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Xtract taps Mutapa to mine, process hard rock gold deposits from Manica project

Xtract Resources Plc inked a deal granting Mutapa Mining and Processing LDA the exclusive right to mine and process hard rock gold deposits from its Manica project in Mozambique over 10 years, with an option to extend.

Mutapa will pay Xtract unit Explorator Limitada US$20,000 for every month of commercial production achieved. Mutapa will also receive between 77% and 80% of operating profit depending on the prevailing gold price.

The processing contractor will finance and conduct the mining operations, including all capital and operating costs. It will also be responsible for the construction of a tailings dam.

Mutapa agreed to use its 42,000-tonne-per-month hard rock processing plant in the area and build a new carbon-in-leach plant with a throughput capacity of 29,000 tpm. Construction is expected to start by Nov. 1, with commercial production targeted by July 1, 2020.

The companies also agreed to form a 50-50 joint venture on the Manica concession if exploration is justified. Mutapa also has two-year option to acquire the Fairbride concession within the project for US$20 million or an amount equal to 80% of the project's net present value at a 15% discount rate, whichever is higher.

Xtract said May 29 that the agreement with Mutapa will replace the one it entered with Omnia Mining Ltd. in February 2018.