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Vast Resources grades improve despite some production setbacks
Romania and Zimbabwe-focussed mining company Vast Resources updated the market on its operations and production for the three months ended 31 March on Tuesday, reporting another record quarter for the Pickstone-Peerless Gold Mine in Zimbabwe.
The AIM-traded firm said outperformance over any previous quarter in terms of ore grade milled, gold produced and sold was achieved.
At the Manaila Polymetallic Mine in Romania, the company said the planned plant shutdown continued in anticipation of the offtake finance, which was finalised during the quarter.
The shutdown did have an adverse impact on production figures for the first quarter, but was anticipated to deliver "substantially increased" performance for the remainder of 2018.
"Gold produced and sold at Pickstone-Peerless rose in the quarter to their highest recorded levels," the board said in its statement.
"An exceptionally high level of pre-stripping was also undertaken in in preparation for the expected increase in ore tonnages in the coming months.
"The high level of stripping and heavy rainfall during February resulted in reduced volumes of ore mined as compared to Q4 2017."
Vast said volumes of ore milled was also reduced during the period, due to plant mechanical problems and delayed availability of parts.
Those mechanical problems had now been remedied and, together with the improved weather outlook, it was anticipated that the plant should process in excess of 30,000 tonnes per month in future quarters.
Looking at the figures, Vast reported a 28% decrease in tonnes of ore mined in the quarter to 65,342 tonnes at Pickstone-Peerless, along with a 6% decrease in tonnes of ore milled to 80,639 tonnes.
The board said there was a 4% increase in gold production to 6,326 ounces, a 14% increase in gold sold to 6,549 ounces, and a 13% improvement in the milled gold grade to 2.78g/t.
"The focus of activity at Manaila during the quarter continued to be pre-stripping, together with plant maintenance and repairs, in order to ensure the sustainable supply of product to satisfy the offtake agreement and funding offer concluded on 21 March 2018 with global energy and commodity trading company Mercuria Trading SA," the board said of the Manaila property.
"As previously advised, the winter months are often used by Romanian mining companies for general repairs and maintenance due to the severe weather conditions, which significantly affect metal recoveries.
"The company has adopted this philosophy whilst utilising the existing, non-insulated, metallurgical plant, and whilst exposing ore in readiness for the levels of concentrate contracted for delivery to Mercuria commencing in April 2018."
As a result of the plant shut down and focus on waste stripping, the stripping ratio had shown a significant increase over the past two quarters and would allow for the required ore grade to be delivered to the plant, the board said.
It explained that the stripping ratio had increased by 85% from 10.4 times to 19.4 times on a tonne-for-tonne basis.
On the numbers front, Vast saw a 35% decrease in tonnes of ore mined at Manaila in the quarter to 15,344 dry tonnes, and a 47% decrease in tonnes of ore milled to 13,616 dry tonnes.
There was an 86% increase in the stripping ratio of waste versus ore in the quarter to 7.8 times.
Vast said there was a 31% decrease in copper concentrate produced to 386 dry tonnes, but a 6% increase in the copper concentrate grade to 17.3%.
For zinc concentrate, there was a 13% decrease in production to 84 dry tonnes, and an 18% decrease in zinc concentrate grade to 30.4%.
As expected, there was a 100% decrease in gold concentrate to nil dry tonnes.
"Our focus during recent months has been to ready ourselves for our next phase of growth - and I see our last couple of quarters as the deep breath before we plunge into unchartered waters," said CEO Andrew Prelea.
"This process has been most noticeable in Romania, where our efforts were redoubled to prepare the Manaila Mine to deliver a sustainable, long-term, high quality source of copper and zinc concentrate to satisfy our off-take agreement with Mercuria.
"These efforts have certainly not been wasted as towards the end of the period, in the lead up to initial deliveries to Mercuria, Manaila has been delivering an excellent performance and I am confident that this will continue."
Prelea said post-period end, Vast achieved its largest delivery in terms of volume and monetary value, and he believed the company was set to meet, and potentially exceed its target for May deliveries.
He added that grades continued to increase at depth as expected at Pickstone-Peerless, and would continue to do so until Vast hit the sulphide orebody.
"Despite the reduction in ore mined and milled, precipitated by heavy rainfall and plant mechanical problems respectively, Pickstone-Peerless still achieved record gold production and sales - which signals a very positive future for the mine.
"The next phase of growth, which we mentioned earlier, is not limited to Manaila and Pickstone-Peerless; we have an expansive strategy for Vast and both Romania and Zimbabwe, we are actively looking at complementary assets and non-dilutive financing structures with which to build Vast into a mid-tier mining company."
The first asset off the block was the recently-announced Eureka Gold Mine, in which Prelea said Vast now held an indirect 23.75% interest.
"Currently on care and maintenance, our intention is to recommission this mine in as short timeframe as possible, and it is with this in mind that I look forward to reporting on our enlarged production portfolio in the near future."