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Vast Resources reports increase in Baita Plai production

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Vast Resources [AIM:VAST], the AIM-listed, Maidstone-based, mining and exploration company with operations in Zimbabwe, Romania and Tajikistan has started the year with a positive update on its Baita Plai Polymetallic Mine in Romania, according to a statement issued to investors this morning (4th January).

However, the update has done little to buttress the miner’s share price, which opened the morning at 0.195p, down from the 0.2p closing price on 3rd January and down 89.1% from this time last year.

Over the last 52-weeks the company’s shares have ranged between 0.15p and 2.65p.


Management has come out in 2023 punching. “[We] strongly believe in Baita Plai’s increasing performance and to achieve our goal of heading towards name plate capacity in 1H23. Based on current production trends we have seen another significant increase in production and sales in 4Q22 and we expect to see the trend continue into 1Q23 and beyond,” said Andrew Prelea, chief executive officer.

Positive changes

And to be fair, 4Q22 production has seen a significant increase in mining and concentrate production as a result of the changes that have been implemented at Baita Plai during the course of 2H22, something Prelea highlighted in the statement.

The company reported a 47% uplift in copper concentrate production in 4Q22 from Baita Plai and reported a 248% increase in copper concentrate sold and a 35% increase in copper concentrate grade from its Romanian polymetallic mine compared to 3Q22.

Management was pleased to announce that it had exceeded its forecasted figures from December 2022, and that the December shipment was delivered with no problems and continued work unhindered during the Christmas and New Year period.

The company is aiming to produce 14,000 tonnes of copper concentrate a month from Baita Plai by 1H23 and is preparing its next shipment for the end of January. The Baita Plai mine is in the Apuseni Mountains in Transylvania, where the majority of Romania’s polymetallic and uranium resources are located.

Higher quality

Vast has developed Baita Plai’s infrastructure to include underground and surface mining operations as well as processing and tailings facilities. The main product from the mine is copper. November 2022 was Vast’s best month in terms of production and the quality of product is also increasing – the average copper grade achieved was 24%, representing an increase of 40% compared to 3Q22

The metrics of the project remain positive – with the ongoing energy crisis in Europe, many nations are looking at ways to become more energy secure and less reliant on imported electricity. As a result, the interest in renewable energy is accelerating and will require ‘vast’ investment in distribution and transmission which will mean a lot of copper wiring.

As previously reported at the end of September 2022, Vast raised GBP656,000 through a placement of 164 million shares for operational costs. In October the miner opened the Takob Mine Processing Project at the Takob Mine in Tajikistan, a polymetallic mine run in partnership with Korkhonai Boygardonii Takob, an indigenous joint stock company in Tajikistan. The company also announced that it had signed an exclusive offtake contract with Trafigura for the sale of bulk concentrates produced at Takob.

Multi-metal

The Takob Project, which is fully-financed, produces lead, zinc and fluoride. The targeted production of the mine is 7,000 tonnes of ore per month containing 1.5% to 2% lead, 1.2% to 1.4% zinc and 27% fluoride. The mine also has historic deposits of silver and gold. Trafigura will buy any lead, zinc, gold or silver, and Vast will receive a participation equivalent to a 12.25% royalty over all sales of non-ferrous concentrate and any other metals produced from the Takob Processing Project.

Vast also owns another mine in Romania, the Manaila Polymetallic Mine, which after a period under care and maintenance the company hopes to bring back into production.

The management team at Vast have a mountain to climb to revitalise its share price. Today’s announcement is a good start – however, most of the information concerned was already fairly-well expected. Moreover, Vast has promised in the past and not delivered, so it will need to have consistent production from the Baita Plai mine and supplement this with resources from its other operations and move towards a more self-financing model.

Deshe Analytics concluded: “Vast Resources’ […] growth, value, and income factors indicate an execution challenge when it comes to generating exciting and consistent growth. Typically, results like these translate into sustained negative momentum and strong downward pressure on stock price. Correspondingly, Vast Resources plc received a ranking of 57 and a ‘Underperform’ recommendation.”

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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