Big picture - Why invest in Vast Resources PLC
Vast Resources PLC Snapshot
Vast Resources has transitioned from an exploration company to a mining company, with a portfolio of high quality assets. In the short-term, the Company is focused on converting Baita Plai in Romania and Pickstone-Peerless in Zimbabwe into cash generating operations with minimal capital expenditure.
Our Baita Plai project will serve as a test case for future developments in Romania, which includes pursuing the Company’s relationship with Remin SA., amongst other interesting prospects.
Additionally, with political stability and clarity on investment rules, Zimbabwe has considerable upside. In the short-term, we are focusing on bringing Pickstone-Peerless into production and being cash generative.
The Company also has a pipeline of additional assets at various stages in the development curve, from green-field exploration to previously producing mines; we aim to realise these assets within a sensible time frame. In the interim, we are committed to keeping our cost base as low as possible and generating revenues.
- 50.1% interest in the Manaila Polymetallic Mine, northern Romania
- Production commenced 14 August 2015 – just four weeks after Vast assumed operating control
- Total mineral resources, estimated in accordance with the Russian Reserves and Resource Reporting System, comprising 1.8Mt in-situ of lead at 0.95%, zinc at 1.86%, copper at 1.17%, gold at 0.63g/t and silver at 45.97g/t
- Phase 1, open pit, has a projected life of mine of three years at a mining rate of 10,000 tonnes per month, with significant further upside
- Phase 2 and Phase 3 operations are currently planned to be underground mines – further detailed work may reveal that an open pit mine is feasible on portions of the Phase 2 or Phase 3 ore body
Vast Resources owns a 50.1% interest in the Sinarom Mining Group SRL, which owns the Manaila Polymetallic Mine in Suceava County, northern Romania where economic mineralisation is comprised of copper, lead, zinc, gold and silver. Total mineral resources estimated in accordance with the Russian Reserves and Resource Reporting System comprise 1.8Mt in-situ of Pb at 0.95%, Zn at 1.86%, CU at 1.17%, Au at 0.63g/t and Ag at 45.97g/t.
The Manaila Mine is 26km from the town of Iacobeni, where the Project’s processing plant is located. Infrastructure at the plant consists of crushing, milling and flotation circuits that produce copper, lead and zinc, with gold and silver credits.
The existing mineral deposits can be mined in three distinct ways:
- Phase 1: The continuation of existing open pit mining for a further three years
- Total mineral resources estimates in accordance with the Russian Reserves and Resource Reporting System for Phase 1 of 0.35Mt in-situ at Pb at 1.10%, Zn at 2.00%, Cu at 1.25%, Au at 0.70g/t and Ag at 50.0g/t
- Potential exists to enlarge the open pit and define resources along strike towards the southeast
- Phase 2 and 3 operations are currently planned to be underground mines
- Due to the undulating topography and faulting on the ore body, Vast has initially decided to examine the economics of an underground operation. Further detailed work may reveal that an open pit mine is feasible on portions of the Phase 2 or Phase 2 ore body.
Mining at Manaila historically produced a 13% copper concentrate and a 3g/t gold concentrate.
Prior to acquisition of the Project, following Vast’s recommendations, the copper concentrate increased to 19% and Vast has identified opportunities to enhance this further.
Importantly, just four weeks after acquiring control of the Manaila mine, Vast commenced production (14 August 2015). This included the first blast in the open pit mine and first production of concentrate at the processing facility in Iacobeni. Vast is targeting a production rate of approximately 10,000 tonnes per month.
During this Phase 1 exploration, work will also be undertaken to evaluate the feasibility of Phases 2 and 3 as underground mines and confirm any potential for open pit expansion.
- Skarn deposit comprising several veins in calcareous sediments in eight distinct pipes
- 1,800,000 tonne copper-silver-zinc-lead- gold-tungsten-molybdenum ore body at 6% copper equivalent (Russian Reserves and Resources Reporting System) within the mining licence area
- Unmeasured resources in other pipes and substantial exploration upside
- Due to lack of capital investment and modernisation the mine became uneconomic and was closed in 2013
- Investment required US$5 million
- Projected post tax cash flow on existing mine US$217 million
- 80% interest acquired
- Mine commissioning is planned for August 2015 with first positive cash flows later in H2 2015
Vast Resources currently has an 80% interest in Mineral Mining, a company in administration, which owns a 100% interest in the well-developed polymetallic underground mine, Baita Plai, and its associated mining rights. A merger between African Consolidated Resources srl (currently in the process of changing its name to Vast Resources SA, a wholly owned subsidiary of Vast Resources) (“Vast Romania”) and Mineral Mining, which was announced on 25 February 2015, should become unconditional and is proceeding to completion and as a consequence, all of the assets and liabilities of Mineral Mining will, by operation of law, be transferred to Vast Romania, and Mineral Mining will cease to exist as a corporate entity. Vast Resources is advised that this should secure the return of the mining licence which was withdrawn from Mineral Mining in connection with its insolvency procedures.
Baita Plai is located in the Apuseni Mountains, Transylvania, an area which hosts Romania’s largest polymetallic and uranium mines. This Project is 50km north-west of Romania’s largest Au-Cu mine, Rosia Montana (>10Moz Au) and 52km north-west of Rosia Poiena, which contains over one billion tonnes of porphyry copper ore.
Baita Plai is a skarn deposit comprising several veins in calcareous sediments in eight distinct pipes. It is estimated, by the Company, to contain 1,800,000 tonnes of polymetallic ore (gold, silver, copper, zinc, lead, tungsten and molybdenum) at 6% copper (‘Cu’) equivalent or 10g/t gold (‘Au’) equivalent, at current prices, (estimated in accordance with the Russian Reserves and Resources Reporting System) within the licensed area. It has unmeasured resources in other pipes and substantial exploration upside. Due to lack of capital investment and modernisation the mine became uneconomic and was put on care and maintenance in 2013. Plant and equipment for the mine are in place but require some rehabilitation.
Resource estimation has been calculated, by Vast Resources, on two different grade assumption bases – the ‘Vast Resources Model’ and the ‘Production Model’. The Vast Resources Model is based on official records which show an in-situ resource based on the Russian Reserves and Resource Reporting System of 1.8 million tonnes at 2.19% Cu, 128g/t silver (‘Ag’), 3.46% zinc (‘Zn’), 3.07% lead (‘Pb’) and 1.41g/t Au. Mine laboratory records and underground inspections with a Niton XRF cross correlate. The Production Model grades are back calculated from actual historical production records but are thought to produce conservative results on account of known inefficiencies in previous production methods.
Included in this resource is a 400,000 tonne copper, silver, zinc, lead, gold, tungsten, molybdenum ore body identified within the current mine workings (non JORC but conservative estimations by Vast Resources geologists) which is ready to mine.
Two high level financial models have been prepared for Baita Plai (both on a 100% basis), one on the Vast Resources Model grade basis reduced to take account of processing losses and one on the Production Model grade basis, to demonstrate possible results over the life of the mine on the basis of a production rate of 10,000 tonnes per month.
Ore modelled using Vast Resources Model compared to Production Model provides the following indications:
Vast Resources holds a 50% interest in Breckridge Investments (Pvt) Ltd, a joint venture between Vast Resources and Grayfox Investments (Pvt) Limited, which holds the remaining 50% interest. Breckridge holds a 100% interest in the Pickstone-Peerless Gold Mine, and mining claims surrounding the former Giant Mine, in Zimbabwe.
The 584ha Pickstone-Peerless Gold Mine is located 100km south-west of Harare and has historically produced over 400,000 oz gold. Pickstone-Peerless has a current JORC Resource of 62 million tonnes grading 1.8 g/t, containing 3.56 million ounces of gold. Included in this Resource is an open-pittable Ore Reserve of 16.6Mt grading at 1.9 g/t for 1.02 million ounces.
The current plant design is expected to exploit the oxide gold cap at Pickstone-Peerless, which has an estimated life of six years. During this period, expansion of the plant to treat the open cast sulphides, at a rate at least double the current monthly volume will be evaluated.
Equity capital of US$4m for the further mining of the oxide gold cap is in place at the Breckridge level.
Mine development is at an advanced stage. It is planned that an ore stockpile will be created in June 2015 ready for first commissioning and first production in August 2015. Annualised gold production of 10,000 – 12,000 oz Au is expected from the initial mining rate of 10,000 tonnes per month.
Mine commissioning is planned for early H2 2015 with first positive cash flows later in H2 2015.
William Battershill - Chairman
William has built an illustrious career in the African steel industry. He founded a steel trading business in 1985, which eventually developed into JSE listed BSi Steel Limited (‘BSi Steel’), a leading steel distributer focused on sub-Saharan Africa. Mr Battershill has been Group Executive Chairman of BSi Steel since 2009. BSi Steel employs over 1,000 people in over 20 operations situated in South Africa, Zimbabwe, Mozambique, Zambia, Democratic Republic of Congo and Ghana, and also has an interest in a Swiss based trade finance business and commodities trading operation.
Roy Pitchford - Chief Executive Officer (Group)
Roy is a Chartered Accountant and past President of the Chamber of Mines in Zimbabwe. His track record in Zimbabwe includes Cluff Resources, where he managed the Freda Rebecca Mine, the largest gold mine in the country, as well as a number of smaller mines. He also oversaw the development of the Ngezi Opencast Platinum Mine into production, the re-commission of the Selous Metallurgical Complex in 2011, and created a company with a platinum-group metals resource base in excess of 300 million ounces whilst at Zimplats, which was acquired by Implats, the world’s second largest producer of PGMs. In South Africa he oversaw the exploration and completion of a bankable feasibility study of the Leeuwkop Platinum Project, owned and managed by African Platinum, which was also later acquired by Implats. As chairman of Lesego Platinum, the company has completed a bankable feasibility study on a 39Moz PGM mine on the eastern limb of the Bushveld Complex. Lesego is now part of the Village Main Reef group where he was the former chairman. He remains a non-executive director of public and private mining companies.
Roy Tucker - Finance Director & Company Secretary
Roy is a Chartered Accountant with 43 years of high level and broad spectrum professional and business experience. He has been the founder of a London banking group, served on bank boards and had a position as a major shareholder of a substantial London commodity house. He is also the founder of Legend Golf and Safari Resort in South Africa. He has substantial investment in the Romanian property sector.
Eric Diack - Non-Executive Officer
Eric is a Chartered Accountant with many years’ experience in the mining and industrial landscape. Eric is the former CEO of Anglo America Ferrous and Industries, and has served on numerous major listed and unlisted company boards, mainly associated with Anglo American. He is currently a member of the Bidvest Group and Aveng boards which are large South African listed companies with extensive international operations.
Brian Moritz - Non-Executive Director
Brian is a Chartered Accountant and former Senior Partner of Grant Thornton UK LLP, London; he formed Grant Thornton's Capital Markets Team which floated over 100 companies on AIM under his chairmanship. In December 2004, he retired from Grant Thornton UK LLP to concentrate on bringing new companies to the market. He specialises in natural resources companies, primarily in Africa, and was formerly chairman of Metal Bulletin plc, African Platinum plc and Chromex Mining plc as well as currently being chairman of several junior mining companies.
Craig Harvey - Group Chief Geologist
Craig began his career with Gold Fields of SA in 1988 as a bursary student in Economic Geology where he worked on various gold, platinum, coal and exploration projects. At Harmony Gold he managed the mineral resources on various operations and was involved in due diligence on acquisitions. He joined Simmer and Jack with a focus on shallow hydro-thermal gold deposits in the Eastern Transvaal and later moved into a corporate role managing and auditing the mineral resource process across all gold and uranium operations. Craig spent 3 years in a Principal Consultant role for Ravensgate based in Perth, Australia, where he conducted numerous resource estimations, valuations and technical reports mainly in gold, uranium, copper and iron ore. Craig joined Vast Resources in 2013 and has been heavily involved in both Zimbabwe and Romania.
Carl Kindinger - Chief Financial Officer
Carl has held senior financial, managerial and board level posts for over 25 years in small to mid-sized companies internationally, including AIM quoted resources entities Island Oil and Gas Plc and Fastnet Oil and Gas Plc. He has significant transactional experience, including fund raisings, corporate restructuring, financial controls and planning, economic analysis, IFRS reporting, and strategic planning. He is an associate member of the UK's Institute of Chartered Management Accountants and also holds a degree in Economics and an M.B.A.
Andrew Prelea - President and Executive Director Romania
Andrew has in excess of 25 years of property development, investor and public relations experience. He has advised the Romanian government on social housing and economic policy and has senior experience as a mineral/metal trader and property developer.
Gabriela Dobrota - Country Manager Romania
Gabriela has a degree in Metallurgy Engineering from the University of Galati Romania, and an MBA from the University of Craiova, Romania. She has over 30 years’ experience in non-ferrous metallurgy, lead, zinc, copper, gold and silver mining and metals trading. She has managed the development of numerous production assets across Romania in different commodities. She has a Graduate Diploma in Safety Labour Management and Graduate Diploma in Quality System Audit.
Gabriela Teletin - CFO Romania
Gabriela has a degree in Mechanical Engineering from the University of Brasov, Romania, a degree in Economical Science from the University of Petrosani Romania and an MBA from the University of Craiova in addition to over 25 years corporate experience. She specialises in establishing companies, restructuring, reorganisation, audit, business consultancy, accounting and cost accounting. She has worked across a number of different fields including audit and consultancy companies such as PWC and Coopers & Lybrand, in addition to the non-ferrous metals sector and additional industries.
Daniel Poienar - Mine Manager
With a degree in Mine Engineering from the University of Petrosani, Romania, Daniel has over 21 years’ experience in the mining industry with a particular focus on exploration, preservation activity and direct cost. He has previously worked with REMIN at the Sasar Mine, Ilba Mine, Nistru Mine and Purcaret Mine.
Vasile Pop - Chief Geologist Romania
Vasile has over 26 years of experience in geology and a degree in Geology and Geophysics Engineering from the University in Cluj, Romania. He is certified by the National Agency for Mineral Resources as a specialist in field works, preparation of geological, technical and economical documentation for mining activities.
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