Xtract Resources PLC (LON:XTR) has updated investors on the pending sale of the Manica gold project in Mozambique ahead of an annual general meeting (AGM) later today.
A deal was agreed to sell the project, in May, for US$17.5mln which is 40% more than it cost Xtract to buy the project a year before. The sale was deemed a preferable option, opposed to the shareholder dilution that would’ve occurred if it raised US$35mln to build a mine.
The company highlighted that the process of closing the transaction is progressing well and the purchasers, Nexus Capital and Mineral Technologies International, have advised that based on due diligence to date they are not aware of any reason not to conclude the deal.
At the same time Xtract is in talks with Auroch Minerals regarding a remaining US$2.5mln payment relating to the AIM company’s acquisition of Manica back in June 2015. A revised payment date will be confirmed in due course, it added.
Xtract has also been given additional time to deliver an almost complete bankable feasibility study to the purchasers – which had previously set a deadline of June 30, otherwise £1mln would be taken off the purchase price. However, that has now been extended without financial penalty.
The company, separately, told investors that at the Chepica mine, in Chile, underground production continues at between 8,500 and 10,000 tonnes per month.
Also at Chepica the company is currently assessing issues that have been impacting upon gold recoveries, and is working on a full review of the whole plant to mitigate against any other potential issues.
A new resource upgrade is also being worked on for Chepica, and the company is in talks to renegotiate option payments.