Xtract acquired its oil shale exploration rights over mining tenements at Julia Creek, Queensland, Australia in two tranches in late 2005 and early 2006. In August 2008 the Queensland Premier declared a twenty year moratorium on oil shale mining on a proposed oil shale development in the Whitsunday coastal region. From the same date there was also a two year review period imposed on all proposed oil shale developments throughout the state during which no new mining activity would be permitted.

Following the announcement in 2008, Xtract put its oil shale activity on a care and maintenance footing until such time the outcome of the moratorium was known. Xtract sought to maintain these mineral rights at limited expense so as to retain the option to exploit the resources when the moratorium was lifted and technology and investment conditions justified.

On 24th March 2012 the Liberal National Party was returned in the Queensland election, replacing the previous Labour administration. It was not clear at that time whether this change in administration would impact on the moratorium but it seemed timely for Xtract to seek a partner to help fund some exploratory activity.

Xtract announced on 28th June 2012, that it had entered into a Heads of Terms with regard to progressing Xtract’s oil shale tenements at Julia Creek with Global Oil Shale Group Ltd (“GOS”). On 17th December 2012, Xtract announced that its negotiations with GOS with regards to Xtract’s oil shale tenements at Julia Creek in Queensland Australia had successfully concluded with the signing of legally binding agreements. On the 13th February 2013, the Newman Government announced that it will allow the development of a commercial oil shale industry in Queensland under strict environmental conditions.

The finalisation of the GOS transaction has enabled the Company to secure a strategic partner in GOS who has an excellent management team and expertise in the oil shale business in order to progress the Julia Creek and Morocco shale oil opportunities. As a result Xtract now holds a strategic equity stake in GOS of 6.0 million shares plus a further up to 1.5 million shares in GOS in the event of its planned IPO. In addition Xtract holds a long term interest in the Julia Creek project through a 1% net smelter royalty;

GOS have advised Xtract that it has prepared a mining plan for the Julia Creek oil shale project comprising of an up to 35,000m reverse circulation drilling programme involving in stages up to 700 boreholes being drilled and air-cored over an area of approximately 150 square kilometres. GOS expect the drilling programme to commence in the summer of 2013 and are in the process of securing appropriate approvals to execute the programme.

GOS has also prepared an extensive testing program for the oil shale samples from Julia Creek for its process of oil concentration and thermal processing of the oil shale. GOS is working in co-operation with some of the leading companies in minerals processing in its testing program.

Furthermore GOS has commenced evaluating its processing approach for Julia Creek and an associated pre feasibility for this purpose, which are made in co-operation with its strategic partners Neste Jacobs and TTU for engineering and processing. The aim of GOS is to prepare detailed input data for its oil shale process modelling and simulation, that also can be used for a Julia Creek bankable feasibility study and pilot scale oil shale testing.

 
     
 

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