20th Oct 2015 08:10
LONDON (Alliance News) - Xtract Resources PLC said Tuesday it has signed a joint venture deal with Mineral Technologies International Ltd to mine alluvial gold on the Manica gold project in Mozambique, and said it has made "excellent progress" at its Chepica mine in Chile despite a recent earthquake.
Xtract expects the new Manica alluvial project to produce around 32,000 ounces of gold per year, of which 16,000 oz gold per year would go to Xtract, in addition to the volumes it already has planned for the open pit project on the wider Manica gold license. The joint venture does not impede development of the open pit project, Xtract said.
Mineral Technologies International will fund the construction of an alluvial gold plant, expected to begin production in the third quarter of 2016, at a cost of USD1.2 million.
At Chepica, Xtract reported a rise in revenue to USD448,112 in the quarter to end-September, up from USD117,000 a year before, resulting in a swing to a profit of USD150,112 from a loss of USD174,000. However, this fell well short of a forecasts USD1.7 million in revenue for the quarter, hit by the earthquake and the lower gold price.
Xtract said that, when compared to its original plan for the third quarter, on reef development at Chepica increased by 55% to 233 metres from the planned 150 metres, and off reef development by 56% to 78 metres from the planned 50 metres.
Due to a 8.3 magnitude earthquake, the main access haulage at Chepica became unsafe, which hit stoping tons in the quarter by 82% to 3,061 tons from 17,201 tons. As a result of the mining method used, the ore that had been blasted could not be accessed, the company said.
As a result of the earthquake damage, a new access portal is being developed, the company said. Stoping operations will begin in the fourth quarter of 2015 at the Colin prospect to partly offset the delay elsewhere. Its forecast profitability for the Chepica in the fourth quarter has been reduced to USD361,121, although it is expected to increase to USD760,000 in the first quarter of 2016.
"We are absolutely delighted with the excellent progress made at Chepica over the past few months despite the challenging impact of the earthquake, in which we are fortunate there were no incidents or injuries. We have seen a significant improvement from the previous quarter on most of the key metrics and are working hard to increase production levels and profitability during the current quarter and into 2016. Our re-development programme is now on track and the mine remains cash positive," said Chief Executive Officer Jan Nelson in a statement.
Shares in Xtract Resources were up 3.5% at 0.254 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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