Alecto Energy plc / EPIC: ALO / Market: AIM / Sector: Exploration & Development

24 May 2011

Alecto Energy plc ("Alecto" or the "Company")

Acquires Ethiopian Gold Project

Alecto Energy plc, the AIM listed resource company, is pleased to announce that it has acquired 100% of the issued share capital of Nubian Gold Exploration Limited ("Nubian Gold"), which holds a 1,953 sq km gold exploration licence (the "Licence") in the highly prospective Aysid-Metekel region of north western Ethiopia.

Highlights:

• Acquisition in line with strategy to become a multi-commodity exploration and development company in Africa - Alecto's portfolio now includes highly prospective projects in recognised highly prospective mineral districts in Mauritania, Ghana and Ethiopia.
• Licence located within the Arabian-Nubian shield on the Western Akobo Greenstone belt - prime mineralised region with extensive artisanal workings:
  • Approximately 50 km N and NE, respectively, of the highly prospective Towchester and Brantham tenements of AIM quoted Nyota Minerals Limited; and
  • Approximately 80 km from the Fiti skarn gold deposit discovered by MIDROC Gold Mine plc, owner-operator of the Lege Dembi gold mine in southern Ethiopia.
• Development programme being formulated to identify prospective targets.
• Ethiopia offers an established and prospective environment to operate - clear strategy to maximise the development of its mineral resources within the context of a free-market economic policy and a five-year (2011-16) National Growth and Transformation Plan (the "GTP").

Alecto Executive Director Damian Conboy said, "We believe that the acquisition of this gold licence in Ethiopia will prove to be a significant and strategic development for Alecto in a country recognised as having an established mining industry along with Government support through the GTP.   A reconnaissance programme, which includes mapping, geochemical stream sediment and soil and rock chip sampling, was initiated by Mineral Exploration Management on behalf of Nubian Gold, and Alecto will review the initial results generated from this programme.  Following the review of the relevant preliminary reconnaissance programme data, our intention would be to continue this work campaign in order to develop a wider understanding of the mineralisation of licence and to generate targets for further exploration work.

"With the results from initial exploratory work on our Mauritanian gold and base metal licences, and our recent licence acquisition in Ghana, we have confidence in this investment in Ethiopia."

Acquisition agreement

Under the terms of a share purchase agreement (the "Agreement"), Alecto has acquired Nubian Gold for an initial consideration of GBP550,000 to be satisfied by a two-stage cash payment of GBP220,000 to be completed within 60 days of completion, and the allotment of 8,870,968 new ordinary shares of 0.7 pence each in Alecto, equal to GBP330,000 at a volume weighted average share price of 3.72p for the 30 days ended 19 May 2011 (the "Initial Consideration Shares").

The sellers have agreed not to dispose of 6,048,387 of the Initial Consideration Shares for 12 months following their allotment.

Should Alecto decide to continue to fund the exploration programme and commitment beyond 31 January 2012, Alecto will pay an additional GBP330,000 to be satisfied by the further allotment of a corresponding number of new ordinary shares of 0.7p each in Alecto, according to a volume weighted average share price for the 30 days prior to 31 January 2012 (the "Deferred Consideration Shares"). Should Alecto decide not to continue funding the exploration on the Licence on or before 1 February 2012 then it will transfer 51% of the issued share capital of Nubian Gold back to the sellers at a nominal consideration of �1 (in aggregate). 

Background to the Licence

The Licence lies within northwest Ethiopia 600 km NW from the capital city, Addis Abbaba, and in the Metekel zone of the Benishangul Gumuz National Regional state.

The Licence has been granted for an initial three year period from 29 April 2011 during which time the main objective of exploration by Alecto will be to define and evaluate targets of merit.  An initial reconnaissance type exploration programme is being carried out by Alecto comprising regional stream sediment, soil and rock chip sampling.  Alecto intends to adopt the Work Programme agreed by Nubian Gold with the Ministry of Mines, which comprises phased exploration appropriate to the regional geology. 

Subsequent to the initial work, a further and staged programme of exploration is anticipated by the Board comprising geological mapping, geophysics including ground magnetic, induced potential and electro-magnetic (EM).  It is expected by the Board that this will lead to trenching as well as various forms of drilling depending on initial results.  The Board consider that this approach is consistent with exploration currently being implemented by other international exploration companies.

Application will be made for the Initial Consideration Shares, which will rank pari passu with the Company's existing ordinary shares in issue, to be admitted to trading on AIM ("Admission").  It is expected that admission will be effective and that dealings in the Initial Consideration Shares that are issued without restriction will commence on 2 June 2011. When issued, the Initial Consideration Shares will represent 4.55% of the Company's enlarged issued share capital (excluding the Deferred Consideration Shares).

The total enlarged issued share capital of the Company following Admission will be 195,136,748 ordinary shares of 0.7 pence each in the Company. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.

**ENDS**

For further information, please visit www.alectoenergy.com or contact:

Notes:

Alecto Energy Plc is an AIM listed resource exploration and development company focussed on Africa. 

Alecto has a diverse portfolio of exploration assets in both Mauritania and Ghana.  In Mauritania, the Company currently owns three gold and base metal development licences totalling 1,902 sq km and two uranium licences totalling 1,592 sq km in the highly prospective Mauritanide mobile belt.  Additionally, the Company controls a 191 sq km gold exploration licence in the highly prospective Ashanti Gold Belt in Ghana.  Alecto is committed to conducting exploratory work across its portfolio, designed to strengthen the Company's knowledge of the assets and delineate targets for further exploration.

Alecto also has a 9.73% shareholding in AIM listed resource investment company Charles Street Capital plc.  The Board believes this investment will provide Alecto with exposure to a diverse range of potential resource projects.

Lottie Brocklehurst

St Brides Media & Finance Ltd

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