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Xtract Resources PLC: DEEP DIVE

Reinforced by continuing cashflow from the Manica gold project, Xtract is now branching out into new metals and new jurisdictions

Xtract Resources now boasts handy quarterly cashflow from Manica
Reinforced by continuing cashflow from the Manica gold project, Xtract is now branching out into new metals and new jurisdictions
OVERVIEW: XTR The Big Picture
Colin Bird and Sino Minerals manager presenting gold ready for shipment
  • Turnaround now nearing completion
  • Track record of gold production now building
  • Experienced management
  • Project acquisition programme diversifying portfolio

What Xtract Resources does

Xtract Resources PLC (LON:XTR) is a long-standing constituent of London’s AIM market that specialises in the exploration and development of gold and base metals assets, and which latterly has gone into production on its Mozambican gold property Manica.

The company is run by Colin Bird, a seasoned resources specialist with a track record of deal-making and value creation. Bird was responsible for the development and subsequent sale of Kiwara to First Quantum Minerals (LON:FQM) for US$260mln.

What Xtract Resources owns

The key asset is the Manica gold project in Mozambique, located 27 kilometres west of the city of Beira, and just across the border from Zimbabwe.

The alluvial portion of the project is currently being mined by local and Chinese contractors, and in recent quarters has delivered cash flow net to Xtract of upwards of US$110,000. That’s a tidy sum for a junior mining company to be raking in, albeit that the production from the alluvials has been a bit uneven.

Xtract also has plans to develop the hard rock portion of Manica, and has carried out a definitive feasibility study which demonstrates that production of 215,000 ounces over a seven-year period would generate an internal rate of return of 41% and gives the project a net present value of just under US$44mln.

Xtract has also recently signed a deal to explore for base metals and gold on the Matrix project in Zambia.

Inflection points

  • Funding for development of Manica hard rock mine
  • Increasing cash flow from alluvial operations
  • Exploration results from Matrix project in Zambia

Executive chairman Colin Bird has a clear strategy going forward

“The iron oxide copper gold exploration potential in Zambia has not been fully explored and several highly prospective opportunities exist,” says Xtract’s executive chairman Colin Bird.

“We have identified the Matrix project as being high in potential and are currently investigating other areas which possess similar potential. In developing our activities into Zambia, we are providing a country balance and also introducing copper as a commodity hedge against gold. The board of Xtract believes that the fundamentals for copper in the future are stronger than have been experienced for a considerable time."




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