Shares in AIM-listed junior Xtract Resources have sunk to all-time lows after two body blows in the departure of charismatic CEO Jan Nelson and the decision to pull the plug on the Chepica gold/copper mine project in Southern Chile.
Xtract raised £1 million in late July through issuing shares at a price of 0.065 pence each. The shares were trading more than 50% lower yesterday at 0.03p each.
The two developments are linked. A terse statement issued on September 13 reported that Nelson had resigned “ with immediate effect, for personal reasons” but Nelson tells Miningmx that he quit because he did not agree with the board decision to walk away from Chepica.
“I decided it was time for new management to run Xtract,” he commented. The company is now being run by Colin Bird who has changed his status from non-executive to executive chairman.
The decision to can Chepica was announced on September 22 in a statement which said “the underlying fundamentals and the risk associated with the project are no longer supportive of continuing investment by the Company.”
According to Bird, “the Chepica mine has been challenged technically and commercially for an extended period.”
Xtract’s only other material asset is the Manica gold mine project in Mozambique which it announced earlier this year it had agreed to sell to Nexus Capital and Mineral Technologies.
But the deal was conditional on the two purchasers making an initial payment of $2m by August 12 which Xtract reported on August 17 had not been made. Xtract said at the time it was in discussions with the purchasers which could result in further revisions to the terms of the deal.
The September 22 announcement said that Xtract would provide an update on Manica “during the early part of next week.”
