The fourth quarter saw record production at Pickstone-Peerless, the gold mine in Zimbabwe operated by Vast Resources PLC (LON:VAST).
A high level of pre-stripping was undertaken in the quarter, which assisted in paving the way for access to the deeper lying sulphide bearing ores, Vast said in its quarterly operations update.
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The new milling and crushing circuits for the sulphide plant were commissioned in the fourth quarter of last year and although the company is not yet mining the sulphide ore, the plant has increased crushing, milling and leaching capacity to in excess of 30,000 tonnes per month.
Despite initial teething problems in October and November, a significant increase in ore tonnage mined was achieved in the final quarter of 2017.
In the fourth quarter, 90,874 tonnes of ore were milled, up 27% quarter-on-quarter (QoQ). There was a 26% QoQ increase in ore milled to 86,097 tonnes and a 28% QoQ increase in gold production to 6,057 ounces.
At the wholly-owned Manaila polymetallic mine in Romania, operations were affected by a planned shut-down of the plant in December in anticipation of finalising off-take finance.
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The shut-down had a dramatic impact on production figures for the fourth quarter but lays the foundation for improved performance at Manaila for 2018.
The mine saw a 42% QoQ decline in ore mined to 23,622 dry tonnes and a 34% decrease in ore milled to 25,654 dry tonnes.
There was a 48% QoQ decline in copper concentrate produced to 562 dry tonnes and a 9% decrease in the copper concentrate grade to 16.3% from 17.9%.
As for zinc concentrate, there was a 19% QoQ decrease in production to 96 dry tonnes and a 12% decrease in the concentrate grade to 37.1% from 42.3%.
"The two principal developments which marked Q4 2017 as a notable period were the commissioning of the crushing, milling and leaching circuits of the sulphide plant in Zimbabwe and the increase in production capacity achieved thereby, and the temporary cessation of primary mining and processing at Manaila in order to establish a more rigorous mine plan and processing route for 2018,” said Andrew Prelea, the chief executive of Vast Resources.
“The first development directly resulted in a record quarter for Pickstone-Peerless, a tremendous result for the team and I am confident that this step change in output will continue over the coming months.
“Looking now to Manaila, the developments there, whilst negatively impacting the result for the quarter, should provide a stable footing through which reliable and sustainable production henceforth is ensured to satisfy our conditional offtake agreement offer with Mercuria Energy Group,” he added.
Historically, it has been the norm in Romania to close down mines for general repair and maintenance during December and January, and Vast has decided to adopt this practice, at least until the new metallurgical plan is constructed.
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"Ensuring long-term sustainability and reliability of production, and hence cash flow, is paramount. This knowledge was foremost in our minds when we made the decision to limit activities at Manaila in favour of reconsolidation work in December and January - deemed as the most suitable time as a result of historical winter conditions causing losses to the company and effectively losing good ore with low recoveries at a high cost,” Prelea explained.
“I am pleased to report that pre-stripping work to access the high-grade massive sulphide orebody is progressing well and normal mining activities have recommenced. Together, this work will ensure a steady feed grade to the plant allowing the company to maximise value from our resource,” he continued.
"The outlook for 2018 remains very positive for Vast, most visibly illustrated by the recently announced pre-payment finance term sheet and off-take agreement offer with Mercuria, which I believe underpins the operational robustness of both our Manaila and Baita Plai Polymetallic Mines, in addition to our ability to unlock each mine's strategic value.
“Combined with an ever-improving production profile at our Pickstone-Peerless Gold Mine and ameliorating economic and political environment in Zimbabwe, we are well positioned to deliver more value throughout the coming months," Prelea declared.
Shares in Vast Resources were down 0.025p at 0.64p in early deals.