Xtract Resources raises £1.7m to pay debt, fund Manica opportunities

JOHANNESBURG (miningweekly.com) – Aim-listed Xtract Resources has conditionally raised £1.7-milion, before expenses, through the placement of 59.64-million new ordinary shares at 2.85p a share.

The net proceeds from the placing will be used to pay off outstanding debt of £530 000 and to take advantage of commercial opportunities offered in the Manica area of Mozambique and elsewhere.

In October, the board announced that alluvial mining contractors Sino Minerals and Omnia Mining had each started production on the eastern and western halves respectively of the Manica concession.

In the eastern half, the smelting of first gold was expected no later than October 10, achieved on October 8.

Xtract received its first gold bars produced in the eastern half of the concession on October 22.

In the western half, first income is expected at the end of November and Omnia continues to work on the gold plant and, in particular, the gold room to increase fine gold recovery.

"The placing was considered necessary to satisfy outstanding debt and remove the requirement for further convertible issues. The company has also made the placing in order to have immediate access to funds to take full advantage of the potential within the Manica area, which may include taking equity positions in operations and fast-tracking the hard rock propositions together with others in the vicinity.

“We will continue to pursue other opportunities if and when deemed appropriate,” Xtract chairperson Colin Bird noted.