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Vast Resources partially offloads Zim mines
30/01/2017 00:00:00
by London South East

ROMANIA and Zimbabwe-focused mining company Vast Resources announced on Monday that it has secured a loan facility and signed a conditional agreement for the partial disposal of a non-controlling interest in its Pickstone-Peerless Gold Mine and Giant Gold Mine, providing gross proceeds of $8m, primarily to advance the company's core activities in Romania.

The AIM-traded company said the strategic investment by SSCG Africa Holdings provided gross proceeds of $8m to Vast, by way of $4m cash consideration for the sale of 49.99% of the Company's 50% interest in the two mines

A $4m long term loan to Vast, repayable in four years with interest charged at 12% per annum, was secured on the group's mineral assets.

Vast said the transaction provided a "significant" cash injection to the company by crystallising a portion of the value of Pickstone and Giant, whilst retaining a controlling interest in the operating asset and optionality on future Zimbabwean gold properties.

Proceeds of the transaction would ensure Vast is fully funded to accelerate development of its core Romanian portfolio of polymetallic mining interests into positive cash flow, the board said.

The funding was achieved without the issue of additional equity or convertible securities by the company, it explained, and the disposal remained subject to certain conditions precedent including due diligence and regulatory approval.

The loan was subject to drawdown in two tranches of $2m.

"This transaction provides Vast with the financial strength to redirect capital to the area of the business which we believe will yield the maximum long term value accretion for the company," said chief executive Roy Pitchford.

"By accelerating the development of our assets in Romania, enabling the company to become cashflow positive without the need for additional dilutionary fundraisings, I believe this transaction heralds a new phase of growth for Vast where we have the ability to rebuild shareholder value."

Pitchford said the company had been presented with a uniquely exciting opportunity to re-commission numerous high value brownfield mining assets across Romania, and through the application of a fully funded and robust investment strategy, he was confident that Vast has the potential to be a significant copper and base metal producer in Europe.


"Our immediate priority is to expand and develop our current resources in and around the Manaila Polymetallic Mine complex and establish one of Europe's largest copper mining projects.

"SSA has demonstrated itself to be an extremely knowledgeable and enthusiastic strategic investor."

He said with exceptional influence in Africa, particularly Zimbabwe, SSA's involvement in the development of other associated gold projects should provide further ancillary benefits in the future.

"SSA has also expressed its interest in Vast's wider portfolio, including our Romanian interests, and this may prove fruitful as Vast evaluates longer term expansion plans in Romania; a country which we maintain offers an enormous opportunity for the company."

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