29 October 2020
Vast Resources plc
(‘Vast’ or the ‘Company’)
Vast Resources plc, the AIM-listed mining company, is pleased to announce its audited final results for the 12 month period ended 30 April 2020.
A copy of the annual report will be available on the Company’s website at www.vastplc.com.
OVERVIEW OF THE YEAR ENDED 30th APRIL 2020
Vast Resources plc (‘Vast’ or the ‘Group’ or the ‘Company’) is focused on two key mining opportunities in Romaniaand Zimbabwe. These opportunities comprise the Baita Plai Polymetallic Mine (‘BPPM’) in Romania, and the Group’s expected diamond concession in Zimbabwe. The Group continued to hold the Manaila Polymetallic Mine (‘MPM’) on care and maintenance with the expectation of a funding round at a later stage.
The Group has arranged financing which it has prioritised for BPPM in Romania and for the Chiadzwa Community Diamond Concession in Zimbabwe. On 31st January, the Group drew down on the first tranche of the Atlas Capital Markets facility ($7.1 million principal). The first tranche has been applied to placing BPPM into production and to the repayment of financial creditors.
Discussions continue regarding the conclusion of the Company’s diamond joint venture with its Zimbabwestakeholders. These discussions are in line with previous expectations, save on timing.
- Comparatives have been drawn up for the thirteen-month period to 30th April 2019 following a change of accounting reference date as announced on 8th April 2019.
- 5.4% decrease in other administrative and overhead expenses for the twelve-month period ended 30 April 2020 ($4.1 million) compared to the thirteen-month period ended 30 April 2019 ($4.3 million).
- Foreign exchange losses of $2.0 million for the period compared to $2.8 million for the thirteen-month period ended 30 April 2019. Included within the $2.0 million of foreign exchange losses is $0.640 million in respect of the Company’s operations in Zimbabwe.
- 16.4% decrease in losses after taxation from continuing operations in the period ($8.3 million) compared to the thirteen-month period ended 30 April 2019 ($10.0 million).
- Cash balances at the end of the period $0.478 million compared to $0.569 million as at 30 April 2019.
Post reporting date:
In September, the Group received an indicative asset backed debt financing proposal from an international banking institution with the purpose of refinancing Tranche 1 of the Convertible Bonds issued to Atlas Special Opportunities LLC (“Atlas”). The proposal has passed through the bank’s initial credit committee approval process following preliminary due diligence covering technical evaluation, environmental & social impact assessment and KYC analysis. The Group has entered into a formal agreement with the banking institution to complete due diligence and finalise terms with a view to receiving final credit committee approval.
- Concluded a joint venture with Chiadzwa Mining Resources (Pvt) Ltd, a company designated to represent Chiadzwa Community interests in the Chiadzwa Community Diamond Concession in the Marange Diamond Fields (the “Concession”).
- Continued discussions to finalise the joint venture agreement with Zimbabwe Consolidated Diamond Company (Pvt) Ltd (“ZCDC”) which will enable the Concession to procure a special grant for the mining of diamonds. Discussions are in line with expectations, save on timing.
- Transitioned resources from MPM to BPPM in order to continue the upgrade and development of BPPM.
- Cold commissioning of BPPM and commencement of drilling programme to establish a 2012 JORC compliant resource estimate.
- Revised an existing agreement with Botswana Diamonds PLC (“BOD”) resulting in BOD acquiring a 2.5% interest in the cashflows generated from Vast’s share in the Concession. In consideration for this interest BOD will provide know-how for all aspects of exploration, mining, processing and marketing in relation to the Concession.
Post reporting date:
- In June, the Company was granted the Manaila Carlibaba Extension Exploitation License which will allow the Company to re-examine the exploitation of the mineral resources within the larger Manaila Carlibaba license area. The enlarged exploitation license is 138.6 hectares in size, an increase of 410% in surface area from the existing exploitation license at Manaila (27.2 hectares). In October, the Company has also received a time extension of five years on the entire licence area in accordance with Romanian Mining Legislation.
- In October, the Company commenced the production of concentrate at BPPM.
- At the end of October 2020, the Company will publish a JORC 2012 compliant Measured and Indicated Mineral Resource for BPPM which covers the first four years of production. Further drilling will be conducted with the objective of publishing an expanded JORC 2012 Mineral Resource.
Fundraising share issues during the year (gross proceeds before cost of issue):
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- First tranche ($7.1 million) of Atlas Capital Markets $15 million bond facility drawn on 31 January 2020
- Debt to Sub-Sahara Goldia Investments fully repaid.
- $1 million of prepayment advance repaid to Mercuria Energy Trading.
·Repayment of $0.5 million principal of the first tranche of the Atlas Capital Markets facility.
·Appointment of Paul Fletcher as Finance Director on 6 November 2019.
Post reporting date:
- Resignation of Eric Diack as Non-executive Director on 4 May 2020.
- Resignation of Mark Mabhudhu as Executive Director of the Company’s Diamond Division on 22 September 2020 following his appointment as Chief Executive Officer of Government owned Zimbabwe Consolidated Diamond Company (Pvt) Ltd.
- Covid-19 restrictions caused some inevitable delays to the BPPM start-up, mostly due to implementing health and safety protocols which reduced productivity and travel restrictions which prevented key managers being on site at certain times. Despite these headwinds, BPPM produced its first concentrate in October 2020 which is to be sold in early November 2020.
- Continuation of the Covid-19 lock-down in Zimbabwe has significantly slowed business activity in the country.
We live in unprecedented times. The Covid-19 pandemic has left no community untouched and created economic, political, and social stresses that we have not witnessed in peacetime. Despite these challenges, the Group has been able to reach some notable milestones at the Baita Plai Polymetallic Mine (“BPPM”) and is well on track to realise the potential of this asset.
The end of January 2020 saw the Company draw down on the first tranche of the Atlas facility. While the Covid-19 pandemic brought inevitable restrictions to our operations, the Group was able to successfully work with our key stakeholders to safely minimise disruption to the start-up plan. We took delivery of our last significant pre-production capital items after the reporting period end in July 2020 and commenced concentrate production in October of this year, with BPPM scheduled to make the first deliveries of concentrate to our off-taker Mercuria in early November. We also completed the first part of a drilling program to both fine-tune the mining plan and to properly articulate the potential of the asset through a JORC 2012 compliant resource estimate which we will publish at the end of October. As stated in the Strategic Report, the drilling results have been extremely encouraging and are in line with the Company’s expectations. We intend to continue the drilling campaign with a view to extending the resource. We look forward to reporting on the continued development of BPPM and the positive impact on operating results for the current financial year.
While progress at BPPM is on track, there has been a delay in finalisation of the joint venture agreement with Government owned Zimbabwe Consolidated Diamond Company (Pvt) Ltd (“ZCDC”), which, amongst other matters, will enable the Group and our other Zimbabwean stakeholders to procure a Special Grant for the exploration, development, and mining of the Concession. As stated in the Strategic Report, we remain confident that we will conclude an agreement and our expectation is that this will occur once Covid-19 lock-down measures are lifted in Zimbabwe.
Directors and management
Paul Fletcher was appointed to the Board as Finance Director on 6 November 2019. Paul joined the Company on 8 February 2019 as Chief Financial Officer.
On 22 September 2020 Mark Mabhudhu, Executive Director of the Company’s Diamond Division left Vast to take up the role of CEO at the ZCDC. We were obviously saddened by Mark’s leaving but we are also excited by the prospect of continuing to work with him as he carries out his new remit to implement Joint Ventures between ZCDC and investors in the diamond sector. The Board would like to thank Mark for all his efforts and wish him all the best in his new role.
On 4 May 2020 Eric Diack resigned from his position as a Non-Executive Director of the Company as a consequence of taking on a new role which requires his full-time attention. The Board would like to thank Eric for his contribution over the years and wishes him well in his new role.
In October 2019 we finalised documentation with Atlas Capital Markets (“Atlas”) for the funding of both the commissioning of BPPM and in due course the commencement of diamond mining at the Chiadzwa Community Diamond Concession. As mentioned above, we have drawn down on the first tranche of the Atlas facility in order to bring BPPM into production. We have also entered a period of due diligence with a banking institution to refinance the first tranche of the Atlas facility. This will allow us to strengthen our balance sheet and realise greater long-term returns for shareholders.
As stated in the Strategic Report, last year the Company adopted the Quoted Company Alliance (‘QCA’) code on Corporate Governance. The Board strives to promote a corporate culture based on sound ethical values and behaviours. The Company maintains a strict anti-corruption and whistle blowing policy and the Directors are not aware of any event in any jurisdiction in which it operates that might be considered to be a breach of this policy. Subsequent to the reporting period the Company has formally adopted Code of Conduct, Health and Safety, Environmental, and Human Rights policies which clearly articulate the Board’s expectations and strengthen the control environment of the organisation. The Company continues to operate a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016. The Company is also committed to maintaining open dialogue with shareholders, employees and other stakeholders.
The continued support and resolve of shareholders and other stakeholders through times that have been challenging is much appreciated. With the funding of BPPM, the Company has passed a significant milestone, and, with the successful start of production, the Company expects to become cash flow positive in a short period of time. To fellow directors, thank you for your advice and support, and to management and staff both in Romania and Zimbabwe for their continued effort on behalf of the Company. Above all we wish all our stakeholders well in these difficult times and remain committed to safeguarding the safety of our employees and the communities in which we operate.
Final Results #VAST @vast_resources https://www.voxmarkets.co.uk/rns/announcement/c742bdd5-667d-4b52-b480-398d6efdc123 #voxmarkets undefined
The following amendment has been made to the ‘Progress on asset backed debt financing and Placing to raise £1,683,000 before costs’ announcement released on 10 September 2020 at 07:00.
Following the First Admission, the total issued share capital of the Company will be 12,471,402,534 and following the Second Admission this will be 13,360,069,200.
All other details remain unchanged.
Correction: Progress on asset backed debt financing and Placing to raise £1,683,000 before costs #VAST @vast_resources https://www.voxmarkets.co.uk/rns/announcement/38baac37-1f82-4f91-afbb-48b5839350c9 #voxmarkets
LSE #VAST - Vox Podcast
* Targets 150 Tonnes Copper a month to Start with Pushing Upwards at 600 Tonnes a Month at Full Capacity
* Zinc Production will start 1 Month after Copper Due to Processing (Targeting 50 tonnes a month ramped up to 150 tonnes a month at full production)
* Majority of Gold and Silver lies within the Copper Concentrates and the Values are a lot larger than previous Historical Data ....
* We will also target Lead Concentrates as we have invested money and its something that we want to take advantage of
* We will also look at Molydenum, Tungsten, and two others that were mentioned. One was beginning with W and sounded like Wolfenite? Which has special uses and is worth targeting.
There are a host of Skarn Deposits in our license area but we are targeting the Antonio Skarn Deposit which has a higher Grade of Copper Ore with Gold and Silver Recoveries ... this is in contrast to a more Polymetallic Ore.
The Antonio Skarn is approximately 300meters away from a local mine that has historically had the name of 'Moly Mine' after *Molydebunum* .. That other mine was mined to level 13 and we are at level 18 so we have 5 levels of Moly to mine.
There is more but the final 2 main points was these new results compared to Historical Data...
Current Data shows 88% and 94% of Copper into copper concentrate where in past Copper averages were 83% for 12 year period . So from 83% to 88% to 94% is an achievement. Also average of Gold recoveries were 75% historically - we are now getting 78% .. And silver recoveries was historically 48% historically which moved to 69% and to now 83%. Again both of these have seen surges in prices.
Finally, the people doing the testing stopped the testing as they saw whilst they were doing it there was 'Free gold' sitting there. Vast Has a nelson** gravity centrifuge and is looking at adding this to the circuit to take the 'free gold'
IMHO This is one of those podcasts that is worth a listen.
Hope you found it useful Enjoy and #DYOR
** Krazy, think you mean a Knelson concentrater , not Nelson
Notes from Todays #VAST Podcast with VoxMarket
* Atlas May not always choose to convert.
* Cashed up and enough cash to get us through.
* Start of first concentrate shortly.
* 7,000tonnes a month ramp up to 14,000 (after 3-4 months)
* Even at 7,000 tonnes a month we are making money - this allows us to support the company. Anything over is a plus.
* Commenced underground at BP and working towards producing concentrate - Only just started Underground and not started at Floatation plant
* AP aware of flat reaction. Doesnt think overnight re-rate but happy with the current trajectory of the business
* Impact and Value of Drilling Results - Average grades of Copper in Mines is below 0.5% * Copper so by grade BP is a world class asset, Not just Copper but Also Gold and Silver Assets
* About 500k to add to the 1.8MT Resource - JORC To Ccome
* Impact of Gold and Silver in Drilling Results: Historically Correlation between Gold and Silver. AP Believe Silver $40-$50 a gramm possible. Every gram of Gold out of ground and into concentrate is additional $1m in cashflow
* When will final test results come - They are coming Shortly - Confident Will be made available Next Week But in August. Looking forward to sharing this via RNS
* Manaila, Blueberry and other Projects - Current Focus for 2020 is to focus on Baita Plai and Diamonds
* Finalising Extension onf Manaila Extension but in future. First is to get susatainable production at Baita Plai
* Update on Community Concession: No specific timelines. Still confident signing with ZCDC and reassured project is continuing. Aware Anjin recent updates but we are talking about Alluvial Diamonds. Community Project is different process.
3 Reason why to add Vast
* Highly Undervalued
* About to Start Floatation Production in Baita Plai - Very High Quality of Copper, Gold, Silver, Molydenum Concentrates which we have clients for
* Diamonds coming and look forward to delivering to Shareholders