Vast Resources secures funding for Chiadzwa diamond project

LONDON Stock Exchange-listed miner, Vast Resources, has secured funding to cover costs of developing its joint venture diamond mining project in the Chiadzwa area of Manicaland province, the company announced on Thursday.

Vast teamed up with the Chiadzwa community, creating a company called Katanga, which in turn partnered the Zimbabwe Consolidated Diamond Company (ZCDC) to mine diamonds.

In a statement, Vast Resources said the US$13.5 million financing arrangement would cover the costs of reaching production at both the Baita Plai mine in Romania and the Chiadzwa diamond project in Zimbabwe. It said a UK-based fund, Atlas Capital Markets, was to be issued with US$15 million of secured convertible bonds, which carried five percent interest per annum and would mature after two years.

“The bonds provide the required capital to enable the company to bring its two core assets, Baita Plai in Romania and the diamond concession in Zimbabwe, into production,” Vast Resources chief executive officer, Andrew Prelea, said.

“We are pleased to have established a new relationship with Atlas Capital Markets and look forward to working together.”

However, the bond funding proposal still requires shareholder approval, which is expected to be secured at a general meeting to be held early next month.

The latest joint venture partnership between the ZCDC and Katanga is part of plans to increase Zimbabwe’s diamond output to 11 million carats per annum by 2023. Zimbabwe has targeted to transform the mining sector into a US$12 billion industry and diamonds are expected to weigh in with revenues of US$1 billion per annum.

Guided by the newly enacted Diamond Policy, Zimbabwe is, among other things, targeting to open up new mines while enhancing revenue through local beneficiation.

Ultimately, the increase in output and local beneficiation is expected to enhance benefits accruing to the nation through the exploitation of diamonds.

Zimbabwe’s diamond production reached 1.8 million carats in 2017, going up to 2.8 million carats in 2018 while the target for this year and next year is 3.1 million and 6.12 million carats respectively. — New Ziana