(Alliance News) - Vast Resources PLC on Tuesday said it completed the necessary due diligence to acquire a company with interests in Aprelevka, which owns a number of highly prospective mining assets in Central Asia.
Vast Resources is a mining and resource development company with interests in Romania, Tajikistan and Zimbabwe. Its stock was up 11% at 0.13 pence in London on Tuesday at midday.
In October, Vast Resources signed a memorandum of understanding on behalf of Bay Square Pacific Ltd, outlining the latter's intention to acquire a 100% stake in Gulf International Minerals LTD for an unspecified sum. Gulf International holds a 49% interest in joint Tajik-Canadian company Aprelevka, with the government of Tajikistan holding the remainder majority stake.
Aprelevka holds four active mining licences throughout central Asia, and currently produces around 11,600 ounces of gold and 116,000 ounces of silver per year.
Following satisfactory due diligence on Aprelevka, conducted by Vast at the request and cost of Bay Square, the company has now confirmed the successful acquisition of Gulf by Bay Square.
Following the October agreement, Vast was appointed to manage and develop Aprevlevka's gold mines on behalf of the owners. Vast has previously outlined its ambition to restore Aprelevka's production to the mines' "historical peak production rates" of around 27,000 ounces of gold and 250,000 ounces of silver per year.
Vast Resources will also receive a 10% share of the earnings before interest and tax that Gulf receives from its 49% interest in Aprelevka. Vast is entitled to a right of first refusal to convert its entitlement into an equity interest of 10% up until January 2027, and may acquire a further 20% of the shares of Gulf at any time in the same period.
Bay Square will finance Vast Resources' intended developments at Aprelevka, which includes the reprocessing of three tailing dams containing high gold values. In addition to the four active mining licences held by Aprelevka, two mines have been explored by Vast, and the company is currently prospecting eight further licenced mining areas.
Chief Executive Officer Andrew Prelea said: "The Aprelevka opportunity should provide Vast with a further meaningful source of revenue in the near-term, whilst insulating shareholders from dilution.
"As managers of the Aprelevka Gold Mines, Vast will have direct exposure to the top line growth of the assets as we work to increase production at the operational mines back to historical highs...and also exposure to the significant upside expected from the development of the three tailings dams and eight further exploration assets."
By Hugh Cameron, Alliance News reporter
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