Key points:
- Vast Resources shares rallied 11.2% on a new offtake agreement.
- The company has a buyer for the ore produced at its Takob mine.
- Should you buy Vast shares? Read on to find out.
The Vast Resources PLC (LON: VAST) share price rallied 11.2% after announcing that it had signed a new exclusive offtake agreement with Trafigura PTE. Ltd regarding the ore processed at its newly-opened Takob Mine Processing Project at the Takob Mine in Tajikistan.
The contract gives Trafigura the exclusive right to sell the bulk concentrates produced via the project. Vast’s interest in the project is through Central Asia Investments Ltd, which has a 49% interest. The stake also includes a 50% shareholding in Central Asia Minerals and Metals Ore Trading FZCO (CAMM), which has signed a Master Agreement with Takob.
Also read: Five Best Gold and Gold Mining Stocks To Buy Right Now.
The agreement estimates that the Takob mine shall produce about 7,000 tonnes of ore each month containing a minimum of 1.5-2% lead, 1.2-1.4% zinc and 27% fluoride. In addition, Takob has agreed to supply a minimum of 1 million tonnes of ore to be processed via the project during the mine’s estimated lifetime of 12 years.
The Master Agreement between CAMM and Takob gives Takob the sole right to market and sell all the non-ferrous concentrates and precious metals produced from Takob’s Mine, including but not limited to zinc, lead, silver and gold. Today’s agreement mandates Trafigura to buy the bulk concentrate generated by the Takob mine at standard market prices.
Investors cheered the announcement that provides a ready market for the ore produced by the Takob mine guaranteeing a ready buyer for the ore produced. In addition, Vast Resources will receive a 12.25% royalty from all the sales made due to its 50% stake in CAMM.
Andrew Prelea, Vast Resources PLC’s CEO, 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.”
So, would I buy Vast shares? The shares look attractive at current prices, given that they are trading sideways above a crucial support zone.
*This is not investment advice.
Vast Resources share price.
The Vast Resources share price rallied 11.17% to trade at 0.458p, rising from Wednesday’s closing price of 0.412p.