Xtract Resources plc Company & Manica Alluvial Gold Update (4279O)

TIDMXTR

RNS Number : 4279O

Xtract Resources plc

29 January 2019

For immediate release

29 January 2019

Xtract Resources Plc

("Xtract" or the "Company")

Company & Manica Alluvial Gold Update

The Board of Xtract Resources Plc ("Xtract" or the "Company") announces the preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month period ended 31 December 2018 (the "Period").

Highlights

-- Total alluvial mining contractor gold production of 41.29Kg (equivalent to approximately 1,328 ounces)

-- Total of 10.32Kg (equivalent to approximately 332 ounces) attributable to Explorator (including Nexus under the Collaboration Agreement)

-- Combined attributable revenue to Explorator from gold sales for the Period amounted to US$310,000

   --     Xtract continue to review the alluvial operations and introduce more equipment 
   --     Plans being made to concurrently work the upper terraces 
   --     Test work carried out over the border in Zimbabwe to extend alluvial income 

-- DFS revised to accommodate less complex ore with the technical and financial study to be released shortly

Colin Bird, Executive Chairman said: "The quarter under review produced modest results compared to previous quarters and reflects the lower grade areas having been ceded back to the Company together with compensation paid to local farmers . The areas mined during this quarter were marginal but considered appropriate for processing, despite lower grades. We expect to see improving production against an improving gold price. We recognise the inconsistency of alluvials, but over the last year have gained considerable insights into the intricacies of alluvial miming and this has moved up into test work programme in neighbouring countries. We now have a very clear vision how to effectively mine the hard rock occurrences which are less metallurgically challenging. The Company is talking to potential partners and investors to develop the Manica project and the board intend to release revised scoping numbers in the near future ".

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 31 December 2018, 30 September 2018, 30 June 2018 and 31 March 2018 are set out in the table below. In addition to the information included in the table set out in the announcement dated 16 July 2018, the table below provides a further breakdown of costs between operational costs, production tax and land resettlement costs:

 
                                 4(th) Quarter    Amended 3(rd)   2(nd) Quarter   1(st) Quarter 
                                         ended    Quarter ended           ended           ended 
                                   31 December     30 September         30 June        31 March 
                                          2018             2018            2018            2018 
 Production and Sales: 
                                --------------  ---------------  --------------  -------------- 
 Total contractor alluvial 
  gold production (equivalent 
  ounces) (Note 4)                       1,328            1,811           1,703           1,200 
                                --------------  ---------------  --------------  -------------- 
 Explorator share of 
  gold produced (equivalent 
  ounces)                                  332              453             426             297 
                                --------------  ---------------  --------------  -------------- 
 Explorator share of 
  gold sold (equivalent 
  ounces)                                  307              251             283             314 
                                --------------  ---------------  --------------  -------------- 
 Explorator attributable            US$310,000       US$242,000      US$291,000      US$333,000 
  revenue from gold sales 
                                --------------  ---------------  --------------  -------------- 
 Xtract share of Explorator          US$155,00       US$121,000      US$116,400      US$133,200 
  attributable revenue 
  from gold sales (Note 
  1) 
                                                       (Note 1) 
                                --------------  ---------------  --------------  -------------- 
 Direct Operational 
  Production Costs: 
                                --------------  ---------------  --------------  -------------- 
 Explorator total direct            US$146,299       US$129,150      US$148,696      US$155,882 
  alluvial operational 
  production costs (Note 
  2) 
                                --------------  ---------------  --------------  -------------- 
 Xtract share of Explorator          US$73,149        US$64,575       US$59,478       US$62,352 
  alluvial direct alluvial 
  operational production 
  costs (Note 2) 
                                                       (Note 1) 
                                --------------  ---------------  --------------  -------------- 
 Total Costs: 
                                --------------  ---------------  --------------  -------------- 
 Explorator total direct            US$254,296       US$292,181      US$315,581      US$268,000 
  alluvial production 
  costs (Note 3) 
                                --------------  ---------------  --------------  -------------- 
 Cost per ounce of gold                 US$820           US$645          US$741          US$902 
  produced 
                                --------------  ---------------  --------------  -------------- 
 Xtract share of Explorator         US$127,148       US$146,090      US$126,232      US$107,200 
  alluvial direct alluvial 
  production costs (Note 
  3) 
                                                       (Note 1) 
                                --------------  ---------------  --------------  -------------- 
 

Note 1: Under the Collaboration Agreement between Explorator and Nexus Capital Limited (previously Mineral Technologies International Limited, "Nexus") as previously announced on 20 June 2017, Xtract's net share of Explorator's gold revenue and costs was 40% for the two three-month periods ended 30 June 2018. Under the New Collaboration Agreement for the three-month period ended 30 September 2018 and 31 December 2018, Explorator's gold revenue and costs increases to 50%. The previously announced revenue and costs for the 3(rd) Quarter have therefore been updated for the amended terms under the New Collaboration Agreement.

Note 2: Direct operational production costs include and not limited to Explorator salaries, rent, vehicles expenses and utilities.

Note 3: Total costs comprises direct operational production costs plus total Production Tax (6% of the value of total production which varies according to the level of production) and Land Resettlement Costs as detailed below:

 
                           4th Quarter    3rd Quarter   2nd Quarter   1st Quarter 
                            ended            ended 30      ended 30      ended 31 
                            31 December     September     June 2018    March 2018 
                            2018                 2018 
------------------------ 
 Production Tax            US$100,675      US$115,400    US$104,448     US$76,118 
 Land resettlement costs       US$7,322     US$47,631     US$62,437     US$36,000 
                          -------------  ------------  ------------  ------------ 
 

Note 4: Presence of gold in alluvial deposits is unpredictable and therefore operational results will vary month-to-month.

Further details are available from the Company's website which details the company's project portfolio as well as a copy of this announcement: www.xtractresources.com

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. The person who arranged for the release of this announcement on behalf of the Company was Joel Silberstein, Director.

Enquiries:

 
 Xtract Resources Plc         Colin Bird,           [phone] 
                               Executive Chairman    www.xtractresources.com 
 Beaumont Cornish Limited     Roland Cornish        [phone] 
  Nominated Adviser and        Michael Cornish       www.beaumontcornish.co.uk 
  Joint Broker                 Felicity Geidt 
 
   Novum Securities Limited     Colin Rowbury         [phone] 
   Joint Broker                                       www.novumsecurities.com 
 
 
 
 
 

ENDS

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January 29, 2019 07:29 ET (12:29 GMT)