Xtract Resources plc Manica Concession Alluvial Gold Quarterly Update (7652U)

TIDMXTR

RNS Number : 7652U

Xtract Resources plc

16 July 2018

For immediate release

16 July 2018

Xtract Resources Plc

("Xtract" or the "Company")

Manica Concession Alluvial Gold Quarterly Update

The Board of Xtract Resources Plc ("Xtract" or the "Company") announces preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month period ended 30 June 2018 (the "Period").

Highlights

-- Total alluvial mining contractor gold production of 52.98Kg (equivalent to approximately 1,703 ounces) (increase of 41.93% from previous quarter).

-- Total of 13.24Kg (equivalent to approximately 426 ounces) attributable to Explorator (including Nexus under the Collaboration Agreement).

-- Combined attributable revenue to Explorator from gold sales for the Period amounted to US$291,000.

-- Xtract are constantly reviewing alluvial operations and are currently in discussions to separate the higher topography alluvials (terraces) from the river side alluvials and anticipate making new arrangements shortly.

Colin Bird, Executive Chairman said: "These results demonstrate an increasing trend in quarterly production. The 1(st) quarter was adversely affected by the rainy season and difficult processing conditions in the West. The 2(nd) quarter was rid of the rains but was affected by difficult processing conditions as a result of fine gold and erratic gold occurrence. We have taken the decision to employ different contractors for the terraces and adjacent to the river alluvials and the appointment is expected to be announced shortly. Since alluvial production commenced in 2017, Explorator has been self-funding and we are encouraged by production levels being maintained by one contractor."

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 30 June 2018, 31 March 2018 and 31 December 2017 are set out in the table below. In addition to the information included in the table set out in the announcement dated 27 April 2018, the table below provides a further breakdown of costs between operational costs, production tax and land resettlement costs:

 
                                            2nd Quarter   1st Quarter   4th Quarter 
                                               ended 30      ended 31      ended 31 
                                              June 2018    March 2018      December 
                                                                               2017 
 Production and Sales: 
                                           ------------  ------------  ------------ 
 Total contractor alluvial gold 
  production (equivalent ounces) 
  (Note 4)                                        1,703         1,200         1,279 
                                           ------------  ------------  ------------ 
 Explorator share of gold produced 
  (equivalent ounces)                               426           297           319 
                                           ------------  ------------  ------------ 
 Explorator share of gold sold 
  (equivalent ounces)                               283           314           210 
                                           ------------  ------------  ------------ 
 Explorator attributable revenue             US$291,000    US$333,000    US$218,000 
  from gold sales 
                                           ------------  ------------  ------------ 
 Xtract share of Explorator attributable     US$116,400    US$133,200     US$87,200 
  revenue from gold sales (Note 
  1) 
                                           ------------  ------------  ------------ 
 Direct Operational Production 
  Costs: 
                                           ------------  ------------  ------------ 
 Explorator total direct alluvial            US$148,696    US$155,882    US$141,466 
  operational production costs 
  (Note 2) 
                                           ------------  ------------  ------------ 
 Xtract share of Explorator alluvial          US$59,478     US$62,352     US$56,586 
  direct alluvial operational production 
  costs (Note 2) 
                                           ------------  ------------  ------------ 
 Total Costs: 
                                           ------------  ------------  ------------ 
 Explorator total direct alluvial            US$315,581    US$268,000    US$254,000 
  production costs (Note 3) 
                                           ------------  ------------  ------------ 
 Xtract share of Explorator alluvial         US$126,232    US$107,200    US$101,600 
  direct alluvial production costs 
  (Note 3) 
                                           ------------  ------------  ------------ 
 

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 is 40%, with the balance being attributable to Nexus.

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:

 
                        2nd Quarter       1st Quarter          4th Quarter 
                      ended 30 June    ended 31 March    ended 31 December 
                               2018              2018                 2017 
------------------ 
 Production Tax          US$104,448         US$76,118            US$84,534 
 Land resettlement        US$62,437         US$36,000            US$28,000 
  costs 
                    ---------------  ----------------  ------------------- 
 

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

As previously announced on 25 June 2018, Moz Gold had halted production on the Western Half and Xtract continues to review new contractor proposals and expects to be able to announcement a new appointment shortly. Xtract has security over Moz Gold's processing plant and no decision has yet been taken by Company whether to utilise the plant for its own account or, alternatively make it available to new contractors who would be responsible for all necessary modifications.

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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July 16, 2018 07:21 ET (11:21 GMT)