adminOliver Kazunga, Senior Business Reporter
AIM-listed Vast Resources plc plans to partially dispose of a non-controlling interest in its Pickstone-Peerless and Giant gold mines for about $8 million.
In the half year ended September 30, 2016, Vast Resources saw production at Pickstone-Peerless Mine increasing by 75 percent to 9 452 ounces (oz).
In a statement, the mining concern indicated that it was exiting the Zimbabwe operations to focus on core mining activities in Romania.
“The AIM listed mining company with operations in Romania and Zimbabwe, is pleased to announce 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 $8 million principally to advance the Company’s core activities in Romania,” it said.
It is envisaged that the transaction would provide a significant cash injection to the company by crystallising a portion of the value of Pickstone and Giant while retaining a controlling interest in the operating asset and optionality on future Zimbabwean gold properties.
“Proceeds of the transaction ensure Vast is fully funded to accelerate development of the company’s core Romanian portfolio of polymetallic mining interests into positive cash flow,” it said.
Through three principal transactions with Mauritius-based investment holding company, SSA Group, Vast Resources would make an effective disposal, of 49,99 percent of its 50 percent interest in each of the Pickstone and Giant mines for $4 million, Mining weekly reported.
The Mauritian investment holding firm has also agreed to provide Vast Resources with a $4 million loan.
The loan facility, which would fund the overheads of Vast and capital expenditure at its projects in Romania will be payable over a four-year period attracting an interest rate of one percent per month.
Vast Resources chief executive officer Mr Roy Pitchford commented that the transaction will provide his company with the financial strength to redirect capital to the area of the business it believes yields maximum long-term value accretion.
“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. By accelerating the development of our assets in Romania, enabling the company to become cash flow positive without the need for additional fundraisings, I believe this transaction heralds a new phase of growth for Vast where we have the ability to rebuild shareholder value,” he said.
“We have 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, I am confident that Vast has the potential to be a significant copper and base metal producer in Europe.”
The company says its immediate priority is to expand and develop current resources in and around the Manaila Polymetallic Mine complex and establish one of Europe’s largest copper mining projects.
Mr Pitchford added that SSA Group has demonstrated itself to be an extremely knowledgeable and enthusiastic strategic investor.
“With exceptional influence in Africa, particularly Zimbabwe, SSA’s involvement in the development of other associated gold projects will, I believe, provide further ancillary benefits in the future,” he said.
“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.”
Vast Resources is a mining and resource development company focused on the rapid advancement of high quality brownfield projects and recommencing production at previously producing mines in Romania.
Presently, it operates the Manaila Polymetallic Mine in Romania, which was commissioned in 2015.
The company’s portfolio also includes the Baita Plai Polymetallic Mine in Romania, where work is underway towards obtaining the relevant permissions to start developing and ultimately commissioning the mine. It also has interests in a number of projects in Southern Africa.
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