Huafei Gold Resources will have the exclusive right to mine the entire unconsolidated alluvial deposits on the permitted area of the mining concession area. The agreement will endure for a period of 10 years or the depletion of alluvials, with the option to extend for a further period of five years, if the alluvials have not depleted, by Huafei Gold Resources as well as rights of early termination either by Explorator or Huafei Gold Resources.
The agreement includes performance targets; from February 1, Huafei Gold Resources will be required to have two fully operational plants with a minimum throughput of 200t/h on a consistent 24 hours per day basis. Explorator will be responsible for recording the gold concentrate produced from the permitted area on a daily basis. Huafei Gold Resources will be responsible for the smelting of the gold concentrate and delivery of gold doré bars.
Colin Bird, executive chairman at Xtract Resources, said: "A number of contractors have expressed interest in mining the other areas of the alluvials in the Manica concession. Huafei Gold Resources was chosen because of their willingness to pay an upfront payment and demonstrated consistency of operation with their existing contract. They provided extra equipment into the concession and we look forward to increased production over the coming months and on completion of the rainy season."