Mozambique’s next gold mine? Gold miner Xtract Resources buys Manica prospect for US$12.5mln

Gold miner Africa Gold miner Xtract Resources

(2015-06-29) A scoping study carried out earlier indicated revenues from the mine of US$55mln annually based on 50,000 ounces per year of gold production.  has bought a new project in Mozambique scheduled to become the country’s first commercial gold mine.

The Manica Gold licence will cost Xtract US$12.5mln and includes the Fair Bride open pit project, where a bankable feasible study is due in six months and production a year later.

A scoping study carried out earlier indicated revenues from the mine of US$55mln annually based on 50,000 ounces per year of gold production, cash costs of US$650 per ounce and an open pit operation for five years and three years underground.

Resources are estimated at 900,000 ounces from 3.5Mt at a grade of 3.01g/t with start-up costs of US$28.4mln and a further US$14.8mln for the underground development.

Fair Bride represents approximately 10% of the total licence at Manica, said Xtract and there are significant opportunities to increase the gold resource through exploration.

A placing, at 0.3p, will raise £4.4mln for Xtract to help pay US$4.5mln cash and US$1.5mln of liabilities. The remaining US$6.5mln will be paid in shares.

Jan Nelson, Xtract’s chief executive said: “The Fair Bride project will allow the company to generate significant revenues.

“With payback on the project of less than three years, the fundamentals are attractive for various forms of project financing.

“The project is less than a year from a completed BFS and we firmly believe that there are significant areas for further optimisation which will lead to improved project economics.”

Colin Bird, Xtract’s chairman, added: “ This is one of the few high-grade, low-cost, low-risk, open-pitable gold opportunities in Africa. Infrastructure around the project is excellent and the project is 18 months from production.”

Source: Proactive Investors

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