REG - Xtract Resources plc - Assay results from Copper Tailings Project <Origin Href="QuoteRef">XTR.L</Origin>

Xtract ResourcesAnnouncement

08/10/2015 07:00

RNS Number : 6036B
Xtract Resources plc
08 October 2015
8 October 2015
Xtract Resources Plc
("Xtract" or "the Company")
Assay results from Copper Tailings project confirms 
higher than assumed in situ copper content 
Xtract Resources Plc (AIM: XTR), the gold and copper mining and development Company with projects in South America and South Africa, announces the copper assay results received from the drilling campaign on its O'Kiep and Carolusberg copper sulphide tailings dams in South Africa (the "Project").
Highlights
 Carolusberg tailings dam reported an average in situ copper value of 0.21% Cu (lowest value of 0.02% Cu and highest value of 0.53% Cu) compared to an assumed in situ value of 0.19% Cu
 O'Kiep tailings dam reported an average in situ copper value of 0.14% Cu (lowest value of 0.05% Cu and highest value of 0.28% Cu) compared to an assumed in situ value of 0.23% Cu
 At an assumed specific gravity of 1.5 (test work is still outstanding on the actual specific gravity) the Carolusberg tailings dam represents 29.35Mt of material compared to an initial assumed volume of 28Mt
 At an assumed specific gravity of 1.5 (test work is still outstanding on the actual specific gravity) the O'Kiep tailings dam represents 7.3Mt compared to an initial assumed volume of 5.8Mt
 The Carolusberg tailings dam contains c122 million pounds of Copper in situ
 The O'Kiep tailings dam contains c22 million pounds of Copper in situ
Xtract's initial in-house calculations, which have not been validated by any independent third party, still estimate that the Project has a Net Present Value ('NPV') of US$110m with an Internal Rate of Return ('IRR') of 68%. These calculations are based on the following assumptions: (i) recoveries of 85% (ii) a copper price of US$4,500/t; (iii) operating costs of US$2,500/t; (iv) a requirement for US$40m of new capital to finance the Project; (v) a discount rate of 10%; (vi) an annual throughput of 5.6Mt over the first 10 years of the project which declines to an annual throughput of 1.4Mt over the last 4 years; and (vii) the in situ copper grade being upgraded to a concentrate grade of 25% Cu. The company has not factored the increase in copper metal reported on above into the model and has kept the NPV the same and will only re-assess this calculation when recovery and mineralogical test work is received and reviewed. 
Jan Nelson, CEO, commented "We are still awaiting the recovery and mineralogical test work results which will enable the Company to conclude if it will move ahead with the Project and complete a Bankable feasibility. The assay results received are in line with our initial assumed estimates and expectations and we are very pleased with these results. In total the dumps contain c.144 million pounds of copper in situ that at a copper price of US$2.5 per pound represent US$360 million of metal value in the ground. We look forward to reporting the findings of metallurgical results in Q4 2015."
Enquiries:
Xtract Resources Plc
Jan Nelson, CEO
+44 (0)20 3416 6471
Cenkos Securities plc
Derrick Lee
Nick Tulloch
+44 (0)131 220 6939
Beaufort Securities
Jon Belliss
+44 (0)207 382 8300
St James's Corporate Services 
Phil Dexter
+44 (0)20 7796 8647
+44 (0)7798 634398
Gable Communications 
Justine James
xtract@gablecommunications.com
+44 (0)20 7193 7463
+44 (0) 7525 324431
Qualified Person
In accordance with AIM Guidelines, Peter Moir, B.Sc. Civil Engineering, M.Eng. Petroleum Engineering, UK Chartered Engineer and Director of Xtract Resources plc is the qualified person as defined in the Guidance Notes for Mining, Oil and Gas Companies, February 2010, of the London Stock Exchange, that has reviewed the technical information contained in this press release. Mr Moir has more than 30 years' experience in technical, operational and commercial aspects of the E&P business.

This information is provided by RNS
The company news service from the London Stock Exchange
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