2018 - Year of the litmus test
Vast Resources plc is an AIM-quoted resource development company that converted from an exploration company to a mining company in 2015, with two operating mines; the Manaila polymetallic mine in Romania (100%), and the Pickstone-Peerless gold mine (25%) in Zimbabwe.2018 looks to be a pivotal year for Vast as the company seeks to turn Manaila to account, and flip the needle towards being a cash flow positive operation, and re-open Baita Plai. In addition to ironing out operational inefficiencies and ramping up the quantity and quality of concentrate production at Manaila, Vast is chomping at the bit to push the button on a major expansion to unlock the value of its Romanian assets. Financing remains the key to unlocking this plan.
The new CEO Andrew Prelea has plans to cut-costs at the corporate level, always a welcome move in the eyes of shareholders. However, more important in our view, is the raft of planned work underway at all operations to increase production and cut costs. A portion of Manaila’s woes are related to issues we typically see when commissioning new capacity, e.g. inefficiencies in the new zinc flotation circuit.
Talking the talk, is likely to become walking the walk and 2018 should be the year of delivery. In Romania, the focus on cost control and ramping up operations, should provide the backbone to springboard into Manaila’s new metallurgical facility which Vast anticipates will slash operating costs. The final grant of the Baita licence would allow the button to be pushed on mine development. In Zimbabwe, the continually improving political situation, may result in a more favourable outlook for the Group’s assets in the country.
Our valuation on Vast shares remains at 1.03p, and we see upcoming news-flow that might act as a catalyst to revaluation: December quarter production (late Jan), Carlibaba JORC-resource (Q1), financing and off-take update, grant of Baita Plai Association Licence.
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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