Alecto Minerals Raises £1,472,500 for drilling and exploration

Alecto Minerals plc, the AIM listed multi-commodity exploration and development company with projects in Ethiopia, Mauritania, and the right to acquire a highly prospective bauxite asset in Guinea,announces that it has raised £1,472,500 by way of a placing of 95,000,000 New Ordinary Shares at 1.55p per share to a new cornerstone investor. The funds raised will primarily be used to advance its highly prospective African resource portfolio through implementing systematic drilling and exploration programmes.

Cornerstone investor Mr. Fahad Al-Tamimi is a highly successful businessman who is the founder and owner of a substantial diversified business group with its head offices in Riyadh, Saudi Arabia. Over the last three decades, Mr. Al-Tamimi has been at the centre of many of the Kingdom's most significant infrastructure projects in the energy, mining and transportation sectors. He has subscribed for 95,000,000 million New Ordinary Shares and has the option to subscribe for further shares in Alecto in order to acquire a 29.9% stake in Alecto following completion of its current fundraising round. Additionally, he has received warrants in relation to the placing, details of which are provided below and he retains the right to appoint a director to the board of the Company.

Alecto's multi-commodity portfolio includes three Mauritanian licences covering 1,902 sq km located in the highly prospective Mauritanide Belt. Results to date have highlighted the presence of potentially significant Iron Oxide Copper Gold ('IOCG') mineralisation at the 615 sq km Mauritanian Wad Amour licence. As a result, the Company has planned a circa 1,500m scout drilling programme.

Exploration programmes are also planned for Alecto's Ethiopian portfolio, which includes the 945 sq km Wayu Boda Gold Project, which has advanced artisanal workings, in the central-southern Adola greenstone belt, and the 1,953 sq km Aysid-Metekel gold licence in the Aysid-Metekel region of north-western Ethiopia.

Additionally, the Company is currently conducting due diligence at the highly prospective 711 sq km bauxite licence 223 in Guinea.

Mr. Al-Tamimi said, "I believe Alecto has the capacity to deliver a strategic footprint of assets in Africa that over time have the ability to add significant value through aggregation and development."

Alecto Managing Director Damian Conboy said, "We are delighted to secure a significant cornerstone investor who has recognised the exciting growth potential offered by our current portfolio of gold and IOCG assets in Africa. The strategic importance of securing a cornerstone investor that shares the same long term vision for Alecto cannot be underestimated. This major investment provides a strong capital foundation, which will allow the Company to fully realise the potential of current assets and unlock their intrinsic value, whilst seeking out new expansion opportunities.

"All our projects provide shareholders with exposure to recognised areas of mineralisation within Mauritania and Ethiopia as evidenced by their close proximity to commercial deposits. With this in mind, we now have the necessary funds and investor support to implement defined exploration programmes to advance these projects and conduct our ongoing due diligence of the Guinean Bauxite Licence 223, which has near-term production potential to build significant value for shareholders."

As part of the transaction, Mr. Al-Tamimi will also be issued with warrants on the basis of one warrant being issued for every two and one half shares subscribed for by Mr. Al Tamimi, a total of 38,000,000 warrants on the basis of a subscription for 95,000,000 New Ordinary Shares. Such warrants will be valid for two years and exercisable at a price of 3.1p, provided that Mr Al-Tamimi may not exercise such warrants, if to do so would result in him acquiring an interest of 30% or more in the share capital of Alecto, which would require him to make a mandatory offer to the shareholders of Alecto under Rule 9 of The City Code on Takeovers and Mergers.

The Placing is conditional, inter alia, on admission of the Placing Shares to trading on AIM ('Admission'). It is expected that Admission will occur, and dealings in the Placing Shares will commence, at 8.00 a.m. on 25 May 2012.

The Placing represents approximately 42 per cent. of the issued share capital of the Company and following Admission, the Placing Shares will represent 29.49 per cent. of the enlarged issued share capital, which will then comprise 322,134,094 Ordinary Shares.

The Placing Shares will, when issued, rank pari passu in all respects with the existing issued Ordinary Shares, including the right to receive any dividends and other distributions declared following Admission.