TIDMXTR
RNS Number : 0535Z
Xtract Resources plc
29 August 2018
For immediate release
29 August 2018
Xtract Resources Plc
("Xtract" or the "Company")
Hard Rock Collaboration Agreement Update
The Board of Xtract Resources Plc ("Xtract" or the "Company") is
pleased to provide an update on the hard rock collaboration
agreement ("Omnia Agreement") with Omnia Mining Ltd ("Omnia") as
announced on 19 February 2018, for the exploitation of the hard
rock gold deposits at Xtract's Manica mining concession in
Mozambique other than the Fair Bride project, which remains under
the sole control and management of Xtract.
Highlights
-- Twelve potential mining sites identified within 15 km radius of Omnia plant
-- Eight of the potential mining sites identified are already
within the existing license areas of the Joint Venture parties
-- Construction by Omnia of its 40kt per month free gold
processing plant completed, with commissioning planned in November
2018
-- Newly discovered quartz vein/alteration system, named André
Zone, has been channel sampled in trenches and gold grades vary
from 1.1m at 0.89g/t (Trench TOM003) to 0.5m at 20.8g/t (Trench
TOM002) (see Table 1 below)
-- The André Zone will be further explored by opening an underground adit
-- Working with outside engineering consultant to optimise plant
upgrade to treat transitional and sulphide ores
Colin Bird, Executive Chairman said: "The general Manica area
has abundant gold mineralisation occurrences with varying
mineralisation hosts and types. The objective of the Omnia
Agreement is to allow us to process these ore types with no
alternative sophisticated processing equipment available in the
area. We are currently carrying out financial and technical
exercises to assist us to decide whether to work the various veins
sequentially or to install a total capability plant suitable for
all ore types. Should we elect the latter route, then Fair Bride
may well be processed through the Omnia plant subject to final
agreement with Omnia".
Background
As previously announced on 19 February 2018, the Omnia Agreement
was entered into by the Company and the Company's wholly-owned
subsidiary, Explorator Limitada ("Explorator"), (the "Group"), and
Omnia.
The objective of the Omnia Agreement was to investigate, explore
and evaluate all hard rock exploration targets within the Manica
concession (excluding the Fair Bride Project) with the aim of being
able to convert these targets into a joint mining operation with
Omnia. Omnia currently has a gold processing plant installed within
its adjacent concession which has a capability to process free
gold. The plant has a milling capacity of 40kt a month with a
gravity circuit which handles the feed. The Omnia plant is unable
currently to process fine gold which requires liberation by a
combination of flotation and cyanidation. Omnia will manage and
operate all the processing of material approved and delivered
through Explorator to Omnia's processing plant.
Xtract will provide technical personnel capable of evaluating
the hard rock gold potential of the Omnia concession and
surrounding areas for mutual development and will be solely
responsible for all exploration and future mining on all target
areas.
The implementation of the Omnia Agreement was structured in five
phases. The parties have completed the desktop study (Phase 1), and
the initial exploration primarily comprising trenching (Phase 2)
and are currently undertaking further follow-up exploration work.
No drilling has been undertaken by the parties at this time (Phase
3).
During phase 2 the parties have identified 12 potential mining
sites within a 15km radius from the Omnia Plant. A number of these
sites (Guy Fawkes, Dots Luck and Boa Esperanza) have under prior
ownership had some exploration drilling and mining activities but
none of these sites would justify the construction of a plant
solely for their production. The parties have agreed to re-visit
these sites with an objective of identifying "open-pittable" mines
or slots in order to supply a constant feed of 500 tonnes a day for
at least the next 2 years, with the capacity to grow production
further.
The following potential mining sites are already within the
existing license areas of Omnia and Xtract:
-- André Mine,
-- Guy Fawkes,
-- Dots Luck,
-- Mushongarokwa,
-- Boa Esperanza,
-- Duke Mine,
-- Try Again
-- Munhena Extension.
The first exploration target is the André Mine Zone (Mining Area
A) which is situated approximately 300m from the Omnia plant.
Recently completed exploration work by Xtract included the
following operations and observations:
-- A programme of six trenches totalling 511m was completed on
mining Concession 3373C, in order to understand previously
inconsistent drilling assay results and to try to establish
"open-pittable" resources for possible immediate mining, targeting
an area near old historical workings.
-- It was established from historical workings and field
observations that the gold at André Mine Zone is related to
bleached calcium or potassium-altered zones within talc chlorite
schist invaded by quartz veins varying from stringers to 15cm in
width.
-- The general orientation of the schistose rocks is
approximately east-west, dipping toward south, while most of the
quartz veins are concordant to subparallel to the schist
structures.
-- The altered package which consists of alternations between
bleached and unaltered zones, has as its foot and hanging-walls
tremolite schist with a total length along strike of about 170m so
far established, with a possibility to extend eastward for an
additional 250m, toward historic drill hole OMN016. A maximal width
of about 25m has been established for the André Zone in the eastern
margin of the trenched area.
Channel sampling was carried out across intervals of interest
totalling 322m in the trenches (quartz veining and alteration
zones). Assay test reports were prepared externally by Performance
Laboratories Zimbabwe.
Table 1: André Mine Zone - Selected Channel
Sample Assay Results
--------------------------------------------------------------------
Trench Trench From To Sample Au Sample type
No. length (m) (m) width (g/t)
(m) (m)
-------- -------- ------ ------- ------- ------- -------------
TOM001 61.0 19.8 20.8 1.0 1.21 Quartz vein
-------- -------- ------ ------- ------- ------- -------------
Altered
53.6 54.0 0.4 6.08 schist
-------- -------- ------ ------- ------- ------- -------------
TOM002 61.0 16.0 16.5 0.5 20.8 Quartz vein
-------- -------- ------ ------- ------- ------- -------------
Leached
26.0 26.9 0.9 2.19 zone
-------- -------- ------ ------- ------- ------- -------------
Leached
35.7 36.2 0.5 0.99 zone
-------- -------- ------ ------- ------- ------- -------------
TOM003 61.0 17.5 18.6 1.1 0.89 Quartz vein
-------- -------- ------ ------- ------- ------- -------------
Leached
42.2 42.65 0.45 0.90 zone
-------- -------- ------ ------- ------- ------- -------------
Leached
zone/quartz
TOM004 139.0 100.6 101.35 0.75 0.81 vein
-------- -------- ------ ------- ------- ------- -------------
The parties plan to map these zones on site in order to
establish their continuity. Of the sampled quartz veins, one may
represent a single vein located in four adjoining trenches over
about 120m strike extent along the northern margin of the André
Zone. While the leached zone gold content is low, with good plant
efficiency and grades greater than 0.8g/t, open pit mining may
potentially be profitable, subject to the very limited availability
of volume of ore. Furthermore, it is known from other gold sites at
Manica that the gold content of near-surface leached zones may not
reflect the true gold content of unweathered bedrock below the
water table. Therefore, it is proposed to develop an underground
adit to test the André Zone beneath the intercepts obtained from
the trenching programme.
In addition, further exploration is planned on 3 other areas of
the André Zone not yet tested by trenching. An in-house feasibility
study (Phase 4 of the Omnia Agreement) is planned to be completed
during September 2018.
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. The
person who arranged for the release of this announcement on behalf
of the Company was Colin Bird, Director.
Enquiries:
Xtract Resources Colin Bird, +44 (0)20 3416
Plc Executive Chairman 6471
www.xtractresources.com
Beaumont Cornish Roland Cornish +44 (0)207628
Limited Michael Cornish 3369
Nominated Adviser Felicity Geidt www.beaumontcornish.co.uk
and Joint Broker
Novum Securities Colin Rowbury +44 (0)207 399
Limited 9427
Joint Broker www.novumsecurities.com
Qualified Person:
Information in this announcement relating to the exploration
activities has been reviewed by Edward (Ed) Slowey, BSc, PGeo, a
consultant to Xtract. Mr Slowey is a graduate geologist with more
than 40 years' relevant experience in mineral exploration and
mining, a founder member of the Institute of Geologists of Ireland
and is a Qualified Person under the AIM rules. Mr Slowey has
reviewed and approved the geological content of this
announcement.
Qualified Person:
In accordance with AIM Note for Mining and Oil & Gas
Companies, June 2009 ("Guidance Note"), Colin Bird, CC.ENG, FIMMM,
South African and UK Certified Mine Manager 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.
TECHNICAL GLOSSARY
The following is a summary of technical terms:
"altered zone" a zone exhibiting change in mineralogical
composition of a rock commonly brought
about by reactions with hydrothermal
solutions
"adit" a horizontal opening to an underground
mine from the surface
"au" Gold
"bleached" made whiter or lighter in colour,
due to exposure hydrothermal solutions
"concordant" in alignment with
"deposit" coherent geological body such as
a mineralised body
"exploration" method by which ore deposits are
evaluated
"flotation" selectively separating hydrophobic
materials from hydrophilic materials
to upgrade the concentration of
valuable minerals
"g/t" gram per metric tonne
"grade" relative quantity or the percentage
of ore mineral or metal content
in an ore body
"hanging wall" the mass of rock above/below a fault
and "footwall" vein or bed of mineralisation
"kt" thousand tonnes
"leached zone" a zone where soluble minerals or
metals have been dissolved out of
the ore
"mineralisation" process of formation and concentration
of elements and their chemical compounds
within a mass or body of rock
"recovery" proportion of valuable material
obtained in the processing of an
ore, stated as a percentage of the
material recovered compared with
the total material present
"quartz" a mineral composed of silicon dioxide,
SiO2
"schist" and a metamorphic rock with a platy
"schistose" or foliated texture
"stringer" a narrow vein or irregular filament
of mineral traversing rock mass
of different composition
"sub-parallel" almost parallel
"talc chlorite" dark green, platy, hydrous silicate
mineral related to mica containing
talc
"tremolite A platy rock comprising white or
schist" grey amphibole mineral containing
calcium and magnesium
"vein" a tabular deposit of minerals occupying
a fracture, in which particles may
grow away from the walls towards
the middle
ENDS
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END
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