6 June 2016

Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: Mining

Alecto Minerals plc ('Alecto' or the 'Company')

Final Results for the year ended 31 December 2015 and Notice of AGM

Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base metal exploration and development company, is pleased to announce its audited final results for the year ended 31 December 2015. In addition, the Company announces that its Annual General Meeting ('AGM') will be held at the Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE on 30 June 2016 at 12.00 p.m. Copies of the Company's Annual Report and Financial Statements, together with the Notice of AGM, will be posted to shareholders today and will shortly be available to view and download on the Company's website at www.alectominerals.com.

Highlights

• Transformation into a pre-production gold company with near to mid-term cash flow potential following the successful acquisition of the historical Matala and Dunrobin Gold Mines in Zambia

• Feasibility Study on Matala completed post period end, demonstrating positive economics for a proposed 400,000 tonnes per annum ('tpa') oxide and transitional open pit operation with a mine life of approximately 4 years 8 months at US$1,200/oz Au with exploration upside and underground mining potential:

  • Estimated capital cost for plant and infrastructure of US$14.4 million

  • Project NPV of US$28.6 million at an 10% discount rate

  • Unlevered project IRR of 52%

• Vendor financing progressing post period end with Yantai Xinhai Machinery Co. Ltd with respect to the proposed construction and financing of mining operations at Matala

• Delivery of two joint venture agreements ('JV') for the Group's Malian gold properties post period end enabling Alecto to retain exposure to its promising exploration assets in Mali, without further direct expense

  • JV with Randgold Resources ('Randgold') for Kossanto West - Randgold to fund all costs up to and including the completion of a pre-feasibility study - Alecto to retain a 35% interest

  • JV with Kola Gold ('Kola') via its subsidiary for the Karan Gold Project - Kola will solely fund all exploration and development costs up to and including the completion initially of a scoping study and ultimately a Bankable Feasibility Study

• Profit before taxation for the Group for the year ended 31 December 2015 of

  £3,343,615 (31 December 2014: restated loss of £767,804) - due to a fair value adjustment to the exploration and evaluation assets acquired by the Group in November 2015

• Cash position of £530,003 (2014: £114,258) bolstered post period end via £665,000 (before expenses) placing - solid position to fund working capital requirements as Matala is progressed towards future production

Alecto's CEO, Mark Jones, commented:

"We made great strides towards becoming an African gold producer in 2015. The strong economics and low costs associated with delivering production at the historical Matala Gold Mine in Zambia, which was acquired alongside the Dunrobin Mine late last year, have been demonstrated and with vendor financing progressing we are in a solid position to execute on our production plans in the near term. This exciting period was also marked by a significant amount of work towards securing joint venture partners for the rest of our African gold exploration portfolio, which were documented and formalised post the period end. With production targeted in the near to mid-term and exposure to a prospective exploration portfolio in proven gold regions at no cost to Alecto, I am confident that the coming months will prove to be both busy and positive for the Company as we seek to build value in our business for shareholders."

Chairman's Statement

Despite the extremely difficult market conditions faced by junior mining and exploration companies over the last several years, this has been a transformational period for Alecto with significant corporate activity in pursuit of our stated strategy to become a gold producer in Africa in the near to mid-term. We made considerable headway in setting the parameters for the successful negotiation of joint venture partnerships in respect of for our attractive exploration portfolio in West Africa and ended the reporting period as a very different Group from how we began in 2015.

As my first statement since being appointed as Chairman of the Company, I am delighted to report on the successful transition of Alecto from explorer to developer, with a JORC Code compliant total estimated resource of over 1 million oz gold ('Au') (from 247,000 oz Au in the prior year) and approximately a further 0.24 million oz Au of non-JORC resources and a 25-year renewable mining licence, with a clear path to production being established in Zambia. This is in addition to the successful delivery of two joint venture agreements for our Malian properties through partnerships with both FTSE-100 Randgold Resources Limited (LSE:RRS) ('Randgold Resources') and Kola Gold Limited, via its subsidiary Cora Gold Limited ('Cora Gold'), which enables us to retain exposure to our promising exploration assets in Mali, without incurring any further direct expense. Accordingly, I believe the Group is well positioned for achieving future growth.

Our executive management and technical staff had been working since 2014 on securing a project that would meet the stringent criteria we had set to ensure that we would have the necessary degree of confidence in financing, developing and managing a resultant future mining operation. Their ability to effectively identify and evaluate mining opportunities in

Africa, culminating, in November 2015, in the successful acquisition of the historic Matala and Dunrobin gold mines in Zambia, confirmed that focused determination and effort to acquire the right project clearly pays off. This acquisition marked a turning point for the Company and is expected to deliver substantial future value and economic returns to stakeholders.

Key Project Developments Zambia

In November 2015, Alecto acquired a 100% interest in the historic Matala and Dunrobin gold

mines in Zambia. With an existing 25-year renewable mining licence covering 32km2 of the Mwembeshi Shear Zone, an environmental permit in place, feasibility study and nearly US$20 million of historic investment, the acquisition brought an additional 760,000 oz Au of estimated resources into the group at an acquisition cost of less than US$3 per ounce, which is substantially below the industry standard cost for a discovery resource of this type.

Having worked closely with the vendor's team for several months prior to completing the acquisition, Alecto developed a new approach to mining the advanced deposits, culminating in the production of an internal Scoping Study that indicated strong economics at the prevailing gold price. Pursuant to this new approach, Alecto was well placed to negotiate and sign an engineering, procurement and construction ('EPC') contract with South African mining consultants and EPC specialists, PenMin (Pty) Ltd ('PenMin') in December 2015, less than a month after acquiring the historic mines.

Post the end of the reporting period, Alecto's executive management team completed an introductory visit to China with PenMin in order to establish a relationship with Yantai Xinhai Machinery Co. Ltd ('Xinhai'), a private Design, Build and Operate ('DBO') contractor, able to supply vendor financing. A key component of these initial meetings was to understand Xinhai's commercial requirements for financing a project such as Matala. Accordingly, in February 2016, PenMin produced a feasibility study for the Matala project which addressed all of Xinhai's requirements, following which all parties signed a Letter of Intent for the provision of up to US$14.4 million of financing for the Design, Build and Operation of a proposed 400,000 tonne per annum mine, expected to produce circa 33,000 oz Au per annum, with a net present value for the project (at a 10% discount rate) of US$28.6 million and an estimated internal rate of return (IRR) of 52%.

Our development plan for Matala is designed to be rapid and robust. Taking advantage of the measured and indicated portions of the shallow oxide and transitional ores to reduce both mining and process risk, a narrow slot cut along strike is planned to create an elongated pit with a reduced stripping ratio. Ore at the relatively high-grade of 2.8g/t Au will be delivered to the run-of-mine ('ROM') pad and a simple crushing, gravity and direct cyanidation process will be adopted. Additional oxide ores from dump and process material from historical mining activity and fresh ores from satellite deposits have been identified and will be mined along with the oxide opportunity at the Dunrobin pit, providing for an estimated 10 year life of mine

('LOM'). Once the oxide and transitional ores have been exhausted a simple process upgrade will allow for the processing of sulphide ores from all deposits and is expected to increase the LOM substantially.

With a recent strengthening of the price of gold, excellent project economics, and a financing route that minimises shareholder dilution, Alecto has established a solid backbone for a profitable and successful future mining operation that will define the Group as a producer in the near to mid-term.

Mali

The Group commenced 2015 with an estimated resource of 247,000 oz Au at its Kossanto East gold project, having grown such resource estimate by 131% during the course of 2014. With market conditions unfavourable to secure funding for further exploration expenditure, and having gauged the level of interest from major gold producers in the Company's assets, the Board took the decision to leverage the strong balance sheets of interested parties and seek joint venture partnership arrangements for the continued development of its exploration portfolio assets in West Africa. The objective of this approach was to maintain exposure to what the Board views as being highly attractive and promising early stage exploration opportunities, without incurring additional expenditure on further drilling and exploration activities.

Kossanto West - Randgold Resources Joint Venture

The process of partnering with a 'major', meant that certain pre-conditions were required to be met including the consolidation and renewal of certain of the Group's licences. To this end, the licences of Kobokoto and Kobokoto East in Mali were consolidated into a single block and, packaged together with Koussikoto, thereby offering Randgold Resources exposure to the regional structure of the Main Transcurrent Shear Zone (MTZ), the current focus for much of their exploration activities in western Mali and eastern Senegal.

A joint venture agreement was duly signed post the end of the reporting period, in February 2016, and activities on the ground are currently expected to commence in late Q2 2016.

Kossanto East

In March 2015, Alecto signed a co-operation agreement with TSX.V quoted Desert Gold Ventures Inc. ('Desert Gold'), to enable information sharing and collaboration, with a view to potentially jointly developing Alecto's Kossanto East and Desert Gold's Barani East deposits as one project. Throughout the reporting period a number of tasks were achieved, including a new technical report on Barani East, preliminary engineering work, and economic and base case studies, which culminated in the production of a scoping study. Initial scoping study level results demonstrated positive economics based on a 400,000 tonnes per annum heap-leach project with an NPV (at a 10% discount rate) of US$27.4 million and an IRR of 107%.