Vast Resources upbeat on new Baita Plai mine plan

Mining company Vast Resources posted its new mechanised mine plan for the producing Baita Plai polymetallic mine in Romania on Tuesday, in line with its previous announcements.

The AIM-traded firm said there would be no further capital expenditure funding required to implement the new plan, with future capital expenditure to be funded from cash flows.

It forecast net revenue under the new mine plan of $17.2m between 1 April 2021 and 30 April 2022, and $28.2m from 1 May 2022 to 30 April 2023.

Revenues thereafter would be $33.4m in 2023 to 2024, and $34.7m in 2024 to 2025.

Net operating cash flow forecast before debt, tax and new capital expenditure was $4.9m from 1 April 2021 to 30 April 2022, and $15.2m from 1 May 2022 to 30 April 2023.

For 2023 to 2024, the cash flow forecast was for $20.9m, with $21.9m expected in 2024 to 2025.

The company said the cash flow forecasts provided “very strong” underwriting for further debt investment, if required, focused on further drilling and capacity upgrades.

It said it was appointing a full-time dedicated international mine management team to supervise every aspect of mining and production.

Mining capacity was planned to increase by 65% under the new mechanised mine plan, compared to the old, “labour intensive” plan.

The new plan included the acquisition of three load haul dump loaders, an Aramine face jumbo drill rig, two Resemin Muki 22 long hole drilling rigs, and a Tomra XRT ore processing and sorting machine.

Vast said the new plan further reduced specific project risk, and said execution risk was expected to be “significantly reduced” compared with the old plan, through the employment of senior international staff, the use of increased mechanisation; and the fact that with the expedited development plan now possible through the new equipment, the mining would be in areas newly drilled by the company, and not in less stable old mining areas.

Production would continue during the development phase, with underground production to continue on levels 17 and 18, in addition to the new mining area on level 19.

Mill feed grades would be concentrated by 1.25x to 1.75x, by using TOMRA advanced XRT processing technology, with the board also expecting a 21% reduction in the dollar expense per mined tonne.

Exploration drilling was targeting the downdip extension of the Antonio skarn from levels 19 to 22, which was expected to start in June.

Drilling to confirm historic drill hole data on the Antonio North skarn was then expected to begin in early 2022.

“This upgraded mine plan, made possible with the employment of a mechanised approach to mining and with the benefit of XRT technology which will produce a primary crushed high-grade pre-concentrate that will feed to the mills and will be implemented by our new team of mine managers who bring with them many decades of practical experience in mine expansion and optimisation,” said chief executive officer Andrew Prelea.

“The capex required for this process is fully funded from existing resources and we expect to deliver a healthy revenue and cash flow from this asset during the 12 months from 1 April, building considerably in the years thereafter.

“This is a robust and comprehensive mine plan which has been developed using rigorous technical parameters.”

At 1146 BST, shares in Vast Resources were up 6.5% at 0.11p.