For immediate release

27 May 2020

Xtract Resources Plc

(“Xtract” or the “Company“)

Manica Alluvial Gold & Corporate Update

The Board of Xtract Resources Plc (“Xtract” or the “Company“) announces the preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month period ended 31 March 2020 (the “Period”).

Highlights

·    Total alluvial mining contractor gold production of 14.52 Kg for the quarter (equivalent to approximately 467 ounces)

·    Total of 4.06 Kg (equivalent to approximately 131 ounces) attributable to Explorator

·    Combined attributable revenue to Explorator from gold sales and other income for the Period amounted to US$508,573

·    Mining on the adjacent licence to be contracted to another Chinese group based on similar terms to the agreements currently in place

·    Discussions in place with a group to mine the Guy Fawkes and Boa Esperanca free milling small hard rock deposits

·    Manica hard rock continues to progress and all aspects of operations advancing satisfactorily

Colin Bird, Executive Chairman said: “The results are a little disappointing for the first quarter based on the rainy season, but particularly the effect of the Coronavirus on spare parts delivery from China.  We continue to experience low grade together with high overburden stripping.  The spare parts arrived 2 weeks ago, and operations are already showing a significant improvement, despite tough operating conditions. 

We intend over the next month to commence a further contract with another Chinese group on an adjacent licence.  The agreement with the group will be similar to existing agreements in place. 

We are actively engaging with another group on working the Guy Fawkes and Boa Esperanca small hard rock deposits.  These deposits have indicated free milling gold at good grades.  Preparations are underway to ship major components for the Fairbride gold project, once border restrictions are lifted, which is expected the middle to late June 2020.  The equipment will be accompanied by the necessary lifting equipment for installation.”

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 31 March 2020, 31 December 2019, 30 September 2019, and 30 June 2019 are set out in the table below. In addition to the information included in the table, the table below provides a further breakdown of costs between operational costs, production tax and land resettlement costs. The Company currently expects that at current rates of activity, the alluvial mining contractors will conclude their operations during the latter part of the current year. The Company’s current focus is to progress the Manica hard rock operations.

Note 1:          Under the Collaboration Agreement between Explorator and Nexus Capital Limited (previously Mineral Technologies International Limited, “Nexus”) as previously announced on 28 October 2018  Xtract’s net share of Explorator’s gold revenue and costs was 50%. On 12 December 2019, the Company announced that the Collaboration Agreement had been terminated by Nexus (as explained further below) with an effective date of 2 December 2019, following which Explorator’s net share of gold revenue and costs is 100%.

Note 2:         Direct operational production costs include and not limited to Explorator salaries, rent, vehicles expenses and utilities.

Note 3:   Total costs comprises direct operational production costs plus total Production Tax (6% of the value of total production which varies according to the level of production) and Land Resettlement Costs as detailed below:

Note 4:   Calculation based on the number of ounces produced during each month of the quarter multiplied by

 the closing month end spot rate.  

Note 5: Presence of gold in alluvial deposits is unpredictable and therefore operational results will vary month-to-month.

Further details are available from the Company’s website which details the company’s project portfolio as well as a copy of this announcement: www.xtractresources.com 

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. The person who arranged for the release of this announcement on behalf of the Company was Joel Silberstein, Director.

Enquiries:

ENDS