Q2 2024 Production update and Operational updates
21/10/2024 07:00
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Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining
21 October 2024
Vast Resources plc
(‘Vast’ or the ‘Company’)
Q2 2024 Production update and Operational updates
Vast Resources plc, the AIM-listed mining company, is pleased to announce the
Q2 2024 production report for its Baita Plai Polymetallic Mine (‘Baita
Plai’) in Romania, provide an operational update following the
reorganisation at the mine, and provide an update on the Concentrate sale (as
it has been previously referred to). The Company is also pleased to provide
an update on production improvements at the Aprelevka mine and the status of
product deliveries at the Takob project in Tajikistan.
Baita Plai Mine Operations
The Q2 period, as indicated in a previous announcement, registered lower
production both due to the factors that led up to the reorganisation announced
on 10 June 2024 and due to the delay in financing which constrained
production. The reorganisation plan has targeted lower levels of production
in the short-term, the immediate reduction of the workforce, and
management’s focus on achieving positive operational cashflow as soon as is
possible.
The significantly reduced labour force and reduced operational costs through
improved working practices have already been achieved; the workforce now
numbers 162, down from 326, and further optimisation initiatives are being
implemented, including focussing on high grade areas to conserve the
Company’s cash resources, improve project outcomes, and provide a stable
platform for phased growth.
Management has calculated that the steps that have been made possible as a
result of the reorganisation process have reduced the operating break-even
production levels from around 275 dmt to 130dmt of Cu concentrate per month,
without taking into account processing income from the former Hanes Gold Mine
(see below).
For clarity, and to avoid any misunderstanding, it is important to note that
under Romanian law, although the reorganisation of Vast Baita Plai SA, the
Company’s wholly owned Romanian subsidiary that holds the Baita Plai
association licence, is under a judicial court process, it is of a voluntary
nature under which administrators are appointed by the Company. Vast Baita
Plai SA, and with it Baita Plai, continue to be controlled by and operated by
the Company through Andrew Prelea as Special Administrator, appointed under
that judicial process. This reorganisation has made it possible to reduce
the labour force, to redraw labour contracts and work practices, and at the
same time obtain up to four years repayment terms for its accrued debts and
eliminate nuisance claims. The process is ongoing with a Court date set for 14
November 2024, at which the Company’s Judicial Administrator will present
the rejected creditors and argue the merits for rejecting any creditors from
the initial creditors table, as well as presenting the progress made since
entering reorganisation, and present the initial step plan for the
reorganisation.
Baita Plai Production
Production for the quarter is provided below with a comparison to previous
quarters.
Period Tonnes mined Concentrate produced (DMT) Cu concentrate grade
Q2 2024 10,239 229 20%
Q1 2024 25,388 613 20%
Q4 2023 24,178 562 18%
Q3 2023 25,600 559 21%
Q2 2023 23,372 468 21%
Baita Plai processing – former Hanes Gold Mine
Baita Plai, as part of its activities, has, as announced on 11 September 2024,
also commenced processing the First Agreement product derived from the former
Hanes Gold Mine, that is anticipated will generate long-term income for the
Company. This activity combined with the mine’s own production is calculated
to allow Baita Plai to be net cash generative towards the end of the year. The
initial results from first production of the First Agreement material is a
polymetallic concentrate containing in excess of 10 g/t of Au and in excess of
1200 g/t of Ag.
500t Concentrate sale
The Company is awaiting final assays to enable the shipment of the first
consignment of the concentrate under the Second Agreement, as announced on 11
September 2024. It was hoped that these would have been received by now; but
when they are received and assuming that they are as expected satisfactory,
the Company will update the market upon shipment departure.
Aprelevka Mine Operations
Progress continues to be made at the Aprelevka mine (a joint venture in which
the Company has a 4.9% interest in income) which the Company estimates has
amounted to cost savings of approximately 25% of the production costs.
The Company now has increased the expat team to include management,
production, mining and geological personnel to implement further improvements
across the business, reduce costs, and improve mining methods and safety.
The changes in crushing have also resulted in an increase in throughput at the
plant from 800 tonnes per day to 950 tonnes per day in Q2, and with further
improvements is expected to increase to 1,500 tonnes per day in Q4 and
beyond including, as already announced, a tertiary crushing system and new
processing equipment currently under construction, that will allow the Company
to reach up to 2,500 tonnes per day in Q2 2025. All capex costs have been
self-generated for the increase in profitability that has been achieved.
The mine has re-commissioned the mills as announced on 4 June 2024 and has
commenced the reprocessing of tailings in tandem with ore production to
increase gold and silver production yielding high recoveries from the
tailings. The new silver processing plant referred to in the Company’s
announcement of 11 September 2024 is currently being installed and is targeted
to be operational in Q4 2024, thus enabling the doubling of silver production
at the plant, up to 360kg per month.
The Company takes this opportunity to notify that following the Company’s
investment in Aprelevka, the Board was informed that Andrew Prelea and Paul
Fletcher had acquired interests of 17.8% and 5% respectively in Gulf,
International Minerals Ltd, which has a 49% interest in the Aprelevka mines.
Aprelevka Production
Production for the quarter is provided below with a comparison to previous
quarters.
Period Tonnes Processed Au oz produced Recovery
Q2 2024 77,371 2878 84.3%
Q1 2024 72,850 1808 81.1%
Q4 2023 75,643 2039 78.7%
Q3 2023 69,332 2062 82%
Takob
Full production has recommenced, and deliveries are expected in November.
Historic Claim
The Company maintains its position as announced on 24 September 2024.
Investor Warning
Investors and other Market Participants should note that the effectiveness of
the measures referred to above to improve performance at Baita Plai and
Aprelevka will only be known as and when the production results are achieved
and can be announced.
Competent Person
The technical information in this announcement has been reviewed by, and the
forward-looking technical views are based on, information interpreted by Dr
Marius Zlagnean. Dr Marius Zlagnean has more than 30 years professional
experience in the mining industry and is currently a Technical Consultant for
Vast for the processing of ore in Romania and Tajikistan. He is also Head
of the Processing Techniques and Technologies Department, and former Vice
President of the Board of Directors, at the Romanian National Institute of
Research and Development for Metals and Radioactive Resources.
Dr Zlagnean is a Qualified Person who is a Member in good standing of the:
Balkan Mineral Processing Technical Academy;
National Association of Specialists in Geology and
Mining, Bucharest (Romania);
Executive Board of the XIII Balkanic Mineral Processing Congress, Bucharest;
Scientific Committee of the journal "Buletin CENTIREM";
Scientific Council National Institute of Research and Development for Metals
and Radioactive Resources.
Dr Zlagnean is a mining engineer and has a PhD in engineering in centrifugal
concentration of gold-silver precious metals at the University Petrosani. He
is an accredited expert of the National Agency for Mineral Resources
of Romania.
**ENDS**
For further information, visit www.vastplc.com or please contact:
Vast Resources plc Andrew Prelea (CEO) www.vastplc.com
+ 44 (0) 20 7846 0974
Beaumont Cornish – Financial & Nominated Advisor Roland Cornish James Biddle www.beaumontcornish.com +44 (0) 20 7628 3396
Shore Capital Stockbrokers Limited – Joint Broker Toby Gibbs / James Thomas (Corporate Advisory) www.shorecapmarkets.co.uk
+44 (0) 20 7408 4050
Axis Capital Markets Limited – Joint Broker www.axcap247.com
Richard Hutchinson +44 (0) 20 3206 0320
St Brides Partners Limited Susie Geliher / Charlotte Page www.stbridespartners.co.uk +44 (0) 20 7236 1177
ABOUT VAST RESOURCES PLC
Vast Resources plc is a United Kingdom AIM listed mining company with mines
and projects in Romania, Tajikistan, and Zimbabwe.
In Romania, the Company is focused on the rapid advancement of high-quality
projects by recommencing production at previously producing mines.
The Company's Romanian portfolio includes 100% interest in Vast Baita Plai SA
which owns 100% of the producing Baita Plai Polymetallic Mine, located in the
Apuseni Mountains, Transylvania, an area which hosts Romania's largest
polymetallic mines. The mine has a JORC compliant Reserve & Resource Report
which underpins the initial mine production life of approximately 3-4 years
with an in-situ total mineral resource of 15,695 tonnes copper equivalent with
a further 1.8M-3M tonnes exploration target. The Company is now working on
confirming an enlarged exploration target of up to 5.8M tonnes.
The Company also owns the Manaila Polymetallic Mine in Romania, which the
Company is looking to bring back into production following a period of care
and maintenance. The Company has also been granted the Manaila Carlibaba
Extended Exploitation Licence that will allow the Company to re-examine the
exploitation of the mineral resources within the larger Manaila Carlibaba
licence area.
Vast has an interest in a joint venture company which provides exposure to a
near term revenue opportunity from the Takob Mine processing facility in
Tajikistan. The Takob Mine opportunity, which is 100% financed, will provide
Vast with a 12.25 percent royalty over all sales of non-ferrous concentrate
and any other metals produced.
Vast has also been contractually appointed to manage and develop the Aprelevka
Gold Mines located along the Tien Shan Belt that extends through Central Asia,
producing at the time of appointment approximately 11,600 oz of gold and
116,000 oz of silver per annum. It is the intention to increase production
closer to historical peak production of 27,000 oz gold and 250,000 oz
silver. Vast is entitled to a 4.9% effective interest in the mines with the
option to acquire equity in the future.
The Company retains a continued presence in Zimbabwe in respect of the
Historic claims.
Beaumont Cornish Ltd
Beaumont Cornish Limited (“Beaumont Cornish”) is the Company’s Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish’s
responsibilities as the Company’s Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
The following is a summary of technical terms:
Ag Silver
Au Gold
Cu Copper
PGM Platinum Group Metals
Grade Grade(s) means the quantity of ore or metal in a specified quantity of rock
Mineral Resource A 'Mineral Resource' is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location,
quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of
increasing geological confidence, into Inferred, Indicated and Measured categories.
Inferred Mineral Resource An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and
grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Indicated Mineral Resource An 'Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient
detail to support mine planning and evaluation of the economic viability of the deposit.
Exploration Target An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for
which there has been insufficient exploration to estimate a Mineral Resource.
Mineral Reserve An ‘Ore Reserve’ is economically minable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility
level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could be reasonably justified.
JORC Code Australasian Institute of Mining and Metallurgy Joint Ore Reserves Committee code on mineral resources and ore reserves
Mineralisation Process of formation and concentration of elements and their chemical compounds within a mass or body of rock