Vast Resources : JORC Compliant Resource Published for Producing Manaila...

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining

27 September 2016
Vast Resources plc
('Vast' or the 'Company')

JORC Compliant Resource Published for
Producing Manaila Polymetallic Mine, Romania

Vast Resources plc, the AIM-listed mining company with operations in Romania and Zimbabwe, is pleased to announce the maiden JORC Compliant Mineral Resource Estimate for the producing Manaila Polymetallic Mine ('Manaila' or 'MPM') in Romania.

Overview

• Maiden JORC Compliant Mineral Resource Estimate updating the previous resource estimated under the Russian Code:

  • Total open pit Mineral Resource (Indicated & Inferred) of 2.6Mt at a grade of 1.0% copper ('Cu'), 0.4% lead ('Pb') and 0.9% zinc ('Zn') at a 0.25% Cu cut-off

  • Total underground Mineral Resource (Indicated & Inferred) of 310,000t at a grade of 1.7% Cu, 0.4% Pb and 0.5% Zn at a 1.00% Cu cut-off

• Exploration Target defined for:

  • Open pit of 4.45Mt-11.88Mt with grades up to 2.3% Cu, 0.5% Pb and 1.1% Zn

  • Underground of 5.92Mt-15.78Mt with grades up to 2.6% Cu, 2.0% Pb and 2.6% Zn

• Current JORC compliant Mineral Resources do not include gold and silver mineralisation which may provide additional upside

Roy Pitchford, Chief Executive Officer of Vast, commented:

'Today's publication of the maiden JORC compliant Mineral Resource statement is another positive milestone at our Manaila Mine where the performance has improved significantly over the past four weeks, underpinned by the success of the metallurgical optimisation work completed during the June quarter. This work has delivered significant, consistent increases in MPM's plant yields and grades which will enable Vast to develop a sustainable and profitable mine at Manaila. This JORC Mineral Resource estimate at MPM will augment this work by providing an internationally recognised and accepted evaluation tool through which to improve grade control by utilising modern methods for mine planning and scheduling. The Mineral Resource statement further reinforces our confidence in the MPM operation as we look now to not only improving quarter on quarter results, but an operation with the long term potential to yield significant returns for our investors and stakeholders.'

JORC Mineral Resource Estimate

A JORC Compliant Mineral Resource estimate has been compiled for the area delineated by the 1.39 square kilometre ('km') exploration perimeter of MPM. Within this exploration licence perimeter the current mining licence boundary is 67,500 square meters ('m ') in extent.

A full geological model has been constructed, constraining the mineralised zone to widths and extents as defined by surface drilling, underground drilling and underground development.

A combination of Ordinary Kriging ('OK') and Inverse Distance Squared ('ID') was carried out, interpolating values for copper, lead and zinc into a three-dimensional constrained geological block model. Density values from historical density measurements undertaken in Romania, and density measurements in use at the operating MPM mine, were assigned to the block model for heavy and moderate weathering profiles and fresh material.

Mineral resource categorisation was undertaken whereby modelled mineralised zones, which could be defined from historical drilling but were lacking sufficient assay data, were assigned to the Exploration Target category and these are reported separately. These zones were interpolated utilising ID.

Mineralised zones, which contained sufficient data from surface drilling, underground drilling and underground channel sampling, were typically modelled with OK. The mineral resources within these mineralised zones were categorised based on the number of samples within various search volumes and on the kriging efficiency obtained, together with a geological confidence applied to each mineralised zone.

The mineral resource estimate has been subdivided into an open pit mineral resource and an underground mineral resource classification. The cut-off point between open pit and underground mining was determined by running a Lerch-Grossman ('LG') pit optimisation based on the prevailing metal prices and the current operational efficiencies being achieved at MPM. The depth of LG pit shells extended to 125 metres below the topographic surface.

Open pit mineral resources were subsequently defined down to a depth of 125 metres below surface and are reported at an in-situ mining grade cut-off of 0.25% Cu. Copper is deemed the main mineral of interest and all mineral resources are based on cut-off grades applied to copper only. Table 1 provides the mineral resources determined to be fresh sulphide open pit mineral resources.

Table 1: Open Pit Mineral Resource Estimate for the Manaila Polymetallic Mine, July 2016.

*as at 31 July 2016 (topographic surface)

* to a maximum depth of 125m below topographic surface

* @ 0.25% Cu cut-off grade

Underground mineral resources were subsequently defined from below a depth of 125 metres below surface to the limits of the mineralised zones and are reported at an in-situ mining grade cut-off of 1.00% Cu. Copper is deemed the main mineral of interest and all mineral resources are based on cut-off grades applied to copper only. Table 2 provides the mineral resources determined to be underground mineral resources.

Table 2: Underground Mineral Resource Estimate for the Manaila Polymetallic Mine, July 2016.

*as at 31 July 2016 (topographic surface)

* from a depth of 125m below topographic surface

* @ 1.00% Cu cut-off grade

An exploration target has been defined over the remainder of the exploration perimeter. There is sufficient information available, from existing surface drill holes and literature regarding the development of sulphide mineralisation in the area surrounding MPM to warrant the development of a staged exploration programme to advance these areas into a mineral resource category in the future. Table 3 provides the exploration target potential for open pit exploration targets and Table 4 for underground exploration targets. All exploration targets are reported with no cut-off grade applied.

Table 3: Open Pit Exploration Target at Manaila Polymetallic Mine, July 2016.

*as at 31 July 2016 (topographic surface)

* to a maximum depth of 125m below topographic surface

Table 4: Underground Exploration Target at the Manaila Polymetallic Mine, July 2016.

*as at 31 July 2016 (topographic surface)

* from a depth of 125m below topographic surface

History, Exploration and Mining
In 1972, the Romanian state exploration company began initial exploration activities, geochemical soil sampling and widely spaced surface diamond drilling at MPM. This led to the identification of Kuroko type volcanogenic sulphide mineralisation within the area similar to the nearby Fundu Moldovei copper mine.

Drilling along the southern boundary of the MPM licence area revealed polymetallic massive and disseminated sulphides. This resulted in 6,418km of underground development along two levels, namely level 4 and level 7. Underground diamond drilling was conducted along the full length of the two levels and channel sampling was conducted where intersections with the mineralised zone took place.

Some trial underground mining took place to generate bulk sample material for metallurgical test work, both on a laboratory scale and pilot plant scale. A trial run of ore processing took place at the nearby Fundu Moldovei copper mine to assess the concentrate obtainable under true plant conditions.

The mine began operations in 1999 when the state owned mining company Remin ('Remin') ran the operations until 2006. In 2006, Remin was placed into liquidation and the assets, including the mining license, transferred to another state owned mining company Mina Bucovina ('Bucovina') who operated the mine until 2009. During 2009, Bucovina was placed into liquidation.

The mining licence was acquired by public auction by the Sinarom Mining Group ('SMG') in 2012. SMG operated the mine until July 2015 when Vast acquired a 50.1% stake in the company and assumed operational control.

Since August 2015, Vast has drilled a total of 14 surface diamond drill holes in the immediate vicinity of the current open pit operations in order to verify the geological model, and thereby allow for the inclusion of the historical drill hole assays and underground channel assays into the assay database.

Vast has sent a bulk sample from the open pit to the laboratories of SGS in the United Kingdom for flotation kinetic test work in order to optimise the quality of the copper concentrate, and to outline the chemical flotation recipe required to depress zinc in the copper concentrate. In addition, test work to subsequently reactivate and float the zinc into a separate zinc concentrate was undertaken. The test work was successful and the implementation in the plant has proved to be a success as well.

Geology
Romania consists of four major areas of Mesozoic and older rocks, the southern Carpathians, eastern Carpathians, Apuseni Mountains, and Dobrogea. The eastern Carpathians consist of two main paleogeographic and structural units, which are, from west to east, the Crystalline-Mesozoic zone ('CMZ') and the outer flysch zone. The CMZ in turn is made up of four main lithostratigraphic groups, namely the Bretila Group, Tulghes Group, Negrisoara Group and the Rebra Group.

The local geology at MPM comprises lithologies of the lowermost units of the TG4 and the uppermost units of the TG3 formations of the Tulghes Group. They comprise the following;

• TG4 Formation

• TG3 Formation

  • Fundu Moldovei Member

  • Morosan Member

The Morosan Member of the TG3 formation is a rhyolitic volcanosedimentary sequence comprising alternating sequences of quartz sericite schists - chlorite - graphite and metamorphosed rhyolites. The top of the sequence is marked by the development of a chlorite sericite schist with porphyroblasts of albite. The contact between the Morosan Member and the overlying Fundu Moldovei Member marks the development of the sulphide mineralisation at MPM

The Fundu Moldovei Member of the TG3 Formation is represented by a predominantly metamorphosed rhyolites and quartz-sericite schists which vary in thickness. The top of the TG3 Formation is marked by the development of the polymetallic mineralisation associated with the mineralisation located within the Putnei - Prasca valley (Lesu Ursului, Fundu Moldova). This mineralised zone occurs along the northern boundary of the current exploration perimeter.

The Basque Member of the TG4 Formation is present in the north western of the exploration perimeter and is comprised of a cyclic alternation of various blastodetrital quartzites and phyllitic lithologies. Thin beds of acid metatuffs occur in the upper portions and indicate late stage extrusive rhyolitic volcanism. The TG4 Formation represents detrital material deposited during and after the waning stage of volcanism.

Competent Person's Review:
This announcement has been reviewed by Mr Craig Harvey, Group Chief Geologist at Vast, and a member of the Geological Society of South Africa and the Australian Institute of Geoscientists. Mr Harvey meets the definition of a 'qualified person' as defined in the AIM Note for Mining, Oil and Gas Companies.

For further information, visit www.vastresourcesplc.com or please contact:

Glossary

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR').

**ENDS**