Modern Mining

GOLD



MODERN MINING



March 2016

he project is located just several

kilometres north of the town of

Manica, approximately 270 km

west-northwest of the city of Beira

and close to the border with Zimba-

bwe. Geologically, it is situated on the eastern

limb of the Zimbabwe Craton and lies on the

OMM (Odzi-Mutare-Manica) greenstone belt.

Xtract announced last year that it was

acquiring the project from ASX-listed Auroch

Minerals and the transaction has now been con-

cluded following the approval of the deal by

the Mozambican mining authorities earlier this

year. This was the last of the regulatory approv-

als required to complete the transaction.

Explaining the background to the update,

Xtract says that in June 2015 it reported on

certain economic metrics for the Manica proj-

ect, which had been completed by Auroch

Minerals as part of the Preliminary Economic

Assessment report (PEA). Following the devel-

opment work it has undertaken since this time

and based on its own in-house estimates, Xtract

has now revised its expectations of the project

(although it stresses that its figures have not

been verified by independent consultants and

have a high probability of changing as the DFS

is completed).

The project’s NPV has now increased from

the US$50 million projected in the PEA to

US$70 million while the IRR decreases to

50 % from the PEA figure of 58 % assuming

a gold price of US$1 250. The Life of Mine

(LOM) increases to 12 years from eight years.

Annual LOM production is estimated at 6,3 Mt

at a head grade of 2,93 g/t recovering 477 koz,

compared to the PEA figures of 3,4 Mt at a head

grade of 3,49 g/t recovering 316 koz. Expected

recoveries are 96 % for oxide ore, 82 % for tran-

sitional ore and 80 % for sulphide ore.

The start-up capital cost is estimated at

US$35 million compared to the PEA capital

Xtract

improves the metrics

of the

Manica

gold project

Aerial view of Manica open

pit area.

Xtract Resources, whose shares are quoted on London’s AIM,

has completed an in-house update on the economic metrics

of the Manica gold project in Mozambique, as part of the

Definitive Feasibility study (DFS) that is currently being un-

dertaken by independent consultants. The update generally

improves on the previous metrics, with total gold produc-

tion increasing significantly and the project NPV (discount-

ed at 10 %) increasing from US$50 million to US$70 million.