The production team at Vast Resources PLC’s (LON:VAST) Pickstone-Peerless gold mine (PPGM) pulled out all the stops in the second quarter of 2016.
Both production and operating costs metrics topped market expectations, according to Vast Resources’ chief executive Roy Pitchford.
There was a 14% quarter-on-quarter increase in ore milled at 61,577 tonnes and a 62% hike in gold produced at 4,542 ounces.
During the quarter, the plant consistently processed more than 20,000 tonnes of ore a month and is now running at a steady state.
Cash costs rose 9% to US$51 per tonne milled, but tumbled 24% to US$695 per ounce of old produced. The average gold price achieved during the quarter rose 8% to US$1,229 an ounce from US$1,139 an ounce in previous quarter.
The mine, 50%-owned by Vast, managed to clear its domestic bank overdraft, which had stood at US$1.2mln at the end of March.
Attention is now being focused on the design of the PPGM sulphide processing plant that will be required when the oxide resources are depleted in the open pits. In addition, development at the nearby Giant Gold Mine is being considered. Further exploration work is required to increase the current inferred resource of around 500,000 ounces.
At the company’s other producing mine, the Manaila polymetallic mine in Romania, initial optimisation work did not produce the expected increase in plant efficiencies, prompting the company to call in consultants to do additional test work. The company said it is confident that this will reflect in increased plant efficiencies and concentrate grades.
Cash costs edged lower to US$33 per tonne milled from US$34 in the preceding quarter, but rose 45% to US$1,341 per tonne of concentrate produced from US$927 in the first quarter.
“The main reasons for the increased cost of concentrate are: (a) reduced mass pull percentage due to mechanical breakdowns; (b) mining of a high pyrite facies ore, negatively affecting metal recoveries in the plant; and (c) experimentation with reagents and the process flow sheet to produce separate copper and zinc concentrates,” Pitchford said.
The Vast Resources’ boss also touched on the subject of the sub-licensing of the Baita Plai polymetallic mine (BPPM) in Romania, where the company remains in talks with the authorities about expediting the granting of the licence.
“Vast understands the shareholder frustration related to the continuous delay in the granting of this sub-licence. As soon as there is further news regarding this, we will update the market without delay," Pitchford promised.
Prior to commencing production at BPPM the company will undertake metallurgical test work on the BPPM ore to optimise the plant configuration. During this time the underground mining plan will be optimised, as will the process flow sheet for the plant.
Once the BPPM licence is received, the company will require further funding to bring the BPPM mine into production, but directors assured shareholders their aim is to keep further shareholder dilution to a minimum.