Xtract reports good gold recoveries at Mozambique concession
Resource development company Xtract Resources chairperson Colin Bird says the company is pleased with the progress being made at the Manica concession, in Mozambique, which produced 4 522 oz of gold in the three months ended March 31.
"The first-quarter performance was excellent when one considers the effect of the heavy and prolonged rains that the project was exposed to during the post-commissioning phase.
“The second-quarter results have seen a continued improvement in performance with more consistent gold production in April and May, returning 68 kg and 66 kg, respectively,” he points out.
Gross mine production from the Fair Bride deposit within the Manica concession has grown month-on-month as the operation has been bedded down and typical post-commissioning issues have been resolved.
Service provider company Mutapa Mining and Processing operates the Manica carbon-in-leach plant on Xtract’s behalf.
A steady improvement has been reported in throughput tonnes processed, run-of-mine (RoM) grade, mill throughput rate and mill availability. These are expected to result in a continued improvement in the unit cash cost per ounce of gold produced, which should benefit revenue, Xtract notes.
It points out that revenue, and therefore Xtract's share of net profit, was impacted by two main factors in the three months ended March 31.
Operating through the rainy season resulted in a shortfall in plant throughput as wet clay-rich, near-surface mined material affected the operating efficiencies of both screens and the mill.
Measures have been put in place to alleviate the problem. The impact of improvements can already be seen with the month-on-month ore processing figure having increased from 30 000 t a month in February to a current reported estimate of about 43 000 t a month in May.
Meanwhile, a significant amount of additional close-spaced drilling was completed during the first quarter, specifically to improve grade control and the ability to better predict the RoM grade that could be anticipated by the processing plant.
This work had an almost immediate impact on improvement in the RoM grade, with the average rising from 1.2 g/t gold in February to a current reported grade for May of about 1.8 g/t gold.
An increase in grade equivalent to an additional $36/t of ore delivered to the plant at the current gold price could also have a significant positive impact on revenue and margin, the company says.
Production at Manica is now dominated by Fair Bride. The gold mined at Manica projects other than Fair Bride has significantly scaled down as the mineable resource for these projects is significantly reduced.
Under the terms of its agreements with Mutapa, Xtract will receive 23% of the net profit at Fair Bride when the prevailing price of gold is greater than $1 250/oz.
Xtract's share reduces to 21.5% if the prevailing gold price is greater than $1 175/oz but less than $1 250/oz, and to 20% if the prevailing price of gold is less than $1 100/oz.
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