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30 May | A Little Look at Alecto

We bought a bunch of Alecto Energy back in November 2010, our reasons then were speculative but simple:

“Alecto has been awarded three gold and copper mining and two uranium mining licenses in the Mauritanide mobile belt of Mauritania and there’s the possibility of more good news on the horizon.”

Since we jumped on board, trading in Alecto has been within a range of between three and four-and-a-half pence a share. Volumes are probably slightly down on where they were six months ago but without doing too much homework on the matter, I reckon that’s probably true across the board for AIM shares for the period.

In fact, looking back with a little hindsight at the beginning of 2011 purely from a price perspective, Alecto has fared pretty well, managing to hang on to most of the big gains of October 2010 and being – in my humble opinion – in a good position to add to those gains again later this year.

We’ve had a couple of spikes on good news but profit takers have bailed out quickly and more than once on a good news day, Alecto has closed lower than it started out.

Following on from Alecto’s final results announced in April (which we spoke about at the time), Alecto has kept the information flow to investors coming with two positive exploration updates from Mauritania, an acquisition of 80% of a 191 square kilometre gold exploration licence in the highly prospective Ashanti Gold Belt in Ghana and most recently, the acquisition of 100% of the issued share capital of Nubian Gold Exploration Limited, which holds a 1,953 square kilometre gold exploration licence in the highly prospective Aysid-Metekel region of north western Ethiopia.

And there’s nothing like a name change (Alecto Energy to Alecto Minerals) to thow a little investor attention your way.

Cash in the bank as reported in their 2010 results was a healthy £2.37M – although obviously this will have dwindled since.

And then there’s Alecto’s 9.73% shareholding in AIM listed resource investment company Charles Street Capital plc which should (the company says) “provide Alecto with exposure to a diverse range of potential resource projects” going forward.

So Alecto’s African assets now include highly prospective projects in recognised highly prospective mineral districts in Mauritania, Ghana and now Ethiopia. They’re not shy when it comes to updating investors and lately there’s been more than enough coming from Alecto to make this a handy hold for this small-time investor who’s expecting some nice gains in the coming 12 months.

As always, please do a ton of your own homework and never invest any money you can’t afford to lose. I’m an amateur investor with a penchant for a speculative punt who’s possibly lost more than he’s won over the journey, so please double check anything I say before considering it fact.

Thanks again for dropping by, may your portfolios swim in a sea of upward pointing arrows.