LONDON (Alliance News) - Vast Resources PLC Tuesday said it has entered into a subscription agreement deal with Bracknor Fund Ltd, under which Bracknor has subscribed for USD2 million worth of convertible loan notes in the company.
The mining company, which has operations in Romania and Zimbabwe, said Bracknor has also committed to subscribe for a further USD3 million loan notes in tranches of USD1 million over a two year-period, should Vast, without obligation, request this.
Vast Resources noted that the further issues of loan notes and the exercise of warrants may require approval of its shareholders.
The loan notes are interest free and unsecured, and may be converted into shares by Bracknor at any time during the year after subscription at a price equal to 90% of the lowest average price of shares in the five business days prior to the conversion date.
There is a provision for the repayment of the loan notes, in cash, at a 15% premium to their face value, at the option of either Vast or Bracknor in the event of major transactions in the life of the company, Vast said.
"This facility, combined with the surplus cash being generated at Pickstone- Peerless and the improved performance of the Manaila Mine, is expected to provide sufficient funding for the company to have two income generating mines in Romania, an income generating mine in Zimbabwe and sufficient funding to evaluate a second mine in Zimbabwe. In the event that Vast elects to draw down from this facility to the full, the company should only have to revert to shareholders for additional capital in the event of additional new value accretive projects being acquired by Vast," said Chief Executive Roy Pitchford in a statement.
Shares in Vast Resources closed down 14% at 0.327 pence Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Vast Res (VAST)