Xtract Regulatory News (XTR)

For immediate release

4 March 2020

Xtract Resources Plc

("Xtract" or the "Company")

Manica Alluvial Gold & Corporate Update

The Board of Xtract Resources Plc ("Xtract" or the "Company") announces the preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month period ended 31 December 2019 (the "Period").

Highlights

· Total alluvial mining contractor gold production of 32.52Kg for the quarter (equivalent to approximately 1,045 ounces)

· Total of 9.10 Kg (equivalent to approximately 293 ounces) attributable to Explorator

· Combined attributable revenue to Explorator from gold sales and other income for the Period amounted to US$241,284

· Post-period end in early January 2020, a total combined revenue to Explorator from gold sales of US$262,474

· Collaboration agreement terminated by Nexus on 2 December 2019, following which Explorator's share of costs and revenue increased from 50% to 100%

· Manica hard rock continues to progress and all aspects of operations advancing satisfactorily

Colin Bird, Executive Chairman said: "The final quarter results are fairly consistent with the alluvial results in general for the property. The overburden remains deep relative to the overall gold grades of the gravel impacting on production results. The viable alluvials are expected to be extracted by the end of the year or possibly sooner. We expect that the cessation of alluvial mining will be replaced by hard rock mining with our partners Mutapa Mining & Processing. Progress on all matters concerning the hard rock mining as well as detailed report will be tabled to shareholders by the end of March 2020."

Production summary

Preliminary unaudited results for alluvial mining contractors for the Manica Concession for the three-month periods ended 31 December 2019, 30 September 2019, 30 June 2019 and 31 March 2019 are set out in the table below. In addition to the information included in the table, the table below provides a further breakdown of costs between operational costs, production tax and land resettlement costs. The Company currently expects that at current rates of activity, the alluvial mining contractors will conclude their operations during the latter part of the current year. The Company's current focus is to progress the Manica hard rock operations.

Note 1: Under the Collaboration Agreement between Explorator and Nexus Capital Limited (previously Mineral Technologies International Limited, "Nexus") as previously announced on 28 October 2018 Xtract's net share of Explorator's gold revenue and costs was 50%. On 12 December 2019, the Company announced that the Collaboration Agreement had been terminated by Nexus (as explained further below) with an effective date of 2 December 2019, following which Explorator's net share of gold revenue and costs is 100%.

Note 2: Direct operational production costs include and not limited to Explorator salaries, rent, vehicles expenses and utilities.

Note 3: Total costs comprises direct operational production costs plus total Production Tax (6% of the value of total production which varies according to the level of production) and Land Resettlement Costs as detailed below:

Note 4: Calculation based on the number of ounces produced during each month of the quarter multiplied by

 the closing month end spot rate.

Note 5: Presence of gold in alluvial deposits is unpredictable and therefore operational results will vary month-to-month.

Update on Nexus

On 12 December 2019, the Company announced that the Collaboration Agreement had been terminated by Nexus with an effective date of 2 December 2019. Prior to termination, Nexus had disputed the receipts in respect of alluvial gold production and pending resolution of this and as provided for under the Collaboration agreement, Nexus had submitted a claim to South African arbitration on 21 June 2019 for payment of US$347,028, being the gross proceeds from alluvial gold sales due to Nexus as at the end of April 2019.

Subsequently, on 3 October 2019, Nexus amended its claim to US$110,128 plus interest which was submitted by Nexus to the arbitrators. On 14 November 2019, a South African "arbitral tribunal" determined that Nexus' claim could be heard in South Africa, but no ruling was made on the quantum of Nexus' claim. Explorator challenged whether a South African arbitration tribunal had jurisdiction and appealed on this basis to the South African High Court. The arbitration is still proceeding and the Company is currently waiting for the appeal to be heard.

Nexus subsequently terminated the Collaboration Agreement. As at the date of termination of the Collaboration Agreement, the total net amount due to Nexus as calculated by Explorator, amounted to US$156,000 which the Company has provided for as at 31 December 2019 in, the Board's view, the unlikely award under arbitration in favour of Nexus.

While Nexus have indicated subsequently that they intend to claim for damages based on future earnings from the alluvial operations, the Board believe there is no basis whatsoever for such a claim were it to be filed and is confident it would have little chance of success.

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 

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. The person who arranged for the release of this announcement on behalf of the Company was Joel Silberstein, Director.

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