Vast Resource plc, which operates mines in Romania and Zimbabwe, recently concluded an agreement with Red Mercury (Pvt) Ltd   for exclusive access to a community trust diamond concession called the ‘Heritage Concession’ located in the Marange Diamond Fields in the Chiadzwa region of Zimbabwe. 

Red Mercury, a company owned by the Marange-Zimunya Community Share Ownership Trust (‘MZ Community Trust’), is registered as a Community Share Ownership Trust under the laws of Zimbabwe. It has received an undertaking from the Government of Zimbabwe for a licence to mine on the Heritage Concession.

“The purpose of the agreement is to carry out initial due diligence on the area with a view to concluding a joint venture agreement (the ‘Joint Venture’), the principal terms of which have been agreed, for exploration, mining and marketing. The 15km² Heritage Concession is close to an area of Vast’s historic Marange Diamond Fields claim and is understood to be an extension of the same geological system,” Vast said while making the announcement.

Detailing the terms of the agreement, Vast elaborated: “Under the Agreement, Red Mercury will be responsible for providing a full mining licence and Vast will be responsible, subject to the results of exploration and subject to Zimbabwe’s future indigenisation laws when changed as anticipated not being an effective bar to investment, to procure funding such as is necessary to develop an efficiently operating diamond mine on the Heritage Concession.”

The Joint Venture will give Vast effective control of exploration and mining on the Heritage Concession and also of marketing of the diamonds in consultation with Red Mercury.

It also details the financials under current indigenisation laws and in case of any changes to it. Further, under the agreement, Vast is committed to giving support to the local community and participating jointly with Red Mercury in cultural heritage ancestral activities and to promoting local jewellery manufacture with a proportion of the production.

The due diligence access is slotted for two months or such longer period as the parties may agree. 

As a background note, Vast added: “Following the accession of the new Government in Zimbabwe indigenisation laws were abolished for most types of mining but retained for diamonds. Under the existing law, within such period as the Minister may prescribe, either 51% ownership is required by a ‘Designated Entity’ or by a Community Share Ownership Trust such as MZ Community Trust or an indigenisation and empowerment option must be earned through the use of credits. However there has been a more recent statement from the President of Zimbabwe that this law is about to change, and a change is widely expected.”

Mark Mabhudhu, Director of Vast Resources Zimbabwe Ltd and former CEO of Government owned Zimbabwe Consolidated Diamond Company Ltd, commented, “The concession area has not been mined before and by virtue of its geographical positioning within the Marange Diamond Fields it is anticipated to contain economically viable diamondiferous alluvials as well as conglomerate ore resources.”

Andrew Prelea, Chief Executive of Vast, commented, “Shareholders will be aware that we have long held an historic diamond interest in Zimbabwe.   With an evolving political backdrop, the country’s mining landscape is beginning to change and new opportunities are emerging.  Whilst we await further developments on our historic claims, we are delighted to be strengthening our operating presence in the area and building on our relations in-country through this agreement with Red Mercury, which we believe paves the way for future growth.”

 Meanwhile Botswana Diamonds plc, with whom Vast has a Memorandum of Understanding (MoU) in place to develop diamond resources in Zimbabwe, lauded the award of exclusive access to Vast.    

John Teeling, Chairman of Botswana Diamonds, commented:  "I am delighted that Vast has been awarded this exclusive access to part of the famous Marange diamond fields and we look forward working with them to realise the full potential of this area and others as they begin to emerge with Zimbabwe opening for business."