Xtract Resources : Manica Alluvial Gold & Corporate Update

Regulatory Story

Xtract Resources plc- XTR

Manica Alluvial Gold & Corporate Update

Released 11:00 12-Nov-2019

RNS Number : 1177T Xtract Resources plc 12 November 2019

For immediate release

12 November 2019

Xtract Resources Plc

("Xtract" or the "Company")

Manica Alluvial Gold & Corporate Update

The Board of Xtract Resources Plc ("Xtract" or the "Company") announces the preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month period ended 30 September 2019 (the "Period").

Highlights

• Total alluvial mining contractor gold production of 30.92Kg for the quarter (equivalent to approximately 994 ounces)
• Total of 8.66Kg (equivalent to approximately 278 ounces) attributable to Explorator (including Nexus under the Collaboration Agreement)
• Combined attributable revenue to Explorator from gold sales and other income for the Period amounted to US$467,683
• Post-periodend in October a total of 14.96Kg of mining contractor gold produced with a current gross value of US$699,000
• Manica hard rock continues to progress and all aspects of operations advancing satisfactorily with long lead items ordered before due date
• Preparation to commence drilling program in Zambia currently being finalised
• Kalengwa metallurgical test work being carried out in South Africa and Zambia including separation and flotation test work
• Review of the Company's corporate structure to facilitate new projects and their implementation

Colin Bird, Executive Chairman said: "The alluvial production at the Manica concession continues to be profitable for the Company and also provides the necessary cash flow whilst we develop the Fairbride Project in Mozambique as well as the Kalengwa Project in Zambia. The alluvials have provided positive cash flow on a monthly basis despite there being volatility in the gold yield, excess overburden removal or a combination of the two. At the same time, we have generally been quite cost efficient with matters under our control, which has assisted to maintain profitability during difficult operational periods.

We are pleased with all aspects of the Manica hard rock development as well as the initial results of the Kalengwa tailings test work and we will report the full set of results as soon as they are available. The Company has carried out several field reviews of the Matrix, Eureka and Kalengwa projects and have identified drilling targets for all properties.

We have reviewed our management structure and are making several changes to meet the requirements of the Company's aggressive production development and new exploration targets in Zambia."

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 30 September 2019, 30 June 2019, 31 March 2019 and 31 December 2018 are set out in the table below. In addition to the information included in the table, the table below provides a further breakdown of costs between operational costs, production tax and land resettlement costs:

	3rd Quarter	2nd Quarter	1st Quarter	4th Quarter
	ended	ended	ended	ended
	30 September 2019	30 June 2019	31 March 2019	31 December
				2018
Production and Sales:
Total contractor alluvial gold production	994	1,088	1,293	1,328
(equivalent ounces) (Note 4)
Explorator share of gold produced	278	305	323	332
(equivalent ounces)
Explorator share of gold sold (equivalent	337	533	340	307
ounces)
Explorator attributable revenue from gold	US$467,683	US$643,568	US$408,197	US$310,000
sales
Xtract share of Explorator attributable	US$233,482	US$321,784	US$204,099	US$155,00
revenue from gold sales (Note 1)
Direct Operational Production Costs:
Explorator total direct alluvial operational	US$140,477	US$125,666	US$138,634	US$146,299
production costs (Note 2)
Xtract share of Explorator alluvial direct	US$70,238	US$62,833	US$69,317	US$73,149
alluvial operational production costs (Note
2)
Total Costs:
Explorator total direct alluvial production	US$231,462	US$199,595	U$238,610	US$254,296
costs (Note 3)
Cost per ounce of gold produced	US$832	US$655	US$738	US$820
Xtract share of Explorator alluvial direct	US$115,731	US$99,797	US$119,305	US$127,148
alluvial production costs (Note 3)

Note 1: Under the Collaboration Agreement between Explorator and Nexus Capital Limited (previously Mineral Technologies International Limited, "Nexus") as previously announced on 20 June 2017, Xtract's net share of Explorator's gold revenue and costs was 40%.Under the New Collaboration Agreement, Explorator's gold revenue and costs increased to 50%.

Note 2: Direct operational production costs include and not limited to Explorator salaries, rent, vehicles expenses and utilities.

Note 3: Total costs comprises direct operational production costs plus total Production Tax (6% of the value of total production which varies according to the level of production) and Land Resettlement Costs as detailed below:

	3rd Quarter ended 2nd Quarter ended 30 1st Quarter ended 31	4th Quarter ended 31
	30	June 2019	March 2019	December 2018
	September 2019
Production Tax	US$64,492	US$67,564	US$81,571	US$100,675
Land resettlement costs	US$26,494,	US$6,365	US$18,405	US$7,322

Note 4: Presence of gold in alluvial deposits is unpredictable and therefore operational results will vary month-to- month.

Further details are available from the Company's website which details the company's project portfolio as well as a copy of this announcement: www.xtractresources.com

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. The person who arranged for the release of this announcement on behalf of the Company was Joel Silberstein, Director.

Enquiries:
Xtract Resources Plc	Colin Bird,	+44	(0)20 3416 6471
	Executive Chairman	www.xtractresources.com
Beaumont Cornish Limited	Roland Cornish	+44	(0)207628 3369
Nominated Adviser and Joint	Michael Cornish	www.beaumontcornish.co.uk
Broker	Felicity Geidt
Novum Securities Limited	Colin Rowbury	+44	(0)207 399 9427
Joint Broker		www.novumsecurities.com

ENDS

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