Xtract Resources PLC (LON:XTR) shares jumped more than 60% on Tuesday after it told investors that the group’s Mozambique subsidiary, Explorator Limitada, has signed a second mining contractor agreement for the Manica gold project.
The arrangement with Sino Minerals Investment Company has been hired to mine the eastern half of the alluvial interest in the Manica concession, Xtract said.
It added that monthly income is expected to be in excess of US$160,000, rising to US$320,000 once the second plant is operational.
Xtract chairman Colin Bird described it as an “important milestone”.
“The combined revenue, once achieved, is expected to be significant and will form a substantial platform from which the company can develop both at Manica and globally,” Bird said.
“We continue to discuss financing and operational agreements for the hard rock and on receipt of income of the alluvials will commence further hard rock exploration potential which we know exist in the area.
“We will keep shareholders fully informed of construction developments as they occur."
The deal sees initial mining getting underway no later than October 15 with minimum throughput anticipated at 200 tonnes per hour, rising to 400 tonnes per hour by mid-January.
Xtract’s subsidiary will be due 25% of the mined gold, which will amount to 19% after mining production tax.
The contract covers up to a ten year period, with the option for a further five years if the gold mining resource is not depleted.
On AIM, Xtract shares climbed 1.25p or 62.5% to trade at 3.25p.