Xtract CEO Jan Nelson
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – The Manica gold project in Mozambique, which has been bought and sold several times in recent years, is being disposed of once more.
On two occasions the disposals have been conducted under the same management head – Jan Nelson, who announced on Thursday that his London Aim-listed Xtract had entered into an agreement to sell the Mozambique gold project to Nexus Capital and Mineral Technologies International (MTI) for $17.5-million cash.
Then CEO of Pan African Resources, Nelson presided over Manica’s sale to Auroch, which sold it to the Xtract he now heads for $12.5-million (Mining Weekly Online June 30, 2015).
Xtract’s $17.5-million in cash, will net down to $12-million after paying off the final amount due to Auroch and taxes, giving it room to apply some of it to operational activities, including those at its producing Chepica gold and copper mine in Chile, which is targeting the milling of 30 000 t in this quarter.
The Manica licence, on 42 km2, hosts both hard-rock and alluvial gold deposits, which Xtract has been developing towards production since June 2015.
Mining of the alluvial gold deposit is due in the third quarter of this year and a bankable feasibility study on mining the hard-rock gold deposit is due out before mid-year.
The new owners will now have to look to a start-up cost in the region of $35-million while Xtract gets a 40% return on its investment in Manica in under 12 months
“We believe that the value we have added to the projects at Manica has been recognised by the offer,” Nelson said in a release to Creamer Media’s Mining Weekly Online.
The agreement is subject to regulatory approvals and the completion of due diligence by August 31.
Late last year Xtract clinched a joint venture agreement with MTI regarding the alluvial gold deposit, where third-quarter mining is due as part of a trial mining programme, near the Fair Bride prospect, where a bulk sample of 16 000 t is due to be taken and production increased to 850 000 t of alluvial material a month in the following six months.