Xtract Resources downgrades forecasts due to earthquake

Shares in Xtract Resources fell after the gold and copper mining and development company said it now expects third and fourth quarter profit to be lower than previously guided due to an earthquake in Chile.

Xtract said it expects to generate a profit of $150,000 in the third quarter, down from a previous forecast of $1.2m and $650,000 in the final quarter, also down from $1.2m.

The company said a magnitude 8.3 earthquake in Santiago, 250km north of its mine, meant it wasn’t safe to use the main access haulage at the Chepica Main prospect.

As a result, the main areas ready for stoping will only be accessed within the next three months.

Xtract now plans to re-develop a new haulage to access the ore-body from a different position.

Chief executive officer Jan Nelson said: "The impact of the earthquake is of course extremely disappointing, however safety is a major priority and we will not produce if we cannot do so safely.

“We have an exemplary safety record at the mine, we have had no accidents or fatalities since we took operational control. Despite the impact the mine is still expected to make a net profit of $650,000 in Q4 and the new access haulage will ensure we can continue to produce safely and therefore sustainably.”

In addition, the company said on Tuesday that it has reduced its net loss for the first half by 19.7% from the same period last year to £0.79m.

For the six months ended 30 June, net assets rose 272% to £5.98m and the company completed three placings.

At 1310 BST, Xtract shares were down 21% at 0.24p.