Aim-listed Vast Resources hopes to restart production at the Zimbabwe-based Eureka gold mine, in which the company’s 25%-owned Dallaglio Investments holds a 95% interest, in the first half of 2019.
Multiple work programmes are currently being undertaken at Eureka to restore the mine to production, the company told shareholders on Thursday.
The openpit, which prior to Vast’s involvement was completely flooded, continues to be dewatered, after which grade control drilling will be undertaken.
Alongside an assessment of the mine, the company has completed a thorough review of the 1.8-million-tonne-a-year processing plant and in-situ associated infrastructure.
“This has enabled us to finalise design plans for the mine and processing operation and work has begun to refurbish old equipment, remove any historical equipment no longer required, and place orders for additional equipment required.”
The initial start-up at Eureka is currently being funded by surplus cash from gold mine Pickstone-Peerless, in which Vast holds a 25% indirect interest. Vast intends to use credit facilities, which are currently being established in Zimbabwe, to finance the majority of the start-up capital at the project going forward.
Further, Vast confirmed that a number of work programmes have already been successfully completed to ensure that it can restart production at the company’s 80%-owned Baita Plai polymetallic mine, in Romania, once the association licence is granted.
The association licence will give Vast’s 80%-subsidiary African Consolidated Resources and Romanian State-owned Baita, the holder of the Baita Plai licence, the right to mine at Baita Plai, which has a 1.8-million-tonne copper/silver/zinc/lead/gold/tungsten and molybdenuym orebody.
The joint application at Romania’s National Agency for Mineral Resources is in the final stage in what has been a protracted legal and administrative process, Vast Resources said in a statement in early August.
The company believes the association licence will be granted shortly and expects a positive outcome.
All lifts and cables have been upgraded at the mine, while wagons have been refurbished and underground pumps have been replaced and underground fronts prepared.
The company has also rebuilt the crusher, insulated the flotation plant and prepared the flotation lines.
However, prior to the restart of mining, Vast will need to reline the flotation cells, reline the mill and install a new conveyor to transport material from the crusher to the mill.
“We also intend to install a new locomotive both above and below ground and will need to purchase additional mining equipment including pick hammers and new underground loaders,” the miner added.
Further, while responding to a shareholders’ concern regarding its Manaila polymetallic mine, in northern Romania, and gold mine Pickstone-Peerless’ profitability and cash flow, Vast confirmed that the Pickstone-Peerless operation has been profitable “for almost two years”, adding that cash flow from the mine has been used to pay off all start-up costs and support a number of expansion efforts, including the recent sulphone mine upgrades.
Vast said that the mine was supporting the company’s wider developments in-country by financing some of the acquisition costs associated with the recently-acquired Eureka gold mine and funding initial start-up at the previously producing mine.
This financing structure is in line with Vast’s commitment to maintaining an active growth strategy whilst safeguarding investors from significant dilution where possible.
Pickstone-Peerless has not started producing sulphides yet, but continues to make good progress in this respect, the company said. An increase in production and quality of ore is being achieved as the operation approaches the sulphide orebody.
The crusher is now processing in excess of 30 000 t/m , a level which is expected to continue into future quarters.
Manaila, meanwhile, has had its months of profit, breakeven and loss, Vast explained, highlighting that the company’s focus was on achieving consistent profitability.
In line with this, Vast pointed out that during the first half of 2018, it had completed necessary plant maintenance and repairs and successfully improved waste stripping, grade and performance at the mine.
“We are now in the process of purchasing new dumpers and excavators that should allow for higher equipment availability, ore and waste movement, and plant throughput so that we can better utilise processing capacity at the Iacobeni metallurgical plant some 32 km away.”
These upgrades are expected to enable Vast to produce a modest profit until the planned new metallurgical plant is built and in production, which is expected in the second quarter of 2020.