TIDMXTR
RNS Number : 1202F
Xtract Resources plc
06 July 2023
6 July 2023
Xtract Resources Plc
("Xtract" or the "Company")
Manica Q1 2023 Gold Production Update
Xtract Resources Plc ("Xtract" or the "Company") announces the
preliminary unaudited results for gold production for the Fair
Bride deposit and other mining within the Manica Concession in
Mozambique, for the three-month period ended 31 March 2023 ("Q1
2023").
Highlights
Fair Bride:
-- Fair Bride, where Xtract has a 23% share of net profit, is
now the main project at Manica ("Fair Bride"). Fair Bride gross
gold production continued to increase during Q1 2023 and was 140Kg
(equivalent to approximately 4,522 ounces)
-- Fair Bride's average gold sales price for Q1 2023 was US$1,859 per ounce
-- Month on month, gold production has increased from 37.6 kg in
January Q1 2023 to 66.3kg in May of the current quarter (Q2
2023)
-- Clear indications are that post the heavy rains, results are
improving significantly and Q2 2023 is showing a marked improvement
with plant throughput increasing from 30,000 tonnes per month in Q1
2023 to current nameplate capacity of more than 40,000 tonnes per
month
-- Application of a more robust grade control process has
resulted in a marked improvement in run of mine grade delivered to
the plant
-- Mill running time has increased from 67.3% availability in Q3
2022 to a reported 82% availability in May Q2 2023
-- The unit cash cost for Q2 2023 is anticipated to be in-line
with similar sized operations on a global basis as the operation
stabilises
Other Manica Projects:
-- For the other projects at the Manica Concession, including
the Alluvial and other hard rock production, Xtract is entitled to
a percentage share of the gold produced ("Other Manica
Projects")
-- The total gold production for these the Other Manica Projects
in Q1 2023 was 36Kg (equivalent to approximately 1,156 ounces) of
which the Xtract's share was 183 ounces
-- Other Manica Projects' average gold sales price for Q1 2023 was US$.1,812 per ounce
Colin Bird, Executive Chairman said: "We are very pleased with
the progress being made at Manica and the first Quarter performance
was excellent when one considers the effect of the heavy and
prolonged rains that the Project was exposed to during the
post-commissioning phase. The second Quarter results have seen a
continued improvement in performance with more consistent gold
production in April and May returning 68 and 66kg respectively. We
will provide regular updates and anticipate continued improvement
in the unit cash cost of production as the benefits of improvement
and optimisation of mining, processing and grade control are felt
by the operation".
Fair Bride Operation
The Fair Bride gold deposit is within the Manica concession
situated 270km NW of the city of Beira within Licence 3990C in the
Odzi-Mutare-Manica Greenstone Belt of Mozambique.
Mutapa Mining and Processing, LDA ("MMP"), is operator of the
Manica carbon-in-leach plant (CIL).
Table 1 shows the quarterly gold production and sales prices for
Quarter 1 2023 for the Fair Bride project and year to date figures
for 2023. The production statistics for Fair Bride are provided by
Contract miner, MMP.
Table 1: Gold Production and sales prices - Fair Bride (Xtract
23% share of net profit)
Q1
Year to date
2023 2023
------------------------------------ ---- --- -------- ---------------
Tonnes Mined & Processed (tons) 107,023 107,023
----------------------------------------------- -------- ---------------
Average grade (g/t) 1.51
----------------------------------------------- -------- ---------------
Au Production (ounces) 4,522 4,522
----------------------------------------------- -------- ---------------
Au recovery (%) 87.70 87.70
----------------------------------------------- -------- ---------------
Average sales price per ounce
in US$ 1,859 1,859
----------------------------------------------- -------- ---------------
Cost per oz of Au (US$) 1,185 1,185
----------------------------------------------- -------- ---------------
Gross monthly mine production from Fair Bride has grown month on
month as the operation has bedded down and typical
post-commissioning issues have been resolved. Steady improvement
has been reported in throughput tonnes processed, run of mine
grade, mill throughput rate and mill availability, all of which are
expected to result in continued improvement in the unit cash cost
per ounce of gold produced which can be expected to benefit
revenue.
Table 2: Ore Tonnes Processed Q3 2022
to Q2 2023
Period under review Ore Processed
(tpm)
---------------
July 2022 15,300
---------------
November 2022 21,800
---------------
February 2023 30,500
---------------
May 2023 43,200
---------------
Table 3: Mill throughput Rate Q3 2022 to Q2 2023
Period under review Ore Tonnes Milled per hour
(t/hr)
----------------------------
July 2022 30.5
----------------------------
November 2022 42.1
----------------------------
February 2023 56.2
----------------------------
May 2023 61.4
----------------------------
Table 4: Fine Gold Poured Q3 2022 to
Q2 2023
Period under review Fine Gold Poured
(kg)
-----------------
July 2022 14.3
-----------------
November 2022 25.5
-----------------
February 2023 37.6
-----------------
May 2023 66.3
-----------------
Revenue and therefore Xtract's share of net profit was impacted
by two main factors. Operation through the first rain season in
Manica resulted in a shortfall in plant throughput as wet clay-rich
near-surface mined material affected the operating efficiencies of
both screens and the mill. Measures have been put in place to
alleviate the problem and the impact of improvements can already be
seen with the month-on-month ore processing figure rising from
30,000 tonnes per month in February of Q1 2023 to a current
reported estimate of approximately 43,000 tonnes per month in May
Q2 2023.
A significant amount of additional close-spaced drilling was
completed during Q1 2023 specifically to improve grade control and
the ability to better predict the Run of Mine grade that could be
anticipated by the processing plant. This work had an almost
immediate impact on improvement in the run of mine grade with the
average rising from 1.2g/t Au in February Q1 2023 to a current
reported grade for May Q2 2023 of approximately 1.8g/t Au. An
increase in grade equivalent to an additional $36 per tonne of ore
delivered to the plant at the current gold price could also have a
significant positive impact on revenue and margin.
Xtract Resources and Manica Project Revenue Stream and
Reporting
Production at Manica is now dominated by Fair Bride. The gold
mined at Manica projects other than Fair Bride is now significantly
scaled down as the mineable resource for these projects is
significantly reduced. Accordingly, the Company has adopted a new
format for quarterly reporting which is set out below. Other Manica
Projects production will no longer be reported quarterly.
Xtract will receive 23% of the net profit at Fair Bride when the
prevailing price of Gold is greater than US$1,250 per ounce.
Xtract's share reduces to 21.5% if the prevailing gold price is
greater than US$1,175 but less than US$1,250 and to 20% if the
prevailing price of Gold is less than US$1,100 per ounce. Profit is
defined as: Revenue on Sale less deductible costs (excluding
non-cash items) and corporation tax of 32% after utilising any tax
losses. At the current gold price Xtract is due 23% of the net
profit.
Xtract will be reporting production and gold price statistics
for Fair Bride on a quarterly basis with Xtract's 23% net profit
share to be included in its annual and interim financial
accounts.
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
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 Michael Cornish www.beaumontcornish.co.uk
and Joint Broker Felicity Geidt
Novum Securities Limited Jon Bellis +44 (0) 207 399 9427
Joint Broker Colin Rowbury www.novumsecurities.com
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
Qualified Person:
Colin Bird: The technical information contained in this
announcement has been reviewed, verified, and approved by Colin
Bird, C.Eng, FIMMM, South African and UK Certified Mine Manager and
Director of African Pioneer plc, with more than 40 years'
experience mainly in hard rock mining.
Glossary
Au Gold
oz Ounces
-------------------------------
Kg Kilogrammes (there are 32.1507
ounces in a Kilogramme
-------------------------------
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END
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