Following completion of smelting, Vast Resources (VAST) has reported an increase in the amount of gold recovered from its four Aprelevka gold mines in Tajikistan.
Previously, the production estimate had been based on a calculation that combined throughput and grade. Following completion of the smelting, the actual production for May 2024 showed an increase from 933 ounces, as had been estimated, to 1,059 ounces.
This is significantly higher than the April production level of 805 ounces and the March production of 643 ounces.
As announced last October, Vast will manage the mining and development activities of the mines in the Aprelevka group for a five year period.
In consideration, Vast will be entitled to a 10% share of the earnings before interest, tax and depreciation that part-owner Gulf receives from its 49% interest in Aprelevka.
Vast will also have the right at any time from 1 January 2025 until the end of the 5-year management period to convert its earnings share entitlement into a 10% equity interest in Gulf and to acquire up to 20% of the share capital of Gulf.
The financing required to carry out the present intended development at the mines will be arranged by Gulf.
The operator of Aprelevka is the local management team in conjunction with Vast Resources PLC.
Consultants at Formin SA have estimated that the resource at the Burgunda deposit contains just over 210,000 tonnes of ore grading 5.58 grams per tonne gold and 17.25 grams silver, across three veins.
Ikkizelon contains just under 404,000 tonnes grading 8.83 grams and just over 23 grams silver.
Kizil Cheku contains just under 748,000 tonnes grading 1.38 grams gold and over 110 grams silver per tonne.
Currently, that amounts to just over 26,000 ounces of gold attributable to Vast, with a further 307,000 ounces of silver also attributable.
View from Vox
The market reacted with caution to this news, perhaps partly because the gold price, though still trading at very high levels, has come off significantly over the past few days. But Vast is now beginning to establish a position for itself as a small-scale gold miner in Tajikistan. If it can make this operation work, build its equity stake and keep the margins healthy in the ongoing bullish gold environment, then the dependency on base metals alone will be reduced. The greater spread of risk and the increased exposure to precious metals is surely welcome. It will be interesting to see what the next set of financials show.