Alluvial collaboration agreement update

RNS Number : 7155W

Xtract Resources plc

12 December 2019

 

For immediate release

12 December 2019

Xtract Resources Plc

("Xtract" or the "Company")

Alluvial Collaboration Agreement Update

The Board of Xtract ("Xtract" or the "Company") announces that the Collaboration Agreement ("Agreement") between the Company and Nexus Capital Holdings PTE Limited ("Nexus") for the exploitation of the Manica alluvials has now been terminated by Nexus with an effective date of 2 December 2019. The terms of the Collaboration Agreement were previously announced on 30 October 2018, pursuant to which Xtract's net share of its wholly-owned Mozambican subsidiary Explorator Limitada's gold revenue and costs was 50%, the balance being for the account of Nexus. Following termination of the Collaboration Agreement, Xtract's net share of Explorator's share of gold revenue and costs will now be 100%.

Alluvial production is unaffected by the termination. In January this year, Xtract announced that it had concluded a mining contractor agreement with Huafei Gold Resources Co Limitada (formerly Sino Minerals Investment Company Limited)  ("Huafei") for the exploitation of alluvial gold deposits at its Manica mining concession in Mozambique. Huafei has the exclusive right to mine the entire unconsolidated alluvial deposits on the permitted area of the mining concession area. The preliminary unaudited results for alluvial mining for the Manica Concession for the three-month period ended 30 September 2019 were announced on 12 November 2019.

Nexus have submitted a claim for an amount of US$110,128 plus interest (which amounts to US$7,341) which Xtract and Explorator Limitada disputes. Arbitration on settlement of this amount is now ongoing and an amount in excess of the claim is held in a separate bank account of Explorator to cover settlement in, the Directors' view, the unlikely award under arbitration in favour of Nexus.

Colin Bird, Executive Chairman said: "The Company and its subsidiaries have maintained a good standing in jurisdictions it operates in and continues to comply with laws and regulations of Mozambique. Our alluvial operations continue unaffected by this change announced today".

Enquiries:

Xtract Resources Plc	Colin Bird, Executive Chairman	[phone] www.xtractresources.com
Beaumont Cornish Limited Nominated Adviser and Joint Broker	Roland Cornish Michael Cornish Felicity Geidt	[phone] www.beaumontcornish.co.uk
Novum Securities Limited Joint Broker	Colin Rowbury	[phone] www.novumsecurities.com

ENDS

 

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