Vast Resources (AIM:VAST) has raised in aggregate £1.68m through a placing of 1.221 billion shares at a price of 0.15p in order to recommence production at the Baita Plai mine.
Specifically, the cash raised from the placing will be applied towards further working capital required on account of delays to cash flow caused mainly through the pause in production caused by the safety issue with the railway bridge issue announced on 7 September.
This will include the costs of advancement of both decline development work to the lower levels to access higher grade ore and the costs of construction of the second production line in order to maintain the Company’s production schedule and cashflow forecast, Vast noted.
The cash raised will also cover due diligence and legal costs associated with the progression of its asset backed debt financing process in regard to the Baita Plai drilling programme.
Meanwhile, Vast also confirmed that it has reached initial credit committee approval after a period of an in depth preliminary due diligence covering technical evaluation, environmental & social impact assessment and KYC analysis at the project in Romania.
Shares in Vast Resources have risen from lows of 0.15p in the past three months and were trading 1.47% lower this morning at 0.168p.
Vast has now received a proposal with terms and conditions. Whilst indicative terms are released by most institutions at the start of a process, this bank will release documentation after a period of due diligence and further approval from its credit committee.
Vast will now enter into an agreement with this international bank to finalise the terms and due diligence to conclude the financing facility and receive final credit committee approval.
“We are of course disappointed that we have had to come back to the Market for further funding to get Baita Plai to recommence production, but are confident that this is now the final stage,” said Andrew Prelea, Chief Executive Officer of Vast Resources.
He added, “However, we are very pleased to have reached this stage in the process with this international banking institution. Part of the money being raised is to cover the expenses of this exercise.
The finalisation of this process with the strategic long term debt provider will, once final Due Diligence is completed and final approval for the facility is received, mark a significant turning point in the way the Company is financed moving forward.”
Vast received ‘excellent results’ last month from metallurgical test work at its Baita Plai mine in Romania, confirming the group’s overall confidence in the quality of the project.
The company said today’s forecast information will form part of the input for the JORC Reserve and Resource report for Baita Plai expected to be released during October 2020.
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