RE: Licence22 Jan 2025 10:45
Drilling is not cheap. And buffer money in our bank required ahead of committing to meaningful drilling contracts. Smallish quarterly payments need time to accumulate to get such a buffer. Also there are -early 25 - decision points dates that might increase monies incoming. A reminder of the terms of the Manica sale if I may:
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(The Settlement and Restructuring Agreement in relation to the termination of Xtract's mining collaboration agreement with MMP dated 28 May 2019 in relation to the Manica Gold Project under which the Xtract Parties are to be paid US$3.325 million in cash to settle all monies due under the Mining Collaboration Agreement from MMP to Xtract and Explorator, Xtract's local Mozambique subsidiary, of which US$2 million -atJan 24 -has already been paid; and to terminate the Mining Collaboration Agreement.)
The Buyers have agreed to pay the Price of US$12 million, of which US$9 million is to be paid in 12 quarterly instalments of US$0.75 million commencing on 1 March 2024, with the last payment due on 1 December 2026, and a further US$3 million to be paid on or before 1 March 2027. In addition, the Buyers have also agreed to pay the Deferred Consideration of up to a further US$3 million on the following basis:
(i) If by 28 February 2025 MMP has not notified Xtract in writing that it has made a decision to build a Sulphide Plant, then Deferred Consideration is payable as follows;
- US$1 million by 7 March 2025;
- US$1 million by 31 August 2025; and
- US$1 million by 31 December 2025.
(ii) If by 28 February 2025 MMP has notified the Seller in writing that it has made a decision to build a Sulphide Plant then Deferred Consideration is payable as follows:
- US$1 million within 14 days of the decision to build Sulphide Plant;
- US$1 million within the earlier of: (a) 14 days of commencement of dry commissioning of the Sulphide Plant; and (b) 1 December 2025; and
- US$1 million within the earlier of: (a) 14 days of the Sulphide Plant achieving commercial production defined as processing 30,000 tonnes in any 30-day period; and (b) 1 February 2026.
(iii) If MMP or any of the Buyers or any of their associates enters into an agreement to sell the rights to any of the Sulphides at the Manica Project or give any other party the right to build or finance a Sulphide Plant or use any other party's sulphide plant to process ore from the Manica Project, then the Deferred Consideration automatically becomes immediately payable in full with no further action or notice required to be given by Xtract.
Up until 31 October 2024, the Buyers have the option to avoid paying the Deferred Consideration by electing to pay the Increased Price Election by increasing the Price by US$1 million to US$13 million provided that all amounts due beforehand pursuant to the MMP Agreements have been paid by their due date and the Buyers pay in full any unpaid amount of the increased Price of US$13M and any unpaid amounts still due unde
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