Analysts at 'house' broker Shore Capital have said they are "encouraged" by the increase in production from Vast Resources PLC (AIM:VAST)'s Baita Plai mine in Romania, which produced 7,900 tonnes during the month of September, representing 50% of the Q3 FY22 production.
Vast Resources has 100% ownership of the Baita Plai and Manaila polymetallic mines in Romania, as well as having joint venture projects at the Takob mine in Tajikistan.
Vast achieved a 20% increase in overall ore production at Baita Plai during Q3 FY22 compared with Q2 FY22 and more importantly, the analysts said, a 15% rise in copper concentrate produced during the same period.
According to management, the ShoreCap analysts noted, Q4 FY22 commenced with further increases in ore production compared with monthly average rates achieved in September.
The current accessible underground ore at Baita Plai stands at around 290,000 tonnes due to the transition to mechanised mining. The mine is currently operating in four separate and highly productive areas utilising the long hole stoping method. Production also continues from two working faces utilising the room and pillar mining method. Taken together, underground production rates are expected to increase into Q1 FY23.
The ShoreCap analysts concluded: "We look forward to further increases in production. In the meantime, we note that despite economic headwinds that have pushed copper prices down nearly 30% from recent highs, the fundamentals support higher prices over the long term, in our view, given the strong global demand and shrinking inventories.
"Looking forward, we believe copper remains a crucial mineral in the global energy transition to meet zero-carbon targets," they said.