REG-Quarterly Production Summary and Operations Update <Origin Href="QuoteRef">VAST.L</Origin>

Vast ResourcesAnnouncement

11/05/2016 11:05

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining 
 11 May 2016 
 Vast Resources plc 
 ("Vast" or the "Company") 
 
 Quarterly Production Summary and Operations Update 
 
 Vast Resources plc, the AIM listed mining company with operations in Romania
and Zimbabwe, is pleased to report an operational update and production
summary for the three months ended 31 March 2016. 
 
 Overview: 
 
 * The Pickstone-Peerless Gold Mine ("PPGM") in Zimbabwe 
 
 
              (commissioned on 20 August 2015, Vast ownership 50
per cent.) : 
               
                   o   17 per cent.  increase in ore
milled, to 54,237 tonnes, and 8 per cent.  increase in gold production, to
2,808 ounces, compared to the previous quarter 
                   o   In March 2016 the plant exceeded
20,000 tonnes per month for the first time and in April 2016 (following the
end of the quarter) more than 40kg of gold was produced   
                   o   Zimbabwean bank overdraft reducing
satisfactorily from approximately US$2.0 million as at 1 January 2016 to
approximately US$1.2 million at 31 March 2016 
                   o   Expansion opportunities now being
evaluated including: 
                               -  Design and
installation of the PPGM sulphide processing plant that will be required for
the next phase of mining once oxide resources are depleted 
                               -  Potential
development of a satellite open pit mine at the nearby Giant Gold Mine which
has a current JORC-compliant inferred resource of 500,000oz of gold 
                           
       ·          The Manaila Polymetallic Mine ("MPM") in
Romania 
              (commissioned on 14 August 2015, Vast ownership
50.1  per cent.):  
                
 
 * Focus during the quarter was on enhancing future production capacity,
including mill relining and refurbishment, flotation circuit upgrade and
associated mine preparation 
 * Production ramp-up targeting up to 20,000 tonnes per month by commissioning
the second mill and float line which occurred in April 2016 
 * Separate lead/zinc line almost completed and commissioning is scheduled for
Q2 2016 
 * Optimisation work together with extreme weather conditions in January &
February negatively impacted production, resulting in a 15 per cent. reduction
in ore milled and a 9 per cent.  reduction in concentrate produced, compared
to the previous quarter 
   
 
 
 * Baita Plai Polymetallic Mine ("BPPM") 
 
 
              (Vast ownership 80 per cent.) 
 
 * Continued progress towards obtaining the relevant permissions to start
developing  BBPM in accordance with Romanian due process post-merger
(announced 30 November 2015) which will allow for the commissioning of the
Company's third mine 
   
 
 
 * Funding Update 
 
 
 Post the Company's rejection of Crede Tranche 2, in addition to the on-going
concentrate and gold sales, the Company has been seeking alternative and/or
replacement financing including: 
                               1. Short-term
bridging finance, repayable from future Crede cash injections; and 
                               2. Crede Tranche
3, provided the share price is at an acceptable level prior to Crede Tranche 3
(GBP 1.25 million receivable on 4 July 2016). 
                                 
 As the MPM expansion capital has been invested, the above financing will be
utilised to fund the ongoing working capital requirements at MPM during the
upcoming ramp-up period and also for the settlement of creditor obligations
upon receipt of the BPPM sub-licence (expected to be approximately US$630,000
at current exchange rates). 
               
 
 Roy Pitchford, Chief Executive of Vast, commented: 
 "Vast continues to make solid progress transforming into a production company
with two operating mines under its control.  PPGM has been the standout
front-runner during the quarter - with ore mined, milled and gold produced all
increasing encouragingly.  The mining currently underway represents only the
first phase of production at PPGM, and we are busy planning and laying the
foundations for the subsequent phases of development to ensure PPGM generates
long-term sustainable cash flow for the group. 
 
 "Our dual focus this quarter has been to upgrade operations at MPM to
increase capacity and enhance operational and financial performance in
subsequent quarters.  Whilst this process has been successful, with mill
relining and refurbishment, flotation circuit upgrade and associated mine
preparation completed, this work, together with the extreme weather conditions
experienced in January and February, has resulted in lower production this
quarter.  However the Vast team is confident that the work completed during
the last few months, together with the separate lead/zinc line which should be
completed in the coming weeks, stands MPM in a strong position to deliver
increased mining capacity, increased concentrate production and enhanced
financial performance over the next quarter and in subsequent periods. 
 
 "Looking at our pipeline of additional mining projects, the sub-licence for
the Baita Plai Polymetallic Mine continues to be a primary objective for us. 
We understand that the grant of the sub-licence, which has been more
protracted than originally thought, has caused consternation for some of our
investors, however we have been counselled by the relevant authorities in
Romania that the process is nearing completion and hope that this provides
shareholders with some comfort.  As soon as there is further news regarding
this, we will update the market without delay."  
 
 PPGM March 2016 Quarterly Production Summary & Operations Update 
 
 At PPGM the plant milled 54,237 tonnes during the quarter, well in excess of
its initial design capacity of 10,000 tonnes per month.  A total of 2,475
ounces of gold were delivered to the Reserve Bank of Zimbabwe, with 556 ounces
being on hand at quarter end that were delivered to the Reserve Bank of
Zimbabwe early in April 2016. Operational efficiencies have started bearing
fruit with production costs decreasing in line with increased gold
production.  Head grades averaged within a range of 1.9 - 2.1 grammes/tonne
during the current quarter and are expected to increase in future as the open
pits are developed to deeper levels. 
 
 The improved production profile has continued into the current quarter with
the milling tonnage again exceeding 20,000 tonnes in April 2016, which along
with higher grades enabled the monthly production to exceed 40kg of gold for
the first time. 
 
 The domestic bank overdraft has been reduced from approximately $2.0 million
at the commencement of operations to approximately $1.2 million in early April
2016.  
 
 Attention is now being focussed on the design and installation of the PPGM
sulphide processing plant that will be required when the oxide resources are
depleted in the open pits. 
 
 In addition, development at the nearby Giant Gold Mine is being considered.
Further exploration work is required to increase the current inferred resource
of approximately 500,000 ounces.   
 
    Operational data:  Pickstone-Peerless        Unit         Mar'16 Quarter      Dec'15 Quarter     %   Change     
  Ore mined                                       Tonnes                   63,825               46,285         38%         
  Waste and low-grade ore mined                   Tonnes                  244,855              188,245         30%         
  Stripping ratio                                  Times                     3.8x                 4.1x                    
  Ore milled                                      Tonnes                   54,237               46,291         17%         
  Gold produced                                   Ounces                    2,808               2,598          8%         
  Gold sold                                       Ounces                    2,475               2,375         4%         
  Gold in stock at period end                     Ounces                      556                 223                    
                                                                                                                      
  Cash costs*                                  ($/t milled)                  47.1                48.5         (3%)        
  Cash costs*                                    ($/oz Au)                    910                 864          5%         
  Average sales price achieved*                  ($/oz Au)                  1,139               1,080          5%         
 
 * excluding government royalty of 5 per cent. 
 
 MPM March 2016 Quarterly Production Summary 
 
 During the past quarter Vast has undertaken a number of capital projects to
improve operational efficiency at MPM, including some maintenance work, which
had been neglected by the previous owner.  As a result of this work, some
plant downtime was incurred during the quarter.  Furthermore, the severe cold
weather experienced during January and some of February negatively impacted
flotation recoveries, resulting in a reduced concentrate quality.  Additional
mining areas were also exposed in anticipation of the increased plant
throughput, resulting in an increase in waste tonnage mined, whilst the
single, mainly copper concentrate produced during the quarter contained high
levels of zinc that resulted in the mine incurring penalties when selling this
concentrate.  
 
 In order to reduce the quantity of zinc in the copper concentrate, a second
flotation circuit has been constructed during the quarter and is now being
tested, along with new reagents identified by flotation test work. 
Additional capital projects undertaken include the relining of the new primary
mill, which was completed towards the end of the quarter allowing for higher
milling tonnage through put and improved grind and recoveries.  The
refurbishment and relining of an older second mill also commenced during the
quarter and was commissioned in April 2016.  This mill is being tested as a
regrind mill, which combined with the second aforementioned zinc float line
will enable separate copper and zinc concentrates to be produced.  In
addition to now having the ability to produce two saleable concentrates, the
grade of the copper concentrate is expected to improve and with the production
of a separate zinc concentrate, the penalties of zinc in the copper
concentrate will decline.  With both mills operational, MPM will have an
installed milling capacity of 20,000 tonnes per month from May 2016 onwards. 
 
 More intensive metallurgical test work has been commissioned for MPM with two
objectives in mind.  The first is to provide data for the design of the new
milling and flotation circuit that Vast wishes to construct at the open cast
mine site to avoid the extensive ore and waste transport costs associated with
using the concentrator 34 kilometres away at Iacobeni.  Secondly, the data
will be used to determine the optimal process flow at Iacobeni using the
existing concentrator until the new unit is constructed at the Manaila open
cast mine. 
 
    Operational data: Manaila               Unit        Mar'16 Quarter      Dec'15 Quarter     % Change   
  Ore mined                                 Tonnes                   20,362               33,756     (40%)    
  Waste mined                               Tonnes                  130,925              121,690      8%      
  Stripping ratio                           Times                      6.4x                 3.6x             
  Ore milled                                Tonnes                   22,510               26,375     (15%)    
  Concentrate produced                    Dry tonnes                    677                 745     (9%)     
  Concentrate sold                        Dry tonnes                    866                 550      57%     
  Concentrate in stock at period end      Dry tonnes                     77                 266             
                                                                                                         
  Cash costs*                            ($/t milled)                  46.4                 30.1      54%     
  Cash costs*                           ($/t of conc)                 1,542                1,065      45%     
  Average sales price achieved*         ($/t of conc)                   949                1,033     (8%)     
 
 * excluding government royalty of 4 per cent.     
 
 Update on Baita Plai Polymetallic Mine (BPPM) 
 
 The BPPM licence process is nearing completion.  All the legal work to
facilitate the merger of S.C Mineral Mining S.A. (in administration) and S.C,
African Consolidated Resources Romania S.R.L. (AFCRR) has been completed. 
Numerous legal proceedings by parties opposing the merger have been
successfully concluded.  Meetings between the Ministry of the Economy, S.C
Baita S.A., a state mining company, and AFCRR are to be convened shortly to
arrange the granting of an associate mining licence to AFCRR. 
 
 In anticipation of the issuing of the licence, certain capex to comply with
underground mining safety has been undertaken. This includes new man-carrying
cages, hoist ropes, and making safe areas that will be accessed in the initial
stages of reopening the mine. 
 
 Metallurgical test work will be undertaken during the rehabilitation of the
mine and processing facilities to confirm that the current processing layout
is appropriate. 
 
 **ENDS** 
 
 For further information visit www.vastresourcesplc.com or please contact: 
 
    Roy Pitchford (Chief Executive Officer)                                                 +40 (0) 372 988 988  (O) +40 (0) 741 111 900  (M) +44 (0) 7793 909985 (M)   
    Strand Hanson Limited - Financial & Nominated Adviser  James Spinney  James Bellman      www.strandhanson.co.uk  +44 (0) 20 7409 3494                              
    Daniel Stewart and Company plc - Joint Broker  Martin Lampshire David Coffman             www.danielstewart.co.uk  +44 (0) 20 7776 6550                             
    Dowgate Capital Stockbrokers Ltd - Joint Broker Jason Robertson Neil Badger                www.dowgatecapitalstockbrokers.co.uk +44 (0)1293 517744                   
    St Brides Partners Ltd Susie Geliher Charlotte Heap                                        www.stbridespartners.co.uk  +44 (0) 20 7236 1177                          
 

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 Source: Vast Resources plc via Globenewswire 
 HUG#2011690