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PART ONE OF THREE
Transcript from 22nd June Interview Between Andrew Scott of Proactive Investors and Andrew Prelea CEO Of Vast Resources:
Link: https://www.youtube.com/watch?v=7NbL83OzBAg&feature=youtu.be
0.25 Seconds Whats the Objective of the Placing?
AP: The Objective was as the non-conversion period for Atlas is looming which is at the end of July. We wanted to be prepared. What we realised in the past is the perception of a conversion is worse than the conversion itself. We said to the market we didn't want a conversion to take place. The market seems to have a perception that the conversion is a negative rather than a positive. So we elected after a lot of internal debate To be prepared to be able to pay out the first conversion Tranche for Atlas which carries a premium to cost of 10%. The idea is to have the funds available to pay out Atlas in the first tranch whilse we finalise the term sheets and the refinancing of the total package for Baita
1m26 Seconds The Atlas payment is not due until the end of July?
AP: 29th July Yeah.
So why are you doing this now?
AP: Well the volotility in the market. We've seen a rise in the share price.It's not that easy to raise that amount of money and when the money became available to us we thought it best to be safe rather than be sorry.If we waited until the end of the month it could have caused panic and allow Atlas to convert which could have caused a negative effect on the share price. We thought we'd do it now whilst the funds are available.
Beyond that this also includes the cost of production. We have always said we will be in production by the end of July but we also have to build up a stockpile of concentrate for the sale. We have a buyer for the concentrate (Mercuria) for Copper but you need to gather a significant amount of quantity to ship it and you only get paid on shipment.
To run a mine like Baita where it is no longer in exploration it costs hundreds of thousands of dollars a month, almost 8 to 9 hundred thousand dollars a month. Just to produce signifcant quantities for us to produce and ship a month.
Margins, if people go back through some of those broker notes, they can reverse engineer the calculations (Already done by Kieran and others) thre is a significant margin within that that will allow the company to operate just on the COpper concentrate alone without including the Zinc or Lead and Molydenum.
PART TWO FOLLOWS ....
#AIM #DYOR
PART TWO OF THREE
Link: https://www.youtube.com/watch?v=7NbL83OzBAg&feature=youtu.be
2min59 Seconds: Are you concerned about the perception by investors about the frequency of these placings?
AP: Ofcourse I am. People look at the dilution as a negative and I completely agree with them. My average is a hellavu lot higher than the current share price. We are not an exploration company anymore. We are not burning cash on overheads and costs. The perception on the market is we are using this money for overheads. We are in a building phase of the mine. We are reopening a mine that is going to be in production in less than what about a month from now (June 22nd) and that costs money.
We did borrow money to get it into production and we have done that; we are on budget and are on time. Now we are in the process of producing which costs money. You have to spend the money to produce the concentrate in order to sell.d in bulk we have final met tests now is showing the concentrate quality is higher than we originally anticipated, the recoveries are higher than originally anticipated. We are waiting for the essay results and will publish those as they come through. These are expected to come throughout the course of July and will enable us to produce a JORC.
The purpose of the JORC, I re-iterate, is not for the refinancing. It is to enable us to give to the market which is what they want. Which will allow us to give them what the cash flows will be. We have our internal budget and our internal calculations. However, we cannot produce (publish) them as they are not third party verified. The JORC will allow us to show the market what it is that we are actually working with (Smile)
5min 58 Seconds: Remind us about the longer term refinancing plans. Where are you with those?
AP: At the moment in the previous RNS we announced that we are talking to several financiers; not just one. There are now 3 in play. We are looking at doing a possible syndication of a couple of them as well. Which is time consuming. More importantly it is based on deliveries and first production for one of them and the other one is going through the due process. COVID hasn't helped as they haven't been able to come out here to do their on-site due diligence. We are going through the preliminary approval stage. We are still confident we will be doing the refinance of the total facility on a long term debt, that is not a convertible debt structure. It is an asset backed debt and we believe as we have said previously that we will have a long term financing partner that is non-diluted.
Considering where we were and where we are we are closer to production (now) and so are a completely different kettle of fish as far as financing goes. When you are in production and revenue generating the cost of funds also decreases.
PART THREE TO FOLLOW ....
#AIM #DYOR
PART THREE OF THREE
Link: https://www.youtube.com/watch?v=7NbL83OzBAg&feature=youtu.be
7mins10s: Given the number of shares in issue have you considered doing share consolidation at some point?
AP: We considered it and have been asked by our advisor and what we noticed and we have done a in depth stufy on the market is that we will consider a consolidation at the right time that will be when we are revenue and profit generating and when there is no visibility on anything that could hinder the share price after post consolidation. Because once you take the liquidity out the market all of a sudden you are going to have a drop in price. Historically if you look at all AIM companies that have consolidated over time you instantly get a 20-25% drop in share value, which is something we do not want to do to our shareholders, unless you are in production and revenue (and profit) generating and this casts a different light onto the perception of Consolidation. So once we are in production and we are revenue generating and profit generating that will definately be a consideration for the company.
8Mins10 Seconds: So ontrack you say the Sale of first concentrate end of August?
AP: Correct. We need to build up a signifiant quantify to make the viability of shipping. So even if we started production by the end of July by the time we get the mining ore up and process it, (this is on a daily basis), you need to get to a shipping quantity that is acceptable to the offtaker. That's generally a minimum of 200-300tonnes. Once that is done then we can start to ship the sales process. They may turn around and say we want 450 or 500 tonnes. So we need to be mindful of when we can start to receive revenue.
Yes we will be generating a material. Yes we will be stockpiling it but we don't get paid until its on the ship or atleast on the trucks on the way to the ports before we can ask for any money from the offtaker.
9mins2seconds: When will they give an indication as to how much they will want?
AP: Once we do the first processing and we get the final quality. Then they will decide whch refinery it (the ore) will be sent to and once they get that they will then advise us of the minimum quantity required. We should know probably by Mid August where it (the ore) is going and what the minimum quantities will be.
9mins25 seconds: Any update on the Diamonds? What's happening here?
AP: Nothing has changed. I mean as you probably have read in the papers Zimbabawe is still in lockdown. We are still confident we are still going to be proceeding. We are talking daily with the relevant authorities. We are unchanged. If there were any changes in the position of the diamonds we would RNS it.
We still believe and we are still confident we are going to proceed with the project.
END
#AIM #DYOR