Revenue and Production Update:
Vast Resources (VAST ) finished Q1 with a stunning 236% increase in revenue compared to the previous quarter including contribution from Tajikistan. Additionally, tonnes milled and dry metric tonne production increased 24.2% and 16.8% respectively at Baita Plai, which focused on copper production in 1Q22.
1Q22 Trading Update
Total Gross Revenue for 1Q22 was £2.2m based on production 12,561 metric tonnes of ore mined and 12,103 milled.
Mining in Q1 was limited to low-grade ore as development of the ramp to sub-level 3 continued.
The ramp has now intersected the Antonio skarn and as mining expands eastward, the skarn widens from 4 to 32 meters, allowing more working faces to be deployed, and hence increased production.
2Q22 Outlook
Vast Resources is implementing significant upgrades to the Baita Plai site in Q2, most notably a transition to mechanised drilling and cleaning. The company is deploying two Mantis CMR4 Jumbo Drilling rigs and an Aramine miniLoader L130D with remote control capability. These changes are expected to substantially increase production of copper concentrate starting in June 2022 with results showing as early as Q3. The Company is expected to focus on plant upgrades next in order to adequately process the extra output.
The Board believes the increase in production will make the mine a profitable and strategically important asset. The presence of bismuth and molybdenum at the site underscore its strategic value. A molybdenum flotation circuit has been installed at the processing plant with final commissioning expected in Q2. It will result in an additional stream of revenue.
Tajikistan Joint Venture Update
As if the 1Q22 figures were not impressive enough, the Company made an additional announcement today regarding a new joint venture in Tajikistan alongside a group of partners via local company Takob.
Currently Vast Resources has a 24.5% indirect interest in the project through its 49% interest in UK-incorporated Central Asian Investments, which in turn has a 50% interest in Central Asia Minerals and Metals Ore Trading FZCO ("CAMM"), which holds the agreement with Takob.
CAMM is to provide equipment, technology, and expertise to modernise and optimise the processing plant at the mine. It will also take on responsibility for the management and execution of the project. Additionally, CAMM has been appointed as Takob's exclusive agent for marketing and selling all non-ferrous concentrates and precious metals from the site, including lead, zinc, gold, and silver. CAMM will be entitled to 50% of net revenue from the sale of non-ferrous concentrate and precious metals from the site.
Takob is owned by TALCO, Tajikistan's largest group of companies. Takob operates the site, a fluoride and galena mine, that supplies fluoride concentrate to TALCO's chemical division.
Under the JV, the mine is to produce 7,000 tonnes per month of ore containing no less than 1.5-2% lead, 1.2-1.4% zinc and 27% fluoride. Historically, the site contained 30 g/t silver and 1-2 g/t gold in situ.
Two months of that production has already been stockpiled on site and ready to be processed in 2Q22.
Vast Resources will provide additional services and marketing obligations for CAMM under a new services agreement. Under the agreement, Vast is entitled to charge for its services on the basis that 24.5% of fees earned will be left outstanding until they can be financed with revenue arising from the project. Additionally, VAST will receive 12.25% royalty of sales of all metals produced.
This initiative is part of the Tajik government's current policy of industrial expansion, aided by significant foreign direct investment.
Andrew Prelea, CEO of Vast Resources, commented:
“His Excelency Emomali Rahmon, President of the Republic of Tajikistan Rahmon declared that the years 2022 to 2026 would be the years of industrial development for Tajikistan and further declared acceleration of industrialisation to be a national strategic goal. The Tajikistan Government has demonstrated its efficiency and willingness to attract Foreign Direct Investment in industrial projects and in particular in the Mining Sector. I have no doubt that the success of our project will attract further foreign investment in Country.”
View from Vox
The barrage of good news was welcomed by investors, with VAST stock closing up over 370% in late afternoon trading hitting intraday highs of 1.75p.
The 12.25% royalty on all sales of non-ferrous concentrate and any other metals produced at Takob’s operating fluoride and galena mine in Tajikistan is truly transformational for the company. Furthermore, investors will also be pleased to hear the Company plans to create additional revenue streams through other metal sales such as Molybdenum.
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