Auroch sells Manica project for $US12m

Perth-based explorer Auroch Minerals has sold its Mozambique assets to Xtract Resources for a cash and share package worth $US12.5 million ($A16.3million).

Under the terms of the deal, Xtract will issue $US6.5 million worth of shares at a price dependent on its 10-day volume weighted average price, and pay $US4.5 million in cash, for the Manica gold project.

Xtract will also provide $US1.5 million in funding to settle project-related creditors, by way of a subscription for new shares equal to 12 per cent of Auroch’s Mozambique subsidiary.

“The agreement with Xtract is a great outcome for the Manica gold project,” Auroch chairman Glenn Whiddon said.

“From Auroch’s perspective, we are pleased to be a shareholder of Xtract and participate in the growth of the project going forward.”

Upon completion of the transaction, Xtract will be responsible for management supervision of operations of the asset, as well as funding costs and liabilities.

Auroch shares were 33.3 per cent higher to 12 cents a share at 9:45am.