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Vast Resources raises working capital as losses increase

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Vast Resources AIM:VAST, the AIM-listed, Maidstone-based, mining and exploration company with operations in Zimbabwe and Romania has had a busy few months.

At the end of September, the company raised GBP656,000 through a placement of 164 million shares through Axis Capital Markets. The money was used for operational purposes as the mining company’s latest concentrate export was delayed. The sale of concentrate expected in mid-October will now occur in the first week of November. Money was also used to support the ramp-up of its underground operations at its Baita Plai polymetallic mine in Romania.

As the calendar turned to October, Vast 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.

The Takob Project, which is fully-financed, produced 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 holds its interest in the project through the acquisition by a recently incorporated UK company, Central Asia Investments Ltd, in which Vast has a 49% interest of a 50% percent interest in Central Asia Minerals and Metals Ore Trading FZCO which has an agreement with Takob. Vast has an effective 24.5 percent indirect interest in the project.

Production increase

Later in October (21st) Vast published an operational update on Baita Plai, announcing a 20% overall increase in 3Q22 production from the mine. The statement said: “the last month of the quarter saw an increase in production via the utilisation of the Mantis rigs resulting in a significant increase in tonnes mined and the quality of the concentrate produced from an average of 16% in July and August to over 22% with peaks of 28.5%. September 2022 was the most successful month of underground production at Baita Plai with the mine producing 7,900 tons of ore, accounting for 50% of underground production in 3Q22.”

The mine has a JORC-compliant reserve & resource report which underpins the initial mine production life of approximately three to four years with an in-situ total mineral resource of 15,695 tonnes copper equivalent with a further 1.8 million to 3 million tonnes exploration target. Vast is working on confirming an enlarged exploration target of up to 5.8 million tonnes.

Vast 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. Vast has also been granted the Manaila Carlibaba Extended Exploitation Licence that will allow it to re-examine the exploitation of the mineral resources within the larger Manaila Carlibaba licence area.

Today (31st October) Vast published its final results for the year ending 30th April 2022. The company reported an increase in revenues to USD3.8m against USD0.9m for the year ending 30th April 2021. However, Vast also reported a 6.6% increase in administrative and overhead expenses for the year to USD4.5m and an increase in foreign exchange losses to USD3.8m, up from USD2.6m from the year previously. Vast explained the forex hit as a result of its dollar-financing of its Romanian operations and the weakness of the Romanian Lei. The company said that the imbalance will be compensated through USD-denominated sales.

Vast Resources reports increased losses

This led to an increase in losses after taxation to USD 15.5m, up from USD7.7m from the year previously. Taking out the forex losses, loss for the period increased 14% to USD11.7m, up from USD10.3m for the previous year. The company reported cash in the bank of GBP130,000, down from USD1.4m as at 30th April 2021.

The company also announced today that it had successfully placed 625 million shares at 0.225p through Axis Capital Markets, raising GBP1.47m to be used as working capital and cover transaction costs for an acquisition.

Vast Resources opened trading today at 0.29p and had fallen 12.96% in early morning trading. The company has offered a -86.76% year-to-date return, and a one-year return of -90.8%, with its shares ranging between 0.22p and 2.85p. The company has a market capitalisation of GBP4.4m

Vast is also operating in Zimbabwe, a joint venture agreement with Chiadzwa Mineral Resources, which represents the Chiadzwa Community interests in the Chiadzwa Diamond Fields located in Marange. The Chiadzwa region has an historic background in diamond mining.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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