Vast is participating, as one of a collective group of partners, in a joint venture project in Tajikistan with Open Joint Stock Company Korkhonai Boygardonii Takob (“Takob”).
- A further revenue stream alongside concentrate sales from the Company’s Baita Plai Polymetallic Mine in Romania;
- 100% financed; and
- Vast will receive a 12.25 percent royalty over all sales of non-ferrous concentrate and any other metals produced at Takob’s operating fluoride and galena mine in Tajikistan.
The interest in the Project has been acquired as a result of the acquisition by Central Asia Investments Ltd, in which Vast has a 49 percent interest of a 50 percent interest in Central Asia Minerals and Metals Ore Trading FZCO (“CAMM”) which has an agreement with Takob. Vast has an effective 24.5 percent indirect interest in the project.
Takob, a wholly owned subsidiary of the Tajikistan Open Joint Stock Company “TALCO”, the country’s largest group of companies that represents a major part of the country’s GDP, is the owner of the operating Takob fluoride and galena mine in Tajikistan where the strategic fluoride concentrate is sold to TALCO’s chemical division for the production of essential raw materials required for primary aluminium production.
Under the agreement, the mine is to produce approximately 7,000 tonnes per month of ore containing no less than 1.5-2% lead, 1.2-1.4% zinc and 27% fluoride. It is for note that it is reported that historically the mine contained 30g/t silver and 1-2g/t gold in situ.
Under the agreement, CAMM is to provide equipment, technology and technical expertise to upgrade and optimise the processing plant at the mine and will undertake the responsibility for the management and execution of the project.
Takob will continue to mine ore at the mine and produce fluoride concentrate. Takob has undertaken to supply no less than 1,000,000 tonnes of ore to be processed in line with the project that is anticipated to run with the current Resource statement for 12 years.
CAMM has also under the agreement been appointed as exclusive agent for Takob to market and sell all non-ferrous concentrates and precious metals from Takob’s Mine including but not limited to lead, zinc, gold and silver.
CAMM has secured financing and is fully funded for the project. In consideration for CAMM’s financing obligations and provision of services under the agreement, CAMM will be entitled to receive 50 percent of net revenue from the sale of non-ferrous concentrate and precious metals.
In order for CAMM to provide the expertise required to fulfil its services and marketing obligations under the agreement, CAMM has entered a services agreement with Vast to provide the services required. Under this agreement Vast is entitled to charge for the services provided on the basis that 24.5 percent of the fees earned therefore will be left outstanding until they can be financed from revenue arising from the project.
In addition to fees receiveable under the services agreement with CAMM, Vast will effectively receive 12.25 percent royalty of all sales of the non-ferrous concentrate and any other metals produced for its participation in the collective group.
Vast has also executed a Memorandum of Understanding linked to processing the tailings produced at Takob.
As part of this project, its joint venture partner, Formin TJK (“Formin”), has commenced surveying, soil sampling and preliminary drilling on site at the tailings facility and the results will be announced upon receipt from ALS Romania. Formin reported visible signs of lead, zinc and precious metals, including gold, silver & platinum group metals, in the tailings facility. Initial surface survey results compiled by Formin show that there is a minimum of 1 million tonnes and up to 3.3 million tonnes of tailings. The depth of the tailings is to be determined once drilling is completed.
The funding for this project, which may be up to U$20 million, will be provided by CAMM on the same or similar terms as the Company’s existing Takob Joint Venture Project.