The previous year was a difficult one for mining contractors and companies, with demand for commodities plunging the world over. However, one junior mining company listed on the London Stock Exchange managed to make genuine progress.
Vast Resources plc was responsible for bringing two mines into production. One is the Pickstone-Peerless gold mine based in Zimbabwe, and the other is Manaila in Romania. The company has announced that it will be reducing its interests in the Zimbabwe mine by half and will be shifting its entire focus to Romania.
Vast Resources has sold 49.9 per cent of its stake in Pickstone-Peerless and the Giant gold mine to SSCG Africa Holdings, reducing its interests in both gold mines to 25 per cent. For SSCG Africa Holdings, this is a strategic investment.
As per the terms of the investment, SSCG Africa Holdings will lend a further US$4 million to Vast Resources at an interest rate of 12 per cent per year. This loan will have to be repaid in four years, and will ensure that Vast Resources has the necessary funding to hasten the development of its polymetallic mining activities in Romania.
Vast Resources CEO Roy Pitchford stated that by speeding up the development of the Romania-based mining assets, the company will have positive cash flow and will not have to dilute other assets to raise more funds. Pitchford said that the collaboration with SSCG Africa Holdings will promote the growth of Vast Resources so that the company can rebuild shareholder value.
Pitchford explained that Vast Resources will now have the opportunity to redevelop and re-commission several brownfield mining sites in Romania. These sites offer a great return on investment, and with the company being completely funded, the new assets in Romania should show the anticipated results in the near future.
He also stated that the company is going to focus on developing and expanding its existing resources in Manaila, Romania, and the company hopes that the project will turn into one of the largest copper mining projects in Europe.