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Auroch Minerals has advised that 1 589 623 629 new ordinary shares in Xtract Resources with a market value of $494 million has been issued to the company.

This follows the conversion of $200 000 of the convertible note,  the establishment fee of $50 000 and interest payable in advance of $13 722.

In addition, a cash payment of about $120 000 will be received by Auroch Minerals on or around 2 March 2017 following completion of Xtract Resources’ tranche 1 placement, said the company.

Xtract Resources has also announced a second tranche placement to raise gross proceeds of £1 232 000, subject to shareholder approval.

Following shareholder approval, the company will receive a second tranche payment representing 15% of the tranche 2 placement gross proceeds of approximately $229 000, Xtract Resources said.

“Upon receipt of the payments above, a principal amount of approximately $1 213 136 will remain outstanding pursuant to the convertible note and loan agreements and will be repaid via a combination of share and cash payments in accordance with the settlement agreement,” said Xtract Resources.

Xtract Resources will be seeking shareholder approval in respect of the tranche two placement and the modification of the loan agreement, by including a conversion option into shares on 13 March 2017.

Auroch Minerals executive chairman Glen Whiddon commented:
“We are pleased that Xtract has raised further capital and put itself on a sound footing going forward.

 “We understand that the Manica feasibility study is progressing well and we believe that under Colin Birds’ new executive leadership the company will continue to do well.”

On 13 February this year, Auroch Minerals said it had agreed settlement arrangements with Xtract Resources with respect to the outstanding debt owed to Auroch Minerals totalling $1 748 136.

Auroch Minerals said the repayment of the Xtract Resources’ debt had been structured as a convertible note agreement to the total value of $748 136; a loan agreement for the balance of the Xtract debt equal to $1 million; a 3% royalty agreement over production (including any alluvial gold production) at the Manica gold project in Mozambique; and the issue of 500 000 000 warrants in Xtract Resources.