The junior said it had the opportunity to raise more but wanted to minimise dilution.
The shares were issued at 2.85p, an 8.5% discount to last night’s close, and will see the shares in issue increase by 20%.
Xtract added that alluvial mining was now underway on both sides of the Manica concession with first income expected from the west operation at the end of November.
The east operation delivered its first gold bars in October.
Colin Bird, chairman, said: "The placing was considered necessary to satisfy outstanding debt [£530,000] and remove the requirement for further convertible issues.“
The placing will give immediate access to funds to take full advantage of the potential within the Manica area which may include taking equity positions in operations and fast tracking the hard rock propositions, he added.