Source: Vast Resources inks deal for Zim, Romania mine projects – NewsDay Zimbabwe October 25, 2019
BY FIDELITY MHLANGA
AIM-listed mining group, Vast Resources plc, has inked documentation for a new US$13,5 million financing arrangement which is set to cover the costs of reaching production at both the Baita Plai Mine in Romania and the Chiadzwa diamond project in Zimbabwe.
A United Kingdom-based fund, Atlas Capital Markets, is to be issued US$15 million of secured convertible bonds at 90% of par, and, carrying 5% interest per year. The bonds mature two years after issuance.
Included in the terms is a “non-conversion period” giving protection from equity dilution following the date of the second tranche of bonds — it provides for six months protection after the first tranche and potentially then 12 months after the second tranche of bonds.
“The bonds provide the required capital to enable the company to bring its two core assets, Baita Plai in Romania and the diamond concession in Zimbabwe, into production,” Vast chief executive Andrew Prelea said in a statement yesterday.
“The agreed non-conversion period, the early redemption and cash settlement options give us flexibility and enable us to limit dilution. The Atlas facility will accelerate the start of production at Baita Plai, while we continue to work on the establishment of a long-term finance facility for Baita Plai and other assets in Romania, whether with the Swiss bank or otherwise.
“We are pleased to have established a new relationship with Atlas Capital Markets and look forward to working together.”
Proceeds will be released to Vast in four tranches, tied to cash flow, with the first tranche comprising US$7,1 million of bonds.
The bond funding proposal will require shareholder approval at a general meeting, to be held on November 8.
Vast Resources plc, which also operates gold mines in Zimbabwe, recently signed a joint venture agreement with Chiadzwa Mineral Resources (Pvt) Limited, a company that represents the Chiadzwa community interests in diamond mining.
Vast told investors that the bond financing does not affect the ongoing process with a Swiss bank or other potential financiers and it continues efforts to secure a long-term financing facility for its Romanian assets, including Baita Plai.
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