With the uncertainty over its licence to mine for diamonds in Zimbabwe now cleared, Vast Resources is putting all its eggs into the diamond basket and bailing out of gold.
Vast Resources, which is listed in London, has announced that it has agreed on the sale of its gold interests in Zimbabwe so that it can focus on its new diamond concession at Chiadzwa.
A contract of sale has been agreed for its 50.1% holding in Ronquil Enterprise, which houses the stakes in Pickstone Peerless, near Chegutu, and in Eureka Gold Mine in Guruve.
In the six months to September, Pickstone Peerless made a profit of US$3.13 million on sales of US$19.3 million.
Vast said the transaction reduces other loan and liabilities on its balance sheet by nearly US$38 million to US$10.5 million vs US$48.3 million.
Through the sale, a US$3.4 million loan to Sub-Sahara Goldia Investments (SSGI) is largely repaid and this gives it the ability to raise finance from other parties, said Vast.
Following the disposal, Vast will focus on the Heritage diamond concession in Zimbabwe.
Andrew Prelea, Vast’s chief executive, said: “The Heritage Concession will require significant investment, not only financial but in human resource to enable near term positive cash flow for the business.
“The divesting of the gold assets in Zimbabwe allows us to focus all of our Zimbabwe finance and management on this key component of the company’s growth.”
Vast is one of the firms that, under Zimbabwe’s diamond policy, is allowed to operate in the Chiadzwa area. In 2018, Vast signed a deal with Red Mercury, a company run by the Marange-Zimunya community trust, for the exploration of a 15 km² concession.
Vast is changing direction just a year after Dallaglio Investments, in which Vast held an interest, bought 95% of Eureka, which had been closed down for close to a decade. Production at the mine is expected to start in 2019.