REG - Xtract Resources plc - Addendum to Manica agreement

Xtract ResourcesAnnouncement

24/02/2025 12:45

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250224:nRSX2349Ya&default-theme=true

RNS Number : 2349Y  Xtract Resources plc  24 February 2025

 

24 February 2025

Xtract Resources Plc

("Xtract" or the "Company")

 Addendum to Manica agreement

 

The Board of Xtract Resources Plc ("Xtract" or the "Company") announce that
they have agreed with MMP, and parties related to MMP, the buyers of the
Manica project ("Buyers"), to reschedule the US$3m balloon payment due on or
before 1 March 2027 as well as the additional deferred payments connected with
the decision to build a sulphide orebody plant both as set out in the share
purchase agreement announced on 24 January 2024 ("Share Purchase Agreement").
The rescheduling of the balloon and deferred payments does not affect the
total amount due to be paid by the Buyers, which remains unchanged. To date,
the Company has received all of the consideration due to be paid by the Buyers
amounting to US$3m in aggregate.

 

Colin Bird, Executive Chairman of Xtract, commented

"We have concluded discussions with the Buyers around their concerns with the
pressure the future payment schedule would present to their current
operations. The current mining is of oxide ore and due to the nature of the
ore body the ore being mined will transition between oxides and sulphides,
thus reducing overall recovery and profitability. The Buyers have confirmed
the operation continues with the available oxides and is producing
satisfactory returns on investment. During the process of designing the
sulphide plant flowsheet, the Buyers have acquired additional sulphide
projects in the adjacent area and the different metallurgical characteristics
of these may affect the overall design of the sulphide plant. As a result of
this the Buyers have asked that the payment schedule be amended to allow time
for final ore testing leading to final sulphide plant design. Xtract is very
familiar with the changing nature of the ore body at Manica and the effect
this can have on the plant design.  The Board have agreed to the Vendor's
request, to revise the scheduling of the balloon and deferred payments on the
basis that this will assist with a smooth transition from oxide to sulphide
mining and a revised oxide mining plan which will ensure continuity of
operations and maintain a stable working environment at Manica the cashflow
from which is being used to pay Xtract."

 

Addendum To Share Purchase Agreement ("Agreement")

Under the restated terms of the Agreement in relation to the payment of the
Price and Deferred Consideration, Xtract and the Buyers have agreed the
following amendments. Unless indicated to the contrary all defined terms have
the meanings given to them in the Company's announcement on 24 January 2024.

 

1.   Price

The total purchase price for the sale of the Shares and the Current
Subsidiaries Shares, and the assignment of the Xtract Loans payable by the
Buyers to the Seller in cash in the proportions remains unchanged at
US$12,000,000 ("Price"), to be paid as follows:

·    US$9,000,000 to be paid in quarterly instalments of US$750,000 per
quarter commencing on 1 March 2024 with the last payment on 1 December 2026.
To date the Buyers have made 4 quarterly payments of US$0.75m each amounting
to US$3m in aggregate; and

·    A balloon payment of US$3,000,000. Originally this had been agreed to
be a single balloon payment due on or before 1 March 2027. Xtract and the
Buyers have now agreed to vary the balloon payment to three instalments of
US$1,000,000 to be paid on or before;

-     1 March 2027;

-     1 June 2027; and

-     1 September 2027.

 

2.   Deferred consideration

Xtract and the Buyers have further agreed that the additional deferred
consideration of US$3,000,000 for the Shares in addition to the Price (the
"Deferred Consideration") which becomes due on the decision by the Buyers to
build a sulphide plant, will now be payable on the following amended basis in
six payments:

·    US$250,000 within the earlier of i) 14 days of the decision to build
Sulphide Plant and ii) 1 December 2026;

·    US$250,000 within the earlier of i) 14 days of commencement of dry
commissioning of the Sulphide Plant and ii) 1 December 2027;

·    US$500,000 within the earlier of i) 14 days of the Sulphide Plant
processing 30,000 tonnes in any 30-day period ("Commercial Production");  and
ii) 1 March 2028;

·    US$750,000 within the earlier of i) 3 months of the Sulphide Plant
achieving Commercial Production; and ii) 1 June 2028;

·    US$750,000 within the earlier of i) 6 months of the Sulphide Plant
achieving Commercial Production; and ii) 1 September 2028; and

·    US$500,000 within the earlier of i) 9 months of the Sulphide Plant
achieving Commercial Production; and ii) 1 December 2028.

All other terms of the Agreement remain unchanged.

 

 

 Xtract Resources Plc                               Colin Bird,          +44 (0)20 3416 6471

                                                    Executive Chairman   www.xtractresources.com (http://www.xtractresources.com)

 Beaumont Cornish Limited                           Roland Cornish       +44 (0)207628 3369

 Nominated Adviser and Joint Broker                 Michael Cornish      www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk)

                                                    Felicity Geidt

 Novum Securities Limited                           Jon Bellis           +44 (0)207 399 9427

 Joint Broker                                       Colin Rowbury        www.novumsecurities.com

 

 

 

Important Notice:

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.

 

 

ENDS

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGRPPUAPPUPAGPC