Business
JV on new alluvial gold production at Manica
JV on new alluvial gold production at Manica.
About this update from Xtract Resources Plc
[{"type":"text","content":"\n \nRNS Number : 7534C Xtract Resources plc 20 October 2015 \n \n\n20 October 2015 \n \nXtract Resources Plc \n(\"Xtract\" or \"the Company\")\n \n JV signed on Manica Gold Project to start Alluvial Gold production within six months\n \nXtract Resources Plc (AIM:XTR) has signed a Joint Venture Agreement with Mineral Technologies International Limited ('MTI') to mine alluvial gold on the Manica gold project (the 'JV Project'). Whilst this project falls within the larger Manica Gold license, it will be progressed as a separate project from the planned open pit gold mine on which Xtract is currently completing a Bankable Feasibility Study. \n \nThe Company expects that the JV Project will produce approximately 32,000oz gold per annum (16,000 gold per annum net to Xtract), in addition to that already planned from the Manica open pit. The JV Project does not impede development of the open pit project and has the added benefit of removing a lot of overburden material thereby benefitting the open pit project by partially pre-stripping the pit.\n \nThe key aspects of the Join Venture Agreement are:\n \n· MTI will fund the construction of an alluvial gold plant, which is expected to commence production in Q3 2016\n· The cost of the plant (to be borne wholly by MTI) is estimated at US$1.2 million\n· MTI will also be responsible for the cost to transport the plant to site\n· MTI will appoint Xtract as the operator of the plant\n· MTI and Xtract will split the gold produced from the plant on a 50:50 basis\n· Xtract will be responsible for the operating costs of the plant\n \nThe key metrics of the JV Project (as determined on a company in-house basis) are:\n \n· Estimated NPV of US$97 million, delivering an IRR of 68% (discount rate of 10%)\n· Life of Mine of 10 years\n· Payback of less than 6 months\n· Produce 32,000oz per annum\n· Operating cost of US$203/oz\n· Treat 6.7Mt per annum\n· Total resource of 29Mt at between 0.6g/t and 1g/t on surface\n \nJan Nelson, CEO of Xtract, ...