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Vast Resources stock rose 9% on production update

Vast Resources (VAST:AIM)

Quarterly production and operations update for the three months ended 31 December 2016, for their mines in Romania and Zimbabwe.

Their 50.1% owned Manaila Polymetallic mine in Romania saw a 44% increase in copper concentrate production over the previous quarter, producing 889 tonnes at an average 19.5% copper. Zinc concentrate production increased 371% from the previous quarter to 165 tonnes at an average 30% Zn. The copper and zinc sales price increased 12% to US$1,120 over the previous quarter. The operating costs per tonne of concentrate declined 40% to US$901 from the previous quarter due to increased production levels.  There was a 9% decline in mined ore to 25,269 tonnes, due to extremely cold weather in December which halted operations, resuming to normal in January. Heating systems for the flotation circuits are being installed to reduce or eliminate future stoppages by extreme cold weather; the company believes this could help achieve their objective of increasing zinc production by 85% as of June 2017 and to increase Zn grades to greater than 45%. A gravity recovery circuit is being installed to help increase gold and silver recoveries.

Pickstone-Peerless Gold mine in Zimbabwe, 50% owned by Vast (25% when SSCG Africa Holdings Ltd financing conditions are fulfilled) experienced an 11% decrease in gold production over the previous quarter to 4356 ounces, due to rainfall which restricted mining and milling in December.  Operating costs declined 10% per ounce produced to US$619 from US$686 in the previous quarter. First sulphide production is expected in Q3 2017, as the plant is currently in construction phase. Construction for the joint venture toll treatment plant has commenced, to recover gold from nearby artisanal mining activities.

Roy Pitchford, Chief Executive, commented:

“I am delighted to report that the turnaround of operations at Manaila has continued, despite the extreme weather conditions experienced at site. With this in mind, the achievements of the period are even more notable, however we are not resting on our laurels and are introducing systems by which to alleviate these problems in future years. In particular, heating systems are being installed in the flotation circuits in order to enhance recoveries from now on. These initiatives, in addition to the utilisation of spare processing capacity at the Iacobeni Metallurgical Complex, should improve operations throughout the rest of the current quarter.

“A primary focus in this and future quarters will be the continued ramping up of zinc production and grade. We are currently producing approximatley 80 tonnes per month of zinc concentrate, however our objective is to increase this by up to 85% and to achieve a grade of over45%, which would greatly enhance revenue per tonne moving forward.”

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