Xtract gets funding for Chile mine

Xtract Resources, traded on London’s AIM board, has secured funding to buy the gold and copper Chépica mine in Chile as well as a phosphate project in that country.

It would also have enough capital to make a bid for the Namakwa uranium deposit in SA, CEO Jan Nelson said last week.

Mr Nelson said Xtract was looking for copper and phosphate options in SA to grow its portfolio. The firm has secured funding from YA Global Master, which is advised by Yorkville Advisors.

The purchase of Chépica and the Mejillones phosphate prospect from Polar Star for £1.25m is dependent on shareholders approving a waiver of the UK Takeover Code due to the related parties in both companies.

This vote should be held in the middle of next month.

Yorkville has agreed to an immediate cash injection of 800,000 to hire a chief operating officer and mine manager at Chépica in coming weeks. Total funding from Yorkville — including the $800,000 — is $5m, which will be released once shareholder approval has been granted.

“The funding is expensive, but for the amount of money we were looking for they, Yorkville, were the only ones to give us that money,” Mr Nelson said. Xtract has secured a further £1.62m in equity funding towards its growth ambitions. Sovereignty Capital is providing a further $3m.

Chépica needs a capital injection of about $60,000 to bring its monthly production up to 10,000 tonnes a month. The plant, which delivered a copper and gold concentrate, had capacity of 15,000 tonnes a month and the balance would be filled by toll-treating material from other mines in the area, Mr Nelson said.

The Mejillones phosphate deposit will undergo a $250,000 drilling programme next year.

seccombea@bdfm.co.za

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