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Xtract Resources should be earning US$300,000 per month by year end

Xtract Resources is on the cusp of significant cashflow, generated by alluvial gold production from Mozambique
Colin Bird
Colin Bird's turnaround of Xtract Resources continues

It looks set to be a company transformed.

Xtract Resources PLC (LON:XTR) is on the cusp of significant cash flow, following the consummation of two gold production deals struck by chief executive Colin Bird.

“The first deal is going gangbusters,” he says.  

“And the second one with the Chinese company is lining up nicely.”

There will be two contractors mining alluvial gold at the company’s Manica project in Mozambique.

READ: Contractors on the cusp of first production at Xtract’s Manica gold project

Omnia has been the first one out of the blocks: it’s already on site and getting down to work. Sino Minerals is following on behind: it’s stumped up an advance payment and will be ready to move in shortly.

If progress made by Omnia is anything to go by, the future for Manica could be assured very shortly. More than two thirds of Omnia’s plant equipment is now on site and installed, following the arrival of the earthmoving gear.

Subsoil is now currently being removed for key installations and infrastructure, with mining expected to commence imminently.

That should set the scene nicely for the pending arrival of Sino Mining, following the agreement of mine plans and logistical layouts, expected very soon.

READ: Xtract Resources updates on Manica contractor operations

It all makes for a company transformed from the precarious state in which Colin Bird found it when he returned to an executive role last year.

Back then the company had a sprawling asset suite that stretched across the Atlantic to South America, and which had been draining it heavily of cash for many a month.

Bird saw that it was time to get back to basics with Manica, an asset which had been with the company from the start, and which Bird has been well acquainted with for nigh-on two decades. 

The South American assets were put on the back-burner and then eventually set free.

Manica became the focus, or as Bird put it in his chairman’s statement in May, “the real asset.”

Real turnaround situation

Since then, progress has been swift. Bird has brought the contractors in, production is imminent, and cash is coming.

“We are sitting now with cash flow due to come in around mid-September,” says Bird. “It’s a real turnaround situation.”

He estimates that Xtract should be earning around US$300,000 per month by year end from the gold mined by the contractors, cash flow which should put the company in very good stead for its ultimate plans to go mining the hard rock at Manica.

READ: Xtract Resources to end loan note facility after raising funds

And for those who like to look at the fine print, there’s already money in the bank, so little likelihood of any funding squeeze between now and first cashflow.

All of which goes a good long way to explaining the 20%-plus rise in the company’s share price since the June roll-back.

There should be more to come.





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