Vast Resources (VAST ) 4Q22 production update at its Baita Plai Polymetallic Mine in Romania prompt a positive reaction in the market.
Following Vast's mid-November concentrate sale, which was the largest monthly tonnage delivery to its offtake partner, the company today confirmed that shipment had been delivered, and that a further shipment was expected later this month.
In an 4Q22 update on production at Baita Plai, Vast said production to date was 15% higher than 3Q22 and expects this metric to rise to 30% by the end of the month. Vast said it expects production figures to continue increasing through 1Q23 and beyond.
Furthermore, the average copper grade achieved was 24%, representing an increase of 40% compared to 3Q22. Vast also announced a potential increase of over 350% of concentrate sales in 4Q22 compared to 3Q22 on the basis of 335 WMT shipped to date, and a further 180 WMT booked to be shipped before the end of the month.
Andrew Prelea, CEO, commented: "Based what we have already achieved in Q4 2022 and what we believe is the pipeline to the end of the year, production will see a significant increase in mining and concentrate production. This is a result of the changes that have been implemented on site and we look forward to this continued trend.
We believe these production trends, will continue into Q1 2023 and beyond."
View from Vox
Markets celebrated Vast's significantly higher production figures in 4Q, sending the company's shares up 14% on Friday. On a QoQ basis, Vast reported up to 30% higher production, 40% higher grade of copper achieved, and 350% higher concentrate sales.
Baita Plai's production increase in 4Q follows a 20% production increase in 3Q, which followed a 17% production increase in 2Q, all quarter-on-quarter. Should the trend continue into 2023, there is significant upside potential for the company whose shares suffered in the 2022 mining sector downturn.
We see no reason that the trend will not continue. Since 30 April, Vast has continued to implement a transition to mechanised mining at Baita Plai, and the mine is now active in four separate high productivity areas utilising Long Hole Stope methodology. The completion of Spiral number 3 will further increase production from Q2 2023. The presence of bismuth and molybdenum at Baita Plai further underscore its strategic value.
Overall, the economic fundamentals for Vast's polymetallic business remain strong. Increased demand for copper and tightness in supply have significantly lifted copper prices. The forecast global growth in EVs will keep pressure on supply over the next decade, exacerbated by declining grades, water supply issues, and community resistance. Demand for other critical metals used in renewable tech will follow a similar trajectory.
Vast's bullish outlook on polymetallics is therefore justified. Moreover, a continued reduction in Romanian and Zimbabwean country risk premiums has the potential to provide significant medium-term growth for the company. In both countries, Vast holds further mining claims and other interests, which are under appraisal.
Investors should stay tuned for a possible upgrade of Baita Plai's resource in 2023. VAST will make its next quarterly production announcement in January 2023. Furthermore, the Company has already engaged a 3rd party technical contractor to review and reprofile the mine resources at Baita Plai, for an updated resource report expected in 1H23, which should also push the shares on further during FY23.
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