Final Results Vast Resources plc / Ticker:

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining 22 September 2017 Vast Resources plc ("Vast" or "the Company")

Final Results

Vast Resources plc, the AIM-listed mining company with operations in Romania and Zimbabwe, is pleased to announce its final results for the year ended 31 March 2017.

A copy of the annual report will be available shortly on the Company's website at http://www.vastresourcesplc.com/.

OVERVIEW OF THE YEAR

Vast Resources plc ('Vast' or the 'Company') has focussed its portfolio of mining assets towards a Romania centric polymetallic mining base with the partial divestiture of its gold mining holding in Zimbabwe agreed during the year under review, and completed post period end. Production at Vast's initial two mines, the Manaila Polymetallic Mine in Romania ('MPM') and the Pickstone-Peerless Gold Mine in Zimbabwe ('PPGM') increased considerably over prior year levels. The Company's mineralised footprint in Romania was materially expanded with the award of several exploration licences culminating post period end in a landmark step towards achieving the Baita Plai Polymetallic Mine ('BPPM') right to mine, following success in a formal selection process.

Financial

• 230% increase in revenue to $23.8 million (2016: $7.2 million)
• 72% decrease in loss from continuing operations to $2.4 million (2016: $8.5 million) - mining and production operations in Zimbabwe performed strongly. However delays in improvements to operational performance in Romania and the corporate overhead continued to weigh heavily on profitability
• There were no discontinued operations in the year under review whereas a loss of $8.7 million from discontinued operations was incurred in 2016
• Cash balance at period end of $1.326 million (2016: $0.831 million)

Post period end:

• Cash balance of $0.425 million in the Group, plus a further $128,700 held in Breckridge Investments (Private) Limited ('Breckridge') in Zimbabwe as at 31 August 2017

Operational Development

• Prospecting licence granted over Faneata tailings dam adjacent to BPPM
• Maiden JORC Resource estimate published at MPM which increased the previously estimated open-pit resources under the Russian classification by approximately 8 times
• Zinc production commenced with the installation of a new flotation line in MPM
• Construction of a sulphide processing plant at PPGM commenced in the first quarter of calendar 2017 - construction was funded by an overdraft facility with a local bank, supplemented by internally generated cash flows 
• Agreement to dispose of an effective 25% interest in PPGM and Giant Gold Mine for $4 million in conjunction with a loan of $4 million from Sub-Sahara Goldia Investments (completed post period end)
• Agreement to acquire the remaining 49.9% interest in Sinarom Mining Group, the operating company of MPM, providing the Company with a 100% interest in MPM (completed post period end)

Post period end:

• Much delayed remedial capital expenditure undertaken to streamline mining and processing operations at MPM  
• 4,037 Troy Ounces of gold produced at PPGM in quarter ended June 2017
• 828 and 157 tonnes of copper and zinc concentrate respectively produced at MPM in quarter ended June 2017
• Success in formal selection process concerning the award of an association licence at BPPM

Funding

• Fundraising share issues during the year:

Management

• 3 October 2016 - resignation of Graham Briggs as Non-Executive Director and appointment of Brian Moritz
• 16 November 2016 - at the Annual General Meeting of the Company William Battershill retired as director by rotation and did not offer himself for re-election.  Brian Moritz was appointed Chairman of the Company in his place.
• 13 March 2017 - appointment of Craig Harvey as Chief Operations Officer

Post period end:

• 30 June 2017 - appointment of Brian Basham as Non-Executive Director

CHAIRMAN'S REPORT It gives me great pleasure to present this my first chairman's report since taking up the role on the 3 ^rd October 2016. I would like to thank William Battershill for his service to the company as chairman and a director during its transition from an exploration company to a mining company. His enthusiasm, commitment and support played an important part in this transition of the company's objectives.

Strategic Highlights This financial year has seen a significant increase in turnover from US$7.2m in 2016 to US$23.8m. The operating loss has reduced from US$8.0m in 2016 to US$1.6m, and the comprehensive loss attributable to shareholders from US$16.2m in 2016 to US$3.7m.

The retention of free cash flow in Zimbabwe to finance the development of the phase two sulphide processing facilities at the Pickstone-Peerless Gold Mine; the funding of the Romanian overhead costs; the funding of maintaining the listing in the United Kingdom and the associated overheads; and the financial support for operations at the Manaila Polymetallic Mine along with the care and maintenance of the Baita Plai Polymetallic mine in Romania; have required further injection of capital via equity raisings and additional borrowings.

During the year, there were also changes agreed in the ownership of certain subsidiary companies. Following period end part of our interest in the Pickstone-Peerless Gold Mine was sold, although we retain voting control over Pickstone-Peerless. The cash generated from that sale was used, in part, to purchase the minority interest in the Manaila Polymetallic Mine, where we now own a 100% interest. While both of these transactions were negotiated during the year, they only reached completion following the reporting date.

Zimbabwe Higher than normal rainfall affected operations at Pickstone-Peerless Gold Mine; nevertheless 239,199 tons of ore were milled compared to a target of 240,000 tons. Access to the higher-grade areas was restricted and low grade areas and stockpiles had to be utilised resulting in the production of 16,500 ounces of gold compared to the target of 18,000 ounces. 

Post year end, milling rates and gold production have reverted to expected levels and work on the sulphide phase two expansion has commenced.

Romania The improving trend experienced at Manaila Polymetallic Mine in the first three quarters of the financial year was severely hampered by unexpected extremely cold weather conditions experienced in the fourth quarter. The cold weather stopped mining and processing operations and therefore the volume of copper and zinc concentrate production. Post year end, the weather conditions returned to normal and the improvement in production has resumed.

Significant achievements during the year included; the removal of the high levels of zinc in the copper concentrate thereby eliminating the zinc penalty; achieving the optimum copper concentrate grade; the production of a separate zinc concentrate and a second income stream; increased copper and zinc concentrate quantities; and commencement of the installation of a gravity gold circuit to recover free gold that was not being recovered in the copper and zinc concentrate production.

The Baita Plai Polymetallic Mine association exploitation licence has remained a key focus of activity in Romania as the quality of the ore body and the potential profit and cash generation of this mine has persuaded the board to persevere with the licence application.  It is very pleasing to note that this effort has now been rewarded by the selection announced on 30 August 2017 of our subsidiary company for the award of the licence.  We now anticipate the grant of the right to mine very shortly.

Management Craig Harvey has been appointed Chief Operating Officer. He is mainly focussed on Romania and improving the mine planning and mining at Manaila Polymetallic Mine along with the various processing improvements earmarked for the metallurgical complex at Iacobeni. The granting of the Baita Plai licence will require further involvement in Romania as this mine is brought back into production.

Craig also continues to provide support for the mining operations at Pickstone-Peerless, the evaluation of the Giant Gold Mine and other potential gold opportunities in Zimbabwe.

Carl Kindinger has assumed the full functions of the CFO role and the corporate secretarial role has been transferred to corporate secretaries Shakespeare Martineau. As stated previously, Roy Tucker indicated his desire to wind down his involvement in the company and these changes in the CFO role and the transfer of the corporate secretarial role are designed to facilitate this objective.

Funding US$4.2m was secured during the year via share issues by way of the conversion of warrants issued in association with capital raisings; an open offer to shareholders; the settlement of liabilities; and the Bracknor equity facility for US$5 million that was terminated after its initial tranche of US$2 million. In addition, an additional US$5.3m was secured during the year through debt financing, with $3.4m of debt being repaid.

The ongoing funding of the U.K. and Romania overheads, and the further support required to bring the Romanian operations to a cash generative position requires additional capital. The company is in discussions with potential strategic partners and expects finalisation of the strategic funding options shortly.

Corporate structure and strategy The geographical and cultural diversity between Romania and Zimbabwe involves the board in reviewing on an ongoing basis the corporate structure and the strategy going forward. In addition, within the shareholder base there are differing perceptions and expectations with regards to the countries and metals produced by the company.

In the event of a separation between the Romanian and Zimbabwe operations there would be individual listed entities with shareholders initially equally represented in both companies. This would enable shareholders to focus investment in either, or both companies, as they wished.

The potential strategic investment referred to earlier could be the catalyst to achieving the objective of establishing separate listed companies to focus on Zimbabwe and Romania.

Appreciation The continued support of shareholders is appreciated; it is planned that during the current financial year operations in Romania will become cash generative and that developments in Zimbabwe will enable access to cash, because of the anticipated strategic investment in the group. To fellow directors, past and present, thank you for your advice and support, and to management and staff in both Romania and Zimbabwe for their continued efforts on behalf of the company.

Brian Moritz Chairman

STRATEGIC REPORT

Principal activities, review of business and future developments Vision The vision of the Company is to become one of the largest copper producers in Eastern Europe whilst retaining a significant interest in the potential increasing gold production in Zimbabwe.

Principal activities Vast is a diversified mining company with open pit polymetallic operations and a planned underground polymetallic mine in Romania, and an open pit gold mine in Zimbabwe. We hold gold and diamond related mining claims in Zimbabwe and have a presence in Zambia with interests in a rare earth and phosphate project. We mine and produce copper and zinc concentrate and gold bullion. We operate a regional model, with our registered office in London, United Kingdom and offices in Bucharest, Romania and Harare, Zimbabwe.

Review of business Zimbabwe Pickstone-Peerless Gold Mine - PPGM PPGM continued to generate free cash flow. This was occasioned by a substantial increase, over prior year levels, in tonnage milled and gold production despite some weather-related disruptions. Cash costs per ounce of gold produced declined to $819 /oz on the higher volumes of production. Profitability has exceeded expectations. Prior to the commencement of the construction of the new sulphide plant cash levels reached $2.5mil. The sulphide plant will expand milling capacity by 75% to 35,000 tonnes per month and will come on stream in the third quarter of 2017. The plant is and will be part funded by a bank loan which is expected to be repaid out of internally generated cash flow within 12 to 18 months of the start of production.

In line with the company's policy of support for the local community and strengthening relations with government a joint venture agreement for a toll treatment plant to recover gold from nearby artisanal mining activities was been concluded and construction was completed during early 2017.

Giant Gold Mine -  GGM Evaluation of GGM, located 28km from PPGM, which has a current JORC-compliant inferred resource of 500,000oz of gold, commenced in the year under review.

Romania Manaila Polymetallic Mine ("MPM") together with extensions and proximal licences Insufficient funding for both pre-stripping activity and remedial capital expenditure, together with unusually adverse winter weather conditions, took a heavy toll in reduced production levels, which fell well below the targeted 15,000 tons per month of mill feed. Plant overheads were not fully recovered as a result. Cash costs of concentrate exceeded realisable sales values per tonne by a wide margin.  Nevertheless, noteworthy achievements during the year include the reduction of zinc contained in copper concentrate to commercially acceptable levels, a steady improvement in quantity and quality of copper concentrate produced, and the introduction of a separate zinc concentrate.  As a result, a reduction in refining charges and penalties have secured higher metal concentrate prices.

In March 2017, a gravity concentrator was commissioned in order to recover a pyrite concentrate with gold and silver credits.  Test throughput has proved to be inconsistent in terms of quantity and quality of the concentrate.  Independent process consultants have been brought to site to assist in resolving these issues.  We are now focused on the development required to increase quantity to a level commensurate with our mining rate. 

Recent funding made available to the Company has enabled commencement of the necessary remedial capital expenditure on the plant.  Furthermore, a crusher has been ordered which will allow for the crushing circuit to deliver smaller sized feed in order to decrease milling time.  Although the cost of transporting ore 34Km from the open pit to the plant continues to erode profitability, trucking capacity has been expanded after year end, thus ensuring this is no longer a limiting factor in production.  Together these measures should enable the full production target of 15,000tpm to be achieved in September 2017.  A significant improvement in performance has already been achieved since the reporting date.

We are undertaking a drilling programme that is nearing completion at the Carlibaba extension to the current Manaila licence area.  Initial drilling results are promising.  The objective is to prove the potential of a second open pit mining operation at Manaila. Full results from the Carlibaba drill programme are anticipated for release in September 2017 together with an outline of Carlibaba's development path.

A new metallurgical processing facility is proposed which will deal with ore from Manaila and Carlibaba.  This is intended to reduce significantly the cost of transportation and processing of ore thereby driving down the cash cost per tonne milled.  It will also enable the plant to be contained in a controlled environment, thus materially reducing the adverse effect of severe winter weather.

In December 2016, the Company expanded its potential resource base through the granting of two prospecting licences proximal to MPM -  Piciorul Zimbrului and Magura Neagra - over which, from previous exploration, there are initial estimates of substantial polymetallic resources.  Exploration licences will be applied for once prospecting work is complete.

Baita Plai Polymetallic Mine ("BPPM") and Faneata Tailings Dam We are aware of shareholders' frustrations regarding the timescales for the grant of the BPPM mining association licence (sub-licence), but following the Company's success in a formal selection process, we are now very confident that the right to mine will be granted shortly.  It needs to be emphasized that the past delays have arisen from the unusual legal background to the situation for which there is no precedent in Romanian mining history.  Since 2014, Vast, through its subsidiary companies, has been granted five licences all promptly and without any difficulties. 

Once the association licence is granted, the Company anticipates that production could begin within six months and has forecast a start-up capital expenditure budget of $1.2 million to make the mine operational.

Meanwhile expenditure at BPPM has been limited to the required care and maintenance requirements and some capital expenditure to comply with health and safety regulations that permit continued access to the important areas of the mine such as the pumping stations.

A prospecting licence was granted in May 2016 over the Faneata tailings dam located 7km from the BPPM.  Subject to the outcome of the feasibility study the intention is to use the BPPM processing facility.

An internally generated Maiden Faneata JORC Compliant Resource Estimate in March 2017 defined a total Mineral Resource of 3.0Mt (Gross, 2.4Mt being net to Vast).  Metallurgical test work has commenced to determine an optimal processing method. A feasibility study to recover the contained metals is underway. An application has been made for an exploitation permit over the tailings dam in anticipation of positive feasibility results. Preliminary economic assessment indicated a break even total processing recovery of 25%.

Corporate In January 2017 the Company contracted with Sub-Sahara Goldia Investments ("Sub-Sahara") firstly to raise US$4million through a divestment of an effective 25% interest in PPGM and GGM, and secondly US$4million by way of a loan, both subject to certain conditions precedent.  Draw down of a significant part of the monies was not completed until June 2017 due to delays in complying with the conditions precedent, principally obtaining consent of the Reserve Bank of Zimbabwe.

In March 2017 the Company announced the acquisition of the remaining 49.9% equity stake in SC Sinarom Mining Group SRL ("Sinarom") (the operator of MPM) and also announced that discussions were continuing concerning further transactions in relation to Sinarom which could include the introduction of a joint venture partner or securing debt at the subsidiary level in order to increase production at both MPM and the newly acquired Piciorul Zimbrului and Magura Neagra licences. 

In July 2017, it was announced that conditional heads of terms had been signed with a corporate finance and investment firm with significant experience in, and investment in, Romania (the "Investor").  This provided for a two-stage investment totalling US$10 million for the purpose of the Company's capital expenditure and working capital requirement, mostly for the expansion of Romanian operations.  The investment was subject to the rights of Sub-Sahara under the terms of its loan agreement, which gave Sub-Sahara a right to provide equivalent finance if the terms and conditions were the same, which right has been exercised by Sub-Sahara in August 2017.  Sub-Sahara has indicated it wishes to work with the Investor and the two parties are in discussion with each other and with Vast to deliver a mutually acceptable investment and corporate strategy.  Meanwhile, in order to prevent any further delay in the grant of the BPPM mining association licence, it was announced on 13 September 2017 that Sub-Sahara had provided an additional loan of $1.68 million for payments in connection with the BPPM association licence. 

Strategy and Key Performance Indicators Our strategy is to:

• develop an appropriate geographic and product profile consistent with our strengths, available opportunities and risks;
• focus on optimising our operations to produce positive cash flow;
• add value to operations by increasing our resources and reserves;
• attract appropriate joint venture partners and public institutions to invest in the Company;
• maintain optionality on Zimbabwe gold production without significant increase in investment risk in Zimbabwe.

A key issue for the Company has been a lack of, or delay in obtaining, adequate funding for Romania.  This has caused utilisation of plant in need of refurbishment and without adequate back-up.  As a result the necessary production volume to yield the targeted cash flow has not been achieved.  This was partly remedied by the delayed finance obtained from the January 2017 Sub-Sahara transaction, but would be fully addressed by the consummation of the funding represented by the heads of terms announced in July 2017 or equivalent finance from Sub-Sahara or elsewhere.

PPGM in Zimbabwe, which was adequately capitalised for the first phase oxide mining and processing and had the benefit of new plant, has produced cash flow in excess of targets.  The cash generated has been applied in funding the second phase new sulphide plant at PPGM and subsequently is planned to finance the development of GGM.  The cash generated currently is therefore not available to fund the Company's overheads or Romanian development.

Excluding Zimbabwe, the Company was a net cash absorber. Inter alia a corporate overhead in excess of $2mil p.a., had to be funded by debt and dilutive equity raises in the absence of a dividend flow from Zimbabwe.

Management believes that delivering in the next two years on a second open pit at MPM and a new processing facility at MPM will increase production volumes appreciably and favourably transform the financial metrics of the Company.

In the light of the explanation of the financial constraints affecting Romania, we should also highlight the fact that it has been impossible to raise funding for investment in Zimbabwe. This resulted in bringing in a 50% investor to get the first phase at PPGM into production.  Furthermore, cash generated from the first phase is therefore needed for the second phase development and the development of GGM. Consequently, funding for head office and Romania was raised through the disposal of 25% of PPGM and a loan from Sub-Sahara.

Key performance indicators In executing its strategy, the Board considers the Company's key performance indicators to be:

• Cash cost per tonne milled
  • Cash cost per tonne is derived from aggregate cash costs divided by tonnes milled and measures productivity.
  • For PPGM the cash cost for the year was $57/t, 10% higher than the 2016 result.
  • For MPM the cash cost for the year was $47/t, 30% higher than the 2016 result. 
• Cash costs or per ounce sold for gold and per tonne sold for copper concentrate
  • Cash cost per ounce sold is calculated by dividing aggregate cash cost by gold ounces produced or concentrate tonnes produced;
  • For PPGM the cash cost was $819/t, 39% lower than the 2016 result;
  • For MPM the cash cost was $1,653/t, 36% higher than the 2016 result.
• Plant utilisation as in targeted production volumes processed
  • PPGM processed a mill feed of 239,608 tonnes for the year, 103% higher than the 2016 level. The targeted plant capacity in 2017 was 240,000 tonnes per annum;
  • MPM processed a mill feed of 97,285 tonnes for the year, 66% higher than the 2016 level, but 46% below the target of 180,000 tonnes per annum.

Total resources and reserves

• These measure our ability to discover and develop new ore bodies and to replace and extend the life of our operating mines.

In Zimbabwe, continual evaluation of dormant operations takes place with a view to supplementing the mineral resource base in that country. In Romania, the focus is on converting the significant inferred mineral resources, defined exploration targets and prospecting licences into measured and indicated mineral resources which would support a feasibility study. At MPM, the current drilling programme is expected to outline a second open pit by upgrading inferred mineral resources to a minimum of indicated mineral resources.  ·                The rate of utilisation of the Group's cash resources. This is discussed further below. Cash resources ·                As can be seen from the statement of financial position, cash resources for the Group at 31 March 2017 were approximately $1.3 million (2016: $0.8 million). During the year, the cash inflows from operations were $2.9 million (2016: $1.7million outflow) and the inflows from financing activities were a net $6.1 million (2016: $7.6 million), after the repayment of borrowings of $3.4 million (2016: $1.2 million). Against this, the outflows from investing activities were $8.5 million (2016: $8.1 million). The Directors monitor the cash position of the Company closely and seek to ensure that there are sufficient funds within the business to allow the Company to meet its commitments and continue the development of the assets. During the year to 31 March 2017, of the $9.4 million of financing raised from share issues and loan drawdowns, $8.8 million, or 93%, was spent on directly developing the three mining properties in Romania and Zimbabwe. ·                The Directors closely monitor the development of the Company's assets and focus on ensuring that the regulatory requirements of the licences are in good standing always and that any capital expenditure on the assets is closely controlled and monitored. Details of the Company's spend on capital items in the year are set out in note 10 of the financial statements. ·                The loss after tax arising from continuing operations during the year was $3.6 million (2016: $6.9 million) However, over the year there was net cash generated by operations of $2.9 million as a result of $6.5 million of non-cash items, principally, depreciation, share option and other share based payment charges, together with movement of a deferred tax credit. The Company raised fresh share capital of $4.2 million (2016: $5.2 million), raised new loan finance of $5.3 million (2016: $3.6 million) and retired debt of $3.4 million (2016: $1.2 million). The net Capital expenditure on the development on mine properties was $8.8 million (2016: $8.7 million). The overall increase in cash available to the Group was therefore $0.5 million (2016: $2.3 million reduction).

Principal risks and Uncertainties The Board has identified the following as being the principal strategic and operational risks (in no order of priority)

• Risk - Going concern

The Group will require more cash for its near term investment purposes - particularly for the development of the BPPM association licence once it is received and for the expansion of Manaila operations to achieve planned increases in mining and production capacity - but is confident that it will be able to raise $10million in cash from investors with whom the Board is currently in negotiation, or otherwise. However, this position could be undermined by a failure to secure the $10million investment.  Further lengthy delays or the failure to be awarded, despite the Company's selection, the BPPM association licence could have a material adverse impact on the Company's cash flow.  The inability to have funds externalised from Zimbabwe to the Company's treasury in the United Kingdom exacerbates the Company's dependence on equity and debt raises to fund corporate overheads. These factors together with unseasonal severe climatic conditions, unforeseen delays in permitting for new mining or plant capacity, cost overruns or adverse commodity price movements are indicative of the material uncertainties which may cast significant doubt about the Company's ability to continue as a going concern.

Mitigation/Comments The Board will continue to engage potential investors to aid understanding of the fundamental strength of the Company's business to be able to attract additional funding when required.  The Board will also whenever possible retain sufficient cash margin to offset contingencies.

Risk - Mining Mining of natural resources involves significant risk. Drilling and operating risks include geological, geotechnical, seismic factors, industrial and mechanical incidents, technical failures, labour disputes and environmental hazards.

Mitigation/Comments Use of strong technical management together with modern technology and electronic tools assist in reducing risk in this area. Good employee relations are also key in reducing the exposure to labour disputes. The Company is committed to following sound environmental guidelines and is keenly aware of the issues surrounding each individual project.

Risk - Commodity prices Commodity prices are subject to fluctuation in world markets and are dependent on such factors as mineral output and demand, global economic trends and geo-political stability.

Mitigation/Comments The Company's management constantly monitors mineral grades mined and cost of production to ensure that mining output becomes or remains economic always. Mining and production shortcomings mentioned above have been addressed in Romania and once output has stabilised at satisfactory levels, it will be possible to hedge future price fluctuations by entering forward selling contracts.  Beyond that, the Company aims to become a low-cost producer of copper and zinc concentrate in Romania by adopting the expansion strategy for Romania.

• Risk - Management and Retention of Key Personnel

The successful achievement of the Company's strategies, business plans and objectives depends upon its ability to attract and retain certain key personnel.

Mitigation/Comments The Company's policy is to the foster a management culture where management is empowered and where innovation and creativity in the workplace are encouraged. To retain key personnel, the Company has introduced a "Share Appreciation Right Scheme" for directors and senior executives which it will shortly be reviewing to take account of all current circumstances.

• Risk - Country and Political

The Company's operations are based in Zimbabwe and Romania. Emerging market economies could be subject to greater risks, including legal, regulatory, economic and political risks, and are potentially subject to rapid change.  In Zimbabwe, the principal risks remain a scarcity of foreign exchange, difficulty with externalisation of funds, and the risk of indigenisation. The country's Indigenisation Regulations are subject to change and are of uncertain effect. Further information on the Indigenisation Regulations is given in Note 26.  With respect to the Giant Gold Mine, where artisanal miners are present, any delay in resolving this issue could impact development of the mine.

Mitigation/Comments The Company's management team is experienced in its areas of operation and skilled at operating within the framework of the local culture in Romania and Zimbabwe to progress its objectives.  In addition, in Zimbabwe our co-investors, Grayfox and Sub-Sahara are well established locally and also experienced and skilled in dealing with the authorities and local communities. The Company routinely monitors political and regulatory developments in each of its countries of operation. In addition, the Company actively engages in dialogue with relevant Government representatives to keep abreast of all key legal and regulatory developments applicable to its operations. The Company has several internal processes and checks in place to ensure that it is wholly compliant with all relevant regulations to maintain its mining or exploration licences within each country of operation.  The Company's strategy as announced in January 2017 was to reduce exposure to Zimbabwe and focus on developing its interests in Romania.

• Risk - Social, Safety and Environmental

The Group's success may depend upon its social, safety and environmental performance, as failures can lead to delays or suspension of its mining activities.

Mitigation/Comments The Group takes its responsibilities in these areas seriously and monitors its performance across these areas on a regular basis.

Outlook The current period under review, as with last year, has seen further progress in the development of the Company's operational status post its exploration focus which had continued until early 2014.

Once again there have been significant challenges that have been overcome by management's dedication and hard work; unusually high rainfall levels in Zimbabwe, and extreme cold coupled with lack of necessary capital through funding delays in Romania.

Pickstone-Peerless Gold Mine has performed very well and the phase two sulphide processing facility development is making good progress. The planned increase in annual milling tonnage from circa twenty thousand tonnes per annum to thirty-five thousand tonnes per annum with an expected grade increase to 3.5 grammes per tonne is expected shortly.

Work on the evaluation of Giant Gold Mine has commenced with a view to increasing the defined resources and completion of a scoping study as preludes to pre-feasibility and bankable feasibility studies. In addition, further gold mining opportunities continue to be examined.

In Romania, several significant objectives have been achieved, the most notable being the selection of African Consolidated Resources SRL as the recipient of the Baita Plai association licence, the funding of the licence requirements, and the commencement of the final procedures to issue the licence. Additionally, two strategic investors have indicated interest in funding the reopening and redevelopment of the two existing mining operations.

The expectation is that phase one of the reopening of the Baita Plai Polymetallic Mine at ten thousand tonnes ore mined and processed will be achieved in mid-2018.

The minority interest of 49.9% in Sinarom Mining Group SRL, the operating company of the Manaila Polymetallic Mine, has been acquired giving the Vast Group total ownership of the mine. Improvements to the open cut mining operation at Manaila and to the metallurgical complex at Iacobeni have resulted in high grade copper and zinc concentrate production and the commencement of a gravity gold concentrate that will provide a third income stream when optimised.

To complement the expected production from Baita Plai Polymetallic Mine and the improved production at the Manaila Polymetallic Mine, Vast will, with the benefit of the planned additional funding, be progressing the construction of a new metallurgical complex adjacent to the Manaila open cut mine. In addition to improved capacity and the benefit of modern technology in terms of lower costs and improved recoveries, the new complex will save transport costs of ore and tailings between the mine and the current complex. These transport costs currently represent up to 33% of the total operating cost of the mine.

The short to medium term objective of Vast is to have two cash generating mines in both Romania and Zimbabwe, whilst seeking additional and potentially larger mining operations in both countries.

As always, my thanks to fellow board members and management for the commitment and hard work that has been put into the company.

On behalf of the Board Roy A. Pitchford Group Chief Executive Officer 21 September 2017

For further information, visit www.vastresourcesplc.com or please contact:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Group statement of comprehensive income for the year ended 31 March 2017

The accompanying accounting policies and notes form an integral part of these financial statements.

Group statement of changes in equity for the year ended 31 March 2017

The accompanying accounting policies and notes form an integral part of these financial statements

Company statement of changes in equity for the year ended 31 March 2017

The accompanying accounting policies and notes form an integral part of these financial statements.

Group and Company statements of financial position As at 31 March 2017

The accompanying accounting policies and notesform an integral part of these financial statements.

The parent Company reported a loss after taxation for the year of $4.615 million (2016: $5.807 million).

The financial statements were approved and authorised for issue by the Board of Directors on 21 September 2017 and were signed on its behalf by:

Roy C. Tucker                                                                                                                                                        Director 21 September 2017

Group and Company statements of cash flow for the year ended 31 March 2017

The accompanying notes and accounting policies form an integral part of these financial statements.

Statement of accounting policies for the year ended 31 March 2017

General information Vast Resources plc and its subsidiaries (together "the Group") are engaged principally in the exploration for and development of mineral projects in Sub-Saharan Africa and Eastern Europe. Since incorporation the Group has built an extensive and interesting portfolio of projects in Zimbabwe and more recently in Romania. The Company's ordinary shares are listed on the AIM market of the London Stock Exchange.

Vast Resources plc was incorporated on as a public limited company under UK Company Law with registered number 05414325. It is domiciled and registered at 60 Gracechurch Street, London EC3V 0HR.

Basis of preparation and going concern assessment The principal accounting policies adopted in the preparation of the financial information are set out below. The policies have been consistently applied throughout the current year and prior year, unless otherwise stated. These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS.

The consolidated financial statements incorporate the results of Vast Resources plc and its subsidiary undertakings as at 31 March 2017.

The financial statements are prepared under the historical cost convention on a going concern basis.

At the date of these financial statements the Directors expect that the Group's Zimbabwean operations, together with a locally agreed overdraft facility, will provide it with sufficient cash flow to support its capital requirements in Zimbabwe.  However, the Group will require further funding to finance the Group's and Company's working capital requirements and the development of the Group's Romanian assets.  The Directors are confident that the Company will be able to raise funds for such requirements from investors as required although no binding funding agreement is in place at the date of this Report.  These conditions indicate the existence of material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern.  The financial statements do not include the adjustment that would result if the Group and Company were unable to continue as a going concern.

Changes in Accounting Policies At the date of authorisation of these financial statements, a number of Standards and Interpretations were in issue but were not yet effective. The Directors do not anticipate that the adoption of these standards and interpretations, or any of the amendments made to existing standards as a result of the annual improvements cycle, will have a material effect on the financial statements in the year of initial application.

Areas of estimates and judgement The preparation of the Group financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are discussed below:

a)             Useful lives of property, plant & equipment Property, plant and equipment are depreciated over their useful economic lives. Useful economic lives are based on management's estimates of the period that the assets will be in operational use, which are periodically reviewed for continued appropriateness. Due to the long life of certain assets, changes to estimates used can result in significant variations in the carrying value. More details, including carrying values, are included in note 10 to the financial statements.

b)             Impairment of intangibles and mining assets The Group reviews, on an annual basis, whether deferred exploration costs, acquired as intangible assets or property, plant & equipment ("PP&E"), mining options and licence acquisition costs have suffered any impairment. The recoverable amounts are determined based on an assessment of the economically recoverable mineral reserves, the ability of the Group to obtain the necessary financing to complete the development of the reserves and future profitable production or proceeds from the disposition of recoverable reserves. Actual outcomes may vary.

c)             Share based payments The Group operates an equity settled and cash settled share based remuneration scheme for key employees. Employee services received, and the corresponding increase in equity, are measured by reference to the fair value of equity instruments at the date of grant.

In addition, the Group may frequently enter into financial arrangements that involve the convertibility of part or all of the liabilities assumed under these arrangements into shares in the parent Company, under an option arrangement.

The fair value of these share options is estimated by using the Black Scholes model on the date of grant based on certain assumptions. Those assumptions are described in note 22 and include, among others, the expected volatility and expected life of the options.

d)             Going concern and Inter-company loan recoverability . The Group's cash flow projections, which have used conservative assumptions on forward commodity prices, indicate that the Group should have sufficient resources to continue as a going concern, although, as stated in the Principal risks section of the strategic report, the group will require additional funding for its near-term investment plans. While the group is confident of its capacity to raise this funding, should it not materialise, or if the projections not be realised, the Group's going concern would depend on the success of future fund-raising initiatives. These conditions indicate the existence of material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern.

The recoverability of inter-Company loans advanced by the Company to subsidiaries depends also on the subsidiaries realising their cash flow projections.

e)             Provisions The Group is required to estimate the cost of its obligations to realise and rehabilitate its mining properties.

The estimation of the cost of complying with the Group's obligations at future dates and in economically unpredictable regions, and the application of appropriate discount rates thereto, gives rise to significant estimation uncertainties.

f)             VAT recoverable In countries where the Group has productive mining operations carried out by its subsidiaries, those subsidiaries are registered for Value Added Tax (VAT) with their respective local taxation authorities and, as their outputs are predominantly zero-rated for VAT, receive net refunds of VAT in respect of input tax borne on their inputs. This amount is carried as a receivable until refunded by the State, which can take some considerable time, both in Zimbabwe and Romania.

The amount carried as a receivable is determined in accordance with the returns submitted to the taxation authorities. While every effort is made by Management to ensure these returns are correct, the aggressive taxation regime in Zimbabwe, coupled with that nation's Government's ongoing and critical fiscal crisis, may give rise to circumstances where part of these amounts may subsequently prove to be irrecoverable, or only recoverable after a prolonged period.

Further details of the specific amounts concerned are given in note 15.

Basis of consolidation Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the Company considers all relevant facts and circumstances, including:

• The size of the Company's voting rights relative to both the size and dispersion of other parties who also hold voting rights.
• Substantive potential voting rights held by the Company and by other parties.
• Other contractual arrangements.
• Historic patterns in voting attendance.

The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Business combinations The financial information incorporates the results of business combinations using the purchase method. In the statement of changes in equity, the acquirer's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Group statement of comprehensive income from the date on which control is obtained. The assets acquired have been valued at their fair value. Any excess of consideration paid over the fair value of the net assets acquired is allocated to the mining asset. Any excess fair value over the consideration paid is considered to be negative goodwill and is immediately recorded within the income statement.

Where business combinations are discontinued, whether by closure or disposal to third parties, any resultant gain or loss on the discontinued operation is identified separately and dealt with in the Group's consolidated income statement as a separate item.

Employee Benefit Trust ("EBT") The Company has established an Employee Benefit Trust. The assets and liabilities of this trust comprise shares in the Company and loan balances due to the Company. The Company includes the EBT within its accounts and therefore recognises an EBT reserve in respect of the amounts loaned to the EBT and used to purchase shares in the Company.  Any cash received by the EBT on disposal of the shares it holds will be recognised directly in equity. Any shares held by the EBT are treated as cancelled for the purposes of calculating earnings per share.

Financial assets The Group's financial assets consist of cash and cash equivalents, other receivables and available for sale investments. The Group's accounting policy for each category of financial asset is as follows:

Loans and receivables These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the statement of comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

The Group's loans and receivables comprise other receivables and cash and cash equivalents in the statement of financial position.

Cash and cash equivalents These amounts comprise cash on hand and balances with banks. Cash equivalents are short term, highly liquid accounts that are readily converted to known amounts of cash. They include short-term bank deposits and short-term investments.

Any cash or bank balances that are subject to any restrictive conditions, such as cash held in escrow pending the conclusion of conditions precedent to completion of a contract, are disclosed separately as "Restricted cash".

There is no significant difference between the carrying value and fair value of receivables.

Available for sale Non-derivative financial assets not included in the categories above are classified as available-for-sale and comprise the Group's strategic investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. They are carried at fair value with changes in fair value recognised directly in equity. Where a decline in the fair value of an available-for-sale financial asset constitutes evidence of impairment, for example if the decline is significant or prolonged, the amount of the loss is removed from equity and recognised in the profit or loss for the year.

Financial liabilities The Group's financial liabilities consist of trade and other payables (including short terms loans) and long term secured borrowings. These are initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method. Where any liability carries a right to convertibility into shares in the Group, the fair value of the equity and liability portions of the liability is determined at the date that the convertible instrument is issued, by use of appropriate discount factors.

Foreign currency The functional currency of the Company and all of its subsidiaries outside Romania is the United States Dollar, while the functional currency of the Company's Romanian subsidiaries is the Romanian Lei (RON) ; these are the currencies of the primary economic environment in which the Company and its subsidiaries operate.

Transactions entered into by the Group entities in a currency other than the currency of the primary economic environment in which it operates (the "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the date of the statement of financial position.  Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are similarly recognised immediately in profit or loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation.

The exchange rates applied at each reporting date were as follows:

• 31 March 2017        $1.2253: £1    and   $1: RON 4.2615  
• 31 March 2016        $1.4367: £1    and   $1: RON 3.9349  
• 31 March 2015        $1.4836: £1    and   $1: RON 4.1115

Goodwill Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, re-measured subsequently through profit or loss. Any direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income.

Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

Intangible assets Mining rights Mineral rights are recorded at cost less amortisation and provision for diminution in value. Amortisation will be over the estimated life of the commercial ore reserves on a unit of production basis.

Licences for the exploration of natural resources will be amortised over the lower of the life of the licence and the estimated life of the commercial ore reserves on a unit of production basis.

Inventories Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Weighted average cost is used to determine the cost of ordinarily inter-changeable items.

Mining inventory includes run of mine stockpiles, minerals in circuit, finished goods and consumables. Stockpiles, minerals in circuit and finished goods are valued at their cost of production to their point in process using a weighted average cost of production, or net realisable value, whichever is the lower. Low grade stockpiles are only recognised as an asset when there is evidence to support the fact that some economic benefit will flow to the Company on the sale of such inventory. Consumables are valued at their cost of acquisition, or net realisable value, whichever is the lower.

Investment in subsidiaries The Company's investment in its subsidiaries is recorded at cost less any impairment.

Leased assets

Where assets are financed by leasing agreements that do not give rights approximating ownership, these are treated as operating leases. The annual rentals are charged to profit or loss on a straight-line basis over the term of the lease.

Non-controlling interests For business combinations completed on or after 1 January 2010 the Group has the choice, on a transaction by transaction basis, to initially recognise any non-controlling interest in the acquiree which is a present ownership interest and entitles its holders to a proportionate share of the entity's net assets in the event of liquidation at either acquisition date fair value or, at the present ownership instruments' proportionate share in the recognised amounts of the acquiree's identifiable net assets. Other components of non-controlling interest such as outstanding share options are generally measured at fair value.

The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests.

Pension costs Contributions to defined contribution pension schemes are charged to profit or loss in the year to which they relate.

Production expenses Production expenses include all direct costs of production, including depreciation of property plant and equipment involved in the mining process, but excluding mine and Company overhead.

Property, plant and equipment Land is not depreciated. Items of property, plant and equipment are initially recognised at cost and are subsequently carried at depreciated cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future costs of dismantling and removing items. The corresponding liability is recognised within provisions.

Depreciation is provided on all other items of property and equipment so as to write off the carrying value of items over their expected useful economic lives. It is applied at the following rates:

Buildings                                            -              2.5% per annum, straight line Plant and machinery                        -              15% per annum, reducing balance Fixtures, fittings & equipment        -              20% per annum, reducing balance Computer assets                               -              33.33% per annum, straight line Motor vehicles                                   -              15% per annum, reducing balance

Proved mining properties Depletion and amortisation of the full-cost pools is computed using the units-of-production method based on proved reserves as determined annually by management.

Capital works in progress Property, plant and equipment under construction are carried at its accumulated cost of construction and not depreciated until such time as construction is completed or the asset put into use, whichever is the earlier.

Provision for rehabilitation of mining assets Provision for the rehabilitation of a mining property on the cessation of mining is recognised from the commencement of mining activities. This provision accounts for the full cost to rehabilitate the mine according to good practice guidelines in the country where the mine is located, which may involve more than the stipulated minimum legal commitment.

When accounting for the provision the Company recognises a provision for the full cost to rehabilitate the mine and a matching asset accounted for within the non-current mining asset. The rehabilitation provision is discounted using a risk-free rate, which is linked to the currency in which the costs are expected to be incurred, and the applicable inflation rate applied to the cash flows. The unwinding of the discounting effect is recognised within finance expenses in the income statement.

Revenue Revenue from the sales of goods is recognised when the Group has transferred the significant risks and rewards of ownership to the buyer and it is probable that the Group will receive the previously agreed upon payment. These criteria are considered to be met when the goods are delivered to the buyer. Where the buyer has a right of return, the Group defers recognition of revenue until the right to return has lapsed. However, where high volumes of sales are made to established wholesale customers, revenue is recognised in the period where the goods are delivered less an appropriate provision for returns based on past experience. The same policy applies to warranties.

Provided the amount of revenue can be measured reliably and it is probable that the Group will receive any consideration, revenue for services is recognised in the period in which they are rendered.

Share based payments

Equity-settled share based payments Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the fair value of goods and services received is charged to profit or loss, except where it is in respect to costs associated with the issue of shares, in which case, it is charged to the share premium account.

Cash-settled share based payments The Company also has cash-settled share based payments arising in respect of the EBT (see below and Note 22). A liability is recognised in respect of the fair-value of the benefit received under the EBT and charged to profit or loss over the vesting period. The fair-value is re-measured at each reporting date with any changes taken to profit or loss.

Remuneration shares Where remuneration shares are issued to settle liabilities to employees and consultants, any difference between the fair value of the shares on the date of issue and the carrying amount of the liability is charged to profit or loss.

Stripping costs Costs incurred in stripping the overburden to gain access to mineral ore deposits are accounted for as follows:

Stripping costs incurred during the development phase of the mine (before production begins) are capitalised as part of the depreciable cost of building, developing and constructing the mine. Capitalised costs are amortised using the units of production method, once production begins.

Stripping costs incurred during the production phase of the mine which give rise to the production of usable inventory are accounted for in accordance with the principles contained in the group's policy on Inventories.  Stripping costs incurred in the production phase of the mine which result in improved access to ore are capitalized and recognized as additions to non-current assets provided that it is probable that the future economic benefit from improved access to the ore body associated with the stripping activity will flow to the Company, that it is possible to identify the component of the ore body to which access has been improved and that the costs relating to the stripping activity associated with that component of the ore body can be measured reliably.

Tax The major components of income tax on the profit or loss include current and deferred tax.

Current tax Current tax is based on the profit or loss adjusted for items that are non-assessable or disallowed and is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Tax is charged or credited to the statement of comprehensive income, except when the tax relates to items credited or charged directly to equity, in which case the tax is also dealt with in equity.

Deferred tax Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position differs to its tax base, except for differences arising on:

• The initial recognition of goodwill;
• The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and
• Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the differences will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when deferred tax liabilities/(assets) are settled/(recovered). Deferred tax balances are not discounted.

Notes to financial statements

For the year ended 31 March 2017

1    Segmental analysis

The Group operates in one business segment, the development and mining of mineral assets. The Group has interests in two geographical segments being Southern Africa (primarily Zimbabwe) and Europe (primarily Romania). 

The Group's operations are reviewed by the Board (which is considered to be the Chief Operating Decision Maker ('CODM')) and split between mining exploration and development and administration and corporate costs. 

Exploration and development is reported to the CODM only on the basis of those costs incurred directly on projects. All costs incurred on the projects are capitalised in accordance with IFRS 6, including depreciation charges in respect of tangible assets used on the projects. 

Administration and corporate costs are further reviewed on the basis of spend across the Group.

Decisions are made about where to allocate cash resources based on the status of each project and according to the Group's strategy to develop the projects.  Each project, if taken into commercial development, has the potential to be a separate operating segment.  Operating segments are disclosed below on the basis of the split between exploration and development and administration and corporate.

Revenue analysis by geographical location, product and customer

100% of sales (2016: 100%) in both Romania and Zimbabwe were made to a single customer in each respective country.

There are no non-current assets held in the Company's country of domicile, being the United Kingdom (2016: $nil).

2    Group loss from operations

3    Auditor's remuneration

4    Finance income and expense

5    Taxation

Deferred tax assets are only recognised in the Group where the company concerned has a reasonable expectation of future profits against which the deferred tax asset may be recovered.

The asset arises in a subsidiary company which has allowable tax losses of $1.8 million (2016: $6.4 million), which are expected to be utilised in the immediate forthcoming periods.

However, of this total, only $1.8 million is anticipated to be off settable against profits in the immediate future. The balance will only be recoverable against future profits, the timing of which is uncertain, and a deferred tax asset has not been recognised in respect of these losses. A deferred tax asset has not been recognised in respect of accumulated tax losses for the Company.

6       Employees

7          Directors' remuneration

The Directors are considered to be the key management of the Group and Company.

Four of the Directors at the end of the period have share options receivable under long term incentive schemes. The highest paid Director received an amount of $210,000 (2016: $210,000).

Included within the above remuneration are amounts accrued at 31 March 2017; please refer to the Directors' Report for full detail.

8          Loss per share

9    Loss for the financial year

The Company has adopted the exemption allowed under Section 408(1b) of the Companies Act 2006 and has not presented its own income statement in these financial statements.

10     Property, plant and equipment

10     Property, plant and equipment (cont.)

11     Investments in subsidiaries

The principal subsidiaries of Vast Resources plc, all of which are included in these consolidated Annual Financial Statements, are as follows:

The table above shows the principal subsidiaries of the Company. A full list of all group subsidiaries is given in Note 29, at the end of this report.

Notes

i.      The Company has effective control of this entity.

ii.     The Company has effective control of this entity by virtue of its casting vote.

iii.    See note 28 for details of post reporting date events concerning the Company's holding in this subsidiary.

12     Loans to group companies

Loans to Group companies are repayable on demand, subject to relevant exchange control approvals being obtained.  The treatment of this balance as non-current reflects the Company's expectation of the timing of receipt.

   13     Business combinations during the year

Sinarom Mining Group On 22 July 2015 the Group acquired 50.1% of the voting equity instruments of Sinarom Mining Group SA (SMG), a Romanian company whose principal activity is ownership and operation of the Manaila mine in Romania. The principal reason for this acquisition was to expand the Group's mining operations.

This acquisition was reported in the year to 31 March 2016 and included a restatement of the value of the underlying property, plant and equipment in accordance with the best estimates of management at the time. In the current year a professional valuation of the Company's assets has been undertaken which results in this previous re-statement being reduced. The resultant impairment of $575,254 has been treated as an impairment of value in the current year.

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and gain arising, as reported in the year to 31 March 2016, are as follows:

14     Inventory

There is no material difference between the replacement cost of stocks and the amount stated above.

15     Receivables

At the reporting date, of the total amount carried as VAT receivable, $2,374,058 relates to subsidiary companies in Zimbabwe where the ongoing fiscal crisis experienced by the State manifests itself in long delays in recovering input tax from the Zimbabwe Revenue Authority (ZIMRA). Of this $2,374,058, $247,582 is due to Canape Investments (Private) Limited (Canape) where it is part of an ongoing dispute with ZIMRA as to the allowability of the input tax. This dispute dates back to 2011 and has thus far resulted in the recovery of over $500,000 of allowable input tax, of which the balance due is subject to gaining final approval from ZIMRA.

While ZIMRA did issue assessments for VAT totalling $2,998,363 in January 2017, Canape did lodge objections to these assessments and Canape and its professional advisors in Zimbabwe are of the opinion that this objection has de facto been allowed, and that the likelihood of eventually recovering this amount is good, although there does remain some uncertainty as to the date by which the amount will ultimately be refunded.

Of the amount of $2,126,476 due to Breckridge Investments (Private) Limited, $1,430,483 is past due for repayment, with a $324,481 being overdue for more than 12 months. The overdue amount was received in full in July 2017.

At the reporting date, of the total amount carried as VAT receivable, $484,101 relates to the Romanian subsidiary, African Consolidated Resources SRL ('AFCR'), which company expects to receive the association mining licence at Baita Plai.  The Romanian Revenue Authority has confirmed that this will be repaid subject to their normal audit procedures, when the association mining licence is in hand.  Legal advice received by AFCR is that the VAT is repayable in any event.

16     Available for sale investments

Available for sale investments comprise shares in quoted companies

17     Loans and borrowings

Non-current secured borrowings consist of:

i)          $1,656,042 loan from a third party secured by a pledge of the Group's shareholding in its subsidiary company, Canape Investments (Private) Limited. The loan bears interest at a rate of 12% per annum. The loan is repayable in four equal six-monthly amounts commencing in April 2016. The loan was repaid in full on 6 July 2017;

ii)         $3,106,182 loan from a third party secured by a pledge over the Company's shareholding in all its operating subsidiaries in Zimbabwe and Romania. The loan bears interest at 12% per annum and is repayable by March 2021. A further $1,000,000 of this facility was drawn down after the reporting date

iii)       $76,642 asset financing loans secured on the underlying movable assets belonging to ACR SRL

Current unsecured borrowing consists of:

1. $1,150,000 loan from the non-controlling interest in Dallaglio Investments (Private) Limited, the operating company for the Pickstone Peerless Gold Mine,
2. $172,557 loans from the non-controlling interests in African Consolidated Resources SRL, the holder of the rights to the Baita Plai Mine.
3. $79,772 short term bank loan to Sinarom Mining Group SRL, which is under dispute.

The loans from the non-controlling interests are interest free and have no fixed terms of repayment.

The overdraft is held in Breckridge Investments (Private) Limited. It bears interest at 12% per annum and is secured by a Special Notarial General Covering Bond over the plant and equipment of the Company, and guarantees given by the shareholders, which includes Canape Investments (Private) Limited.

18        Trade and other payables

19     Provisions

As more fully set out in the Statement of Accounting Policies, the Group provides for the cost of the rehabilitation of a mining property on the cessation of mining. Provision for this cost is recognised from the commencement of mining activities.

This provision accounts for the estimated full cost to rehabilitate the mines at both Manaila and Pickstone Peerless according to good practice guidelines in the country where the mine is located, which may involve more than the stipulated minimum legal commitment. When accounting for the provision the Group recognises a provision for the full cost to rehabilitate the mine and a matching asset accounted for within the non-current mining asset.

20        Financial instruments - risk management

Significant accounting policies Details of the significant accounting policies in respect of financial instruments are disclosed on pages 22-27 of the annual report. The Group's financial instruments comprise available for sale investments (note 16), cash and items arising directly from its operations such as other receivables, trade payables and loans.

Financial risk management The Board seeks to minimise its exposure to financial risk by reviewing and agreeing policies for managing each financial risk and monitoring them on a regular basis. No formal policies have been put in place in order to hedge the Group and Company's activities to the exposure to currency risk or interest risk; however the Board will consider this periodically. No derivatives or hedges were entered into during the year.

The Group and Company is exposed through its operations to the following financial risks:

• Credit risk
• Market risk (includes cash flow interest rate risk and foreign currency risk)
• Liquidity risk

The policy for each of the above risks is described in more detail below.

The principal financial instruments used by the Group, from which financial instruments risk arises are as follow:

• Receivables
• Cash and cash equivalents
• Trade and other payables (excluding other taxes and social security) and loans
• Available for sale investments

The table below sets out the carrying value of all financial instruments by category and where applicable shows the valuation level used to determine the fair value at each reporting date.  The fair value of all financial assets and financial liabilities is not materially different to the book value.

Credit risk Financial assets, which potentially subject the Group and the Company to concentrations of credit risk, consist principally of cash, short-term deposits and other receivables. Cash balances are all held at recognised financial institutions. Other receivables are presented net of allowances for doubtful receivables.  Other receivables currently form an insignificant part of the Group's and the Company's business and therefore the credit risks associated with them are also insignificant to the Group and the Company as a whole.

The Company has a credit risk in respect of inter-company loans to subsidiaries. The recoverability of these balances is dependent on the commercial viability of the exploration activities undertaken by the respective subsidiary companies. The credit risk of these loans is managed as the directors constantly monitor and assess the viability and quality of the respective subsidiary's investments in intangible mining assets.

Inter-company loan amounts between the holding company and its Zimbabwean subsidiary, Canape Investments, are subject to credit risk in so far as the Zimbabwe's exchange control regulations, which change from time to time, may prevent timeous settlement.

Maximum exposure to credit risk The Group's maximum exposure to credit risk by category of financial instrument is shown in the table below:

The Company's maximum exposure to credit risk by class of financial instrument is shown in the table below:

*Net of impairment charges on advances to Group companies of $8.5 Million (2016 - $8.5 million)

Market risk Cash flow interest rate risk The Group has adopted a non-speculative policy on managing interest rate risk.  Only approved financial institutions with sound capital bases are used to borrow funds and for the investments of surplus funds.

The Group and the Company seeks to obtain a favourable interest rate on its cash balances through the use of bank deposits. At the reporting date, the Group had a cash balance of $1.326 million (2016: $0.831 million) which was made up as follows:

At the reporting date, the Company had a cash balance of $1.239 million (2016: $0.615 million) which was made up as follows:

The Group had interest bearing debts at the current year end of $5.698 million (2016: $3.744 million). These are made up as follows:

Foreign currency risk

Foreign exchange risk is inherent in the Group's and the Company's activities and is accepted as such. The majority of the Group's expenses are denominated in United States Dollars and therefore foreign currency exchange risk arises where any balance is held or costs are incurred, in currencies other than United States Dollars. At 31 March 2017 and 31 March 2016, the currency exposure of the Group was as follows:

The effect of a 10% strengthening of Sterling against the US dollar at the reporting date, all other variables held constant, would have resulted in decreasing post tax losses by $56,690 (2016: $27,159 increase). Conversely the effect of a 10% weakening of Sterling against the US dollar at the reporting date, all other variables held constant, would have resulted in increasing post tax losses by $56,690 (2016: $27,159 decrease).

At 31 March 2017 and 31 March 2016, the currency exposure of the Company was as follows:

Liquidity risk Any borrowing facilities are negotiated with approved financial institutions at acceptable interest rates. All assets and liabilities are at fixed and floating interest rate. The Group and the Company seeks to manage its financial risk to ensure that sufficient liquidity is available to meet the foreseeable needs both in the short and long term. See also references to Going Concern disclosures in the Strategic Report.

As set out in Note 18, of the consolidated trade and other payables balance of $7.109 million, $5.386 million is due for payment within 60 days of the reporting date.

Capital The objective of the directors is to maximise shareholder returns and minimise risks by keeping a reasonable balance between debt and equity. In previous years the Company and Group has minimised risk by being purely equity financed. In the current year, the Group has assumed debt risk but has kept the net debt amount as low as possible.

21     Share capital

* Details of the shares issued during the year are as shown in the table below and in the Statement of Changes of Equity.

There were no shares reserved for issue under share options at 31 March 2017 (2016:13,970,022). The number of shares held by the EBT at 31 March 2017 was 32,500,000 (2016: 32,500,000), see note 22 for additional details about the EBT.

The deferred shares carry no rights to dividends or to participate in any way in the income or profits of the Company.  They may receive a return of capital equal to the amount paid up on each deferred share after the ordinary shares have received a return of capital equal to the amount paid up on each ordinary share plus £10,000,000 on each ordinary share, but no further right to participate in the assets of the Company.  The Company may, subject to the Statutes, acquire all or any of the deferred shares at any time for no consideration.  The deferred shares carry no votes.

The ordinary shares carry all the rights normally attributed to ordinary shares in a company subject to the rights of the deferred shares.

See also Note 28 for details of share issues after the reporting date.

Crede Capital financing agreement As reported in the report for the year to 31 March 2016, on 4 January 2016 the entered into a financing agreement with Crede CG III Limited (Crede) by which Crede would subscribe for new ordinary shares of 0.1p each in the Company in order to raise up to £5.0 million. In addition to the new ordinary shares Crede would also receive one warrant for each share issued, which warrant would entitle it either to one share at a price of 130 per cent of the issue price of the shares to which the warrant related or to a number of shares to be determined by a calculation based on a Black Scholes valuation of the shares at the time of exercise.

In January 2016 the first tranche of funding was executed and the initial 156,250,000 new Ordinary Shares had been issued together with 156,250,000 warrants. As at 31 March 2016 Crede had exercised 70,745,774 warrants and held 85,504,226 unexercised warrants. These were all exercised during the current year, as detailed in the table above.

On 5 April 2016, the Company announced that it was withholding its consent to the issue of the second tranche of shares and warrants, as this would result in Crede exceeding the 25% shareholding limit contained in the agreement.

On 1 July 2016, at the General Meeting of the Company held on that date to seek approval from members for authority to issue further shares to Crede in the course of the third tranche of the agreement, the shareholders voted not to consent to the increase of capital required. This gave the Company the right to terminate the agreement which right the Company then exercised.

Directors and Management financing agreement As previously reported, on 6 January 2016 the Directors of the Company, together with certain senior managers, subscribed an aggregate amount of £0.5 million on the same terms as agreed with Crede; 62,500,000 new Ordinary Shares were issued by the Company together with 62,500,000 warrants.

As at 31 March 2016, 11,356,077 of these warrants had been exercised and 18,518,516 new ordinary Shares issued. At 31 March 2016, the Directors and senior managers held 51,143,923 unexercised warrants; of these, a total of 36,560,673 were exercised during the current year, as detailed in the table above.

At 31 March 2017, the Directors and senior managers held 5,208,313 unexercised warrants.

Existing shareholders financing agreement As reported in the report for the year to 31 March 2016, on 4 March 2016 the Company entered into an agreement with a number of existing shareholders (the "Investors") for their subscription for up to £0.8 million, on similar terms as agreed with Crede. The investments was to be in four tranches, on 4 March 2016; 3 April 2016; 4 July 2016 and 3 October 2016 respectively.

The first tranche of £400,000 resulted in 50,000,000 new Ordinary Shares and 50,000,000 warrants being issued by the Company. At 31 March 2016 the Investors had exercised the 50,000,000 warrants, exchanging them for 81,535,714 new ordinary Shares; at 31 March 2016 the Investors had no unexercised warrants remaining from the initial subscription.

The second, third and fourth tranches of the arrangement proceeded as agreed. A total of 140,211,632 shares were subscribed for; in addition 140,211,632 warrants were issued. Of these, 133,597,871 were exercised before 31 March 2017. The total funds raised in the three tranches was £603,661

At 31 March 2017 there remained 6,613,756 warrants unexercised by these investors.

Bracknor Fund financing arrangement On 11 October 2016, the Company announced it had entered into an agreement with Bracknor Fund Limited ("Bracknor") under which Bracknor subscribed for US$2 million convertible Loan Notes in the Company, with a commitment by Bracknor to provide a further US$3.0 million, in tranches of $1M, if requested.

The Loan Notes were unsecured, interest free and may be capable of conversion into ordinary shares in the Company at any time during a 12-month conversion period immediately following the Subscription, at a price equal to 90 per cent. of the lowest average price of the Shares in the five business days immediately preceding the conversion date. In addition, warrants were to be issued to Bracknor exercisable at 130 per cent. of the lowest Average Price of Shares in the five business days immediately preceding the issue of the Loan Notes.

The funds realised from the Subscription were to be applied to the ongoing refinement to the zinc production line at Manaila, ongoing drilling to expand the maiden JORC resource at Manaila, the drilling, evaluation and design of the Faneata Tailings Dam reprocessing facility, the initial payments associated with the Baita Plai Mining sub-licence, once granted, and the general corporate overheads of the Company.

The Loan Notes, together with 80,425,000 warrants, were issued on 10 October 2016.

The Loan Notes were converted between 26 October 2016 and 29 November 2016, as more fully detailed in the table above. Bracknor exercised a total of 75,000,000 warrants, being issued a total of 300,000,000 shares, between 22 February 2017 and 6 March 2017. As at 31 March 2017, a total of 5,450,000 warrants are still unexercised.

The charges arising from the issue of warrants in connection with all of the foregoing four financing arrangements have been accounted for and the charge in respect of these warrants has been recognised.

22     Share based payments

Equity - settled share based payments The Company has granted share options and warrants to directors, staff and consultants.

In June 2015, the Company also established a Share Appreciation Scheme to incentivise directors and senior executives. The basis of the Scheme is to grant a fixed number of 'share appreciation rights' (SARs) to participants. Each SAR is credited rights to receive at the discretion of the Company ordinary shares in the Company or cash to a value of the difference in the value of a share at the date of exercise of rights and the value at date of grant. The SARS are subject to various performance conditions.

The tables below reconcile the opening and closing number of SAR's in issue at each reporting date:

The tables below reconcile the opening and closing number of share options and warrants in issue at each reporting date:

The weighted average remaining lives of the share options or warrants outstanding at the end of the period is 28 months (2016: 50 months). All of the 708,040,706 options and warrants outstanding at 31 March 2017 are fully vested in the holders and are exercisable at that date; in 2016, of the 247,617,761 options and warrants outstanding, all were fully vested in the holders while 40,000,000 options were not yet exercisable.

Fair value of share options The fair values of share options and warrants granted have been calculated using the Black Scholes pricing model which takes into account factors specific-to-share incentive plans such as the vesting periods of the plan, the expected dividend yield of the Company's shares and the estimated volatility of those shares.  Based on the above assumptions, the fair values of the options granted are estimated to be:

Volatility has been based on historical share price information. A higher rate of volatility is used when determining the fair value of certain options in order to reflect the special conditions attached thereto

Based on the above fair values the expense arising from equity-settled share options and warrants made was $1,648,400 (2016: $1,154,347).

Cash-settled share based payments The directors of the Company have set up an Employee Benefit Trust (EBT) in which a number of employees and directors are participants.  The EBT holds shares on behalf of each participant until such time as the participant exercises their right to require the EBT to sell the shares.  On the sale of the shares the participant receives the appreciation of the value in the shares above the market price on the date that the shares were purchased by the EBT, subject to the first 5% in growth in the share price, on an annual compound basis, being retained by the EBT.  The participant pays 0.01p per share to acquire their rights.  The table below sets out the subscription price and the rights exercisable in respect of the EBT.

As set out in the EBT accounting policy note, the EBT has been included as part of the Company financial statements and consolidated as part of the Group financial statements.

F air value of EBT participant rights

The fair values of the rights granted to participants under the EBT have been calculated using a Black Scholes valuation model.  Based on the assumptions set out in the table below, as well as the limitation on the growth in share price attributable to the participants (as set out in the table above) the fair-values are estimated to be:

The group has recorded liabilities in respect of the EBT of $nil and $nil in 2016 and 2017. Fair value of the EBT is determined by using the Black Scholes model using the assumptions noted in the above table. The group recorded total expenses of $nil and $nil in 2016 and 2017, respectively. The total intrinsic value at 31 December 2016 and 2017 was $nil and $nil, respectively.

Volatility has been calculated by reference to historical share price information

Warrant and Share option expense

23     Reserves

Details of the nature and purpose of each reserve within owners' equity are provided below:

·                Share capital represents the nominal value at 0.1p each of the shares in issue.

·                Share premium represents the balance of consideration received net of fund raising costs in excess of the par value of the shares.

·                The share options reserve represents the accumulated balance of share benefit charges recognised in respect of share options granted by the Company, less transfers to retained losses in respect of options exercised or lapsed.

·                The foreign currency translation reserve represents cumulative foreign exchange differences arising from the translation of the Financial Statements of foreign subsidiaries; this reserve is not distributable by way of dividends.

·                The available for sale reserve represents the gains/(losses) arising on recognising financial assets classified as available for sale at fair value.

·                The EBT reserve has been recognised in respect of the shares in the Company purchased by the EBT; the reserve serves to offset against the increased share capital and share premium arising from the Company effectively purchasing its own shares.

·                The retained deficit reserve represents the cumulative net gains and losses recognised in the Group statement of comprehensive income.

24     Non-controlling Interests

Breckridge Investments (Private) Limited is a 50% owned subsidiary of the Company that has material non-controlling interests (NCI). Control is exercised by the Group by virtue of a casting vote held by the Chairman of the Company, who is the Chief Executive Officer of the Group.

African Consolidated Resources SRL is an 80% owned subsidiary of the Company which also has a NCI. This follows the merger of this company with Mineral Mining in February 2016

Sinarom Mining Group SA is a 50.1% owned subsidiary of the Company which also has a NCI.

Summarised financial information for these three entities, before intra-group eliminations, is presented below together with amounts attributable to NCI:

25     Related party transactions

Company and group Directors and key management emoluments are disclosed in notes 6 and 7.

Group The non-controlling interest in African Consolidated Resources SRL, where 20% of the shareholding of the subsidiary is held by third parties (the "AP Group"), consisting as to a majority of a director and senior executives of the group, namely:

At the reporting date, there was an amount owing by African Consolidated Resources SRL to the AP Group of $117,303 (2016: $127,039)

At the reporting date, there was an amount owing by African Consolidated Resources SRL to the individual related members of the AP Group, totalling $23,233 (2016: $79,934).

At the reporting date, there was an amount owing by African Consolidated Resources SRL to Ozone Homes SRL (Ozone) of $52,448 (2016: $89,428) in respect of transactions undertaken by Ozone in 2014. Ozone is a company controlled by Andrew Prelea, the senior Group executive in Romania. Since the reporting date US$39,000 of the amount due to Ozone has been settled.

At the reporting date, there was an amount owing by Breckridge Investments (Private) Limited (Breckridge) to Hopina Investments (Private) Limited (Hopina) of $1,150,000 (2016: $1,150,000) in respect of plant and equipment disposed of to Breckridge at the commencement of operations at Pickstone Peerless Gold Mine. Hopina is a company controlled by the non-controlling interest in Breckridge.

26     Contingent liabilities and capital commitments

Contingent liability - Zimbabwe Indigenisation Indigenisation regulations extant stipulate that all Zimbabwean registered mining companies, with a net asset value over a certain threshold transfer not less than 51% of their issued shares to indigenous persons within a five-year period.  These regulations are relevant to both Vast Resources Zimbabwe (Private) Limited and Canape Investments (Private) Limited and their subsidiaries which are Group companies registered and operating in Zimbabwe.

Following the profitability achieved from the operation of the Pickstone-Peerless Gold Mine, these regulations now come into effect in respect of the Group's subsidiary, Breckridge Investments (Private) Limited ("Breckridge"). The company's 50% partner, Grayfox Investments (Pvt) Ltd, has an approved indigenisation plan in place and, on account of this, Breckridge has obtained a Certificate of Provisional Compliance under the Indigenisation Regulations, which certificate is effective until 31 May 2018.

All other Zimbabwean companies in the Group were or are in a net liability position at the reporting date, due to them being financed by loans from the holding or other group companies. As such the Directors believe that there is currently no compulsion to affect any transfer of shareholding in these subsidiaries to any third party. Counsel's opinion supports this view.

A number of announcements have been made in the local media of possible amendments to the current regulations which are intended to reassure foreign investors in the Mining Sector. These have included suggestions that local ownership of any mining company listed on the Zimbabwe Stock Exchange would be included in the calculation of any indigenous shareholding. Further, in April 2016 the President of Zimbabwe made a public statement that foreign mining companies operating in Zimbabwe would now comply with the Indigenisation law through retained earnings rather than through the transfer of a controlling 51% shareholding to locals. Compliance with the Indigenisation and Economic Empowerment Policy would now be the retention of value, in the form of wages, salaries, taxation, community ownership schemes and other activities such as procurement and linkage programmes. However, at the date of reporting these changes have not been incorporated into the relevant regulations and their final effect remains uncertain.

If the company's Zimbabwean subsidiaries had to transfer equity interests to local indigenised parties this could result in share based payment charges and/or loss of control of the subsidiaries. The full effect that this legislation might have on the operations of the Group is yet to be quantified and is subject to some uncertainty. It is the Group's stated policy that it will comply with the Indigenisation Regulations once they are clarified and codified.

Contingent liability - Tax Investigation in Zimbabwe On 25 January 2017, the Zimbabwe Revenue Authority issued assessments for Value Added Tax, penalties and interest against Canape Investments (Private) Limited (Canape) for a total of $2,998,363 for the years 2009 to 2015. Canape has entered a formal objection to these assessments. The management of Canape, advised by its professional advisors, consider that little, if any, of the amounts assessed are due and that any amounts which may become payable are fully provided for.

27     Litigation

Marange In 2006 the Group registered several mining claims in Marange under shelf companies. At that time the Group was not aware that the shelf companies had not actually been registered.  In Zimbabwe the registration process had started but the companies were only registered a short period after the claims were registered in their names.  After the registration of the claims 120,031.87 carats of diamonds were acquired from the claims.  The Zimbabwe Mining Commissioner subsequently cancelled the registration of the claims on the instructions of the Minister of Mines.  The Group instituted proceedings in the Zimbabwe High Court challenging the cancellations of the registration of the claims.  The Zimbabwe High Court handed down a judgement declaring that the cancellations were invalid and that the Group legally held the claims. The High Court also ordered that the diamonds, which had been seized from the Group's offices in Harare, should be returned.

The Minister of Mines instructed the Attorney General to note an appeal to the Supreme Court. The appeal was noted but the Attorney General renounced agency because he considered that there were no valid grounds of appeal.  The diamonds that were seized from the Group were not returned.  They are being held in the vault of the Reserve Bank of Zimbabwe.

The Minister of Mines subsequently wrote to the High Court judge asking him to rescind his judgement on the basis that the Group had fraudulently withheld information in order to get a favourable judgement.  Although the Judge had no jurisdiction to deal with the matter because it was on appeal to the Supreme Court, he did issue a judgement rescinding his earlier judgement.  The Group has appealed against that judgement.  Legal opinion is to the effect that the Rescission Judgement is fatally flawed.  The Minister withdrew his appeal to the Supreme Court so if the Supreme Court upholds the appeal against the Rescission Judgement the claims will revert to the Group.

In 2010, soon after the issue of the Rescission Judgement, the Attorney General laid criminal charges against the Group the allegations being that registration of the claims in the names of the non- registered companies was prejudicial to the Ministry of Mines; alternatively, the Group was illegally in possession of the diamonds above.  The Group applied to the High Court for the charges to be quashed.   More than 2 years later, in May 2013, the Judge handed down his judgement.  He ruled that he could not quash the charges and that the Group should have applied for a stay of proceedings until the appeal had been determined.  The suggested application has since been made to the Attorney General. Legal opinion is to the effect that the possibility of conviction on any of the charges is very remote. However, the Attorney General has now withdrawn the charges because, instead of the charges being laid against the parent company or any active group subsidiary, they were laid against African Consolidated Resources (Private) Limited, a company registered in Zimbabwe, which is a shelf company and not a group company.  It could not have been involved because it had no staff.

28     Events after the reporting date

Acquisition of remaining share of Sinarom Mining Group SRL On 22 March 2017 the Company announced that it had concluded an agreement to acquire the remaining 49.9% of Sinarom Mining Group SRL ("Sinarom") through which the Company owns its interest in the Manaila Polymetallic Mine in Romania, thus increasing the Company's ownership of the producing mine to 100%.

The consideration for the purchase of the shares and outstanding loan account owned by the former shareholder was US$1,135,000, with US$400,000 payable by 31 March 2017 and the balance of US$735,000 on 30 April 2017. Transfer of the shares was to take place on the making of the final payment. These payments were made in due course and the shares transferred on 19 July 2017. From this date Sinarom has operated as a wholly owned subsidiary of the Company.

Strategic investment in the Group

On 24 July 2017 the Company announced that it had entered into a conditional heads of terms relating to a proposed two stage investment of up to US$10 million in Vast ('the Proposed Investment') by a corporate finance and investment firm with significant experience and investments in Romania (the 'Investor').

The Proposed Investment was subject to the rights of Sub-Sahara Goldia Investments ('Sub-Sahara') pursuant to its loan agreement with the Company which gives Sub-Sahara a right to provide equivalent finance to the Proposed Investment if the terms and conditions are the same.  Sub-Sahara has exercised that right but has indicated it wishes to work with the Investor to deliver a mutually investment and corporate strategy. 

On 13 September 2017 it was announced that Sub-Sahara had provided an additional $1.68 million on a 180 day loan for payments in connection with the BPPM association licence.

Disposal of non-controlling interest in subsidiary On 30 May 2017 the Company announced that the Reserve Bank of Zimbabwe had approved the assignment of 49.99% of the Company's interest in its loan from its principal Zimbabwean subsidiary, Canape Investments (Private) Limited. As a result, in accordance with the announcement of the made by the Company on 30 January 2017, all conditions precedent relating to the agreement to dispose of a non-controlling portion of its investment in the Pickstone-Peerless and Giant Gold mines had now been met and the disposal will therefore be completed. The Group retains effective voting control over both the Pickstone-Peerless and Giant Gold asset holding companies.

Exercise of warrants Warrants were exercised, and shares issued, as follows:

Appointment of non-executive director On 30 June 2017 Brian Basham was appointed to the board as a non-executive director

Change in Company Secretary and Registered Office On 8 May 2017 Roy Tucker retired from the position of Company Secretary and Ben Harber, of Shakespeare Martineau LLP, was appointed in his place. In addition, the Company's registered office was changed to 60 Gracechurch Street, London, EC3V 0HR.

29     Group subsidiaries

A full list of all subsidiary companies and their registered offices is given below:

*        The company has effective control of this entity

**      Formerly ACR Nominees Ltd

**ENDS**