Xtract Resources, the London-listed firm which is buying the Manica gold mine from Australia’s Auroch, today upgraded its outlook for the mine, saying it could yield $245 million in profits over 12 years.
Independent consultants are still working on a definitive feasibility study (DFS) for the mine project, which previously belonged to Pan African Resources. Xtract’s CEO Jan Nelson formerly headed up Pan African Resources – and he told an investor conference today that most of Xtract’s management team has been working on the Manica project for over 15 years, in one capacity or another.
The company plans to start mining later in 2016 with an open pit, which it will mine for four years before moving to an eight-year underground mining operation. The new projections are a significant upgrade on the preliminary economic assessment which put the life of the mine at just eight years in total, expected to bring in $130 million in profits.
Xtract paid Auroch around $11 million for the mine and also agreed to pay the capital gains tax bill to the Mozambican government, which came to around $700,000. The mine will pay royalties to the Mozambique government of 6% on its revenues, Nelson said today.
The DFS should be completed by the end of Q2 2016, the company said today, along with the necessary technical and environmental studies.
A study into how to conduct a re-settlement of people living on the mine area is also due by the end of Q2 2016. However the company said the process may be slowed by a recent change in legislation and will be subject to certain approvals being granted by a government committee, which may require additional time – delaying the DFS by up to three months.
Xtract is currently engaged in discussions with several banks and institutions regarding finance for the Manica project, the company said.
source: Zita mar news
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