Xtract Resources said its Mozambican subsidiary Explorator had concluded a mining contractor agreement with Huafei Gold Resources for the exploitation of gold deposits at the Manica mining concession.
Huafei had paid an initial entry fee to Xtract of $150k, with another $200k to be recovered through future alluvial gold production.
Explorator would be entitled to retain a net percentage of the gold mined of 22% until the entry fee had been settled in full, and 20% thereafter.
The initial contract period was for 10 years, or by the depletion of the alluvials, with an option to extend for five years if the alluvials were not yet depleted.
'A number of contractors have expressed interest in mining the other areas of the alluvials in the Manica concession,' chief executive Colin Bird said.
'Huafei Gold Resources was chosen because of their willingness to pay an upfront payment and demonstrated consistency of operation with their existing contract.'
'They provided extra equipment into the concession and we look forward to increased production over the coming months and on completion of the rainy season.'
At 2:58pm: (LON:XTR) Xtract Resources Plc share price was +0.13p at 0.85p