Xtract is currently preparing a bankable feasibility study for a larger open pit mine at Manica, and the new project will have the added benefit of removing significant overburden.
Nevertheless, Xtract will treat the alluvial project as a separate undertaking.
The plan is to mine 32,000 ounces per year of which 16,000 will be attributable to Xtract under the terms of the joint venture.
Start-up costs, estimated at US$1.2mln for the plant plus transport costs, will be wholly borne by MTI, while Xtract will assume operating costs once the plant is on site.
Internal estimates set the net present value of the alluvial operation at US$97mln and show that it will deliver an internal rate of return of 68%.
Operating costs are estimated to be US$203 per ounce, so there ought to be plenty of margin on offer, given that the current gold price is pushing on towards US$1,200 at the moment.
The plan is to get the project into production within six months.