Vast Resources plc Quarterly Production Summary & Operations Update
18 November 2016 - 10:00PM
UK Regulatory
TIDMVAST
Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining
18 November 2016
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, is pleased to report an operational update and
production summary for the three months ended 30 September 2016.
Overview:
Manaila Polymetallic Mine ("Manaila") in Romania
(commissioned on 14 August 2015, Vast Ownership 50.1%.):
-- 13% increase in ore mined to 27,848 tonnes (June 2016: 24, 711 tonnes) -
the increase was achieved despite operations being adversely impacted by
heavy flooding of both excavation work and transport routes in July
-- 9% decrease in ore milled to 27,274 (June 2016: 29,830) due to on-going
test work to produce a separate zinc concentrate and modifications to the
flotation circuits
-- 15% decrease in concentrate produced to 616 tonnes (June 2016: 727
tonnes) due to temporary lower grade as a consequence of flooding, and
on-going test work to produce a separate zinc concentrate
-- 19% increase in sales price of US$1,003 per tonne achieved (June 2016);
sales prices rose steadily from US$896 in July to US$1,248 in September
-- Operating costs were maintained at the same level of US$33 per tonne
milled (June 2016: US$33), but increased by 12% to US$1,504 per tonne of
concentrate produced (June 2016: US$1,341)
-- The increase was occasioned by low concentrate production in July,
high usage of consumables in establishing and testing the new zinc
/ lead line and high on-going upgrades to the milling and
flotation circuit
-- Separate zinc concentrate line successfully commissioned during the
quarter ended September 2016 creating a new revenue stream for the
Company
--
-- During the current quarter the zinc concentrate grade has
continued to improve
-- Zinc production with concentrates >45% Zn will favourably impact
sales revenue in future quarters
-- Optimisation to increase plant efficiencies has resulted in improved mass
pull and copper concentrate grades. Processing specialists Minxcon Group
("Minxcon") are currently engaged to further enhance the quantity and
quality of the zinc concentrate and reduce operational costs
-- During the current quarter, copper concentrate quantity and quality has
continued to improve. The zinc concentrate grade has also continued to
improve and is now close to the planned grade and the focus of attention
is on the recovery and quantity of zinc concentrate
-- Maiden JORC Compliant Mineral Resource Report published, which increased
the open-pittable estimated resources under the previous Russian
classification by approximately eight times - thus securing a much
enhanced open pit mine life:
-- Total open pit Mineral Resource (Indicated & Inferred) of 2.6Mt at
a grade of 1.0% copper ("Cu"), 0.4% lead ("Pb") and 0.9% zinc
("Zn") at a 0.25% Cu cut-off
-- Total underground Mineral Resource (Indicated & Inferred) of
310,000t at a grade of 1.7% Cu, 0.4% Pb and 0.5% Zn at a 1.00% Cu
cut-off
-- Exploration Target defined for:
-- Open pit of 4.45Mt-11.88Mt with grades up to 2.3% Cu, 0.5%
Pb and 1.1% Zn
-- Underground of 5.92Mt-15.78Mt with grades up to 2.6% Cu,
2.0% Pb and 2.6% Zn
-- Current JORC compliant Mineral Resources does not include gold and
silver mineralisation
Baita Plai Polymetallic Mine ("Baita Plai") and Faneata Tailings
Facility ("Faneata") in Romania
(Vast Ownership 80%):
-- Prospecting licence granted in May 2016 over the estimated 4.6Mt Faneata
tailings dam located 7km from Baita Plai
-- Completed 825m drill programme at Faneata in November 2016 - results to
support a maiden JORC Compliant Resource Estimate (Q1 2017)
-- Initial metallurgical test work is expected to take 8-12 weeks to
complete
-- Plant commissioning anticipated during H2 2017 dependent on a mineral
reserve and a viable processing method being defined
-- Continued progress towards obtaining the mining sub-licence for Baita
Plai (the "Baita Plai Licence") in accordance with Romanian due process
has been made post the merger announced 30 November 2015 - the granting
of this mining-licence will allow for commissioning of the Company's
third mine
-- Once the Baita Plai Licence has been granted, the Company will undertake
metallurgical test work on the Baita Plai ore in order to optimise the
plant configuration. Ore samples will be tested at SGS (UK) in order to
optimise the process flow sheet. During this process the plant will be
refurbished
Pickstone-Peerless Gold Mine ("Pickstone-Peerless") in Zimbabwe
(commissioned on 20 August 2015, Vast ownership 50%):
-- 6% increase in ore milled to 65,573 tonnes (June 2016: 61,577 tonnes)
-- 8% increase in gold production to 4,910 ounces (June 2016: 4,542 ounces)
-- During the quarter ended September 2016 the plant consistently exceeded
20,000 tonnes per month and is now currently running at steady state at
this level
-- At the end of September 2016 Pickstone-Peerless had US$2.3 million on
deposit with banks and institutions of which 50% is attributable to Vast.
Cash will remain in Zimbabwe to fund sulphide plant CAPEX.
-- Design of the Pickstone-Peerless sulphide processing plant required for
the next phase of mining, once oxide resources are depleted, has been
completed and construction of the new plant has commenced with first
sulphide production scheduled for Q3 2017 (calendar year)
-- Total cost of the sulphide plant is estimated at US$8.0m and planned to
be funded by retained cash flows and local debt facilities
-- Evaluation of the nearby Giant Gold Mine ("Giant Mine"), which has a
current JORC-compliant inferred resource of 500,000oz of gold, has
commenced
-- A Joint Venture agreement for a toll treatment plant to recover gold from
nearby artisanal mining tonnages has been concluded and construction has
commenced
Roy Pitchford, Chief Executive of Vast, commented:
"The continued improvement at Pickstone-Peerless and Manaila is
encouraging. With significant optimisation work successfully concluded
at Manaila where a second revenue stream is now coming online with the
commissioning of the zinc concentrate line in addition to the copper
concentrate, the progress towards Manaila becoming cash positive is
evident.
"Completion of the drilling at Faneata ahead of schedule will enable the
analysis of the material to commence immediately and we expect the
results to support a maiden JORC Compliant Resource Estimate in Q1 2017.
The limited capital expenditure at Baita Plai has significantly reduced
the care and maintenance costs and forms part of the capital cost of
reopening the mine. Close liaison with the relevant authorities in
Romania regarding the Baita Plai Licence continues."
MPM September 2016 Quarterly Production Summary
Manaila Units Sept'16 Quarter June'16 Quarter % Change
Ore mined Tonnes 27,848 24,711 13%
Waste mined Tonnes 117,558 125,357 -6%
Stripping ratio Times 4.2 5.1
Ore milled Tonnes 27,274 29,830 -9%
Concentrate
produced - Cu Dry tonnes 616 727 -15%
Concentrate sold
- Cu Dry tonnes 960 461 108%
Concentrate in
stock at period
end - Cu Dry tonnes 0 344
Concentrate
produced - Zn Dry tonnes 35 0
Concentrate in
stock at period
end - Zn Dry tonnes 35 0
Cash costs* (US$/t milled) 33 33 0%
Cash costs** (US$/t of conc) 1504 1341 12%
Average sales
price
achieved* (US$/t of conc) 1003 844 19%
* excluding royalty of 4%.
** Flooding in July 2016 increased production costs
and temporarily reduced the grade fed to the mill
Cash costs for August and September reduced by 33%
(approx. US$1063 per tonne), and an improvement in
quality of the concentrate increased the average price
per tonne of concentrate to US$ 1,214
PPGM September 2016 Quarterly Production Summary & Operations Update
Sept'16 June'16
Pickstone-Peerless Units Quarter Quarter % Change
Ore mined Tonnes 69,500 83,035 -16%
Waste and low-grade
ore mined Tonnes 497,840 470,607 6%
Stripping ratio Times 7.2 5.7
Ore milled Tonnes 65,573 61,577 6%
Gold produced Ounces 4,910 4,542 8%
Gold sold Ounces 5,025 4,021 25%
Gold in stock at
period end Ounces 962 1,078
Cash costs* (US$/t milled) 51 51 0%
Cash costs* (US$/oz Au) 686 695 -1%
Average sales price
achieved* (US$/oz Au) 1338 1229 9%
Competent Person's Review:
This announcement has been reviewed by Mr Craig Harvey, Group Chief
Geologist 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.
For further information visit www.vastresourcesplc.com or please
contact:
Vast Resources plc
Roy Pitchford (Chief Executive Officer) +40 (0) 372 988 988 - Office Romania
+40 (0) 741 111 900 - Mobile Romania
+44 (0) 7793 909985 - Mobile UK
Strand Hanson Limited - Financial & Nominated Adviser www.strandhanson.co.uk
James Spinney +44 (0) 20 7409 3494
James Bellman
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/
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November 18, 2016 06:00 ET (11:00 GMT)
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