The AIM-listed mining company said it entered the deal with SSCG Africa Holdings Ltd, under which it has conditionally agreed to sell 49.99% of its 50% interest in the two mines in Zimbabwe for USD4.0 million in cash, and has received a USD4.0 million loan.
The loan from SSCG is repayable in four years with interest charged at 12% per annum secured on Vast Resources’ mineral assets.
Vast Resources said the deal provides a “significant cash injection”, allowing it to redirect capital to the area which it believes will yield the maximum long-term value accretion, namely its assets in Romania.
“By accelerating the development of our assets in Romania, enabling the company to become cash flow 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,” said Chief Executive Roy Pitchford.
The interest sale is subject to certain conditions including due diligence and regulatory approval, and the loan is subject to drawdown in two tranches of USD2.0 million each.
Shares in Vast were up 22% at 0.384 pence on Monday morning.-Alliance News