Xtract Resources increases Manica gold deposit estimate by 36%

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Xtract Resources increases Manica gold deposit estimate by 36%

6:10 CAT | 12 May 2016

Proactive Investors / Picture is the Manica project in Mozambique

The British-based company Xtract Resources has increased the estimate of the amount of gold contained in its Manica project which is situated four kilometres north of the central Mozambican town of Manica, near the Zimbabwe border.

In an announcement on Wednesday, the company revealed that an independent technical report on its Fair Bride gold deposit increased the estimated gold resource to 1.257 million ounces, a 36 per cent increase on the previous estimate of 923,000 ounces.

Xtract’s chief executive Jan Nelson commented “we are extremely pleased with this significant increase in the Manica resource ahead of the completion of the bankable feasibility study. Not only has the gold content increased significantly but the total measured and indicated volume available to be mined has also increased by over 56 per cent. This creates flexibility from an open pit perspective, considering our revised mine plan”.

He added “the significant increase in the inferred category also shows that the life of mine of the project has the potential to be increased well beyond 12 years with further drilling”.

The current price of gold is around 1,270 US dollars per ounce, making the total amount of gold at Fair Bride worth just under 1.6 billion dollars at today’s prices. However, the latest estimate was based on more material being processed and a reduction in gold recovery from just over three grammes per tonne to 2.26 grammes per tonne.

According to the company’s website, this should still be highly profitable as it stated that it will be able to mine 48,000 ounces of gold per year with production costs of 670 dollars per ounce.

In addition, the company will soon begin mining a nearby alluvial deposit in a joint venture with the company Mineral Technologies International (MTI). Xtract stated that this will be the largest alluvial gold mining operation in Africa.

Xtract Resources plans to begin mining at the Manica Gold Project in April 2017 with alluvial mining at the MTI joint venture commencing in June 2016.

Source: AIM