Aim-listed Xtract Resources has achieved significant progress at its Manica gold project, in Mozambique, in the year ended December 31, 2017.
The mine produced its first gold in October, from Sino Minerals, which marked a milestone in the company's history.
“Since October, we have been involved in increasing daily gold production,” CEO Colin Bird said in a statement on Wednesday.
He added that, since November 2017, Manica has been generating cash flows to cover the Manica overhead, but has yet to fulfil the expectation of management and shareholders.
Alluvial gold mining in the upper terraces produced some large nuggets, although contractors have been reluctant to remove large amounts of overburden necessary to access the alluvials.
Bird pointed out that the rainy season this year was particularly aggressive and delayed operations on the west of the project area, while Sino Minerals, operating on the east of the project area, were able to continue working but with some disturbance.
“Alluvial mining results are difficult to define and results can be erratic and random. On the west, we are seeing very fine gold, which requires an additional process plant and equipment specifically designed to recover fine gold and we are currently carrying out testwork aimed at recovering fine gold,” he noted.
He added that the company was in discussions with Moz Gold regarding plant modification, after Omnia advised that they no longer wished to work Extract’s alluvial concession.
“We have a loan facility of $400 000 with Moz Gold which gives us a 20% conversion right into their company, as well as default ownership of their processing plant. Dependent on our testwork, we may elect to use the plant on our own account or, alternatively, make it available to new contractors with the responsibility for fine gold modification being theirs.”
In terms of the hard-rock mining, Xtract is reviewing several proposals to either finance, work for royalty or equipment provision against interest for the Fair Bride hard-rock openpit.
“We expect to conclude an arrangement during the second half of the year and, thereafter, move into project development. We continue to look for opportunities which might further favourably position the company within the market and give the potential for an increase in shareholder value,” Bird said.
The company narrowed its loss for the financial year under review to £1.26-million from £8.94-million in 2016.