TIDMXTR
RNS Number : 7208F
Xtract Resources plc
30 October 2018
For immediate release
30 October 2018
Xtract Resources Plc
("Xtract" or the "Company")
Alluvial Collaboration Agreement terms amended
The Board of Xtract Resources Plc ("Xtract" or the "Company") is
pleased to announce that Xtract and Nexus Capital Limited
(previously Mineral Technologies International Limited, "Nexus")
have today agreed to revise the terms of the collaboration
agreement for the exploitation of alluvial gold deposits at Manica,
which was previously amended and agreed to by the parties as
announced on 20 June 2017.
Highlights
-- The new collaboration agreement ("New Agreement") signed between the Company and Nexus
-- Net gold production attributable to the Company to be shared equally with Nexus
-- All Entry Fees received from the Contract Miners after 31 May
2018 to be divided equally between the Company and Nexus
-- Agreed settlement of US$76,000 to be paid by the Company to
Nexus for fees accrued between 1 January 2018 and 31 May 2018
-- The New Agreement provides Xtract with more favourable terms
and potential additional income with minimal operating risk
Colin Bird, Executive Chairman said:
"The New Agreement is the result of prolonged negotiations
between Nexus and Xtract targeted towards an equitable agreement
which reflects concession ownership and our responsibilities. This
agreement has removed key aspects of negative control by Nexus and
remains in the general interest of both parties. I am very pleased
that agreement has been reached with Nexus and now look forward to
working to increase the production of the Manica alluvials by
revising the current contracting arrangements."
Background to the new Collaboration Agreement
On 13 February 2017, the Company announced that it had entered
into an agreement with Nexus (a private Hong Kong registered
company) and agreed to develop the alluvial gold interest of the
Mining Concession together through the appointment of third-party
contract miners, who would have the exclusive right to mine
unconsolidated alluvial deposits on specified areas of the Mining
Concession area ("February Agreement"). The Company would operate a
smelter ("Smelter") to smelt the alluvial gold recovered by the
Contract Miners from the Mining Concession.
On 20 June 2017, the Company announced that the parties had
agreed to revise the terms of the February Agreement signed on the
13 February 2017 ("June Agreement"). The parties agreed that Nexus
would receive all front-end fees received from the Contract Miners.
The parties also agreed that Explorator Limitada, the Company's
wholly-owned Mozambican subsidiary ("Explorator") would be
responsible for all transportation costs and 40% of the smelter
costs capped at US$16,000 per month, in addition to other operating
costs (including gold export royalties and taxes). Nexus would be
responsible for all refining costs, 60% of the smelter costs capped
at US$24,000 as well as all capital costs including project
equipment and project vehicles. Nexus would be paid a refining
administration fee ("Refining Admin Fee") equal to 5.5% of all
alluvial gold delivered on Explorator's account to a refiner for
refining and a service fee equal to 60% of all alluvial contract
mining proceeds received by Explorator from Contract Miners less
the applicable Refining Admin Fee and Nexus' 60% share of the
smelter costs.
The New Collaboration Agreement
The parties have today agreed to enter into a New Collaboration
Agreement which takes effect as of 1 June 2018.
Gold Production & Nexus Fees
The total amount of gold produced from the Mining Concession
Area, less the percentage Mining Production Tax and gold paid the
Contract Miners, ("Net Gold Production"), will now be shared
equally the Company and Nexus. Nexus will be entitled to an amount
equal to 100% of the sales' price of Nexus's share of the Net Gold
Production, less Nexus's pro rata share of transport costs, and 50%
of any transporter costs and refinery fees recovered from the
Contract Miners.
Any Entry Fees payable by any Mining Contractor to Explorator
after 31 May 2018 will now be divided equally between the Company
and Nexus.
Project costs
Nexus will be responsible for contributing US$20,000 towards
monthly costs and expenses of the project ("Project Costs") as well
50% of any land compensation costs (comprising any ad hoc
compensation payments made to local inhabitants of the Mining
Concession Area to allow the alluvial mining of the Mining
Concession Area).
Settlements
The Company will pay a settlement amount of US$76,000 in
relation to fees due to Nexus for the period 1 January and 31 May
2018. The parties have further agreed that the Company and
Explorator will take all necessary steps to recover amounts owed by
Moz Gold under the terms of the Moz Gold Agreement (entered into on
6 March 2018), and that any amounts recovered will be divided
between the parties on the basis of the June Agreement, being 60%
payable to Nexus and 40% to the Company.
Quarterly alluvial gold production update
As the New Agreement takes effect from 1 June 2018, Xtract's
previously reported share of Explorator's attributable revenue from
gold sales and total direct alluvial production costs for the
three-month period ended 30 September 2018 (see announcement dated
25 October 2018), will increase to 50% (from 40%) and as now
amended will be as follows:
3rd Quarter 2nd Quarter 1st Quarter
ended 30 ended 30 ended 31 March
September June 2018 2018
2018
Production and Sales:
------------ ------------ ----------------
Xtract share of Explorator US$121,000 US$116,400 US$133,200
attributable revenue from
gold sales (Note 1)
------------ ------------ ----------------
Xtract share of Explorator US$64,575 US$59,478 US$62,352
alluvial direct alluvial
operational production
costs (Note 1)
------------ ------------ ----------------
Xtract share of Explorator US$146,090 US$126,232 US$107,200
alluvial direct alluvial
production costs (Note
1)
------------ ------------ ----------------
Note 1: Under the Collaboration Agreement between Explorator and
Nexus Capital Limited (previously Mineral Technologies
International Limited, "Nexus") as previously announced on 20 June
2017, Xtract's net share of Explorator's gold revenue and costs was
40% for the two three-month periods ended 30 June 2018. Under the
New Collaboration Agreement for the three-month period ended 30
September 2018 Explorator's gold revenue and costs increases to
50%.
Note 2: Save for the changes above there has been no further
adjustment to the un-audited alluvial production results as
announced on 25 October 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 Joel Silberstein, Director.
Enquiries:
Xtract Resources Plc Colin Bird, +44 (0)20 3416 6471
Executive Chairman www.xtractresources.com
Beaumont Cornish Limited Roland Cornish +44 (0)207628 3369
Nominated Adviser and Michael Cornish www.beaumontcornish.co.uk
Joint Broker Felicity Geidt
Novum Securities Limited Colin Rowbury +44 (0)207 399 9427
Joint Broker www.novumsecurities.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
AGRGMMFGMGGGRZM
(END) Dow Jones Newswires
October 30, 2018 07:05 ET (11:05 GMT)
Xtract Resources (LSE:XTR)
Historical Stock Chart
From Apr 2024 to May 2024
Xtract Resources (LSE:XTR)
Historical Stock Chart
From May 2023 to May 2024