LONDON, UK: Xtract Resources Plc has agreed to sell its entire interests in the Manica Gold Project in Mozambique to its local partner MMP and related parties. The deal includes Xtract’s 23% net profit share interest in the project, which will fetch up to US$15 million in cash over four years, and the termination of Xtract’s mining collaboration agreement with MMP, which will result in a US$3.325 million cash payment to Xtract and its subsidiary Explorator.
The sale is subject to shareholder and regulatory approval, as well as other customary conditions. It will also mark a fundamental change of business for Xtract, which will focus on its copper projects in Zambia and Australia. The company will hold a general meeting on 13 February 2024 to seek shareholder approval for the sale. A circular with more details on the sale is being sent to shareholders today.
Colin Bird Executive Chairman said: “The Manica Project will be transitioning to the complex ore phase which has not yet been fully scoped or technically and financially modelled. We do not want to be exposed to this risk, particularly in exciting copper times for our Company. The President of Zambia is targeting annual production of 3Mt of Cu per annum and the discovery of Western Foreland – Kamoa style mineralisation in Zambia will do much to achieve this goal.
The predictive rise in copper use notwithstanding electric vehicles (“EVs”) is forecast to be substantial and whilst EVs are important, developing world emergence and growth is providing significant additional copper demand. We believe that the resulting copper supply shortage is becoming more acute and Xtract is determined to be a major player in the copper discovery arena.
Viewing worldwide exploration activities, the Xtract Board is even more convinced that its southern African copper focus, and particularly on the Western Foreland, exploration and small mine opportunities, is the optimum strategy for our shareholders.
The two projects in the Xtract copper portfolio in NW Zambia hold a pivotal position in the Western Foreland geological architecture and present a significant potential opportunity for both our shareholders and our copper portfolio in general.”
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