To the extent applicable, and to the extent able (given the current size and structure of the Company and the Board), the Company has adopted the Quoted Companies Alliance Corporate Governance Code (the QCA Code).

In light of the Company’s size and nature, and the geographical spread of operations, the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed.

The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how the Company applies each of the principles:

Principle One: Business Model and Strategy

The Company’s strategy is to identify mineral deposits which can be developed into mines, and to operate those mines to create value and income for shareholders. The geographical areas of operation are Romania and Zimbabwe.

In Romania the Group owns the Baita Plai underground polymetallic mine which is planned to commence production in 2020. The Group also owns the Manaila open pit polymetallic mine which is currently on care and maintenance, but which is considered to have significant long-term potential. The Group is also examining other projects in Romania where it plans to obtain external equity finance for development and retain a minority interest or where possible obtain debt finance.

In Zimbabwe, the group announced, in September 2019, that it had signed a Joint Venture Agreement with Chiadzwa Mineral Resources (Pvt) Ltd (“CMR”), a company designated to represent the Chiadzwa Community interests in the Chiadzwa Community Concession, a substantial concession area in the Marange Diamond Fields. This resulted in the formation of Katanga Mining (Pvt) Ltd (”Katanga”). A further Joint Venture Agreement between Katanga and the Zimbabwe Consolidated Diamond Company (Pvt) Ltd (“ZCDC”), a government entity which represents the Republic of Zimbabwe in the diamond mining sector, is set to be officially signed. Details of the Chiadzwa JV will be announced at the same time as the announcement of the ZCDC JV to which it is linked.

Principle Two: Understanding Shareholder Needs and Expectations

As the large majority of the Company’s shares are held in CREST, with the beneficial owner not disclosed, the Company seeks to communicate with shareholders primarily by indirect methods. Regulatory news announcements are made via RNS whilst social media, subject to strict controls on use, are used as a means of communication. The CEO, Andrew Prelea, supported where appropriate by senior management, conducts webcasts with Q and A sessions, attends and presents at investor forums wherever possible as well as holding discussions with mining analysts, shareholders and investment managers.

In addition, many of those shareholders with an active interest in the Company attend the Company’s Annual and General Meetings where shareholders have a good opportunity to express views and ask questions of the Company’s Board.

Investors also have access to current information on the Company though its website, www.vastplc.com or through enquiry to our Investor Relations Manager online at IR@vastplc.com or by phone on (+44) (0) 207 846 0974.

Shareholders can also contact the specific Investor Relations email via a contact form on the website which gives users the option to allow Vast to collect their contact details and opt to subscribe to a Company newsletter. A monthly newsletter to subscribers to allow for more regular updates on progress at the Company’s assets is planned.

Shareholders are also able to contact the Company via its corporate pages on LinkedIn, Twitter & Facebook, where general contact details are also listed.

From the interest in the Q&A sessions, shareholder questions to the Company and shareholder attendance at General Meetings, the Board believe that good communication with shareholders has been and will continue to be successfully achieved.

Principle Three: Considering wider stakeholder and social responsibilities

The Company operates in two countries which are far apart both geographically and in recent history, Romania and Zimbabwe. It follows that the strategy for identifying the interests of stakeholders and the Company itself differ substantially between the two regimes. The mining sector in Romania suffered a sharp decline at the end of the communist era. Old technology and mining methods meant that production costs tended to exceed the value of the end product, forcing most mines to close, despite having, in many cases, valuable ore bodies. The strategy of Vast is to re-evaluate such closed mines with a view to bringing them back into production. As historic mining areas, there is an existing local workforce which has a history of mining and welcomes new employment opportunities. Other than main Board Directors, the whole of the management and workforce has been recruited locally, and subcontractors are also local firms.

Future expansion in Romania is likely to include very substantial projects which will require large scale finance. In such cases the strategy of the Board is to bring in external equity and debt finance, possibly from an industry major, so that the Company will retain a minority interest and management without the requirement to contribute substantial funds.

Zimbabwe has experienced a long period of economic decline, but following a change in leadership the Board also sees opportunities for rapid expansion in that country. The main stakeholders identified are the State itself and the local communities in mining areas. In particular, while unemployment is high and new employment is welcomed, the Directors are also sensitive to the needs of local artisanal miners. While previous indigenisation rules no longer apply, the Directors understand the need to involve indigenous Zimbabweans at all levels, including equity.

The Directors believe that the Company’s joint venture on the Chiadzwa Community Concession in the Marange Diamond Fields with a company owned by a local Community Trust can be made to be an exemplar for giving benefit back to the local community.

The Board recognises that the long term-success of the Company is reliant upon the efforts of the employees of the Company as well as its suppliers, contractors and other stakeholders. The Board ensures that it has close ongoing relationships with all stakeholders and provides them with the opportunity to raise issues and provide feedback to the Company.

Principle Four: Risk Management

In addition to its other roles and responsibilities, the Audit and Compliance Committee is responsible to the Board for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the Company.

The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal control. An internal audit function is not considered necessary or practical due to the size of the Company and the close day to day control exercised by the Executive Directors. The Board works closely with and has regular ongoing dialogue with the Company Financial Director and financial controller and has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.

The risks facing the Company are detailed in the Strategic Report that is included in the Company’s Annual Report. The board seeks to mitigate such risks so far as it is able to do, but certain important risks cannot be controlled. The CEO is primarily responsible to the Board for risk management.

In particular, the products the Company mines and is seeking to identify are traded globally at prices reflecting supply and demand rather than the cost of production. In Romania, the Company seeks to protect its cash flow by means of a long term offtake agreement, but it does not hedge future production.

Principle Five: A Well Functioning Board of Directors

Current membership of the Board is as follows:

Name Role Appointed
Paul Fletcher Chief Financial Officer 08-Nov-19
Craig Harvey COO / Technical Director 01-Mar-18
Nick Hatch Non-executive 09-May-18
Brian Moritz Non-executive Chairman 06-Oct-16
Andrew Prelea Chief Executive Officer 01-Mar-18
Roy Tucker Executive Director 05-Apr-05

All the Non-executive Directors are considered to be independent.

All the Directors are subject to re-election at intervals of no more than three years.

The table illustrates the success of the Board in refreshing its membership.

The Board is well balanced both in its skill sets and in the domicile of its members. Of the Executive Directors, Andrew Prelea is resident in Romania, Roy Tucker and Paul Fletcher in the UK, and Craig Harvey in Southern Africa. Of the Non-Executive Directors, Nick Hatch and Brian Moritz are both resident in the UK.

All of the current Non-executive Directors are considered to be independent. None of them have been a Director for a sufficient length of time to prejudice such independence.

Non-executive Directors are committed to devote 3 days per month to the Company. Executive Directors devote substantially the whole of their time to the Company.

Where possible Directors are physically present at board meetings, but, due to the wide divergence of locations, Directors may be present by telephone. This is particularly the case during the Covid-19 pandemic.

During the thirteen month period ended 30 April 2019 there were six full board meetings in addition to twelve meetings on specific issues. Of the Directors holding office throughout the period, Eric Diack (former Director), Paul Fletcher, Craig Harvey, Brian Moritz, Andrew Prelea and Roy Tucker, attended all the full meetings either in person or by telephone.

Principle Six: Appropriate Skills and Experience of the Directors

CVs of the Directors – Four executives and two Non executives – are disclosed on the website – www.vastplc.com/about-us/our-team. In addition, the Company has employed the outsourced services of Ben Harber of Shakespeare Martineau as company secretary.

The Company believes that the current balance of skills in the Board as a whole reflects the broad range of commercial and professional skills that the Company requires. Among the Executive Directors, Andrew Prelea is experienced in general management, including identifying and negotiating new business opportunities; Roy Tucker is a Chartered Accountant with many years experience in general commercial & financial management, Paul Fletcher is a Chartered Accountant with significant international finance experience ; and Craig Harvey is a qualified geologist experienced in constructing and operating mines.

Among the Non-executives Brian Moritz is a Chartered Accountant with senior experience. In addition to his financial skills he has former experience as a Registered Nominated Adviser. Nick Hatch is a qualified geologist with experience in evaluating mining companies and natural resource projects. Following the resignation of Eric Diack through taking on a new role which required his full time attention, the Company will be seeking an additional Non-executive Director in due course.

Importantly, Directors without geological qualifications have significant experience with junior companies in the natural resources sector.

Principle Seven: Evaluation of Board Performance

The Group is in the process of fast evolution and at this stage in the Company’s development it is not deemed necessary to adopt formal procedures for evaluation of the Board or of the individual Directors. There is frequent informal communication between members of the Board and peer appraisal takes place on an ongoing basis in the normal course of events however the Board will keep this under review and may consider formalised independent evaluation reviews at a later stage in the Company’s development

Given the size of the Company, the whole Board is involved in the identification and appointment of new Directors and as a result, a Nominations Committee is not considered necessary at this stage. The importance of refreshing membership of the Board is recognised and has been implemented. In 2018 Andrew Prelea was appointed to replace Roy Pitchford as CEO, and Nick Hatch replaced Brian Basham as a Non-executive Director. Paul Fletcher was appointed in 2019 as Finance Director at which point Roy Tucker moved into an Executive Director role. The Directors believe that the Board operates efficiently and cost effectively for the benefit of all stakeholders. Nevertheless, it is envisaged that the Board will be strengthened in due course as and when new projects are operated by the Company.

Principle Eight: Corporate Culture

The Board strives to promote a corporate culture based on sound ethical values and behaviours. The Board is aware that it operates in jurisdictions where ethical standards may differ from those in the UK, and which may, rightly or wrongly, have a reputation for corrupt practices. To that end the Company has adopted a strict anti-corruption and whistle blowing policy, but the Directors are not aware of any event in either jurisdiction which might be considered to breach this policy. The Company has also adopted a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.

The Board is also aware that the tone and culture it sets will greatly impact all aspects of the Company and the way that employees behave, as well as the achievement of corporate objectives. A large part of the Company’s activities is centred upon an open dialogue with shareholders, employees, clients and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives.

Principle Nine: Maintenance of Governance Structures and Processes

The corporate governance structures which the Company is able to operate are limited by the size of the Board, which is itself dictated by the current size and geographical spread of the Company’s operations, with Directors resident in the UK, Romania and Southern Africa. With this limitation, the Board is dedicated to upholding the highest possible standards of governance and probity.

The chairman, Brian Moritz:

  • leads the Board and is primarily responsible for the effective working of the Board;
  • in consultation with the Board ensures good corporate governance and sets clear expectations with regards to Company culture, values and behaviour;
  • sets the Board’s agenda and ensures that all Directors are encouraged to participate fully in the activities and decision-making process of the Board.

The CEO, Andrew Prelea:

  • is primarily responsible for developing Vast’s strategy in consultation with the Board, for its implementation and for the operational management of the business;
  • is primarily responsible for new projects and expansion;
  • is responsible for attracting finance and equity for the Company;
  • runs the Company on a day-to-day basis;
  • implements the decisions of the Board;
  • monitors, reviews and manages key risks;
  • is the Company’s primary spokesperson, communicating with external audiences, such as investors, analysts and the media.

The COO / Technical Director, Craig Harvey:

  • is responsible for operational improvements and efficiency of mining operations in Romania;
  • is responsible for expansion and exploration of projects at the mine level;
  • is responsible for the re-opening of the Baita Plai mine;
  • assists and advises on the operation and expansion of the Zimbabwe operations and projects;
  • provides technical input on new projects.

The CFO / Finance Director, Paul Fletcher:

  • is responsible for group financial administration;
  • oversees the accounting function of all group companies;
  • deals with all matters relating to the independent audit.

The Executive Director, Roy Tucker:

  • is responsible for legal and compliance matters;
  • is the main point of contact with the Company’s lawyers and Nomad, and the London Stock Exchange;
  • deals with executive matters as they arise.

The Remuneration Committee is chaired by Nick Hatch and comprises Nick Hatch and Brian Moritz. It meets on an ad hoc basis when required. The Remuneration Committee is responsible for establishing a formal and transparent procedure for developing policy on executive remuneration and to set the remuneration packages of individual Directors. The Committee’s policy is to provide a remuneration package which will attract and retain Directors and management with the ability and experience required to manage the Company and to provide superior long-term performance.

The Audit and Compliance Committee is chaired by Brian Moritz and comprises Brian Moritz and Nick Hatch. It normally meets twice per annum to inter alia, consider the interim and final results. In the latter case the auditors are present and the meeting considers and takes action on any matters raised by the auditors arising from their audit.

Matters reserved for the Board include:

  • Vision and strategy
  • Production and trading results
  • Financial statements and reporting
  • Financing strategy, including debt and other external financing sources
  • Budgets, acquisitions and expansion projects, divestments and capital expenditure and business plans
  • Corporate governance and compliance
  • Risk management and internal controls
  • Appointments and succession plans
  • Directors’ remuneration

Principle Ten: Shareholder Communication

The Board is committed to maintaining effective communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders as explained above under Principle Two. The Company is desirous of obtaining an institutional shareholder base, and institutional shareholders and analysts will have the opportunity to discuss issues and provide feedback at meetings with the Company.

The Investors section of the Company’s website provides all required regulatory information as well as additional information shareholders may find helpful including: information on Board members, advisors and significant shareholdings, a historical list of the Company’s Announcements, its corporate governance information, the Company’s publications including historic annual reports and notices of annual general meetings, together with share price information.

Results of shareholder meetings will be publicly announced through the regulatory system and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions.

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