30 Jun Final Results
RNS Number : 8958Q
Xtract Resources plc
30 June 2022
Xtract Resources Plc
(“Xtract” or the “Company”)
Audited results for the 12 months ended 31 December 2021
The Board of Xtract Resources Plc (“Xtract” or the “Company”) announces its audited financial results for the 12 months ended 31 December 2021. The 2021 Audited Annual Report and Accounts (“Accounts”) are in the process of being posted to shareholders and will be available together with this announcement on the Company’s website www.xtractresources.com.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 (“UK MAR”).The person who arranged the release of this announcement on behalf of the Company was Joel Silberstein, Director.
|Xtract Resources Plc||Colin Bird, Executive Chairman||+44 (0) 203 416 6471|
|Beaumont Cornish (Nominated Adviser & Joint Broker)||Michael Cornish / Felicity Geidt||+44 (0) 207 628 3369|
|Novum Securities (Joint Broker)||
Jon Bellis/Colin Rowbury
|+44 (0) 207 399 9427|
Corporate & Operational highlights
· At Bushranger results from Phase-One drilling and an Induced polarization (IP) MIMDAS survey have provided significant potential to upgrade the known Inferred Mineral Resources at the Bushranger copper-gold project within a world-class mining district in New South Wales, Australia
· The follow-up Phase-Two drilling programme succeeded in defining a shallow high-grade ‘crown’ to the Racecourse deposit, which will be modelled with a view to developing an open pit mine
· The Phase-Two drilling programme at Bushranger was also successful in discovering a new deposit located to the south of Racecourse, named Ascot. Initial holes and assays suggest that this deposit has a higher gold tenor than Racecourse. Further drilling is in progress to test the new discovery
· At the Eureka copper project in Zambia completed drilling and analysis of drill core confirmed the extension of the Eureka mineralised zone to the north-west – beyond 300m and still open
· Trial pilot-scale mining is under way at Eureka to test copper recoveries with a view to supplying ore to a local processor
· Total of £10.50 million (before expenses) raised through equity placings
· During the 2nd half of 2021 all of the alluvial and small hard rock operations achieved highest production levels since commencing mining in 2017
· Total of 43.83kg (equivalent to 1,404 ounces) of production attributable to Explorator (2020: 19.38kg (equivalent to 620 ounces)
· Post year end the Company decided to withdraw from the Kalengwa Project in Zambia and fully impair the carrying value with a consequent charge to the income statement of £0.36 million
· Cash of £5.39m (2020: £0.92m)
· Net assets of £11.93m (2019: £10.78m)
· Revenue from gold sales of £0.69m (2020: £1.73m)
· Administrative and operating expenses of £3.31m (2020: £2.09m)
The period under review has again been positive for our group activities. Our mission to work small scale mining operations and conduct major exploration has advanced according to plan.
Starting with the Australian Lachlan Fold Belt project at Bushranger, I am very pleased to report that in a short period we have advanced the exploration to a much better understanding than we had at the time of writing last year’s report.
As of now, we have largely delineated the Racecourse project and are busy modelling resource shape to determine tonnage and grade. The Racecourse Project would most likely be planned to a surface mine, with a high-grade component that can support mining for a number of years, with typical porphyry ore grade thereafter. We intend to rework the conceptual model, with the benefit of more definitive grades, metallurgical test work results and tonnage disposition.
We conducted further geophysics, which better assisted our drilling programmes and pointed towards the potential for another large-scale target towards the south of Racecourse, also identifying other anomalous areas, with a similar signature as at the Racecourse Project.
We drill tested a strong anomaly some 1.3km south of Racecourse and identified large areas of mineralisation, with gold grades being generally higher than Racecourse, as was the molybdenum. The different chemistry and mineralisation distribution caused us to give the occurrence its own name, and we named the area Ascot. We have drilled a further 8 holes into the area, with varying results and our last hole assays, at the time of writing this report, had minimal copper intersections, but had very significant gold intersections, with higher than previously experienced molybdenum values. The lithology leads us to the opinion that the true porphyry may be deeper, and we will therefore drill a further hole to test this prognosis.
At the time of writing this report, we were embarking on a limited drilling programme at the Footrot prospect to the south of Racecourse-Ascot to test the veracity of the geophysics, which are also similar to Racecourse, and where previous companies have had some indication of porphyry style lithology.
In general, our exploration activities in Australia have been extremely encouraging and without a doubt we have discovered a major system, well beyond our original expectations. As with all porphyries, however, a full understanding requires much drilling to define the full potential and our projects are no exception. The phase 2 exploration programme is about to be completed and when we have modelled and evaluated all the raw information, we will be well advanced on the value curve and able to position the project in the global market.
Our alluvial gold production activities in Mozambique have continued to be somewhat erratic, but no month has passed without producing a surplus of income over expenditure. Towards the end of 2021 all of the alluvial and small hard rock operations produced well and record results were achieved. The rains of course, hampered operations, but nonetheless results were very satisfactory, and the higher trend was maintained.
We expect alluvial and small gold operations to continue for the remainder of the year and I am happy to report that the Fair Bride hard rock operation has now commenced production. We expect a production build up during the 3rd quarter 2022, with full commercial production being achieved during the 4th quarter. On this basis we expect earnings from our Mozambique gold operations to be significant, with the Fair Bride operation continuing for some five years. We intend with our partners to test drill the area, since we are convinced of further discovery potential and during next year will design plant additions, which will allow us to treat all mineralisation gold types found in the area.
In Zambia we have identified and modelled a potentially mineable resource at Eureka and are carrying out trial mining. The initial trial mining produced a very high-grade ore, but metallurgical testing proved to be very refractory. Further drilling and test mining has shown this to be a local phenomenon and we intend to commence operations during the 3rd quarter 2022.
The Company’s aim is to identify small deposits of 1-5 years production capability at a rate of about 50,000 tonnes per year. We have been working one small deposit, known as Chongwe, to ascertain its size and potential contribution. The projects have produced satisfactory ore for a nearby processing capability, producing a surplus of income over expenditure. It is however unlikely to be a long-life proposition and we continue our efforts to identify other resources in relatively close proximity to processing capability.
The Kalengwa Project has been subordinated to our other activities since it is remote to processing capability and challenged by availability of power and the Company has therefore impaired all costs relating to the project.
As a junior miner, we continue to be mindful of guarding the Company’s cash position. The awarding of options is considered a crucial element in the Company’s ability to incentivise the Company’s employees and directors and allows for the retention of services and expertise. In March 2021, the Company awarded options to directors and employees which resulted in a share-based payment accounting charge of £1.47 million which has been included in our administration and overhead expense.
The company is examining a number of exciting opportunities in the small copper and gold sector and look forward to reporting progress during the 3rd quarter.
I would like to thank my fellow directors and management team for their untiring efforts to advance the company during the year under review, against intense competition and challenging circumstances.
30 June 2022
The full Xtract Resources PLC Audited results for the 12 months ended 31 December 2021 are available here.