Mutapa Mining and Processing Archives

Xtract Resources’ wholly-owned Mozambique subsidiary, Explorator Limitada, has concluded a mining contractor agreement with Longhau Tianci Mining Co Ltd for the exploitation of the Guy Fawkes hard-rock gold deposit at its Manica mining concession in Mozambique.

The pact will see Longhau mine the Guy Fawkes deposit for six years or until the orebody is depleted or no longer viable, Xtract says.

Guy Fawkes was mined historically since 1893 and was one of the largest of a series of hard-rock gold mines in the district, with total production of almost 16,000 oz Au reported, Xtract said. A previously reported SAMREC-compliant indicated and inferred resource at Guy Fawkes came out at 1.13 Mt at 1.91 g/t Au with potential for additional upside in several dimensions.

Subject to a number of pre-conditions including the contract miner obtaining a gold trading licence and Explorator securing a mining licence and environmental licence, the agreement includes performance targets whereby Longhau will be required to commission a plant with a minimum throughput of 60 t/d within two months from the date of signing. The throughput tonnage will be increased to 120 t/d within three months of commencing operations, Xtract said.

Explorator will be responsible for recording the gold concentrate produced from the permitted area on a daily basis, while the contract miner will be responsible for the smelting of the gold concentrate and delivery of gold doré bars.

Longhau, as the contract miner, will retain 74% in gold for services provided, and Explorator will retain 26% of all gold production, amounting to 20% after payment by Explorator of the applicable Mining Production Tax of 6%.

After deduction of applicable expenses and costs and tax incurred by Explorator, Xtract has agreed with Mutapa Mining and Processing LDA (MMP), Explorator’s existing hard-rock collaboration partner, to split the net cash flow 65% in Explorator’s favour (with 35% due to MMP).

Xtract Resources, back in 2019, signed up to a collaboration agreement with MMP that could see the building of a carbon in leach plant and the subsequent processing of hard-rock ore from Manica.

Longhau is to commence adit mining and initial underground development during the processing build phase, Xtract said.

Colin Bird, Xtract Executive Chairman, said: “We are pleased to report the signing of this agreement, which should provide the opportunity for incremental cash flow during MMP’s Fair Bride construction and building phase.

“The Guy Fawkes deposit shows considerable variation both in mining width and grade, demonstrating propensity for selective higher-grade mining. Longhau intends to work a portion of the deposit by open-cast methods where drilling indicates that suitable grades locally can run close to surface. Underground mining will be selective.

“We are currently in discussions in respect of the Boa Esperanza deposit and look forward to updating shareholders shortly.”

Xtract Resources has signed up to a collaboration agreement with Mutapa Mining and Processing (MMP) that could see the building of a carbon in leach (CIL) plant and the subsequent processing of hard-rock ore from its Manica deposit in Mozambique.

As part of this agreement, MMP, in partnership with Omnia – a company Xstract previously signed a joint venture and collaboration agreement with in 2018, will be appointed as independent mineral processing contractor on the various gold-bearing mineral deposits on the Manica concession.

MMP has agreed to finance and conduct the mining operations at Manica, including all capital and operating costs, with Xtract receiving between 20% and 23% (depending on the prevailing gold price) of the hard-rock after tax operating cash flow.

At the same time as this, Xtract intends to exploit gravity-recoverable gold during the CIL plant-build phase, assuming suitable material is available.

Colin Bird, Executive Chairman of Xtract, said: “This agreement allows for the extraction of CIL-amenable resources to be commenced in the mid-term whilst alluvial operations continue. The income to Xtract, once commercial levels of production are achieved, is expected to be significant and continuing for in excess of six years.”

While alluvial operations continue and the CIL plant plan is finalised, alluvial gold will still be exploited through an agreement Xtract has in place with Huafei Gold Resources.

And a concession exploration programme will be initiated with a view to enlarging the currently known resource by drilling at depth and testing areas not yet investigated, according to Bird.

MMP is currently the owner of a 42,000 t/mth hard-rock processing plant, which includes crushing, milling and gravity recovery circuits and furnace, for mining and mineral processing, located in the Manica region of Mozambique, according to Xtract. This plant has already had over $11 million invested to date and, as Xtract is aware, represents the only sophisticated hard-rock processing capacity in the Manica region, the company said.

“The MMP plant is the key reason supporting the rationale of agreeing the collaboration agreement, as it reduces both capital expenditure requirement and the time to production of the Manica project,” Xtract said.

MMP has undertaken to commence construction of the CIL plant and to provide Xtract with a schedule of purchases and an activity chart indicating initial production and a target date for commercial production of no later than July 1, 2020, Xtract said. Commercial production is defined in the agreement as the installation of a processing plant with throughput capacity of not less than 29,000 t/mth (being 70% of the planned 42,000 t/mth throughput).

Longhau pact sets up hard-rock mining at Xtract’s Manica operation

Xtract Resources and Mutapa enter hard-rock processing collaboration pact