In an indepth interview with London South East, #VAST Resources CEO Andrew Prelea gives us a financial and operational update from Bucharest on the polymetallic mine Baita Plai in Romania, and the Chiadzwa diamond mine concession in Zimbabwe.
Vast Resources have recently started both mining and producing copper concentrate in Romania at their polymetallic mine at Baita Plai.
As Andrew explained “From funding, which happened on 1st January 2020, to 22nd October when we announced the copper concentrate production, in nine months we managed to reopen the mine and get it all into production. It’s a credit to the team on the ground.
“Production means income generation, and we have raised enough money to get the mine open in time to meet our commitments and I’m confident now that we are over the worst of it.
“We have met out targets for October, we are waiting for the vessel to be announced by Mercuria for the offtake, we were told early November, and the quantity is already packed and ready to go. We anticipate the containers will arrive onsite next week. It’s a one day truck drive from the mine to the port, once its delivered to port we get paid within 24 hours. Our first payment, first sale will be in the course of next week. It will be nice to have the cash in the bank.
“We are confident we will meet our November and December targets, and then we will have a ramp up phase in the first quarter of next year which will take us to doubling production by April/May – but July is the official date.
“All this including the decline development which takes us to the next level down will take us to $9M of free cash at the asset level in 2021 including the last Q of this year, ramping up to $14.5M in 20-23, modelled on slightly lower currency prices than now. This is our 24 month forecast. We will over the course of the next few months be delivering a PFS externally driven, although this is not a big priority for the company – the priority is to get into production and bring cash into the business.
Andrew went on to explain that to hit the targets for next year they need to get the second line operational. “At the moment we have the first line which was refurbished, and this is doing copper concentrate and also zinc concentrate. The quality is good but not in commercial quantities, which won’t happen until about December. The second line will allow us to run the second mill which will allow us to double quantities for both copper and zinc.
As for the asset-backed financing which has been discussed, Andrew said: “We have been in negotiation with a Tier-1 bank since March this year and gone through due diligence, site visits etc and we are anticipating, we have been advised that we will get a binding Term Sheet by the end of November. Final credit approval will be by December and we are looking forward to drawing down on that credit facility which will allow us to take out the balance of the current facility with Atlas and move forward with an asset-backed debt.
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