Vast Resources (VAST ) announced this morning it has signed an exclusive offtake contract with Trafigura for the sale of bulk concentrates produced at its Takob mine in Tajikistan. Trafigura is a major Singapore-based commodity trading company.
Vast and Trafigura have agreed terms and conditions for Trafigura to purchase bulk concentrate with lead, zinc, gold, and silver as payables under a market standard priced contract. Vast receives a participation equivalent to a 12.25% royalty over all sales of non-ferrous concentrate and any other metals produced from the Takob mine.
Takob has committed to supply no less than 1 million tonnes of ore to be processed in line with the project that is anticipated to run with the current resource statement for 12 years.
Andrew Prelea, CEO of Vast Resources, commented:
"We are delighted to announce our new relationship with Trafigura which really highlights the potential of the Takob Mine Processing Project in Tajikistan. We look forward to building on this relationship as we look to progress other projects such as the Takob Tailings Project in Tajikistan and beyond."
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Today's announcement represents a major endorsement of the Takob JV project, which officially opened on 15 August 2022. Takob's aggressive schedule to production means a conversion to revenues in the near-term, all delivered through a financing structure that insulates Vast shareholders from dilution.
Vast has an effective 24.5% interest in the Takob project via Central Asia Investments and Central Asia Minerals and Metals Ore Trading FZCO (CAMM). Takob is a wholly-owned subsidiary of TALCO, Tajikistan's largest group of companies.
CAMM is the exclusive agent for Takob to market, selling all precious metals from the Takob mine, including lead, zinc, gold and silver. Under CAMM's agreement with Takob, the mine is to produce c. 7,000 tonnes/month of ore containing no less than 1.5-2% lead, 1.2-1.4% zinc and 27% fluoride.
Takob has committed to supply no less than 1 million tonnes of ore in line with the project, which is expected run for 12 years.
Vast receives a participation equivalent to a 12.25% royalty over all sales from the Takob project. This royalty equivalent revenue supplements the company's existing steady revenue from its flagship 100%-owned Baita Plai polymetallic mine in Romania.
At Baita Plai, Vast reported Cu Conc production up 17% QoQ in Q2 following deployment of additional equipment. Vast will publish a Q3 production report for Baita Plai before the end of October, expected to reveal a further significant increase in production and sales QoQ due to two additional rigs being deployed and a second mining circuit opening.
Vast raised £656K on 26 September via a placing of ordinary shares at 0.40p, ensuring its operations continue to be supported over the coming weeks and months.
VAST shares jumped 9.4% this morning on the news.
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