Business
Strategic investment in Manica alluvial operator
Strategic investment in Manica alluvial operator.
About this update from Xtract Resources Plc
[{"type":"text","content":"\n \nRNS Number : 4946Z Xtract Resources plc 15 December 2017 \n\n \nFor immediate release\n15 December 2017\n \nXtract Resources Plc\n(\"Xtract\" or the \"Company\")\n Xtract makes strategic investment in Manica alluvial operator\n \nThe Board of Xtract Resources Plc (\"Xtract\" or the \"Company\") is pleased to announce that it has today made a strategic investment in Moz Gold Limitada' (\"Moz\"). As previously announced on 7 December 2017, Moz currently operates the M Block in the Western mining area of the Manica mining concession in Mozambique owned by the Company's wholly-owned Mozambican subsidiary, Explorator Limitada (\"Explorator\"). The details of the agreement are outlined below. \n \nHighlights\n \n· Xtract to make an initial convertible loan of US$400,000 to Moz Gold\n· Loan and interest at 30% per annum, to be repaid over 5 months \n· Xtract has the right to convert the loan at any time into to 25% equity interest in Moz Gold \n· Xtract has agreed to provide a further US$300,000 convertible loan to Moz with the right to convert for a further 10% interest in Moz Gold\n· Moz Gold now in commercial production on the M Blocks\n \nColin Bird, Executive Chairman said: \"As owners of the Manica concession, Xtract consider it of shareholder benefit to take a bigger stake in gold production from the concession, since we consider the revenues will be long life and sustainable. This agreement should significantly enhance Xtract's earnings from alluvial activities well beyond initial expectations. All other components of area consolidation are proceeding satisfactorily, and I look forward to updating before year end or certainly early in the new year\".\n \n \nConvertible Loan Agreement\nThe Company has agreed today to loan a total of US$700,000 to Moz to be drawn down in two separate tranches, with an interest rate of 30% per annum.\n \nThe first tranche of US$400,000 shall be drawn down shortly after the execution date of the loan. The second tranche of US$300,000 can only be drawn down at Xtract's discretion and only once the first tranche has been fully repaid or converted into equity in Moz.\n \nThe first tranche is to be fully rep...