Xtract Resources PLC says it has given Huafei Gold Resources Co. Ltd of China the contract to explore for alluvial deposits of gold in the Manica mining concession in western Mozambique, and to extract any it finds there.
Xtract Resources issued a written statement saying its Mozambican subsidiary, Explorator Ltd had previously given Huafei Gold Resources a contract to look for gold in just part of the Manica concession.
The statement says Huafei Gold Resources will pay Xtract Resources US$350,000 up front and hand over 20 percent of any gold it eventually mines.
The contract will last for 10 years or until the gold runs out, and may be extended for five years if any gold remains.
Huafei Gold Resources must operate around the clock two processing plants with a minimum throughput of 200 tonnes of alluvium, Xtract Resources says.