REG - Xtract Resources plc - Manica Q1 2023 Gold Production Update

Xtract ResourcesAnnouncement

06/07/2023 07:00

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RNS Number : 1202F  Xtract Resources plc  06 July 2023

 

 

6 July 2023

Xtract Resources Plc

("Xtract" or the "Company")

Manica Q1 2023 Gold Production Update

 

Xtract Resources Plc ("Xtract" or the "Company") announces the preliminary
unaudited results for gold production for the Fair Bride deposit and other
mining within the Manica Concession in Mozambique, for the three-month period
ended 31 March 2023 ("Q1 2023").

 

Highlights

 

Fair Bride:

·    Fair Bride, where Xtract has a 23% share of net profit, is now the
main project at Manica ("Fair Bride"). Fair Bride gross gold production
continued to increase during Q1 2023 and was 140Kg (equivalent to
approximately 4,522 ounces)

·    Fair Bride's average gold sales price for Q1 2023 was US$1,859 per
ounce

·    Month on month, gold production has increased from 37.6 kg in January
Q1 2023 to 66.3kg in May of the current quarter (Q2 2023)

·    Clear indications are that post the heavy rains, results are
improving significantly and Q2 2023 is showing a marked improvement with plant
throughput increasing from 30,000 tonnes per month in Q1 2023 to current
nameplate capacity of more than 40,000 tonnes per month

·    Application of a more robust grade control process has resulted in a
marked improvement in run of mine grade delivered to the plant

·    Mill running time has increased from 67.3% availability in Q3 2022 to
a reported 82% availability in May Q2 2023

·    The unit cash cost for Q2 2023 is anticipated to be in-line with
similar sized operations on a global basis as the operation stabilises

 

Other Manica Projects:

·    For the other projects at the Manica Concession, including the
Alluvial and other hard rock production, Xtract is entitled to a percentage
share of the gold produced ("Other Manica Projects")

·    The total gold production for these the Other Manica Projects in Q1
2023 was 36Kg (equivalent to approximately 1,156 ounces) of which the Xtract's
share was 183 ounces

·    Other Manica Projects' average gold sales price for Q1 2023 was
US$.1,812 per ounce

 

Colin Bird, Executive Chairman said: "We are very pleased with the progress
being made at Manica and the first Quarter performance was excellent when one
considers the effect of the heavy and prolonged rains that the Project was
exposed to during the post-commissioning phase. The second Quarter results
have seen a continued improvement in performance with more consistent gold
production in April and May returning 68 and 66kg respectively. We will
provide regular updates and anticipate continued improvement in the unit cash
cost of production as the benefits of improvement and optimisation of mining,
processing and grade control are felt by the operation".

 

 

 

 

Fair Bride Operation

 

The Fair Bride gold deposit is within the Manica concession situated 270km NW
of the city of Beira within Licence 3990C in the Odzi-Mutare-Manica Greenstone
Belt of Mozambique.

 

Mutapa Mining and Processing, LDA ("MMP"), is operator of the Manica
carbon-in-leach plant (CIL).

 

Table 1 shows the quarterly gold production and sales prices for Quarter 1
2023 for the Fair Bride project and year to date figures for 2023. The
production statistics for Fair Bride are provided by Contract miner, MMP.

 

 Table 1: Gold Production and sales prices - Fair Bride (Xtract 23% share of
 net profit)
                                                                     Q1       Year to date 2023

                                                                      2023
 Tonnes Mined & Processed (tons)                                     107,023  107,023
 Average grade (g/t)                                                          1.51
 Au Production (ounces)                                              4,522    4,522
 Au recovery (%)                                                     87.70    87.70
 Average sales price per ounce in US$                                1,859    1,859
 Cost per oz of Au (US$)                                             1,185    1,185

 

Gross monthly mine production from Fair Bride has grown month on month as the
operation has bedded down and typical post-commissioning issues have been
resolved. Steady improvement has been reported in throughput tonnes processed,
run of mine grade, mill throughput rate and mill availability, all of which
are expected to result in continued improvement in the unit cash cost per
ounce of gold produced which can be expected to benefit revenue.

 

 Table 2: Ore Tonnes Processed Q3 2022 to Q2 2023
 Period under review  Ore Processed

                      (tpm)
 July 2022            15,300
 November 2022        21,800
 February 2023        30,500
 May 2023             43,200

 

 

 Table 3: Mill throughput Rate Q3 2022 to Q2 2023
 Period under review  Ore Tonnes Milled per hour

                      (t/hr)
 July 2022            30.5
 November 2022        42.1
 February 2023        56.2
 May 2023             61.4

 

 

 

 

 

 

 

 

 Table 4: Fine Gold Poured Q3 2022 to Q2 2023
 Period under review  Fine Gold Poured

                      (kg)
 July 2022            14.3
 November 2022        25.5
 February 2023        37.6
 May 2023             66.3

 

 

Revenue and therefore Xtract's share of net profit was impacted by two main
factors. Operation through the first rain season in Manica resulted in a
shortfall in plant throughput as wet clay-rich near-surface mined material
affected the operating efficiencies of both screens and the mill. Measures
have been put in place to alleviate the problem and the impact of improvements
can already be seen with the month-on-month ore processing figure rising from
30,000 tonnes per month in February of Q1 2023 to a current reported estimate
of approximately 43,000 tonnes per month in May Q2 2023.

 

A significant amount of additional close-spaced drilling was completed during
Q1 2023 specifically to improve grade control and the ability to better
predict the Run of Mine grade that could be anticipated by the processing
plant. This work had an almost immediate impact on improvement in the run of
mine grade with the average rising from 1.2g/t Au in February Q1 2023 to a
current reported grade for May Q2 2023 of approximately 1.8g/t Au. An increase
in grade equivalent to an additional $36 per tonne of ore delivered to the
plant at the current gold price could also have a significant positive impact
on revenue and margin.

 

Xtract Resources and Manica Project Revenue Stream and Reporting

 

Production at Manica is now dominated by Fair Bride. The gold mined at Manica
projects other than Fair Bride is now significantly scaled down as the
mineable resource for these projects is significantly reduced. Accordingly,
the Company has adopted a new format for quarterly reporting which is set out
below. Other Manica Projects production will no longer be reported quarterly.

 

Xtract will receive 23% of the net profit at Fair Bride when the prevailing
price of Gold is greater than US$1,250 per ounce.  Xtract's share reduces to
21.5% if the prevailing gold price is greater than US$1,175 but less than
US$1,250 and to 20% if the prevailing price of Gold is less than US$1,100 per
ounce. Profit is defined as: Revenue on Sale less deductible costs (excluding
non-cash items) and corporation tax of 32% after utilising any tax losses. At
the current gold price Xtract is due 23% of the net profit.

 

Xtract will be reporting production and gold price statistics for Fair Bride
on a quarterly basis with Xtract's 23% net profit share to be included in its
annual and interim financial accounts.

 

 

 

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

 

 Xtract Resources Plc                               Colin Bird,          +44 (0)20 3416 6471

                                                    Executive Chairman   www.xtractresources.com (http://www.xtractresources.com)

 Beaumont Cornish Limited                           Roland Cornish       +44 (0)207628 3369

 Nominated Adviser and Joint Broker                 Michael Cornish      www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk)

                                                    Felicity Geidt

 Novum Securities Limited                           Jon Bellis           +44 (0)207 399 9427

 Joint Broker                                       Colin Rowbury        www.novumsecurities.com

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").

Qualified Person:

Colin Bird: The technical information contained in this announcement has been
reviewed, verified, and approved by Colin Bird, C.Eng, FIMMM, South African
and UK Certified Mine Manager and Director of African Pioneer plc, with more
than 40 years' experience mainly in hard rock mining.

Glossary

 

 Au   Gold

 oz   Ounces

 Kg   Kilogrammes (there are 32.1507 ounces in a Kilogramme

 

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