.

The Financial Statements are presented in Pounds Sterling, rounded to the nearest pound, which is the Company’s functional and Group’s presentation currency.
(b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement. (c) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: · assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position sheet; · income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and · all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income.

When a foreign operation is sold, such exchange differences are recognised in the Statement of Comprehensive Income as part of the gain or loss on sale. 2.7 Intangible assets (a) Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.

Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.

Goodwill is monitored at the operating segment level. Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment.

The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell.

Any impairment is recognised immediately as an expense and is not subsequently reversed. (b) Exploration and evaluation The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources.

Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource.

Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production. Exploration and evaluation assets are recorded and held at cost. Exploration and evaluation assets are assessed annually for impairment.

The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas. Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement. 2.8 Plant and Equipment Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

The carrying amount of the replaced part is derecognised.

All other repairs and maintenance are charged to the Income Statement during the financial period in which they are incurred. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates: Field equipment – 20% straight line Motor vehicles – 20% straight line Computer equipment – 20-50% straight line The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other (losses)/gains’ in the Income Statement. 2.9 Impairment of non-financial assets Intangible assets that have an indefinite useful life, for example, intangible assets not ready to use, are not subject to amortisation and are tested annually for impairment. Tangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 2.10 Financial Assets Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss; loans and receivables; and available-for-sale.

The classification depends on the purpose for which the financial assets were acquired.

Management determines the classification of its financial assets at initial recognition.
(i) Financial assets at fair value through profit or loss Financial assets at fair value or loss are financial assets held for trading.

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term.

Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise, they are classified as non-current.
(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

They are included in current assets, except for maturities greater than 12 months after the Statement of Financial Position date.

These are classified as non-current assets.

The Group’s loans and receivables comprise trade and other receivables, restricted assets and cash and cash equivalents in the Statement of Financial Position. Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.

They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period. Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade date – the date on which the Group commits to purchasing or selling the asset.

Financial assets carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the Income Statement.

Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value unless the Group is precluded from doing so as, in the case of unlisted equity securities, the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed.

In such circumstances available-for-sale financial assets are held at cost and reviewed annually for impairment. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the Income Statement within “Other (Losses)/Gains – Net” in the period in which they arise. Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the Income Statement as “gains and losses from investment securities.” Interest on available-for-sale securities calculated using the effective interest method is recognised in the Statement of Comprehensive Income as part of other income.

Dividends on available-for-sale equity instruments are recognised in Income Statement as part of other income when the Group’s right to receive payments is established. Impairment of financial assets The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired.

A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated. The criteria that the Group uses to determine that there is objective evidence of an impairment loss include: · significant financial difficulty of the issuer or obligor; · a breach of contract, such as a default or delinquency in interest or principal repayments; · the disappearance of an active market for that financial asset because of financial difficulties; · observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio; or
· for assets classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost. (i) Assets carried at amortised cost The amount of impairment is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset’s original effective interest rate.

The asset’s carrying amount is reduced, and the loss is recognised in the Income Statement.

As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the Income Statement. (ii) Assets classified as available-for-sale The cumulative impairment loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the Income Statement – is removed from equity and recognised in the Income Statement. 2.11 Trade and Other Receivables Trade and other receivables are amounts due from third parties in the ordinary course of business.

If collection is expected in one year or less they are classified as current assets.

If not they are presented as non-current assets. Trade and other receivables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less provision for impairment. 2.12 Derivative financial instruments Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. 2.13 Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and in hand, and are subject to an insignificant risk of changes in value. 2.14 Share Capital Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. 2.15 Share Based Payments The Group operates a number of equity-settled, share-based schemes, under which the entity receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group.

The fair value of the third party suppliers’ services received in exchange for the grant of the options is recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the service provided.

The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted: · including any market performance conditions; · excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and · including the impact of any non-vesting conditions (for example, the requirement for employees to save). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest.

The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions.

It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity. When the options are exercised, the Company issues new shares.

The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised. 2.16 Trade Payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Accounts payable are classified as current liabilities if payment is due within one year or less.

If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method. 2.17 Taxation There has been no tax credit or expense for the period relating to current or deferred tax.

Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.

Deferred tax assets and liabilities are not discounted. 2.18 Operating leases Leases of assets under which a significant amount of the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases.

Operating lease payments are charged to the income statement on a straight-line basis over the period of the respective leases. 2.19 Finance income Interest income is recognised using the effective interest method. 2.20 Compound Financial Instruments Compound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at the option of the holder.

The number of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option.

The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component.

Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to their initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method.

The equity component of a compound financial instrument is not remeasured subsequent to initial recognition, except on conversion or expiry. 3.

Financial Risk Management 3.1 Financial Risk Factors The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk and price risk), credit risk and liquidity risk.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. Risk management is carried out by the London based management team under policies approved by the Board of Directors. Market Risk (a) Foreign currency risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Central African Franc, Ethiopian Birr, Mauritanian Ouguiya and the Pound Sterling.

Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group negotiates all material contracts for activities in relation to its subsidiaries in either Pounds Sterling or Euros which in the Directors’ opinion are more stable than the respective local currencies.

The Group also holds minimal liquid assets in Central African Franc, Mauritanian Ouguiya and Ethiopian Birr.

The Group does not hedge against the risks of fluctuations in exchange rates.

The volume of transactions is not deemed sufficient to enter into forward contracts.

The Group ha



Products & Services | Jobs