Gold mine in Xtract’s sights
XTRACT Resources intends building Mozambique’s first large gold mine and restarting sizeable copper output in the Northern Cape‚ says CEO Jan Nelson‚ who was behind the growth of Pan African Resources into a mid-tier gold miner.
Xtract‚ which trades on London’s Alternative Investment Market‚ has a cash-generating gold mine in Chile and has now turned its focus to the Manica gold prospect in Mozambique as well as a copper dump retreatment project in Northern Cape.
Manica was once the flagship project in Pan African‚ which bought it in 2006.
It was enough of an asset to attract the attention of then Johannesburg-listed Metorex‚ which folded its Barberton gold mine into Pan African in exchange for a controlling stake in the company.
However‚ the Metorex board took the view that Manica would not be developed‚ Nelson said, adding that Xtract planned to bring the deposit into production of 50 000oz per year in the next 18 months.
“We understand the deposit. It’s well drilled and the metallurgy is understood. I always wanted to develop it. I was just not allowed to develop it.”
Pan African sold Manica to Auroch Minerals‚ an Australian company‚ which took the project to within months of a finalised bankable feasibility study. Auroch estimated the Fair Bride portion of Manica would cost $28-million (R345million) to deliver 330 000oz of gold over seven years.
Xtract agreed to buy Manica for $12.5-million. It raised £4.4million (R84.6-million) in a rights issue this week towards the cash and share deal.
Xtract could raise up to 40% of the $28-million capital cost and could secure debt for the rest‚ Nelson said. A Chinese company could sell it a processing plant in exchange for mined gold.
Xtract had agreed to a cash and share purchase of rock dumps at O’Kiep for $4.75-million. “The two biggest dumps we’ve bought have 70% of all the metal value of the surface material contained in eight dumps in the area.”
The grade was estimated at 0.2% copper and the in-situ value was $400-million.
Xtract would spend $400 000 over the next six months to explore the dumps. A plant to process the copper could cost up to $60-million. — BDlive