LONDON (ShareCast) - Mining firm Xtract Resources raised £4.4m, to be put toward a mining licence in Mozambique, the company said on Monday.
Xtract said the £4.4m, raised through a share placement would go towards the 100% acquisition of the 3990c Manica Gold Mining licence.

The licence includes mining rights for the Fair Bride open gold deposit and would be purchased from from Australian Stock Exchange listed Auroch Minerals.

Under the licence deal Xtract would pay $4.5m in cash, allocate shares to the value of $6.5m and pay off project related creditors to the tune of £1.5m, Xtracts said in an update.

According to an Auroch study, the mine is capable of producing $55m per year, which means payback for the mine would be less than three years.

Xtract chief executive Jan Nelson said the project would allow the company to generate significant revenue.

"The project is less than a year from a completed Bankable Feasibility Study and we firmly believe that there are significant areas for further optimisation which will lead to improved project economics," Nelson said in a statement.

Shares in Xtract Resources were at 0.333p when the market closed on Friday.

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