XTRACT Resources intends building Mozambique’s first large gold...

XTRACT Resources intends building Mozambique’s first large gold mine and restarting sizeable copper output in the Northern Cape, says CEO Jan Nelson, who was behind the growth of Pan African Resources into a mid-tier gold miner.
Xtract, which trades on London’s Alternative Investment Market, has a cash-generating gold mine in Chile and has now turned its focus to the Manica gold prospect in Mozambique as well as a copper dump retreatment project in Northern Cape.
Manica was once the flagship project in Pan African, which bought it in 2006. It was enough of an asset to attract the attention of then Johannesburg-listed Metorex, which folded its Barberton gold mine into Pan African in exchange for a controlling stake in the company.
However, the Metorex board took the view that Manica would not be developed, Mr Nelson said on Wednesday, adding that Xtract planned to bring the deposit into production of 50,000oz per year in the next 18 months.
“We understand the deposit. It’s well drilled and the metallurgy is understood. I always wanted to develop it. I was just not allowed to develop it.”

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Pan African sold Manica to Auroch Minerals, an Australian company, which took the project to within months of a finalised bankable feasibility study.
Auroch estimated the Fair Bride portion of Manica would cost $28m to deliver 330,000oz of gold over seven years.
Xtract agreed to buy Manica for $12.5m. It raised £4.4m in a rights issue this week towards the cash and share deal.
Xtract could raise up to 40% of the $28m capital cost and could secure debt for the rest, Mr Nelson said. A Chinese company could sell it a processing plant in exchange for mined gold.
Xtract believed it could recover 85% of the gold from the sulphide ore deposit with a grade of 3.5g a tonne by using ultra-fine grinding to liberate the gold and putting it through a carbon-in-leach process, he said.
In the fourth year, underground development would cost nearly $15m. There was a chance to mine alluvial gold on Manica, bringing in a third party to build a plant and share profits with Xtract, generating revenue in six months, he said.
Xtract had agreed to a cash and share purchase of rock dumps at O’Kiep for $4.75m.
“The two biggest dumps we’ve bought have 70% of all the metal value of the surface material contained in eight dumps in the area,” Mr Nelson said.
The grade is estimated at 0.2% copper and the in-situ value is $400m. Xtract would spend $400,000 over the next six months to explore the dumps.
A plant to process the copper could cost up to $60m and Xtract has to decide whether to produce copper cathode plate or a concentrate for sale.
One market participant who had scoured the area for copper assets said: “Those old miners were good and they didn’t throw a lot away. It’s going to be interesting to see what Xtract can really do with those dumps”.
Village Main Reef, which is owned by China’s Heaven-Sent, had bought exploration tenements in Northern Cape, which included some of the old Metorex copper mining areas, said Marius Saaiman, a director at the Heaven-Sent operation.
“It’s too early for us to talk about how prospective the area is,” he said on Wednesday.

The purchase price included $6.5-million in Xtract shares and $4.5-million in cash. Xtract would also provide funding to settle project-related creditors up to $1.5-million.
Xtract Resources, led by chairperson Colin Bird and CEO Jan Nelson, had a portfolio of projects in Chile and South Africa and was aiming to become a midtier gold and copper producer with a focus on low-cost, high-margin shallow or surface deposits.
The company on Tuesday raised £4.4-million through the placement of 1.47-million shares at 0.3p a share to part fund the Manica acquisition. The concession includes a number of gold prospects, including the Fair Bride openpit gold deposit, on which a bankable feasibility study (BFS) would be completed within the next six months
. A preliminary economic assessment (PEA) completed by Auroch and South African mining consultancy JPMC, had shown that the project, which had a Joint Ore Reserves Committee-compliant resource of 900 000 oz, was capable of generating revenues of $55-million a year at steady-state production with the payback on the project being less than three years.
The PEA had further determined that production at Fair Bride could start within 18 months, delivering about 50 000 oz/y of gold at a cash cost of $650/oz.
The orebody would be mined from surface as an openpit operation for five years and then from underground for a further three years. A mining licence had been granted for the project, which would be Mozambique’s first gold mine. Start-up capital costs were estimated at $28.4-million and underground development costs at $14.8-million.
“The Fair Bride project will allow the company to generate significant revenues. With payback on the project of less than three years, the fundamentals are attractive for various forms of project financing. The project is less than a year from a completed BFS and we firmly believe that there are significant areas for further optimisation, which will lead to improved project economics,” commented Nelson.
Bird added that the project was one of only a few high-grade, low-cost, low-risk, openpitable gold opportunities in Africa. “Infrastructure around the project is excellent and the project is 18 months from production.
This acquisition will progress Xtract towards becoming a midtier gold producer with all the benefits that will bring to the company and, ultimately, growth for shareholders,” he said. Auroch chairperson Glenn Whiddon commented that Xtract had an excellent technical and operating team and had the ability, in the near future, to bring the project into production. “From Auroch’s perspective, we are pleased to be a shareholder of Xtract and participate in the growth of the project going forward,” he said.
Azonto Petroleum We look forward to benefitting from his experience as we move forward


zoomAzonto’s operations offshore West Africa.
Azonto Petroleum, a London-based oil and gas company focused on West Africa, has appointed Glenn Whiddon, who stepped down from the board in 2012, as Non-Executive Director.
The company says that Whiddon, formerly a Non-Executive Director and Executive Chairman of the company, stepped down from the Board in March 2012 to pursue other interests. He is based in Australia, where the company has a corporate office in Perth.
Chairman of the Board, Andrew Sinclair said: “We are pleased to welcome back Glenn onto the Board. He is a significant shareholder of the Company and already has a good understanding of the Company from his previous involvement. We look forward to benefitting from his experience as we move forward.”
According to Azonto’s press release, Whiddon was formerly Executive Chairman, Chief Executive Officer and President of Grove Energy Limited, a European and Mediterranean oil and gas company that was acquired by Stratic Energy Limited for C$150 million ($120.8 million).
Broker RFC Ambrian said Azonto Petroleum (ASX:APY, LON:AZO) (AZO)
Broker RFC Ambrian said it remains confident Azonto will proceed to Gazelle project sanction in 2015, given that Vioco has been consistently reassured of the political importance ascribed to the project by the authorities in Côte d’Ivoire.
“We believe that the main near-term stock catalyst will be news on the development of the Gazelle gas/condensate field ,” the broker said, as it reiterated its ‘speculative buy’ rating on the stock.
SP Angel

We believe that his appointment is a positive first step in the Company’s rehabilitation, and in the process of unlocking the value inherent within its asset base.
While Whiddon’s appointment is in a non-exec capacity, we believe that the more time that the Company can call upon, the better its outlook will be, and if Andrew Sinclair can be convinced to swap his non-executive role for an executive one, and Andy Bartlett can be convinced to stay, then Azonto’s future would start to look very bright indeed.
The appointment of Glenn Whiddon is a significant step as it places more control in the hands of the shareholders and of a group that has a demonstrated track record in generating value.
What would really transform the Company would be the management “Trinity” of Messers Bartlett, Sinclair and Whiddon, but in the absence of Bartlett the dynamic duo of Sinclair and Whiddon is a pretty close second. As such, we believe that positive things should now start to happen, and while there is a long way to go before value can be restored, this is a timely first step.
CEO.
“As we indicate in our corporate presentation and as also highlighted in external research available on our website, the value of Azonto’s interest in Gazelle is significantly in excess of our current market capitalization.,the economics remain fully robust even though the price of oil has fallen significantly in recent months.
We look forward therefore to working with Vioco towards project sanction and unlocking full value for shareholders.”