Mozambique: ExxonMobil reaffirms commitment to gas project in Cabo Delgado
Xtract Resources to sell Manica gold project for US$17.5 million
8:39 CAT | 27 May 2016
The British-based company Xtract Resources announced on Thursday that it has decided to sell its Manica gold project. This is situated four kilometres north of the central Mozambican town of Vila Manica, near the Zimbabwe border.
The company has entered into an agreement with Nexus Capital Limited and Mineral Technologies International (MTI) which will see it receive 17.5 million US dollars in return for its Manica licence.
Xtract Resources bought the project from the Australian company Auroch Minerals last June for 12.5 million dollars. It only received approval from the Mozambican government for this acquisition in March.
The licence covers both hard rock and alluvial deposits. Xtract planned to begin gold production from the hard rock deposit in the last quarter of 2017, whilst mining of the alluvial deposit was scheduled to start before the end of this year.
The main gold deposit, known as Fair Bride, is estimated to hold 1.257 million ounces of gold. However, mining will recover just three grammes of gold for every tonne of material processed. Today’s gold price is around 1,230 dollars, and Xtract has calculated that it could mine 48,000 ounces of gold per year at Fair Bride with production costs of 670 dollars per ounce.
Under the terms of the sale to Nexus and MTI, Xtract has to complete a bankable feasibility study by the end of June or forfeit a million dollars.
Source: AIM
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