Xtract Resources plc Company & Manica Alluvial Gold Update (7460X)

TIDMXTR

RNS Number : 7460X

Xtract Resources plc

01 May 2019

For immediate release

1 May 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 March 2019 (the "Period").

Highlights

-- Total alluvial mining contractor gold production of 40.20Kg (equivalent to approximately 1,293 ounces)

-- Total of 11.26Kg (equivalent to approximately 323 ounces) attributable to Explorator (including Nexus under the Collaboration Agreement)

-- Combined attributable revenue to Explorator from gold sales for the Period amounted to US$408,197

   --     Discussions advancing favourably with hard rock production plan 

Colin Bird, Executive Chairman said: "The results from operations were a little flat due to the rainy season and high stripping ratio against low grade gravel. The recent cyclone did not affect production directly but had a knock-on effect on material transport and in particular diesel. The modest alluvial results are mitigated by the improved percentage the Company receives from operations and in the coming months this could produce improved results notwithstanding the vagaries of gold distribution in the gravel. The hard rock production planning is progressing favourably with a number of options being considered. The Company expects to announce a decision before the end of the second Quarter 2019".

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 31 March 2019, 31 December 2018, 30 September 2018 and 30 June 2018 are set out in the table below. In addition to the information included in the table, the table below provides a further breakdown of costs between operational costs, production tax and land resettlement costs:

 
                                 1(st) Quarter   4(th) Quarter    Amended 3(rd)   2(nd) Quarter 
                                         ended           ended    Quarter ended           ended 
                                      31 March     31 December     30 September         30 June 
                                          2019            2018             2018            2018 
 Production and Sales: 
                                --------------  --------------  ---------------  -------------- 
 Total contractor alluvial 
  gold production (equivalent 
  ounces) (Note 4)                       1,293           1,328            1,811           1,703 
                                --------------  --------------  ---------------  -------------- 
 Explorator share of 
  gold produced (equivalent 
  ounces)                                  323             332              453             426 
                                --------------  --------------  ---------------  -------------- 
 Explorator share of 
  gold sold (equivalent 
  ounces)                                  340             307              251             283 
                                --------------  --------------  ---------------  -------------- 
 Explorator attributable            US$408,197      US$310,000       US$242,000      US$291,000 
  revenue from gold sales 
                                --------------  --------------  ---------------  -------------- 
 Xtract share of Explorator         US$204,099       US$155,00       US$121,000      US$116,400 
  attributable revenue 
  from gold sales (Note 
  1) 
                                                                       (Note 1) 
                                --------------  --------------  ---------------  -------------- 
 Direct Operational 
  Production Costs: 
                                --------------  --------------  ---------------  -------------- 
 Explorator total direct          US$138,634        US$146,299       US$129,150      US$148,696 
  alluvial operational 
  production costs (Note 
  2) 
                                --------------  --------------  ---------------  -------------- 
 Xtract share of Explorator          US$69,317       US$73,149        US$64,575       US$59,478 
  alluvial direct alluvial 
  operational production 
  costs (Note 2) 
                                                                       (Note 1) 
                                --------------  --------------  ---------------  -------------- 
 Total Costs: 
                                --------------  --------------  ---------------  -------------- 
 Explorator total direct             U$238,610      US$254,296       US$292,181      US$315,581 
  alluvial production 
  costs (Note 3) 
                                --------------  --------------  ---------------  -------------- 
 Cost per ounce of gold                 US$738          US$820           US$645          US$741 
  produced 
                                --------------  --------------  ---------------  -------------- 
 Xtract share of Explorator         US$119,305      US$127,148       US$146,090      US$126,232 
  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 three-month period ended 30 June 2018. Under the New Collaboration Agreement for the three-month period ended 30 September 2018, 31 December 2018 and 31 March 2019, Explorator's gold revenue and costs increased to 50%. The previously announced revenue and costs for the 3(rd) Quarter ended 30 September 2018 reflect 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:

 
                     1st Quarter   4th Quarter   3rd Quarter      2nd Quarter 
                        ended 31      ended 31      ended 30    ended 30 June 
                      March 2019      December     September             2018 
                                          2018          2018 
------------------ 
 Production Tax        US$81,571    US$100,675    US$115,400       US$104,448 
 Land resettlement     US$18,405      US$7,322     US$47,631        US$62,437 
  costs 
                    ------------  ------------  ------------  --------------- 
 

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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May 01, 2019 05:57 ET (09:57 GMT)