Xtract subsidiary signs second contractor mining agreement for Manica project

JOHANNESBURG (miningweekly.com) – Xtract Resources’ subsidiary Explorator has completed a mining contractor agreement with Sino Minerals Investment Company for the exploitation of alluvial gold deposits at the Manica mining concession, in Mozambique.

Xtract and Nexus Capital in February agreed that the alluvial gold deposit at Manica would be developed jointly through the appointment of third-party contract miners.

Explorator last month signed a mining contractor agreement with Omnia Mining and Moz Gold, which gained the exclusive right to mine unconsolidated alluvial deposits on the western half of the permitted area of the mining concession for the next ten years.

Under the terms of the agreement signed between Explorator and Sino, Explorator will be entitled to 25% of the gold mined, with mining to start no later than October 15. The contract is for ten years, or the depletion of alluvials, and may be extended for a further five years if the alluvials are not yet depleted.

The agreement also includes performance targets, with Sino required to have a fully operational plant with a capacity of 200 t/h in place from October 15. Plant capacity will have to increase to 400 t/h from January 15, 2018.

Xtract expects the initial monthly income under the agreement with Sino will be at least $160 000.

"The conclusion of this contract for the eastern section of the Manica concession is an important milestone. The combined revenue, once achieved, is expected to be significant and will form a substantial platform from which the company can develop both at Manica and globally.

“We continue to discuss financing and operational agreements for the hard rock and on receipt of income of the alluvials will commence further hard rock exploration potential which we know exists in the area. We will keep shareholders fully informed of construction developments as they occur," Xtract chairperson Colin Bird said on Tuesday.