Xtract Resources plc Manica Concession Alluvial Gold Quarterly Update (1949F)

TIDMXTR

RNS Number : 1949F

Xtract Resources plc

25 October 2018

For immediate release

25 October 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 the preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month period ended 30 September 2018 (the "Period").

Highlights

-- Total alluvial mining contractor gold production of 56.34Kg (equivalent to approximately 1,811 ounces) (increase of 6.35% from previous quarter)

-- Total of 14.09Kg (equivalent to approximately 453 ounces) attributable to Explorator (including Nexus under the Collaboration Agreement)

-- Combined attributable revenue to Explorator from gold sales for the Period amounted to US$242,000

-- Xtract continue to review the alluvial operations and discussions to separate the higher topography alluvials (terraces) from the river side alluvials

   --     Pit and process planning underway to commence hard rock mining in the 1(st) Quarter of 2019 

Colin Bird, Executive Chairman said: "The production results continue to show improvement and the operation has remained self-funding since production commenced. We continue to discuss with our collaboration partners and contractors routes to improved performance and distributable income. The high topography alluvials continue to be investigated for higher quantities of gold in the gravel. The cost of overburden removal requires high in situ gold values.

The hard rock methodology is likely to be incremental, in that we commence in hard rock areas where gold can be separated by gravity methods. Thereafter installing a leaching capability and finally the production of a floating concentrate. Discussions are progressing well with our partners and we will update the market shortly on our more definitive plans."

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 30 September 2018, 30 June 2018 and 31 March 2018 are set out in the table below:

 
                                     3rd Quarter   2nd Quarter       1st Quarter 
                                        ended 30      ended 30    ended 31 March 
                                       September     June 2018              2018 
                                            2018 
 Production and Sales: 
                                    ------------  ------------  ---------------- 
 Total contractor alluvial 
  gold production (equivalent 
  ounces) (Note 4)                         1,811         1,703             1,200 
                                    ------------  ------------  ---------------- 
 Explorator share of gold 
  produced (equivalent ounces)               453           426               297 
                                    ------------  ------------  ---------------- 
 Explorator share of gold 
  sold (equivalent ounces)                   251           283               314 
                                    ------------  ------------  ---------------- 
 Explorator attributable              US$242,000    US$291,000        US$333,000 
  revenue from gold sales 
                                    ------------  ------------  ---------------- 
 Xtract share of Explorator            US$96,800    US$116,400        US$133,200 
  attributable revenue from 
  gold sales (Note 1) 
                                    ------------  ------------  ---------------- 
 Direct Operational Production 
  Costs: 
                                    ------------  ------------  ---------------- 
 Explorator total direct              US$129,150    US$148,696        US$155,882 
  alluvial operational production 
  costs (Note 2) 
                                    ------------  ------------  ---------------- 
 Xtract share of Explorator            US$51,660     US$59,478         US$62,352 
  alluvial direct alluvial 
  operational production 
  costs (Note 2) 
                                    ------------  ------------  ---------------- 
 Total Costs: 
                                    ------------  ------------  ---------------- 
 Explorator total direct              US$292,181    US$315,581        US$268,000 
  alluvial production costs 
  (Note 3) 
                                    ------------  ------------  ---------------- 
 Cost per ounce of gold                   US$645        US$741            US$902 
  produced 
                                    ------------  ------------  ---------------- 
 Xtract share of Explorator           US$116,873    US$126,232        US$107,200 
  alluvial 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:

 
                           3rd Quarter   2nd Quarter       1st Quarter 
                              ended 30      ended 30    ended 31 March 
                             September     June 2018              2018 
                                  2018 
------------------------ 
 Production Tax             US$115,400    US$104,448         US$76,118 
 Land resettlement costs     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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October 25, 2018 06:04 ET (10:04 GMT)