16th Jan 2019 15:16
LONDON (Alliance News) - Xtract Resources PLC on Wednesday said it has concluded a further mining contractor agreement with Huafei Gold Resources Co Ltd over alluvial gold deposits at its Manica mining concession in Mozambique.
Shares in Xtract were up 11% at 0.80 pence on Wednesday afternoon.
The agreement is between Huafei Gold and Xtract's Mozambican subsidiary, Explorator Ltd.
Huafei Gold has now been appointed to mine the entire Manica concession and will pay a USD350,000 entry fee to Xtract. This consists of an initial USD150,000 payment, followed by another USD200,000 payment funded by future gold production.
Explorator will be entitled to retain 22% of the gold mined, after tax, until the entry fee has been settled, and 20% after that.
The contract is for ten years, or until the alluvial gold is depleted, and has a five-year option extension.
Huafei Gold will be required to have two fully operational plants with a minimum throughput of 200 tonnes per hour on a consistent, 24 hour per day basis.
"Huafei Gold Resources was chosen because of their willingness to pay an upfront payment and demonstrated consistency of operation with their existing contract. They provided extra equipment into the concession and we look forward to increased production over the coming months and on completion of the rainy season," said Xtract Executive Chair Colin Bird.
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