TIDMVAST
Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining
28 July 2017
Vast Resources plc
("Vast" or the "Company")
Quarterly Production Summary & Operations Update
Vast Resources plc, the AIM listed mining company with operations in
Romania and Zimbabwe, presents its operational update and production
summary for the three months ended 30 June 2017 ('Q2 2017').
To view a presentation, which presents the Q2 2017 results together with
the previous four quarters, please visit the Company's website:
www.vastresourcesplc.com.
Production Overview:
Q2 2017 was a solid quarter for Vast, which saw operations at the
Manaila Polymetallic Mine ("Manaila") in Romania and the
Pickstone-Peerless Gold Mine ("Pickstone-Pickstone") in Zimbabwe improve
significantly over the previous quarter in terms of tonnes mined, tonnes
milled and overall production profile. Importantly, performance post
period end has also been encouraging at both mines, confirming an
improved trend compared to previous quarters.
Manaila Production Summary
(commissioned on 14 August 2015, Vast Ownership 100%.):
Results for the quarter demonstrate a considerable improvement over Q1
2017. An acceleration of this improving trend was evidenced in a marked
upturn in performance in the last two weeks of June, continuing Q3 2017.
Summary of Q2 2017 Production:
-- 41% increase in tonnes of ore mined from Q1 2017 to 27,707 dry tonnes (Q1
2017: 19,711 dry tonnes*)
-- 54% increase in tonnes of ore milled from Q1 2017 to 28,082 dry tonnes
(Q1 2017: 18,262 dry tonnes*)
-- 57% increase in copper concentrate produced from Q1 2017 to 828 dry
tonnes (Q1 2017: 526 dry tonnes)
-- Copper concentrate grade maintained above 18% threshold at 18.2% (Q1
2017: 18.8%)
-- 19% increase in zinc concentrate produced from Q1 2017 to 157 dry tonnes
(Q1 2017: 132 dry tonnes)
-- 51% increase in zinc concentrate grade from Q1 2017 to 39.8% (Q1 2017:
26.3%)
-- Inaugural concentrate production from test phase of the Knelson
Concentrator extracting a pyrite concentrate containing gold credits - 5
dry tonnes at a grade of 45g/t produced since commissioning on 25 April
2017
Pickstone-Peerless Production Summary
(commissioned on 20 August 2015, Vast ownership 25%):
Production at Pickstone-Peerless has recovered from the slowdown in
open-pit mining operations occasioned by the high rainfall experienced
during Q1 2017. A return to mining higher grade areas in the open-pit
has also facilitated an increase in production over the prior quarter.
-- 33% increase in tonnes of ore mined from Q1 2017 to 68,659 tonnes (Q1
2017: 51,660 tonnes)
-- 15% increase in tonnes of ore milled from Q1 2017 to 58,923 tonnes (Q1
2017: 51,102 tonnes)
-- 36% increase in gold production from Q1 2017 to 4,037 ounces (Q1 2017:
2,974 ounces)
Development Overview:
The production summary should be read in concert with the development
initiatives underway in Romania and Zimbabwe. The purpose of these
development initiatives is to increase and optimise production, lower
operating costs and build a portfolio of long term sustainable mining
operations.
Manaila Expansion & Regional Metallurgical Complex Romania
-- 10-hole drill programme for 1,000 metres nearing completion at the
Carlibaba prospect located adjacent to the current Manaila open pit
-- Objective to prove up potential to support a second open pit mining
operation at Manaila and establish an enlarged mining complex that will
utilise a centralised metallurgical processing facility
-- Full results from Carlibaba drill programme anticipated for release in H2
2017 together with an outline of Carlibaba's development path
-- Planning of prospecting activities at Piciorul Zimbrului and Magura
Neagra licences underway - exploration licences will be applied for once
prospecting work is complete
Faneata Tailings Facility ("Faneata") Romania
-- Prospecting licence granted in May 2016 over the Faneata tailings dam
located 7km from the Baita Plai Polymetallic Mine - intention to use
Baita Plai processing facility 6.5km away
-- An internally generated Maiden JORC Compliant Resource Estimate in March
2017 defined a total Mineral Resource of 3.0Mt (Gross, 2.4Mt being net to
Vast)
-- Metallurgical test work has commenced to determine optimal processing
method
-- A feasibility study to recover the contained metals is underway
-- Application has been made for an exploitation right over the tailings dam
in anticipation of positive feasibility results
-- Preliminary economic assessment indicates a break even total processing
recovery of 25%
Pickstone-Peerless & Giant Gold Project Zimbabwe
-- Construction of sulphide plant progressing on time and on budget ahead of
commissioning during the coming quarter
-- 75% increase in installed primary milling capacity anticipated once
sulphide plant is commissioned to 35,000 tonnes per month from the
current 20,000 tonnes per month
-- Mill grade expected to increase from 2.35g/t** gold ('Au') to between
3.00g/t Au and 4.00g/t Au over a 6 to 9-month period as higher-grade
sulphide ore is mined and processed, resulting in a significant increase
in production
-- Evaluation of the Giant Gold Project - located 28km from
Pickstone-Peerless, which has a current JORC-compliant inferred resource
of 500,000oz of gold, is ongoing
Roy Pitchford, Chief Executive of Vast, commented:
"Manaila has delivered a significant improvement in performance compared
to the previous quarter, and this upturn in operations is anticipated to
continue throughout Q3 2017 demonstrating a clear upward trajectory in
our production profile. This improvement has been delivered through our
Romanian operational team's efficient and effective attention to
remedial actions undertaken during Q1 and Q2 2017 to resolve persistent
open-pit and production issues, and will support the delivery of a
consistent 15,000 tonnes per month mill feed from September.
"The quantity and quality of the zinc concentrate production at Manaila
has improved dramatically, with production during calendar consistently
registering grades over on average 40% at Manaila. Positive progress
has also been made with concentrate production from test phase of the
Knelson Concentrator, which extracts a pyrite concentrate containing
gold credits. Work is on-going to optimise production from the Knelson
Concentrator with the objective of this contributing to Manaila's
revenue and enhancing our overall production profile. The important
lessons learnt from turning around the performance at Manaila will be
factored into future operational plans and the proposed new
metallurgical complex to be sited at our Carlibaba prospect, located
near to our Manaila open pit.
"Looking now to Zimbabwe, mining, processing and production levels at
Pickstone-Peerless have recovered from the previous quarter, and
importantly, progress in the construction of the sulphide processing
facility is progressing on schedule ahead of commissioning in Q3 2017.
The sulphide plant is a critical development for Pickstone-Peerless and
should increase production capacity by approximately 75%, promising a
significant increase in ounces produced.
"We remain confident that the underlying quality and value prospects of
our mines in both Zimbabwe and Romania are excellent and expect
production rates to be further enhanced going forward."
Further Information
Romanian Interests
Manaila Mine
The operational focus during the period has been on deploying remedial
capital expenditure to resolve persistent mining and production issues
experienced at Manaila to increase the flows and measurement of ore fed
into the mill. This work has delivered a significant improvement in
Manaila's production profile in Q2 2017 and improvements in this regard
are expected to continue to be realised in Q3 2017.
The refurbishment of the Manaila milling and flotation circuits has been
largely completed to allow for 15,000tpm to be processed and a tertiary
crusher has been ordered and pending delivery will allow for the
crushing circuit to comfortably provide sufficient mill feed tonnage at
the correct particle size. The Company's objective is to achieve a
consistent run rate of 15,000tpm by September 2017.
Planned maintenance work, including the relining of the primary mill, is
being undertaken at the mine currently. This will result in reduced
operations for a brief period whilst the necessary work is completed.
Nonetheless, thanks to a strong start to July, with an average milled
rate of 464 tonnes per day, production is expected to resume and
continue at the improved levels achieved over recent weeks.
The gravity line was commissioned during the quarter to recover a pyrite
concentrate which has gold and silver associated with it. The gravity
line is producing the expected concentrate grade but has yet been unable
to deliver the expected mass on a consistent basis. Work is ongoing at
the open pit and the plant to understand the effects of the various ore
types on the gravity line recovery.
Zinc is being produced at grades which are attracting increased unit
sales prices and the quantities produced are steadily increasing.
Restricted capacity for the transportation of ore to the Iacobeni
Metallurgical Complex was also addressed in Q2 2017 by increasing the
number of ore transport vehicles. Further capacity will be arranged in
Q3 2017 to improve deliveries from the open-pit.
Manaila Expansion & Regional Metallurgical Complex
Further to the announcement on 8 June 2017, the 10-hole drill programme
for 1,000 metres at the Carlibaba prospect is now well advanced with six
out of the eight drill holes currently completed. All samples will be
despatched to ALS analytical laboratories in Rosia Montana once drilling
is complete.
To date, the drilling has intersected sulphide mineralisation close to
the planned depths and has returned better than expected widths, further
confirming the geological interpretation. Full results and analysis is
expected for publication in September 2017.
Once drilling at Carlibaba has been completed and the proposed
investment outlined below has been finalised, the Company will begin to
actively evaluate appraisal activities at Piciorul Zimbrului and Magura
Neagra. Further updates will be made available as appropriate.
Baita Plai Manaila Mine & Faneata Tailings Dam
The Board and management are aware of shareholders' frustrations
regarding the timescales for the grant of the Baita Plai mining
sub-licence. However, as reported previously, it would be imprudent for
the Company to comment on the specifics of the process as there is
currently no direct precedent for this situation.
However, the entire team at Vast would like to take this opportunity to
reiterate the spirit of cooperation we have experienced with the
Romanian authorities since Vast became active in the country. Since
2014, Vast, through its subsidiary companies, has been granted five
licences - all promptly and without issue - highlighting that Baita Plai
is certainly the exception to the rule.
The Board and management, together with the Romanian authorities, remain
focussed on resolving the outstanding issues to deliver the mining
sub-licence in as short a timeframe as practicable. The Company will
update shareholders of any developments as soon as we are able to do so.
Once granted, the Company anticipates that production could begin within
six months and have forecast a capex budget of $1.2 million. It is
intended that this capex would be funded from the proposed investment of
$10 million detailed below.
The licence at Baita Plai constitutes a separate right from the
prospective licence over Faneata, which is located 7km from Baita Plai.
Faneata has the potential to be a stand-alone mining operation and a
Feasibility Study is currently being undertaken at the tailings dam to
define the parameters for development. The results of this study were
anticipated towards the end of Q2 2017, however due to unforeseen delays
with transport and custom clearance, the results are now anticipated
during Q3 2017 In anticipation of positive results, application has
been made for an exploitation right over the tailings dam.
Zimbabwean Operations
Pickstone-Peerless Gold Mine
The primary focus during the period has been on the advancement of the
sulphide processing facility, which is due for commissioning during Q3
2017, and is expected to double production capacity at
Pickstone-Peerless. During Q2 2017, the third mill was placed on its
foundation plinths and the sulphide flotation units were delivered to
the mine site and are in the process of being installed. The additional
CIL tanks were approximately 50% complete at the end of the period. The
upgraded crushers are on site and being installed and post quarter end
the upgraded crushing circuit has been commissioned.
We have been informed that production at the toll treatment plant, which
was commissioned during Q1 2017, is progressing well. Whilst we await
formal confirmation of current production rates, artisanal recovery is
expected to be 50% with the remaining 50% to be shared between Vast and
the artisanal plant operator. Accordingly, the plant is expected to
generate a modest amount of gold for Pickstone-Peerless. Nonetheless,
the construction of the plant has significantly strengthened the
Company's relationship with the local artisanal miners, the community
and government.
Evaluation of the gold resource potential at Giant Gold Mine has
commenced. The objective is to define a larger gold resource to support
an initial scoping study, which, if positive, would be followed with
pre-feasibility/feasibility studies. A similar artisanal gold milling
facility as installed at Pickstone-Peerless Gold Mine is anticipated to
be installed at Giant.
The success of the Pickstone-Peerless Gold Mine has resulted in further
gold mining opportunities being presented in Zimbabwe. In conjunction
with Vast's co-investors in Zimbabwe, these opportunities are being
jointly evaluated with a view to significantly increasing gold
production.
Corporate Update
As announced on 24 July, Vast has entered into a conditional head of
terms relating to a proposed investment of up to US$10 million by a
corporate finance and investment firm with significant experience in and
investment in Romania.
If the proposed investment proceeds, following the satisfaction of the
various criteria set out in the heads of terms announcement, the funds
would be used for the Company's capital expenditure and working capital
requirements, mostly for the expansion of the Romanian operations.
The Board sees this proposed investment as a highly encouraging and
positive development, which would enable Vast to execute its strategic
objectives in Romania. The Board will provide further information on
this proposed investment in the coming weeks.
Production Statistics
June 2017 Quarterly Production Summary
Operational data:
June'17 Mar'17 Dec'16 Sep'16
Manaila Units Quarter Quarter Quarter Quarter
Ore mined Tonnes 27,707 19,711(1) 23,905(2) 25,620(3)
Waste mined Cubic Metre 53,267 45,143 38,538 117,558
Stripping ratio Times 1.9 2.3 1.6 4.6
Ore milled Tonnes 28,082 18,262(1) 26,786(2) 25,092(3)
Milled Grade - Cu Percentage 0.73% 0.79% 0.91% 0.71%
Milled Grade - Zn Percentage 0.74% 0.76% 0.88% 0.74%
Concentrate
produced - Cu Dry tonnes 828 526 889 616
Percentage 18.2% 18.8% 19.5% 20.4%
Concentrate
produced - Zn Dry tonnes 157 132 165 35
Percentage 39.8% 26.3% 30.0% 29.6%
Concentrate sold -
Cu Dry tonnes 995 321 889 960
Concentrate sold -
Zn Dry tonnes 252 0 200 0
Concentrate in
stock at period
end Cu Dry tonnes 38 206 0 0
Concentrate in
stock at period
end Zn Dry tonnes 37 132 0 35
Operational data:
June'17 Mar'17 Dec'16 Sep'16
Pickstone-Peerless Units Quarter Quarter Quarter Quarter
Ore mined Tonnes 68,659 51,660 70,930 69,500
Waste and low-grade
ore mined Tonnes 1,035,785 546,126 435,083 497,840
Stripping ratio Times 15.1 10.6 6.1 7.2
Ore milled Tonnes 58,923 51,102 61,356 65,573
Grams per
Milled Grade Tonne 2.35 2.06 2.41 2.57
Gold produced Ounces 4,037 2,974 4,352 4,910
Gold sold Ounces 3,992 2,873 4,706 5,025
Gold in stock at
period end Ounces 755 710 609 962
(1) Converted to dry tonnes. Previously wet tonnes mined of
21,901and wet tonnes milled of 20,291
(2) Converted to dry tonnes. Previously wet tonnes mined of
25,245 and wet tonnes milled of 29,776
(3) Converted to dry tonnes. Previously wet tonnes mined of
27,848 and wet tonnes milled of 27,724
Quarterly Conference Call
Roy Pitchford, Chief Executive of Vast, will host a conference call for
shareholders at 11.00 a.m. today.
To participate in this conference call, please dial 0808 109 0701, or
+44 (0) 20 3003 2701 if you are calling from outside of the UK, and
enter participant code 1109957# when prompted to do so. Please note
that all lines will be muted except for Vast's management, however the
Company invites shareholders to submit questions to its public relations
adviser, St Brides Partners Ltd, ahead of the call via email to
shareholderenquiries@stbridespartners.co.uk or through the online chat
function.
To access the online chat function, please use the link below and log in
as a participant using the event number 957 679 072 followed by the
password, 'Vast':
https://sbmf.webex.com/sbmf/onstage/g.php?MTID=e37f78826fd1b0f7ba83bfa32ffbbf087
On the right-hand side of the screen you will find an option to submit
questions during the call. The Q&A function will only be made live once
the call has commenced.
The management team will strive to answer as many questions as possible
during the call. A recording of the call will also be made available on
the Company's website.
If you have any problems accessing the call, please contact St Brides
Partners Ltd on shareholderenquiries@stbridespartners.co.uk or call +44
(0) 20 7236 1177.
A copy of the presentation will also be uploaded to the Research, Media
& Presentations page of the website at www.vastresourcesplc.com shortly
before the call commences.
Competent Person's Review:
This announcement has been reviewed by Mr Craig Harvey, Chief Operating
Officer at Vast, and a member of the Geological Society of South Africa
and the Australian Institute of Geoscientists. Mr Harvey meets the
definition of a "qualified person" as defined in the AIM Note for Mining,
Oil and Gas Companies.
* In the previous Quarterly Production Summary, this figure was reported
as wet tonnes however from April 2017 all tonnage measurement are
reported as dry tonnes
** Calculated as an average grade over the previous four quarters
-ENDS-
For further information visit www.vastresourcesplc.com or please
contact:
Vast Resources plc www.vastresourcesplc.com
Roy Pitchford (Chief Executive Officer) +44 (0) 20 7236 1177
Beaumont Cornish - Financial & Nominated Adviser www.beaumontcornish.com
Roland Cornish +44 (0) 020 7628 3396
James Biddle
Brandon Hill Capital Ltd - Joint Broker www.brandonhillcapital.com
Jonathan Evans +44 (0)20 3463 5016
Peterhouse Corporate Finance Ltd - Joint Broker www.pcorpfin.com
Duncan Vasey +44 (0) 20 7469 0936
St Brides Partners Ltd www.stbridespartners.co.uk
Susie Geliher +44 (0) 20 7236 1177
Charlotte Page
The information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 ("MAR").
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Vast Resources plc via Globenewswire
http://www.acrplc.com/
(END) Dow Jones Newswires
July 28, 2017 03:00 ET (07:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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