Xtract Resources (XTR)

 

Xtract notes Manica alluvial mining contractor agreement

Xtract Resources said its wholly-owned Mozambique subsidiary Explorator Ltd has concluded a Mining Contractor agreement with Omnia Mining Ltd and Moz Gold Group Ltd for the exploitation of alluvial gold deposits at its Manica mining concession in Mozambique.

HIGHLIGHTS:

- Experienced alluvial mining contractors, who are already operating in the Manica area, appointed to mine the western half of the alluvials in the Manica Concession

- Agreement provides for monthly payments against the monthly run-of-mine performance

- Initial mining to take place (subject to obtaining the environmental impact assessment) no later than 1 September 2017 with a minimum capacity of 220,000 tonnes per month to be achieved by 1 November 2017

- Price per tonne to vary according to installed capacity

- Run-of-mine payment adjusted against gold price with a floor price of $US1,250 per ounce and a cap of US$1,600 per ounce

- Annual production target of 2,640,000 tonnes of alluvial materials, with penalites and termination clauses against non-performance

- Assuming a base gold price of US$1,250, from November onwards expected Explorator attribuatable monthly revenue of US$165,000

- Initial contract period of 10 years or the depletion of alluvials, with an option to extend for a further 5 years if the alluvials are not yet depleted.