JOHANNESBURG (miningweekly.com) – Aim-listed Xtract Resources’ wholly-owned subsidiary Explorator has concluded a mining contractor agreement that will result in the exploitation of alluvial gold deposits at its Manica mining concession, in Mozambique.
Contract miners Omnia Mining and Moz Gold will have the exclusive right to mine unconsolidated alluvial deposits on the western half of the permitted area of the mining concession area for the next ten years.
“The alluvial agreement is a very positive move for Xtract, providing potential significant cash flows with upside based on contractual minimums,” said Xtract chairperson Colin Bird in an update to shareholders on Monday.
The company is also continuing negotiations for the eastern half of the concession with other contractors, with expectations of an announcement by the end of July.
Subject to obtaining the environmental-impact assessment authorisation, initial mining is set to start by September 1, targeting a minimum capacity of 220 000 t/m by November 1. The contractors are obligated to have a fully operational plant with a mining capacity of 100 t/h in place by October 31.
The minimum targeted mining capacity is expected to increase from November, with an eventual yearly production target of 2.64-million tonnes of alluvial materials expected.
The agreement also provides for monthly payments against the monthly run-of-mine performance, adjusted against the gold price with a floor price of $1 250/oz and capped at $1 600/oz.
Assuming the base gold price of $1 250/oz, Explorator expects attributable monthly revenue of $165 000 from November.