Vast Resources (VAST) , an AIM-listed mining company with projects in Europe, Tajikistan, and Zimbabwe, announced a new exclusive offtake agreement with Trafigura Group for all copper concentrate produced at VAST's wholly-owned Baita Plai polymetallic mine in Romania.
The new offtake will be in place until June 2025, replacing the existing agreement. VAST said the pricing terms were competitive at a small discount to the LME cash settlement quotation averaged over an agreed period, and with adjustments for the grade of copper delivered.
VAST noted that copper production at Baita Plai was still ramping up after dry metric tonnes increased by 24% year-on-year from Q4 2022 to Q4 2023. Ongoing mine upgrades are expected to yield further production increases as well as a reduction in grade variability, in accordance with VAST's offtake objectives with Trafigura.
VAST shares jumped 7.4% on the news.
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More good news from Vast Resources and its flagship Baita Plai copper mine in Romania. The new offtake agreement builds on VAST's existing relationship with Trafigura, a leading commodity trading and logistics company. Previously, VAST signed an exclusive offtake with Trafigura relating to its Takob Mine in Tajikistan.
The terms of the new offtake are favourable to VAST, ensuring the miner benefits from the widely forecast increase in the price of copper over the next year and beyond. UBS recently issued a bullish report on the metal, saying "a copper supply crunch is unavoidable".
Meanwhile, production at Baita Plai continues to ramp up, with ongoing operational improvements promising further increases over the medium term, as well as improvements in the grade and consistency of grade delivered. VAST is in the process of building an underground decline access ramp at the mine, which is expected to substantially increase productivity through reduced underground haulage times, and provide faster access to high-grade ore at depth.
Production increases at Baita Plai have come at minimum capex cost to Vast, and with the new favourable offtake and ongoing mine improvements, we expect cashflow from the asset to accelerate. Investors welcomed today's news, sending VAST shares 7.4% higher.
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