Vast Resources inks new offtake deal with Trafigura
By Josh White
Date: Wednesday 13 Mar 2024
(Sharecast News) - Vast Resources announced a new exclusive offtake agreement with Trafigura Group on Wednesday, for all copper concentrate produced at the Baita Plai Polymetallic Mine in Romania.
The AIM-traded firm said the deal extended its existing relationship with Trafigura, a prominent independent commodity trading and logistics company, established through a previous exclusive offtake agreement for the Takob Mine in Tajikistan signed in October 2022.
It said the new offtake agreement, effective until June 2025, replaced the previous arrangement and included pricing terms aligned with market standards.
Pricing adjustments would be made for the grade of material delivered, with a slight discount to the LME cash settlement quotation averaged over an agreed period for copper, silver, and gold to ensure competitive pricing.
Copper concentrate production at Baita Plai had been increasing, with dry metric tonnes rising by 24% from the fourth quarter of 2022 to the same period in 2023.
At the same time, the company was accelerating the development of the underground decline access ramp at Baita Plai.
That was expected to enhance productivity by reducing underground haulage times and providing quicker access to high-grade ore at depth.
As a result, Vast said it anticipated an overall increase in concentrate grade and a reduction in grade variability, aligning with its offtake objectives with Trafigura.
In addition, Vast said discussions were ongoing regarding the extension of loans to A&T Investments and Mercuria Energy Trading beyond the current repayment date of 29 February.
"Vast has been developing a relationship with Trafigura, one of the world's leading independent commodity trading and logistics companies, since early 2022 and we are delighted to report this new exclusive offtake over our producing asset in Romania," said chief executive officer Andrew Prelea.
"The terms of the offtake ensure that Vast will benefit from the widely forecast price increase over the coming months and into 2025 as global supply struggles to meet demand, with UBS going as far as to say that 'a copper supply crunch is unavoidable'.
"As a company in production, which continues to ramp up with limited additional capex required, Vast is in a solid position to capitalise on these market dynamics through its new offtake with Trafigura."
At 1353 GMT, shares in Vast Resources were down 4.94% at 0.37p.
Reporting by Josh White for Sharecast.com.
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