6 July 2023

Xtract Resources Plc

("Xtract" or the "Company")

Manica Q1 2023 Gold Production Update

Xtract Resources Plc ("Xtract" or the "Company") announces the preliminary unaudited results for gold production for the Fair Bride deposit and other mining within the Manica Concession in Mozambique, for the three-month period ended 31 March 2023 ("Q1 2023").

Highlights

Fair Bride:

·    Fair Bride, where Xtract has a 23% share of net profit, is now the main project at Manica ("Fair Bride"). Fair Bride gross gold production continued to increase during Q1 2023 and was 140Kg (equivalent to approximately 4,522 ounces)

·    Fair Bride's average gold sales price for Q1 2023 was US$1,859 per ounce

·    Month on month, gold production has increased from 37.6 kg in January Q1 2023 to 66.3kg in May of the current quarter (Q2 2023)

·    Clear indications are that post the heavy rains, results are improving significantly and Q2 2023 is showing a marked improvement with plant throughput increasing from 30,000 tonnes per month in Q1 2023 to current nameplate capacity of more than 40,000 tonnes per month

·    Application of a more robust grade control process has resulted in a marked improvement in run of mine grade delivered to the plant

·    Mill running time has increased from 67.3% availability in Q3 2022 to a reported 82% availability in May Q2 2023

·    The unit cash cost for Q2 2023 is anticipated to be in-line with similar sized operations on a global basis as the operation stabilises  

Other Manica Projects:

·    For the other projects at the Manica Concession, including the Alluvial and other hard rock production, Xtract is entitled to a percentage share of the gold produced ("Other Manica Projects")

·    The total gold production for these the Other Manica Projects in Q1 2023 was 36Kg (equivalent to approximately 1,156 ounces) of which the Xtract's share was 183 ounces

·    Other Manica Projects' average gold sales price for Q1 2023 was US$.1,812 per ounce

Colin Bird, Executive Chairman said: "We are very pleased with the progress being made at Manica and the first Quarter performance was excellent when one considers the effect of the heavy and prolonged rains that the Project was exposed to during the post-commissioning phase. The second Quarter results have seen a continued improvement in performance with more consistent gold production in April and May returning 68 and 66kg respectively. We will provide regular updates and anticipate continued improvement in the unit cash cost of production as the benefits of improvement and optimisation of mining, processing and grade control are felt by the operation".

Fair Bride Operation

The Fair Bride gold deposit is within the Manica concession situated 270km NW of the city of Beira within Licence 3990C in the Odzi-Mutare-Manica Greenstone Belt of Mozambique.

Mutapa Mining and Processing, LDA ("MMP"), is operator of the Manica carbon-in-leach plant (CIL).

Table 1 shows the quarterly gold production and sales prices for Quarter 1 2023 for the Fair Bride project and year to date figures for 2023. The production statistics for Fair Bride are provided by Contract miner, MMP.

Gross monthly mine production from Fair Bride has grown month on month as the operation has bedded down and typical post-commissioning issues have been resolved. Steady improvement has been reported in throughput tonnes processed, run of mine grade, mill throughput rate and mill availability, all of which are expected to result in continued improvement in the unit cash cost per ounce of gold produced which can be expected to benefit revenue.

Revenue and therefore Xtract's share of net profit was impacted by two main factors. Operation through the first rain season in Manica resulted in a shortfall in plant throughput as wet clay-rich near-surface mined material affected the operating efficiencies of both screens and the mill. Measures have been put in place to alleviate the problem and the impact of improvements can already be seen with the month-on-month ore processing figure rising from 30,000 tonnes per month in February of Q1 2023 to a current reported estimate of approximately 43,000 tonnes per month in May Q2 2023.

A significant amount of additional close-spaced drilling was completed during Q1 2023 specifically to improve grade control and the ability to better predict the Run of Mine grade that could be anticipated by the processing plant. This work had an almost immediate impact on improvement in the run of mine grade with the average rising from 1.2g/t Au in February Q1 2023 to a current reported grade for May Q2 2023 of approximately 1.8g/t Au. An increase in grade equivalent to an additional $36 per tonne of ore delivered to the plant at the current gold price could also have a significant positive impact on revenue and margin.

Xtract Resources and Manica Project Revenue Stream and Reporting

Production at Manica is now dominated by Fair Bride. The gold mined at Manica projects other than Fair Bride is now significantly scaled down as the mineable resource for these projects is significantly reduced. Accordingly, the Company has adopted a new format for quarterly reporting which is set out below. Other Manica Projects production will no longer be reported quarterly.

Xtract will receive 23% of the net profit at Fair Bride when the prevailing price of Gold is greater than US$1,250 per ounce.  Xtract's share reduces to 21.5% if the prevailing gold price is greater than US$1,175 but less than US$1,250 and to 20% if the prevailing price of Gold is less than US$1,100 per ounce. Profit is defined as: Revenue on Sale less deductible costs (excluding non-cash items) and corporation tax of 32% after utilising any tax losses. At the current gold price Xtract is due 23% of the net profit.

Xtract will be reporting production and gold price statistics for Fair Bride on a quarterly basis with Xtract's 23% net profit share to be included in its annual and interim financial accounts.

Further details are available from the Company's website which details the company's project portfolio as well as a copy of this announcement: www.xtractresources.com

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Qualified Person:

Colin Bird: The technical information contained in this announcement has been reviewed, verified, and approved by Colin Bird, C.Eng, FIMMM, South African and UK Certified Mine Manager and Director of African Pioneer plc, with more than 40 years' experience mainly in hard rock mining.

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