Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining
31 January 2025
Vast Resources plc
('Vast' or the 'Company')
Interim Results: 1 May 2024 - 31 October 2024
Vast Resources plc, the AIM-listed mining company, is pleased to announce that it has released its unaudited interim report and financial results for period from 1 May 2024 to 31 October 2024.
The report can be found on the Company's website at the following address: https://www.vastplc.com/investor-information/document-downloads.
Market Abuse Regulation (MAR) Disclosure
Certain information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR”) until the release of this announcement.
For further information visit www.vastplc.com or please contact:
Vast Resources plc
Andrew Prelea (Chief Executive Officer) |
www.vastplc.com +44 (0) 20 7846 0974 |
Beaumont Cornish - Financial & Nominated Adviser
Roland Cornish James Biddle |
www.beaumontcornish.com +44 (0) 020 7628 3396 |
Shore Capital Stockbrokers Ltd - Joint Broker Toby Gibbs James Thomas | www.shorecapmarkets.co.uk +44 (0) 20 7408 4050 |
Axis Capital Markets Ltd - Joint Broker Richard Hutchinson | www.axcap247.com +44 (0) 203 026 0320 |
St Brides Partners
Susie Geliher |
www.stbridespartners.co.uk +44 (0) 20 7236 1177 |
Financial
- A decrease in losses after taxation in the six-month period ended 31 October 2024 (US$3.341 million) compared to the six-month period ended 31 October 2023 (US$6.220 million). Eliminating the effects of foreign exchange gains and losses, the loss for the period has decreased 23.9% from US$4.861 million for the six-month period ended 31 October 2023 to US$3.701 million for the six-month period ended 31 October 2024.
- Administrative and overhead expenses broadly unchanged for the six-month period ended 31 October 2024 (US$1.863 million) compared to the six-month period ended 31 October 2023 (US$1.848 million). Administrative and overhead expenses for the six-month period ended 31 October 2024 (US$1.863 million) are lower compared to the six-month period ended 30 April 2023 (US$2.315 million).
- A significant decrease in revenues for the six-month period ended 31 October 2024 (US$ 0.211 million) compared to the six-month period ended 31 October 2023 ($1.791 million). This is due mainly to reduced production and slowness in sales due to logistical and grade consistency considerations, such as higher lead content, which management expects will be alleviated through the current targeting of high-grade production areas and blending with current inventory rich in lead for sales in due course.
- Foreign exchange gain of US$0.360 million for the period compared to a loss of US$1.359 million for the six-month period ended 31 October 2023. Gains of US$0.360 predominantly arise from the Company's USD denominated funding of its Romanian Lei functional currency subsidiaries and are partly compensated by foreign exchange translation losses of US$0.143 million. The Company funds its Romanian businesses in USD given this funding will ultimately be repaid from USD denominated sales.
- Cash balances at the end of the period US$0.235 million compared to $0.964 million as at 31 October 2023.
- Debt of US$11.050 million at the end of the period compared to US$10.411 million at 30 April 2024.
- In June 2024, the Company decided to enter Vast Baita Plai SA ("VBPSA”), the operator of BPPM, into a period of voluntary reorganisation effected by a Court judged process under the Insolvency Act in Romania. This was executed in response to operational pressures caused by the Unions and certain BPPM employee demands and practices which were adversely impacting mine performance. The reorganisation does not affect the ownership or control of the mine and has been executed in the best interests of the Company and its shareholders.
- In August 2024, the Company's 100% subsidiary Vast Baita Plia SA ("VBPSA”) successfully extended the Head Licence held by Baita SA and under which VBPSA has the rights to mine polymetallics at BPPM for a further five years by way of Government Decision 6/2024 on 9 August 2024. In obtaining this approval, drilling results from the Company's drill campaign commenced in 2023 were submitted.
- In September 2024, the Company executed agreements with an ecological project to process and market products from clean-up operations at the former Hanes Gold Mine located in the Alba region of Romania.
- In December 2024, a Memorandum of Understanding (the 'MOU') was signed between the Government of Tajikistan, Vast and Gulf International Minerals Ltd ('Gulf'), (the company which appointed Vast to manage and develop the Aprelevka Gold Mines, in which Gulf holds a 49% interest) as a framework agreement to expand current mining activities in Tajikistan.
Share issues during the period: gross proceeds / consideration before cost of issue
£ | $ | Shares Issued | Issued to |
1,966,000 | 2,527,432 | 1,630,000,000 | Placing with investors |
1,966,000 | 2,527,432 | 1,630,000,000 |
£ | $ | Shares Issued | Issued to |
50,000 | 63,668 | 50,000,000 | To settle liabilities |
50,000 | 63,668 | 50,000,000 |
Several extensions were made to the loans from Alpha and Mercuria, culminating in a new schedule of repayments announced on 29 April 2024 and which would begin on 7 May 2024 and in large part would be funded through refinancing. Given the delays in refinancing, the Company has not repaid any amounts to its lenders under the revised schedule. The Company continues to discuss arrangements with both Alpha and Mercuria and plans to repay the debts from the proceeds of alternative revenue streams and/or from refinancing. As part of this process, the Group is in discussions with several strategic investors to invest at the project level in both the Manaila Polymetallic Mine ("MPM”) and the Baita Plai Polymetalic Mine ("BPPM”) and has also initiated other alternative measures for funding.
CHAIRMAN'S STATEMENT
It has been another challenging period for the Company but one in which management has taken the necessary action to stabilise the business, particularly in Romania. The voluntary reorganisation at Baita Plai Polymetallic Mine ('BPPM') which was initiated in June 2024 has allowed the Company to reposition the business and reduce costs. Management is currently in discussions with potential investors with a view to ramp up BPPM and finally realise the potential that we believe the asset holds. The Company is also in the process of assessing its administrative costs in Romania given the current sizing of the business. During the period the directors have continued to defer their remuneration as a means of conserving cash.
The Company entered into a defacto royalty agreement with a mine greening company during the period. We anticipate this will provide an exciting opportunity offering near-term liquidity. The Company conducted processing tests on the rock dump material from Hanes and we anticipate marketing the concentrate in early 2025.
Significant progress has been made and continues to be made by the parties relating to the historic parcel with the objective of completing the process of recovery. Whilst the Company continues to be in default of the repayment terms to Alpha and Mercuria, the Company continues to discuss arrangements with both Alpha and Mercuria. The Company has commenced alternative measures for settling the outstanding debts and steps to address the short-term working capital needs of the group.
Increasingly the Company is turning its attention to Tajikistan. In December 2024 the Company signed an MOU with the Government of Tajikistan and Gulf International Minerals Ltd with the goal of growing the non-ferrous mining industry in the Republic of Tajikistan. The potential for such future opportunities is a product of our involvement in Takob and Aprelevka and the positive contributions the Company has made.
I wish to thank all our stakeholders for their patience in what have been challenging times.
Brian Moritz
Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
In June 2024, the Company decided to enter Vast Baita Plai SA ("VBPSA”), the operator of BPPM, into a period of voluntary reorganisation to be effected by a Court sanctioned process under the Insolvency Act in Romania. This was executed in response to operational pressures caused by the Unions and certain BPPM employee demands and practices which were adversely impacting mine performance. The reorganisation does not affect the ownership or control of the mine and has been executed in the best interests of the Company and its shareholders. The reorganisation process is ongoing. On 14 November 2024, the Company's Judicial Administrator presented to the court the rejected creditors and argued the merits for rejecting any creditors from the initial creditors table, as well as presenting the progress made since entering reorganisation, and present the initial step plan for the reorganisation. Following this successful court hearing, the next court hearing has been scheduled for 3 April 2025 and will involve the Judicial Administrator providing further updates to the court about the progress of the reorganisation which continues to proceed satisfactorily. The reorganisation has allowed the Company to reduce ongoing costs from levels experienced in the previous twelve months and to a level at the end of the period that is significantly lower with the initial objective of achieving operational breakeven as soon as possible. Management is also currently in discussions with potential investors with a view to ramp up BPPM and finally realise the potential that we believe the asset holds. Manaila Polymetallic Mine (MPM) remained on care and maintenance during the period and we continue discussions with several investors with the aim of restarting production later in the year.
In August 2024, the Company's 100% subsidiary Vast Baita Plia SA ("VBPSA”) successfully extended the Head Licence held by Baita SA and under which VBPSA has the rights to mine polymetallics at BPPM for a further five years by way of Government Decision 6/2024 on 9 August 2024. In obtaining this approval, drilling results from the Company's drill campaign commenced in 2023 were submitted.
In September 2024, the Company executed agreements with an ecological project to process and market products from clean-up operations at the former Hanes Gold Mine located in the Alba region of Romania. Subsequent test processing at BPPM has shown the project to be viable. The project is in alignment with a strategic ecological initiative, encouraged by the Romanian government, to clean up former era derelict mining areas in the Alba region of the country. The processing and marketing of concentrate derived from the Former Hanes Gold Mine is expected to provide near term cash flow whilst utilising excess capacity at Baita Plai. Subsequent to the period end, the Company is preparing product from the rock dump for processing at BPPM with the objective of executing sales in the near-term.
Full production has commenced at Takob in the period. The first delivery to final destination has been delayed due to weather related conditions. These issues are expected to be resolved shortly.
In January 2025, a Memorandum of Understanding (the 'MOU') was signed between the Government of Tajikistan, Vast and Gulf International Minerals Ltd ('Gulf'), the company which appointed Vast to manage and develop the Aprelevka Gold Mines, in which Gulf holds a 49% interest. The purpose of the MOU is to provide a framework of cooperation and facilitate collaboration among the parties in respect of developing the growth of the non-ferrous mining industry in the Republic of Tajikistan, with the objective of unlocking the resource potential of the country by attracting foreign direct investment and opening markets for export and beneficiation of non-ferrous metals to the Gulf Cooperation Council and US markets.
The MOU, which was signed by Mr. Sherali Kabir, Minister of Industry & New Technologies of the Republic of Tajikistan, is intended to formalise and extend the positive working arrangements that the three have enjoyed since Vast took over the management and development of the Aprelevka Gold Mines in January 2024. As previously announced, there are currently four operating mines within the Aprelevka venture, and the parties to the MOU are now in the process of finalising up to nine previously explored exploration sites adjacent to the current mining areas, which would make Aprelevka one of the largest gold and polymetallic mining groups in the Republic of Tajikistan.
As stated in the Chairman's Report, progress has been made by the parties relating to our historic claim. This has been a long outstanding issue and the company remains confident of completing the process of recovery.
The Company anticipates an improved second half of the financial year with significantly stronger revenues. The reorganisation at BPPM has improved the quality of concentrate and is expected to produce regular shipments over the coming months. Our involvement in an ecological project to process and market products from clean-up operations at the former Hanes Gold Mine located in the Alba region of Romania, is expected to contribute revenues in the second half of the financial year. The Company has recently commenced operations at the Hanes rock dump and will use BPPM's current excess capacity to process product. Finally, the Company is expecting to generate further income from its interests in Tajikistan.
Many thanks to fellow Board members and management for the commitment and hard work that has been put into the Group. I thank all our stakeholders for their continued support.
Andrew Prelea
Chief Executive Officer
Condensed consolidated statement of comprehensive income
for the six months ended 31 October 2024
31 Oct 2024 | 30 Apr 2024 | 31 Oct 2023 | ||
6 Months | 12 Months | 6 Months | ||
Group | Group | Group | ||
Unaudited | Audited | Unaudited | ||
Note | $'000 | $'000 | $'000 | |
Revenue | 211 | 2,026 | 1,791 | |
Cost of sales | (1,194) | (7,575) | (2,989) | |
Gross loss | (983) | (5,549) | (1,198) | |
Overhead expenses | (1,726) | (6,454) | (3,836) | |
Depreciation of property, plant and equipment | (229) | (633) | (308) | |
Share option and warrant expense | - | (329) | (329) | |
Sundry income | 6 | - | 8 | |
Exchange gain / (loss) | 360 | (1,329) | (1,359) | |
Other administrative and overhead expenses | (1,863) | (4,163) | (1,848) | |
Fair value movement in available for sale investments | - | - | - | |
Loss from operations | (2,709) | (12,003) | (5,034) | |
Finance income | - | 1 | - | |
Finance expense | (632) | (2,650) | (1,186) | |
Loss before taxation from continuing operations | (3,341) | (14,652) | (6,220) | |
Taxation charge | - | - | - | |
Total (loss) taxation for the period | (3,341) | (14,652) | (6,220) | |
Other comprehensive income | ||||
Items that may be subsequently reclassified to either profit or loss | ||||
(Loss) / gain on available for sale financial assets | - | - | - | |
Exchange gain /(loss) on translation of foreign operations | (143) | 1,055 | 1,132 | |
Total comprehensive expense for the period | (3,484) | (13,597) | (5,088) | |
(Loss) per share - basic and diluted - amount in cents ($) | 4 | (0.22) | (2.15) | (1.15) |
for the six months ended 31 October 2024
Share capital | Share premium | Share option reserve | Foreign currency translation reserve | Retained deficit | Total | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
At 30 April 2023 | 44,373 | 103,358 | 932 | (1,573) | (144,547) | 2,543 |
Total comprehensive loss for the period | - | - | - | 1,132 | (6,220) | (5,088) |
Share option and warrant charges | - | - | 329 | - | - | 329 |
Share options and warrants lapsed | - | - | - | - | - | - |
Shares issued: | ||||||
- for cash consideration | 1,760 | 2,274 | - | - | - | 4,034 |
- to settle liabilities | - | - | - | - | - | - |
At 31 October 2023 | 46,133 | 105,632 | 1,261 | (441) | (150,767) | 1,818 |
Total comprehensive loss for the period | - | - | - | (77) | (8,432) | (8,509) |
Share option and warrant charges | - | - | - | - | - | - |
Share options and warrants lapsed | - | - | (178) | - | 178 | - |
Shares issued: | ||||||
- for cash consideration | 1,548 | (355) | - | - | - | 1,193 |
- to settle liabilities | - | - | - | - | - | - |
At 30 April 2024 | 47,681 | 105,277 | 1,083 | (518) | (159,021) | (5,498) |
Total comprehensive loss for the period | - | - | - | (143) | (3,341) | (3,484) |
Share option and warrant charges | - | - | - | - | - | - |
Share options and warrants lapsed | - | - | (203) | - | 203 | - |
Shares issued: | ||||||
- for cash consideration | 2,102 | 211 | - | - | - | 2,313 |
- to settle liabilities | - | - | - | - | - | - |
At 31 October 2024 | 49,783 | 105,488 | 880 | (661) | (162,159) | (6,669) |
As at 31 October 2024
31 Oct 2024 | 30 Apr 2024 | 31 Oct 2023 | ||
Unaudited | Audited | Unaudited | ||
Group | Group | Group | ||
$'000 | $'000 | $'000 | ||
Assets | Note | |||
Non-current assets | ||||
Property, plant and equipment | 3 | 17,728 | 17,274 | 17,351 |
Available for sale investments | 891 | 891 | 891 | |
Investment in associates | 417 | 417 | 417 | |
Loans to group companies | - | - | - | |
19,036 | 18,582 | 18,659 | ||
Current assets | ||||
Inventory | 5 | 1,276 | 823 | 1,113 |
Receivables | 6 | 2,395 | 2,426 | 3,560 |
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