Issue of up to £5.0 million of Equity <Origin Href="QuoteRef">VAST.L</Origin>

Vast ResourcesAnnouncement

04/01/2016 07:10

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining 
 
 4 January 2016 
 Vast Resources plc 
 ("Vast" or the "Company") 
 
 Issue of up to £5.0 million of Equity 
 
 Vast Resources plc, the AIM listed mining company with operations in Zimbabwe
and Romania, is pleased to announce that, on 4 January 2016, it has entered
into an agreement with Crede CG III Ltd (" Crede Capital " or the " Investor
") according to which it will subscribe for new ordinary shares of 0.1p each
in the Company (" Ordinary Shares ") in order to raise up to £5.0 million
(the " Subscription Shares ") and associated warrants (together the "
Financing ") (the "Subscription Agreement" ). Crede Capital is a U.S.-based
family office with a successful record of investing in emerging European
growth companies. Further information on Crede Capital is set out at the end
of this announcement. Certain Managers (as defined below), including directors
of the Company, intend to invest an aggregate principal amount of £0.5
million on the same terms as agreed with Crede as set out below, within two
trading days of the Issue Date. Details of the Managers' Investments will be
announced in due course. 
 
 156,250,000 new Ordinary Shares, which make up the first tranche of the
Subscription Shares, are being issued by the Company today (the " Issue Date
"), conditional on admission to AIM, at an issue price of 0.8 pence per new
Ordinary Share (" Tranche 1 "). The Company also announces that it has issued
156,250,000 warrants to acquire Ordinary Shares in the Company exercisable at
any time until 3 January 2021 at a price calculated according to the
provisions described below. Subsequent issues of Subscription Shares and
associated warrants (issued on the basis of one warrant per ordinary share
subscribed for by the Investor) as part of the Financing are conditional,
inter alia, on sufficient share issuance authorities being in place. 
 
 Overview 
 
 * Binding subscription agreement entered into between Vast and Crede Capital
which provides for an investment of £5.0 million in Vast through the issue of
Ordinary Shares to Crede Capital in four separate tranches, occurring at
90-day intervals (" Investment Dates "), with each tranche being equal to
£1.25 million in quantum (the " Subscription Agreement "). The 156,250,000
new Ordinary Shares, which make up the first tranche of the Subscription
Shares, are being issued by the Company today, conditional on admission to
AIM, at an issue price of 0.8 pence per new Ordinary Share under existing
share issuance authorities.  Further details on the terms of the Subscription
Agreement are provided below. 
 * The subscription for the second, third, and fourth tranches is conditional
on an investment of £0.5 million to be subscribed for Ordinary Shares by
directors and senior executives or consultants of the Company within two
trading days of the Issue Date as explained more fully below. 
 * Each issue of Subscription Shares will be priced at the closing bid price
of the Ordinary Shares on the trading day prior to each Investment Date of the
Subscription Shares (" Subscription Price "). 
 * The Investor will also be issued with one (1) warrant for every one (1)
Subscription Share issued (the "Investor Warrants"). 156,250,000 Investor
Warrants are being issued by the Company today under existing share issuance
authorities. Further details on the terms of the Investor Warrants are
provided below. 
 * The Financing provides the Company with funding certainty at a key period
in its development as it progresses its producing mining projects. The funds
may be utilised for general working capital purposes. 
 * The Financing is staged to minimise dilution to existing shareholders
whilst simultaneously providing maximum flexibility to the Company. 
 * The allotment and grant of Subscription Shares and associated Investor
Warrants in respect of the remaining tranches (the " Relevant Securities ")
are conditional, inter alia, on sufficient share issuance authorities being in
place. Accordingly, the Company will seek to convene a General Meeting to be
held in February 2016 to seek authorities to issue Relevant Securities under
the terms of the Subscription Agreement. The Company will seek further share
issuance authorities from its shareholders to issue the Relevant Securities if
the Company does not have sufficient issuance authorities at any subsequent
Investment Date. 
 
 
 Roy Pitchford, Chief Executive Officer of Vast, commented: 
 
 "Securing a long term, cornerstone investor has been a requirement of the
Company since its transition from a junior explorer to a mine operating
company. The funding from Crede Capital will facilitate increasing production
at Manaila, the potential increase in open cut ore resources, the
re-commissioning of Baita Plai and its eventual expansion, and funding for new
projects. 
 
 "The development of Manaila and Baita Plai to their respective full capacity
will provide Vast with a strong foundation in Romania and enable the Company
to exploit additional mining opportunities that have already been identified. 
 
 "In welcoming Crede Capital to the Vast share register, it is hoped that
there will be further investment opportunities available to Crede and existing
shareholders as Vast endeavours to build its mining operations in Romania."  
 
 Following the issue of Tranche 1, Crede Capital will be interested in
156,250,000 Ordinary Shares representing 8.61 per cent. of the Company's
issued share capital. Application has today been made to the London Stock
Exchange plc for the 156,250,000 Subscription Shares to be admitted to trading
on the AIM market with admission expected to occur on 8 January 2016 ("
Admission "). The issued Subscription Shares will rank pari passu in all
respects with the existing Ordinary Shares.  
 
 Following Admission, the issued ordinary share capital of Vast will consist
of 1,814,845,366 Ordinary Shares. There are no Ordinary Shares held in
treasury, therefore the total number of voting rights in the Company,
following the issue of the 156,250,000 Subscription Shares pursuant to Tranche
1, is 1,814,845,366. 
 
 Terms of the Subscription Agreement 
 
 Under the terms of the Subscription Agreement, Vast will issue Ordinary
Shares to Crede Capital in four separate tranches, at each Investment Date,
with each tranche being equal to £1.25 million in quantum. Crede Capital will
also be issued with one (1) warrant for every one (1) Subscription Share
issued to it. 
 
 156,250,000 new Ordinary Shares at an issue price of 0.8 pence per new
Ordinary Share and 156,250,000 Investor Warrants are being issued by the
Company today, conditional on Admission. The Subscription Agreement includes
warranties from the Company customary for an agreement of this nature and also
an indemnity from Vast to Crede Capital, inter alia, in relation to the
Company's covenant to Crede Capital that it shall use all reasonable
endeavours to ensure that it has sufficient shareholder authorities in place
to meet its obligations to allot and/or grant Relevant Securities free of all
pre-emptive and other similar rights and restrictions at the relevant times. 
 
 For each subscription of Subscription Shares by Crede Capital, a commission
(" Commission ") equal to 10 per cent. of the aggregate purchase price for the
relevant Subscription Shares may become payable by the Company to Crede
Capital in the event that Crede Capital subsequently subscribes for Ordinary
Shares pursuant to the exercise of Investor Warrants under the Warrant
Instrument at a price per Ordinary Share equal to the Black-Scholes
Subscription Price. The payment of such Commission is subject to further
conditions and payment mechanics as detailed in the Subscription Agreement.
The Subscription Agreement also provides that in the event that Crede Capital
subsequently subscribes for Ordinary Shares pursuant to the exercise of
Investor Warrants under the Warrant Instrument at a price per Ordinary Share
equal to the Black-Scholes Subscription Price, the Company shall pay to Crede
Capital a commission, by way of administration fee on the issue of the
Ordinary Shares, equal to 10 per cent. of the Black-Scholes Subscription Price
payable for the Ordinary Shares subscribed for by Crede Capital. Further
details on the terms of the Investor Warrants, the Warrant Instrument and
including the Black-Scholes Subscription Price are provided below. 
 
 The Subscription Agreement requires the Company to obtain the consent of
Crede Capital to further issues of shares other than pursuant to the
Subscription Agreement or in relation to existing commitments until 90 days
after the subscription of the fourth tranche of £1.25 million.  There is a
carve out for issues of up to 1 per cent. of the issued ordinary share capital
(calculated on a fully diluted basis at the date of such issue) in relation to
ordinary course licence and assets acquisitions. 
 
 The Subscription Agreement also provides that the Company may, within two
trading days of the Issue Date, allot to all or some of the directors, senior
executives or consultants of the Company or any of the Company's subsidiary
companies, or such companies or trusts associated with such individuals ("
Managers ") such number of Ordinary Shares at (and in no circumstances for
less than) the closing bid price per Ordinary Share on the trading day
immediately prior to the Investment Date as is, in aggregate, equal to an
aggregate purchase price for such Ordinary Shares of £0.5 million and one
warrant to subscribe for Ordinary Shares on the same basis as the Investor
Warrants per Ordinary Share subscribed for by the relevant Manager ("
Managers' Investment ").  In this regard, certain Managers, including
directors of the Company, intend to invest an aggregate principal amount of
£0.5 million, within two trading days of the Issue Date. Details of the
Managers' Investments will be announced in due course. 
 
 The allotment and/or grant of Relevant Securities are conditional, inter
alia, on there being sufficient share issuance authorities in place. The
Company will seek to convene a General Meeting to be held on or about 15
February 2016 (and subsequent general meetings, if required) to seek
authorities to issue Relevant Securities under the terms of the Subscription
Agreement. The Company shall procure that the circular to shareholders to
approve the allotment and/or grant of Relevant Securities includes, inter alia
(i) the unanimous recommendation of the directors to the shareholders to vote
in favour of the resolutions therein; (ii) a statement that each director and
each of their respective "associates" (as defined in the Subscription
Agreement) intends to vote in favour of the resolutions therein; and (iii) an
opinion from the independent directors, having consulted with the Company's
nominated adviser, that the terms of Crede Capital's participation and
subscription of Relevant Securities are fair and reasonable insofar as the
shareholders are concerned. 
 
 Terms of the Warrants 
 
 At each Investment Date, one (1) Investor Warrant will be issued to the
Investor for every one (1) Subscription Share subscribed for. Each Investor
Warrant will entitle the Investor to acquire new Ordinary Shares, with a five
year exercise period. The terms of the Investor Warrants are covered in full
under a separate warrant instrument entered into by the Company (the " Warrant
Instrument "). 
 
 For each Investor Warrant, the Investor may either (i) subscribe for one (1)
new Ordinary Share at an exercise price equal to 130 per cent. of the closing
bid price on the day prior to each Investment Date; or (ii) subscribe for such
number of new Ordinary Shares calculated by dividing the aggregate
Black-Scholes Value of the Investor Warrants held and to be exercised by the
Investor by the closing bid price of Ordinary Shares on the trading day two
days prior to the date on which the Investor Warrant notice is issued, at a
price per Ordinary Share equal to the Black-Scholes Subscription Price payable
in full on the trading day the Investor Warrant is exercised. 
 
 " Black-Scholes Value " means the value of an Investor Warrant calculated
using the Black-Scholes model as developed in 1973 by Fischer Black, Robert
Merton and Myron Scholes, using the Economic Research Institute's
Black-Scholes calculator, where the volatility shall be 135 per cent., the
term of the Investor Warrants shall be deemed to be 60 months (regardless of
the then actual remaining term of the Investor Warrants), the stock price
shall be the closing bid price of Ordinary Shares on the trading day
immediately preceding the Investment Date and the option price shall be 130
per cent. of the Subscription Price. 
 
 " Black-Scholes Subscription Price " means a price per new Ordinary Share
equal to a deemed nominal value of £0.001 per Ordinary Share on the trading
day the Warrant is exercised. 
 
 The Company has the right to call the Investor Warrants at any time the
Ordinary Share price is trading at a 25 per cent. premium to the exercise
price of the Investor Warrant for a period of 20 consecutive trading days and
the average daily trading volume of Ordinary Shares during this period exceeds
£200,000 in value. 
 
 Maximum Investor Holding 
 
 Under the terms of the Subscription Agreement, the Investor, without the
prior written consent of the Company, shall not subscribe for any Subscription
Shares on any subsequent Investment Dates if such subscription would, if
completed by the Investor, when aggregated with interests it already held
pursuant to its holding of Ordinary Shares and Investor Warrants, result in
the Investor holding 25 per cent. or more of the Ordinary Shares (calculated
on a fully diluted basis). 
 
 General Meeting 
 
 The Company will seek to convene a General Meeting to seek authorities to
issue such new Ordinary Shares as will be necessary to satisfy the terms of
the Subscription Agreement. Timing of the General Meeting and full details of
the resolution(s) to be put to shareholders will be provided in a Notice of
General Meeting (and associated Proxy Form) to be included in a circular to be
sent to shareholders by 18 January 2016 and which will be made available on
the Company's website at www.vastresourcesplc.com . 
 
 Romania Operational Update 
 
 Vast is currently operating the Manaila Polymetallic Mine at a rate of ten
thousand tonnes of ore mined and processed per month. With an installed
capacity of twenty thousand tonnes of ore mined and processed per month, the
plan is now to commission the second milling and flotation circuit. On
completion, Manaila will produce separate copper and zinc concentrates, both
at better grades and quality. 
 
 Having recently renewed the licence at Manaila, application has been
submitted to expand the licence perimeter to facilitate the evaluation of the
potential to extend the life of the open cut mine. The geology of the area
suggests that ore body continues beyond the current perimeter. 
 
 Having completed some of the preparatory work at the Baita Plai Polymetallic
Mine and in anticipation of receiving the licence in the near future as a
consequence of completing all the necessary regulatory and legal requirements
for the issue of the licence, work to reopen the mine will commence. 
 
 Initial production is planned at ten thousand tonnes of ore through the mill
and flotation circuit per month, utilising two of the three installed mills
and parts of the four installed flotation circuits. Thereafter,
re-commissioning of the third mill and full utilisation of the installed
flotation circuits, the monthly production is expected to increase to twenty
thousand tonnes per month. 
 
 Funding, adequate personnel, and time permitting, additional identified
project in Romania will be evaluated, including the mining assets of S.C.
Remin SA. 
 
 About Crede Capital 
 
 Crede Capital is a family office located in Los Angeles, New York and
Beijing, providing capital in U. S., Canadian, European, Australian and Asian
markets directly to small-cap public companies with market capitalizations
below US$1.0 billion. Since its inception in 2009, Crede Capital has completed
approximately 115 transactions committing in excess of US$900 million in
capital. Crede is a passive investor and does not seek board seats or control
positions. Crede Capital is focused on life sciences, healthcare, energy,
natural resources, media, social media, technology and special situations. 
 
 Related Party Transaction 
 
 As a result of the Financing, Crede Capital may become a substantial
shareholder in the Company as defined under the AIM Rules and consequently the
Financing may obligate the Company to enter into a Related Party
Transaction(s) under the AIM Rules for Companies. Accordingly, the Company's
directors consider, having consulted with the Company's nominated adviser,
Strand Hanson Limited, that the terms of the Financing are fair and reasonable
insofar as the Company's shareholders are concerned. 
 
 For further information visit www.vastresourcesplc.com or please contact: 
 
  Vast Resources plc Roy Tucker (Finance Director)                                           +44 (0) 1622 816918   +44 (0) 7920 189012                                        
    Roy Pitchford (Chief Executive Officer)                                                   +40 (0) 372 988 988  (O)  +40 (0) 741 111 900  (M)  +44 (0) 7793 909985     
    Strand Hanson Limited - Financial & Nominated Adviser  James Spinney  James Bellman       www.strandhanson.co.uk                                                       
                                                                                               +44 (0) 20 7409 3494                                                             
    Daniel Stewart and Company plc - Joint Broker  Martin Lampshire David Coffman              www.danielstewart.co.uk                                                      
                                                                                               +44 (0) 20 7776 6550                                                             
    Dowgate Capital Stockbrokers Ltd - Joint Broker Jason Robertson Neil Badger                www.dowgatecapitalstockbrokers.co.uk  +44 (0)1293 517744                      
    St Brides Partners Ltd Charlotte Heap Susie Geliher                                        www.stbridespartners.co.uk                                                     
                                                                                               +44 (0) 20 7236 1177