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Vast Resources pins hope on Zimbabwe diamond project

London Stock Exchange-listed resources group, Vast resources says its Zimbabwean diamond asset will be one of the mining concern’s key growth drivers.

The Zimbabwe operation, together with that in Romania should see the mining firm increase its revenue streams as it transforms from being an exploration company to a mining company.

Vast, has operations in Romania and Zimbabwe’s Chiadzwa diamond fields in Marange, which are all expected to be the launch pads for the group’s growth strategy.

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“Vast Resources is focused on the rapid transformation from exploration company to mining company and delivering multiple revenue streams. This will be driven by the advancement of its two primary value drivers, the Baita Plai Polymetallic Mine in Romania, and the Chiadzwa Community Concession in Zimbabwe, into near term production,” Vast revealed on its website.

Vast’s chairman Brian Moritz indicated in the group’s 2019 annual report that: “In repositioning the business, the group has divested its 25,01 percent stake in its Zimbabwean gold operations, reduced debt, strengthened its management team, and directed resources exclusively to placing its key Romania and Zimbabwean assets into production.

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Mr Moritz also highlighted that while the gold asset was performing well the business faced several challenges in extracting cash from the operation in the short or medium term for general corporate purposes. Resultantly, the group decided to focus more on the diamond business as the gold asset also soiled the group’s balance sheet.

“We accordingly took the fundamental decision to dispose of our Zimbabwe gold assets and concentrate our resources on the diamond sector,” said Mr Moritz.

Vast recently entered into a Joint venture agreement with Chiadzwa Mineral Resources (CMR), a company designated to represent the Chiadzwa Community interests in the concession, which resulted in the formation of Katanga Mining.

Mr Moritz said:“Moreover, we understand that the diamond joint venture with our partners, Chiadzwa Community and ZCDC will, subject to completion of all agreements, entitle the ZCDC joint venture company to retain sale proceeds from the diamonds that are not required in Zimbabwe, offshore.

“This constitutes a significant advantage compared with the position for gold operations where all sales have to be made via the in-country refinery owned by the Reserve Bank, and where remission of proceeds are restricted by the Exchange Control laws.”

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