24th Feb 2015 12:48
LONDON (Alliance News) - Xtract Resources PLC Tuesday said it has re-negotiated the Chepica Gold and Copper mine's earn-in option agreement and agreed a revised payment schedule beginning in October this year.
In a statement, the company said that all payments that are due under the option agreement over the Chilean mine have been suspended by agreement of both parties until October.
Under the revised schedule, a payment of USD350,000 is due by October 15 under a payment for the quarter ending September 30.
All remaining quarterly payments until the end of 2016, which total USD2.4 million, remain unchanged, the company said.
On January 1 2017, the company will then make a final payment of USD1.1 million, representing deferred payments from January 2015 to July 2015, on its way to acquiring the mine.
Chief Executive Jan Nelson said the past four months have been challenging for management, creditors and shareholders, against a backdrop of "the most severe ground conditions" he has seen in his career.
"We have successfully re-negotiated the terms of the option agreement to allow the mine to build up adequate capital over the coming months. The team's focus over the next three months will be to ensure the mine returns to profitability and that we capitalize the Company sufficiently in order to move forward with our development plans," Nelson said.
The mine is now forecast to mill 6,500 tonnes in March and 8,500 tonnes in April. It is expected to break even in March and is expected to be profitable in April 2015.
The mine is in a position to sell some of its mine equipment, which should generate about USD300,000.
Xtract shares were up 36% at 0.122 pence on Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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