LONDON-quoted resources outfit, Vast Resources says it will commence diamond mining in Zimbabwe once government has lifted the COVID-19-induced lockdown restrictions.
BY MTHANDAZO NYONI
In March, government announced blanket firm closures that grounded the economy as it sought to prevent contagion after the COVID-19 pandemic tore through the southern African country.
Several investment and corporate deals that were in the pipeline were grounded after the announcement.
However, in the past three months President Emmerson Mnangagwa’s administration has been relaxing the measures to help companies return to business and rebuild the economy.
Vast Resources, one of many firms whose plans were stalled by the COVID-19 crisis, was finalising its joint venture (JV) agreement with the State-run Zimbabwe Consolidated Diamond Company (ZCDC).
Once completed, the pact will mark the commencement of diamond mining.The joint venture project involved Vast’s Katanga Mining and ZCDC.
This was the second phase of key JVs that Vast entered into before commencement after inking the first with the Chiadzwa Community Development Trust to form Katanga Mining.
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The diamond claims lie in the Chiadzwa community in eastern Zimbabwe.
In a commentary accompanying financial statements for the year ended April 30, 2020, Vast said the project had been delayed by the deadly pandemic.
It said extracting diamonds in one of the world’s richest gem fields offered immense opportunities for the firm to improve its cashflows.
“We remain confident that we will be able to commence our mining operations once COVID-19 lockdown measures are lifted in Zimbabwe,” Vast said.
“The group has now focused its Zimbabwe strategy on mining its diamond concession in Zimbabwe. This opportunity potentially offers high and near term positive cashflow and is unrestrained by tight currency controls. While good progress was made in concluding a joint venture agreement with the local Chiadzwa community, to date there has been a delay in finalising the joint venture agreement with ZCDC,” the firm added.
Finalisation of the JV will help the company procure a special grant under the relevant Zimbabwean legislation for the exploration, development, and mining of the concession.
Vast has mining and exploration interests in Romania and Zimbabwe.
In the period under review, the company reported a 5,4% decrease in administrative and overhead expenses compared to the same period last year.
It also reported foreign exchange losses of US$2 million for the period compared to US$2,8 million for the 13-month period ended April 30, 2019.
Included within the US$2 million foreign exchange losses is US$0,640 million in respect of the company’s operations in Zimbabwe, it revealed.
Vast also recorded a 16,4% decrease in losses after taxation from continuing operations in the period, while the cash balance at the end of the period was US$0,478 million.
