Member Info for TigerByTheTail

Hi Sarah!
First, remember that Vast currently spends about $600K per month on G&A - things like salaries and expenses and general running costs. In particular, I don't think it's been cheap to chase after the diamonds in Zimbabwe.
Manaila is also clearly losing money, though Vast don't give a reason why. I rather suspect the grades are poorer than expected. So that also is a constant drag on the cash position.
As for Pickstone Peerless, it's (very real) profits currently go towards paying for Eureka, and they are not available to the parent company. Even without that factor, it's not easy to get money out of Zimbabwe.
So, IMO the reality is that Mercuria's $4m advance and the equity raises have mostly been eaten up by the costs of keeping the lights on and running Manaila at a loss. There hasn't really been all that much genuine "investment".
In short, AP has badly overstretched Vast. The cash position was about $1.3m after Bergen 1 was issued a month ago. Given general running costs and some equipment ordered for Baita Plai, it must be getting near critical now. The next month could get very hairy, given how hard it will be to raise any new cash.

Actually, AP will probably be shitting bricks right now.
He is very close to losing his job (Vast bankruptcy). And, without Vast, his shares of Baita Plai and Zagra are nearly worthless. So he's staring at financial and reputational ruin.
But, yes, I don't suppose he cares much about our losses!

I'd love it if Vast could keep PP - even if that were at the expense of dumping all the Romanian assets, and continuing as a "Zimbabwe only" company.
But Vast is so tangled up in debts and liens that (as far as I can see) it just doesn't work. The moment Vast defaults on either Mercuria or SSGI the whole house of cards comes tumbling down.
So IMO the only way forward is to sell the "good" liquid asset (PP), and to take a chance that Baita Plai can be put into operation quickly. It stinks, but these are desperate times for Vast. Bankruptcy is a very imminent threat; at most Vast have a month to sort this mess out.

FWIW, I'm not so sure that the company will survive the current turmoil.
Firstly, the possibilities of raising money via issuing equity are becoming limited. I don't think Bergen will finance T2 with the share price so near to the all important 0.1p par value, and I'm not even sure that Vast will be able to get an 800,000GBP placing away, even at a rock bottom 0.1p price. And placing lower than that is simply a legal impossibility.
Secondly, it's asking a lot for an offtaker to advance approximately the current mcap of the company against the securities of an unprofitable mine (Manaila) and one that is not yet in production (BP); especially when you know that half of that money is going to pay off existing debt. I think Vast will get a new offtake agreement, yes - but not with a huge upfront payment attached. So no salvation there.
At a minimum, I think Vast's 25% share of Pickstone Peerless (it's only fairly liquid asset) will need to be sold asap. But even the first $3.4m from that sale will have to go to paying off SSGI. And it's hard to believe Vast will get more than a fire sale price, too. Obviously, costs need to be slashed, so Vast should abandon the Marange diamonds project and pull out of Zimbabwe entirely, as well.
With a good CEO, I'd say Vast had a 50%/50% chance of making it through the current situation. With AP, less.
Anyway, here's hoping...

Yes, Vast can place huge numbers of shares (and no doubt will).
But legally they can't place below the face par value of the shares (0.1p), which we are approaching now. So (IMO) this will limit the amount that can be raised in equity. And I struggle to see why an offtaker would give Vast a huge prepayment against one loss-making mine and another that isn't yet in production.
I sense it is time for the BOD to make some very hard decisions. I.e. a. unless the licence arrives in the next few days, drop the diamonds entirely and cut costs; and b. start negotiations to sell PP.
All in all, it's a horrible mess, and I'm not sure I believe AP has the skills to extract Vast from it.

I've been trying to understand how much money Vast will require to survive the next few months until they can get Baita Plai into production.
My basic assumptions are that: a. All profits from PP go to paying for Eureka, and are not available to parent company; and
b. the new offtaker will demand security over BP and Manaila in return for pre-financing an offtake deal; and
c. Vast do not take the new trucks, and instead obtain a refund of the $500K deposit, as hinted at in today's Q&A.
So, I see that:
1. Vast require $900K to release SSGI security over BP;
2. Vast require $4m to repay Mercuria and to release their security over Manaila;
3. Vast need to invest $3.5m to get BP into production (see today's presentation);
4. Vast need approx $600K per month to cover General & Administrative costs, allow 6 months = $3.6m total;
5. Vast need to cover continuing Manaila losses. I've no idea of this figure, but let's say a modest $300K.
TOTAL NEEDED: $12.3m
Money available:
1. Current cash balance - based on December figures and average cash burn, I estimate (very roughly) at $500K
2. Return of deposit on new trucks / excavators - $500K
SUB-TOTAL STILL NEEDED: $11.3m
I make it that the rest of the money must come from the new offtake deal plus new equity raises. Given the current SP and overhead Vast can probably raise about $2.5m from issuing equity (Bergen T2 + headroom), so the new off-take deal will have to include a prepayment of about $8.8m. IMO, this is a really tough ask - not impossible, just very difficult.
The only other way out of this mess (that I can see) is selling Vast's stake in PP to SSGI for a mix of debt cancellation and new cash (and also slashing Zimbabwe general costs as well).
Any thoughts? Have I missed anything?

Look at the time stamp - IMO, it was a "sell"...

Well, I've cut my losses and dumped most of my shares.
I just don't see how the next 3 to 6 weeks aren't going to be hell for Vast shareholders - it's clear that massive dilution is coming our way, and I can't see where good news is going to come from. (The offtake agreement will take time to finalise, even if it can be agreed on satisfactory terms (a big if); and I think the diamond story is chasing rainbows).
IMO, the share price is going down to 0.1p, the minimum at which Vast can place. I may buy back the same number of shares at that price, but only if I'm confident that Vast can manage its debts.
God knows I've been wrong about this company over the last few months, so I hope for everybody's sake I'm wrong again now. Good luck all!

FWIW, I think the BOD really need to get real and to think about:
a. Selling Vast's shares in Pickstone Peerless / Giant / Eureka to SSGI in return for cancellation of 3.4m debt, release of charge over Baita Plai, and some new money (to be used to develop BP asap);
b. Reassessing the likelihood of Red Mercury obtaining the diamond licence, and if they conclude it is not very likely to come in the near term, closing down Vast's Zimbabwe operations entirely, thus saving on G&A;
c. Sacking Andrew Prelea, who bears a great deal of personal responsibility for this unholy mess.

I'd be very surprised if we don't get another Bergen conversion RNS later today, probably using the 5 day Monday to Friday VWAP last week.
If / when it turns up, I'll take it as good news, because I'm one of those who firmly believes the shares are being sold in advance, and thus the dilution is now "in" the share price.
Share price still basically ridiculous for a company with Vast's assets (especially Pickstone Peerless), but that's where we are!

Hi ExeterChief!
I'm shorting Stobart to make up some losses here.
I think we'll see carnage in their share price once the Flybe deal starts to unravel (as I believe it will). The BOD isn't much cop anyway, the SP is already soft, and a major shareholder is reducing, so I believe the downside risk is acceptable.

Hi Pianista!
Yes, I agree this dispute won't get settled by a rival bid or by an EGM, but in the courts.
I'm not quite sure why the share is being so heavily traded, when what really matters (in legal terms) is who held shares at the moment the "takeover" was announced.
Anyway, I'm hoping to see the current board lose all their personal wealth - which is the least they deserve given their antics. Really, hefty prison sentences are required, if only to send a message to other BODs.

Hi Hazrat!
It's a tricky one, but I'm tending to agree with you.
The task here is to open enough new mining areas up to achieve target run rate and profitability. If that were achieved then the market cap of RBW - which is currently very depressed - would have to double, at the least.
I reckon RBW may need up to $2m new capital to open up those new areas, which would equal (very roughly) 30% dilution. So, all in all, 30% dilution to double market cap should be a good deal.
However, patience will be required!

Hopefully, we'll get an RNS confirming that Bergen have converted another tranche of the convertible loan today. It's now been five clear market days since the big fall on Friday 18th, so they should get a good low average price.
Personally, I think the bulk of Bergen tranche 1 (if not all of it) has already been sold off in advance and is in the current share price. And I'm hoping that tranche 2 never happens.

I also need to sit down and think this RNS through. It's not a simple deal, and it's not the usual case of "convertible loan = bad." Does anybody know anything about Lind?
Also, to ask an obvious question, why so much money (in RBW terms)? To put a couple more areas into production (to achieve break even) would only cost a million dollars at most. Yet this deal is for up to $7.5m. Why? Is it to do with bringing Kiyenzi into production well?

I give up. This is just plain stupid.

Hi Teacup!
I know you're trying to look clever, but you really need to study some basic geology.
Baita Plai is a previously producing mine. It's ore body is a known quantity, exactly because a part of it has been mined and processed, and the results are known. So, yes, the dataset from that mining is indeed huge.
Also, there is ore at surface waiting to be processed and stopes exposed and ready to go underground. Both are easy money. It would be madness to delay operations just to drill a few more holes.
Apart from anything else, why do you think the Romanians spent a huge amount of money building both the mine and the production plant if they weren't confident of the resource?!?
So, yes, to call a spade a spade, for reasons of your own, you're spreading mischievous bollox.

Hi Teacup!
I called this mischievous bollox yesterday, and it still is.
The dataset at Baita Plai is huge, because it is a previously producing mine. If you knew any geology, you'd understand the value of having actually hauled ore from a shaft, rather than just drilled holes the diameter of a wine bottle and extrapolated from that.
By the way, have you bought any shares in Vast yet?

I accept that Vast are probably trying to get clarification from the Zim government right now, and that can take time.
But my guess is that the diamonds are a lost cause now; just as is being reported in the press. I feel sorry for the local people if the Heritage Concession ends up in Anjin's hands (again); it will go hard for them.
Under the current circumstances, I even think that losing the diamonds may be a blessing in disguise for us shareholders. Vast should be cutting costs and concentrating on putting BP into production asap. And nothing should distract the company from that.

I'm sorry to be rude, Teacup, but this is mischievous bollox.
Baita Plai is a previously producing mine, with lots of figures about previous actually realised ore grades. This, in many ways, is far more reliable data than any JORC. It also has stopes exposed and ready to go, so you can actually see the ore.
Also, Soviet reporting system surprisingly robust (the Soviets might not have known how to produce a decent passenger car, but they were rather good at geology and mining). P1 not what you describe. I suppose, in JORC terms, it would be more than Inferred, and less than Measured - so very roughly "Indicated".