Xtract Resources subsidiary signs mining agreements in Mozambique

Josh White Sharecast | 19 Jun, 2017 12:36 | | |

libras

Xtract Resources

0.01

17:18 22/06/17
-4.35%
-0.00
  • 7,636.99
  • 0.01%0.74
  • Max: 7,647.60
  • Min: 7,487.67
  • Volume: 0
  • MM 200 : n/a
17:18 22/06/17
  • 968.20
  • -0.31%-2.99
  • Max: 970.71
  • Min: 968.11
  • Volume: 0
  • MM 200 : n/a
17:18 22/06/17

Xtract Resources announced on Monday that its wholly-owned Mozambican subsidiary, Explorator Limitada, had concluded a mining contractor agreement with Omnia Mining and Moz Gold Group for the exploitation of alluvial gold deposits at its Manica mining concession in Mozambique.

The AIM-traded firm confirmed the “experienced” alluvial mining contractors, who were already operating in the Manica area, had been appointed to mine the western half of the alluvials in the Manica Concession.

It said the agreement provided for monthly payments against the monthly run-of-mine performance.

Initial mining was to take place - subject to obtaining the environmental impact assessment - no later than 1 September, with a minimum capacity of 220,000 tonnes per month to be achieved by 1 November this year.

The price per tonne would vary according to the installed capacity, the board explained.

It said the run-of-mine payment would be adjusted against the gold price, with a floor price of $1,250 per ounce and a cap of $1,600 per ounce.

Annual production had a target of 2,640,000 tonnes of alluvial materials, with penalties and termination clauses against non-performance.

Assuming a base gold price of $1,250, expected Explorator attributable monthly revenue would be $165,000 from November onwards.

The firm said the initial contract period was for 10 years or to the depletion of alluvials - whichever occurs first - with an option to extend for a further five years if the alluvials were not yet depleted.

“The alluvial agreement is a very positive move for Xtract, providing potential significant cash flows with upside based on contractual minimums,” said chairman Colin Bird.

“We are currently negotiating the eastern half of the concession with other contractors and expect to make an announcement by the end of July 2017.”

Bird said the agreement would begin early next week, and the board “fully expects” to receive some income during the build-up to September.

“In the meantime, we have further evaluated the Manica concession and see much potential to value add to our hard rock as well as possible further alluvial mining.

“We are also reviewing financing alternatives for the open pit mine and will keep the market informed with our progress.”

More news

17:39 FX round-up: Sterling mixed, prone to volatility as PM May heads Brussels

Sterling had a mixed Thursday as PM Theresa May went to Brussels to unveil to European leaders her allegedly more generous plans for the rights of EU citizens in the UK.

17:26 London close: FTSE scrapes along as PM takes her Brexit show to Brussels

The FTSE scraped along to a lower close as PM Theresa May looked took her Brexit and hung-parliament show to Brussels.

17:01 Commodities: Crude gets a Thursday fillip higher, but downside risk remains

Prices of crude oil got a Thursday fillip higher as investors took some note of recent falls in US inventories, but nonetheless remain mindful of the black liquid's potential for further declines.

16:57 Union alleges serious decline in construction inspections

The Unite union issued a statement on Thursday, confirming it was seeking “urgent meetings” with ministers and the Health and Safety Executive (HSE) after a freedom of information (FOI) request revealed a “sharp drop” in construction inspections.

16:10 EVR virtual reality platform enters global partnership with Microsoft

Virtual reality content creator EVR Holdings announced on Thursday that its subsidiary MelodyVR had entered into a global partnership and ‘Windows Mixed Reality App’ collaboration agreement with Microsoft Corporation.

16:08 FTSE 250 movers: Rotork boosted by upgrade; JD Sports goes ex-div

London's FTSE 250 down 0.1% to 19,664.53 in afternoon trade.

16:00 TP Group added to MOD supplier framework

Specialist services and engineering company TP Group announced on Thursday that it had been awarded listing on the ‘Multi-Participant Framework Agreement’ for technical support (FATS/5).

15:28 Friday preview: Eurozone and US flash PMIs to give early GDP growth reading

The UK corporate diary is all but empty on Friday, with most financial events happening away on foreign shores, with first 'flash' readings of June surveys for the eurozone and US.

15:19 US open: Wall Street little changed as oil prices stabilise

Wall Street's main indices were little changed in early trading as oil prices recovered their footing and against a backdrop of solid readings on the jobs and housing markets.

14:49 FTSE 100 movers: Provident Financial recovers; United Utilities goes ex-div

London's FTSE 100 was down 0.3% to 7,426.43 in afternoon trade.