TINASHE MAKICHI
AIM listed Vast Resources plans an initial investment of $30 million towards its diamonds operations at Zimbabwe’s Marange diamond fields. However, the venture is hinged on the signing of an agreement with Red Mercury.
Red Mercury is an investment vehicle which was formed by the Marange-Zimunya Community Trust which has since signed a Memorandum of Understanding with Vast Resources. The resources group is planning an initial $30 million, which will culminate in the setting up of a big operation.
The signing of the agreement for the mining of diamonds in Marange is subject to Red Mercury receiving the final licence and the resources group is anticipating a considerable change in its direction and its near term cash flow.
Vast Resources is the first private company to mine diamonds following the consolidation of the diamonds industry by government in 2015.
Chief executive Andrew Prelea said: “A significant event that will potentially change the direction and near term cash-flow of the company is the signing of the agreement with Red Mercury which should, subject to Red Mercury receiving the final licence, lead to the mining of diamonds on the Heritage Concession in the Marange Diamond Fields of Zimbabwe.”
The mining group has so far concluded an exclusive access agreement for due diligence and pre-agreed Joint Venture terms with Red Mercury as outlined in the company’s announcement of August last year and since then has completed posi tive commercial due diligence on the project.
Prelea noted that Vast Resources would in the outlook focus on improving results in its core operations in both Romania and Zimbabwe.
“Opportunities in both jurisdictions will be pursued rigorously with reliance made on its local management and the extensive network of relationships with key parties,” said Prelea.
Vast Resources on Zimbabwe gold operations
On Vast’s gold operations in Zimbabwe, Chegutu based PickstonePeerless Gold Mine experienced above trend increases in mining and overhead costs in its interim results to September 30 and this was occasioned by an unprecedented flooding of the pit and an increase in overburden stripping to access declining oxide ore reserves; to facilitate sulphide mining and to provide adequate mining areas for future periods.
There was an 8% increase in gold production to 13 352 Troy ounces from 12 383 Troy ounces in the six months to 31 March 2018.
Prelea said the benefits of this overburden removal will be positively felt during future reporting periods. Cash flow generated at Pickstone-Peerless has generated funds which together with the local bank overdraft, has funded both the recently constructed sulphide plant and initial expenditure on the Eureka Gold Mine.
He added that a $30 million debt facility is currently being negotiated to fund the development of Eureka Mine based in Guruve, Mashonaland Central.
