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Xtract Resources expects Chepica to turn profit this quarter

The miner has increased total development rate at newly acquired Chepica mine to 300 metres per month from 40 metres. Management team also strengthened with three new senior staff.
Xtract Resources expects Chepica to turn profit this quarter

Xtract Resources (LON:XTR) expects its Chepica mine to become profitable within the next three months following a surge in activity since its acquisition in February.

The miner, which has also announced a significant beefing up of its management team, has been focused on boosting production and the speed of development at the gold and copper mine in Chile.

The total development rate is now 300 metres (m) per month, up from 40m per month, which the company said had generated a better mining mix and improved recovered concentrate grade.  Chepica previously operated from two mines, but this has now been extended to four.

This should lead to an increase in tonnage from 5,000 to 10,000 tonnes per month and boost the concentrate gold grade from 40-50 grams per tonne (g/t) to 60-70 g/t, Xtract said.

The increased development work and drilling programme carried out over the past month had also now opened up a new pay zone, which is currently running at 70-80 g/t. 

“As a result, Chepica is now on course to become profitable in the second quarter of 2014.”

Xtract added it is also looking at the possibility of mining the existing tailings dam, which has an average in situ grade of 1.3 g/t.

The new appointees include Eduard Victor, who worked with Xtract’s chief executive Jan Nelson at Pan African Resources (LON:PAF), as chief operating officer. 

Peet Prinsloo becomes chief technical officer while Albert Pistorius takes on the job of country manager Chile.

Also in Chile, discussion are underway to bring in a strategic partner for the Mejillones phosphate project, while due diligence has been completed over the Namakwa uranium deposit in South Africa.

Jan Nelson said: "The appointments of Eduard Victor as COO and Albert Pistorius, who is an experienced miner with extensive practical experience, are already beginning to bear fruit at Chepica. 

"Peet Prinsloo will help the team focus on expanding the current resource base at the mine to grow future production.” 

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