HomeBusinessVast Resources prepares for Zim diamond project

Vast Resources prepares for Zim diamond project

BY MTHANDAZO NYONI

DIVERSIFIED minerals miner, Vast Resources, remains confident that it will be able to commence operations in Zimbabwe in due course despite delays in the finalisation of its Chiadzwa diamond project.

The AIM-listed mining company, which has operations in Zimbabwe and Romania, announced in September 2019 that it had signed a joint venture (JV) agreement with Chiadzwa Mineral Resources, a company designated to represent the Chiadzwa community interests in the concession.

This resulted in the formation of Katanga Mining (Pvt) Ltd.

A further JV agreement between Katanga and the Zimbabwe Consolidated Diamond Company (ZCDC), a government entity, is set to be officially signed.

Details of the Chiadzwa JV, according to Vast Resources, will be announced in due course.

In its financial results for the full year ended April 30, 2021, Vast lamented delays in the finalisation of the JV agreement but remained confident that it would be concluded.

“The group has now focused its Zimbabwe strategy on mining its expected diamond concession.

“This opportunity potentially offers high and near term positive cashflow and is unrestrained by tight currency controls,” the company said.

“Discussions with the various Zimbabwe stakeholders remain in line with previous expectations, other than on timing, and we remain confident that we will be able to commence our mining operations in due course.

“We remain confident that we will be able to conclude our mining agreement in Zimbabwe despite the delays.”

Vast management said that the business environment in Zimbabwe will improve as the government establishes an attractive base for sustainable foreign investment.

“The group’s diamond investments will not be subject to remittance restrictions as the group is advised that foreign currency regulations will allow export proceeds not required to meet costs in Zimbabwe to be retained offshore,” it said.

The company said there are, however, risks particular to Zimbabwe arising from a scarcity of foreign exchange, difficulties in remitting funds to other countries, as well as empowerment risks, which it said had significantly been reviewed.

During the period under review, the group reported a 3,7% increase in other administrative and overhead expenses to US$4,2 million compared to US$4,1 million recorded in the prior comparable period.

Foreign exchange gains of US$2,6 million were recorded for the review period compared to losses of US$2 million reported in the previous financial year.

Included within the US$2 million of foreign exchange losses last year was US$0,640 million in respect of the company’s operations in Zimbabwe.

The company recorded a 7,1% decrease in losses after taxation to US$7,7 million compared to US$8,3 million recorded in the previous comparable period.

Cash balances at the end of the period stood at US$1,385 million.

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