Vast Resources posts wider first half loss

AIM-listed Vast Resources said its first half pre-tax loss widened as it made the transition from a junior explorer to a mining and production company.

For the six months to 30 September, it reported a pre-tax loss of $3.64m (£2.5m) compared with a loss of $2.76m last year.

On the plus side, though, the company made its first revenue, with sales of minerals of $1.04m.

During the period, Vast Resources completed the construction and commissioning of the Pickstone-Peerless Gold mine in Zimbabwe, while production at Pickstone-Peerless and Manaila Polymetallic mine is ramping up to steady state.

In addition, the group said it terminated its exploration activities in Zimbabwe and Zambia save for the Nkombwa Hill Rare Earth project in Zambia which is being funded and managed by a partner.

The company said its former Zimbabwean head office has been sold and the acquisition of 50.1% of the Manaila Polymetallic mine in Romania has been completed.

Production at the Baita Plai Polymetallic mine is planned to early next year, Vast Resources said.

The company added that Romania is the major focus for the foreseeable future. Its short-term objectives include making improvements to the open cast mine to facilitate increased mining volumes and expansion of the mining licence area to increase the potential to expand the mine life.

Vast Resources said the company's share price and market capitalisation is being negatively affected by the decline in commodity prices worldwide, which in turn is making investors in this sector reconsider their holdings, causing some of them to sell their mining stocks.

“Many large and small high cost producers are likely to be forced out of the market, reducing supply/metal inventories. Very little exploration is being undertaken to replace the metal currently being consumed, which, in our view, coupled with the supply/inventory decline, will lead to a recovery in metal prices in the medium to long term,” it said.

At 0948 GMT, Vast shares were down 5.3% to 0.8526p.