Proactive Investors - Run By Investors For Investors

Xtract Resources signs up for near-term cash flow from alluvial gold production

Xtract has signed a deal to reactivate alluvial mining at the Manica gold deposit, and secure much needed cash flow in the process
Xtract Resources signs up for near-term cash flow from alluvial gold production
Cash flow from gold production is now due in a few months' time

The essential idea behind the latest transaction from Xtract Resources PLC (LON:XTR) is to provide short-term cash-flow, according to executive chairman Colin Bird.

It’s a plan he’s had in the pipeline ever since he resumed a more active role in the day –do-day running of the company following the departure of former chief executive Jan Nelson last year.

Bird found a company with a mixed suite of assets spread across two continents in fairly urgent need of funding.

The Manica gold project, which was the one Xtract was originally built around, resumed centre stage. South American assets were declared more peripheral, and the focus firmly return to Africa.

In the longer-term, the plan is to build a hard rock mine at Manica, and to that end various studies have been completed.

A decade or more ago it was thought the ore at Manica might be refractory, but Bird says that is now not the case, although it’s true that some of the metal is encapsulated in silica.

Instead, work on the grinding size has allayed the earlier concerns.

“The previous work was done at quite a coarse grind,” he says. “But with a finer grind the liberation is quite good. It has a mixture of oxides and sulphides.”

But how is Xtract, a company that’s now only capitalised at around £4 mln going to set about funding development at Manica?

That’s an open question, especially since there are already over 20bn shares outstanding.

But the latest transaction, under the terms of which Xtract will collaborate with Nexus Capital in mining the alluvial gold deposits at Manica, with Nexus taking on tall the costs save those for monitoring and transport.

Under this new agreement it’s anticipated that Xtract will receive its first income in the second quarter of this year. What’s more the official resumption of alluvial mining at Manica is likely lead to the opening up of more areas for exploitation in the months to come.

“There are many alluvial mining operations in the Manica area and significant expertise has been gained in the art as well as the science of working such deposits,” says Bird.

“We can now move forward with restoring shareholder value.”

Xtract’s shares rose by more than 20% on the news to 0.3p. 

View full XTR profile View Profile

Xtract Resources PLC Timeline

Related Articles

map of project area
March 26 2018
The prospect of an IOCG deposit, similar to Olympic Dam, has ignited interest in the stock.
Zinc in periodic table
April 17 2018
The report was prepared by CSA Global under contract to SLR Consulting Ireland ...
Picture of pilot plant
April 05 2018
An impressive pre-feasibility study features a pre-tax valuation of $227 million for start-up capital expenditure of $65 million.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use