Q1 2018. Stripped back, ready to rock
A mixed bag for Vast this quarter. Production at Manaila was impacted severely by the planned winter plant shut-down, with mining and processing throughput well down. However, the green shoots of recovery were evident post-period end, with an increase in copper ore and concentrate grades, and concentrate production already running close to the target quarterly run-rate. Pickstone hit a record gold production quarter despite very high pre-stripping and heavy rainfall. With considerable remedial work undertaken at both operations, the outlook for future quarters finally looks to be on an upwards trajectory.The planned plant shut-down at Manaila materially affected Q1 2018 production figures. A typical practise in Romania during the severe winter months, but nevertheless frustrating for Vast, with the shut-down masking some of the positive impact of remedial work. The substantial decrease in ore mined and milled resulted in copper concentrate production of 386t, a decrease of 31% from Q4.
Vast did provide a glimpse of post-period performance from mid-March to mid-April, and the impact of remedial work has already made a significant impact. Vast reports that the last 15 days in March the copper grade increased to 0.84% Cu, and for the first 15 days in April, to 0.79% Cu. This was achieved with concomitant increase in copper concentrate grade. For the first 15 days of April, the copper con grade increased to 19.4% - the highest level since the December 2016 quarter.
Record gold production at Pickstone. Despite a reduction in ore mined due to unseasonal heavy rainfall and an exceptionally high level of pre-stripping, total gold production for Q1 was 6,326oz, an increase of 4% over the 6,057oz in Q4. Lower tonnes were offset by higher milled gold grades which increased to 2.78g/t Au, from 2.46g/t Au, the highest milled grade achieved so far, impressive given that mined ore was supplemented with stockpile material.
We have updated our model for the quarterlies and recent events. We have pushed back modelled production at Baita by 6-months to early 2019 pending the licence award. This and the poor quarter at Manaila is off-set by rolling forward our NPVs for Manaila and Pickstone at year end and a better outlook at Pickstone. We incorporate a nominal value ($8.1m) for Vast’s 23.75% economic interest in Eureka, based on our typical $25 EV/oz resource value benchmark for African developers.
The net result is that our current valuation of Vast increases to 1.19p / share, from 1.03p.
Mkango Resources Ltd is engaged in the business of rare earth element and associated minerals exploration and development in the Republic of Malawi, Africa.
Rio Tinto is engaged in finding, mining and processing mineral resources. Co. has four product groups: iron ore, which supplies the global seaborne iron ore trade; aluminium, which includes bauxite mines, alumina refineries, and aluminium smelters; Copper and Diamonds, which has managed operations in Australia, Canada, Mongolia and the U.S., and non-managed operations in Chile and Indonesia, with by-product including gold, silver, molybdenum and others such as sulphuric acid, rhenium, and lead carbonate; and Energy and Minerals, which comprises mining, refining and marketing operations across borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium sectors.
Vast Resources is a mining company with open pit polymetallic operations and a planned underground polymetallic mine in Romania, and an open pit gold mine in Zimbabwe. Co. holds gold and diamond related mining claims in Zimbabwe and has a presence in Zambia with interests in an earth and phosphate project. Co. mines and produces copper and zinc concentrate and gold bullion.
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