GOLD
22
MODERN MINING
March 2016
T
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.