Modern Mining March 2016

GOLD

Xtract improves the metrics of the Manica gold project

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 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.

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.

Aerial view of Manica open pit area.

22  MODERN MINING  March 2016