13th May 2015 07:36
LONDON (Alliance News) - Xtract Resources PLC saw its shares rise early Wednesday after it said it had defined a significant concentration of gold on the intersection of two major geological structures at the Salvadori prospect at the Chepica Gold and Copper Mine in Chile and intends to start mining there.
The gold and copper explorer said the discovery is the result of the exploration work targeting prospects outside the current mining area at Chepica. "Production from this new target will be realised imminently as the company intends to commence mining operations on this target," it said.
The main characteristics of the ore zone are that it outcrops on the surface and is open to depth; from surface to a depth of 25 metres the zone represents 5,000 tonnes at 5.5 grammes a tonne in situ; the ore zone has been exposed by underground development 25 metres below the surface and has an average grade of 17 grammes per tonne of gold along 17 metres of drive intersection; about 1,000 ounces of gold is available to be produced within two weeks of mining being started in the upper 25 metres, and the area represents an in situ metal value of USD1 million at an assumed price of USD1,200 an ounce.
The company has bought a drill rig so that the geological team can define the ore zone to depth. The rig will also be used to define further ore zones and increase the resource on the mine.
Chief Executive Jan Nelson said he expects output from the new zone to start contributing to production in May, boosting revenue and profitability for the month.
Xtract Resources shares were up 9.3% at 0.350 pence Wednesday morning, one of the best-performing stocks in the AIM All-Share index.
By Steve McGrath; [email protected]; @stevemcgrath1
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