REG - Xtract Resources plc - Manica Q2 2023 Gold Production Update

Xtract ResourcesAnnouncement

23/10/2023 13:45

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RNS Number : 0000R  Xtract Resources plc  23 October 2023

 

 

23 October 2023

Xtract Resources Plc

("Xtract" or the "Company")

Manica Q2 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 30 June 2023 ("Q2 2023").

 

Highlights

 

Fair Bride:

·    Fair Bride, where Xtract has a 23% share of net profit, is now moving
towards target production. Fair Bride gross gold production continued to
increase during Q2 2023 and was reported to be 192Kg (equivalent to
approximately 6,456 ounces) by the operator

·    Fair Bride's average gold sales price for Q2 2023 was US$1,989 per
ounce as per the operator's accounts

·    Month-on-month, gold production has increased from 35.4kg in December
Q4 2022 to 82.9kg in July (Q3 2023) as reported by the operator

·    Project performance indicators for Q2 2023 have again improved across
the board with gains in ore production, mill throughput, and ounces gold
produced.

·    The impact of a new grade control programme has resulted in a further
improvement in recovered grade

·    An intense in-pit drilling programme for grade control purposes has
increased costs and therefore cost per ounce in Q2 2023.

 

 

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 the Other Manica Projects in Q2 2023
was 12.3Kg (equivalent to approximately 395 ounces) of which the Xtract's
share was 84 ounces

·    Other Manica Projects' average gold sales price for Q2 2023 was
US$1,963 per ounce

 

Colin Bird, Executive Chairman said: "During the first half of the year the
Fair Bride operation progressed in every aspect of production with financial
control and reporting systems being modified and developed by the Operator to
meet international reporting standards. Similarly, mining and processing was
managed by the Operator moving towards an operation which will satisfy the
requirements necessary for the reporting and management of a small gold
operation not withstanding its remoteness. We continue to work with and
encourage the Operator to achieve sustainability and excellence with a view to
reducing mine costs to below US$1,000 per ounce which we feel is achievable
against all of the critical parameters of the operation. The Company continues
to monitor the operation and where appropriate insist on statutory and legal
adherence and similarly to improve administrative and financial reporting and
contractual obligations where appropriate to the benefit of all stakeholders."

 

 

 

 

 

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 the Operator of the Manica
carbon-in-leach plant (CIL).

 

Table 1 shows the quarterly gold production and sales prices for Quarters 1
& 2 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: Operator's Report - Total Gold production and sales prices - Fair
                      Bride (Xtract 23% share of net profit)
                                                                                      Q2             Q1             Year to date 2023

                                                                                       2023           2023
 Tonnes Mined & Processed (tons)                                                      124,523        107,023        231,547
 Average grade (g/t)                                                                  1.74           1.51           -
 Au Production (ounces)                                                               6,456          4,522          10,978
 Au recovery (%)                                                                      89.05          87.70          -
 Average sales price per ounce in US$                                                 1,989          1,859          -

 Cost per oz of Au (US$)                                                              1,215          1,185          -

 

Gross monthly mine production from Fair Bride has increased 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 as set out in
table 2-4 below

 

Xtract and its subsidiary, Explorator, continued and will continue to monitor
and make recommendations for all safety aspects of the operation and where
necessary make proposals regarding future operations.

 

 Table 2: Ore Tonnes Processed Q3 2022 to Q2 2023
 Month           Ore Processed

                 (tpm)
 September 2022  21,300
 December 2022   28,200
 March 2023      40,800
 June 2023       42,000

 

 

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

                 (t/hr)
 September 2022  39.3
 December 2022   48.9
 March 2023      69.2
 June 2023       72.5

 

 

 

 Table 4: Fine Gold Poured Q3 2022 to Q2 2023
 Month           Fine Gold Poured

                 (kg)
 September 2022  28.70
 December 2022   36.20
 March 2023      50.99
 June 2023       62.60

 

At the start of the first rainy season it took time for the Project operating
team to adapt to the wet clay-rich mined material being fed to the plant and
by the end of Q2 2023, month-on-month ore processing and throughput had risen
from 28,200 tonnes per month in December Q4 2022 to approximately 42,000
tonnes in June Q2 2023, an increase of approximately 49%.

 

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 grade rising to a reported grade for Q2 2023 of
approximately 1.74g/t Au.

 

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. Xtract will
report production and gold price statistics only for Fair Bride on a quarterly
basis. Xtract's 23% net profit share will be reported on semi-annually in
Xtract's annual and interim financial accounts.

 

The Net Profit share due to Xtract for the 6 months ended 30 June 2023 is
estimated to be US$2.1 million. Xtract receives 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.

 

Other Manica Projects production will no longer be reported quarterly.

 

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 (http://www.xtractresources.com)

 

Enquiries:

 

 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").

The person who arranged for the release of this announcement on behalf of the
Company was Colin Bird, Executive Chairman and Director.

Qualified Person:

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

 

 

ENDS

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