Xtract Resources plc Manica project strategic and progress report (3885P)
17 November 2016 - 6:00PM
UK Regulatory
TIDMXTR
RNS Number : 3885P
Xtract Resources plc
17 November 2016
For immediate release
17 November 2016
Xtract Resources Plc
Manica project strategic and progress report
The Board of Xtract Resources Plc ("Xtract" or the "Company")
are pleased to announce that they have completed a review of the
Manica project. The review was conducted as part of a total review
of the Company's position and prospect relative to its various
projects. The board announced on 22 September 2016 that it would be
prudent to cease funding to Minera Polar for the Chepica project.
Thereafter the Board reduced overheads, which was reported on 24
October 2016.
The Board has focused its activities on all matters surrounding
the Manica project in Mozambique. The Board review covered all past
work from previous owners and consultant contributors and has
established the most appropriate way forward for the project. As
previously reported, Minxcon (Pty) Ltd ("Minxcon") was appointed to
complete open pit optimisation modelling.
The definitive feasibility study ("DFS") which is being reviewed
and optimised is not expected to change materially. The Board
review concluded to develop Manica solely on an open pit basis and
dismissed the concept of a high grade open pit operation followed
by an underground mine. This decision was based on the need in
underground development for crown pillars which would sterilise a
significant portion of the resource. Weak wall rock conditions
underground were expected to require back-fill which would have a
serious adverse effect on underground operating cost.
As part of the DFS update, a re-optimisation process has
recently been completed by Minxcon with the following key inputs
and initial conclusions:
-- Gold price USD1,270 per oz
-- Approximately seven years life of mine
-- A target of 480,000 tonnes per annum (40 000 tpm)
-- Estimated average grade of 2.26 g/t mined
-- The optimisation overall stripping ratio before detailed design is circa 7.2
-- Optimisation break even all-in cost including capital recovery is USD908 per oz
-- The re-optimisation indicated a positive return for the
revised strategy and the net present value will be determined
during the DFS update.
-- The review has identified several exploration targets within
the Manica concession which have not been tested or if so, only
superficially
-- Constructive discussions continue with Auroch concerning the
USD1.65 million outstanding payment and a mutually agreeable
outcome is expected to be documented and announced before the end
of the year.
-- The status of the alluvials remains under discussion and is expected to be finalised shortly.
Colin Bird, Executive Chairman, said: "I am pleased to report
that the Manica project shows all the signs of a robust open pit
gold mining project which can be developed by us or with others,
whichever route provides the best shareholder value against risk.
We are currently reviewing these options. The exploration
potential, if successful, could lead to extended mine life with the
processing plant paid for. The same could apply for any underground
extension which would be justified on its own economics. I look
forward to providing the market with a DFS which will be fully
optimised making Manica ready for development investment."
Daan van Heerden of Minxcon said:" We have been involved with
this project over the last two years and have a significant data
set which has assisted us to arrive at this point. Further
optimisation will be directed towards re-designing the pit and
firming up capital and operating cost for the plant. Once
commissioned and mandated we expect to produce an updated DFS in
short time, which will allow the Company to move the project
forward to its next step of development."
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
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014 on market abuse.
Enquiries:
Xtract Resources Colin Bird, Executive +44 (0)20 3416
Plc Chairman 6471
Michael Cornish +44 (0)207628
Beaumont Cornish Felicity Geidt 3369
Email: corpfin@b-cornish.co.uk
+44 (0)207 382
Beaufort Securities Jon Belliss 8300
Qualified Person
In accordance with AIM Note for Mining and Oil & Gas
Companies, June 2009 ("Guidance Note"), Colin Bird CC.ENG, FIMMM,
UK Chartered Engineer and a Fellow of the Institution of Materials,
Minerals and Mining and Director of Xtract Resources plc, with more
than 40 years experience mainly in hard rock mining, is the
qualified person as defined in the Guidance Note of the London
Stock Exchange, who has reviewed the technical information
contained in this press release.
Glossary
"crown pillar" an ore pillar left for wall support
and protection
------------------ ------------------------------------
"g/t" grams per tone
------------------ ------------------------------------
"oz" ounce
------------------ ------------------------------------
"stripping ratio" in-pit tonnes of waste divided
by the in-pit tonnes of ore.
------------------ ------------------------------------
"tpm" tons per month
------------------ ------------------------------------
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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