REG - Vast Resources PLC - Repayment of Atlas Special Opportunities Completed

Vast ResourcesAnnouncement

16/05/2022 09:45

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RNS Number : 5991L  Vast Resources PLC  16 May 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU No. 596/2014) ("MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining

 

16 May 2022

Vast Resources plc

("Vast" or the "Company")

 

Repayment of Atlas Special Opportunities LLC Completed

Asset Backed Debt facility of USD$4,000,000

Conditional Placing & Subscription to raise GBP£3,243,325

 

Vast Resources plc, the AIM-listed producing mining company, is pleased to
announce that it has repaid in full the outstanding bonds owed to Atlas
Special Opportunities LLC  ("Atlas") linked to the Bond Issuance Deed
announced on 24 October 2019 with the result that Atlas no longer has any
conversion or any right to call for the issue of Vast ordinary shares. The
Company has also undertaken to make a debt reduction of US$1,000,000 to the
amount owed to Mercuria Energy Trading SA ("Mercuria") relating to Tranche A
of the Prepayment Agreement announced on 21 March 2018 (together referred to
as the "Transaction"). As part of the Transaction the Company has secured a
$4,000,000 asset backed debt facility from A&T Investments SARL (Alpha)
arranged by Alpha Credit SA ("Alpha"), a Swiss investment banking and asset
management boutique, and has raised in aggregate £3,243,325 before costs
through a conditional subscription and placing (the "Subscription" &
"Placing") of 463,332,161 new ordinary shares of 0.1 pence in the Company (New
Ordinary Shares) at a price of 0.7p per Ordinary Share (the "Subscription
& Placing shares").

 

The Subscription and Placing are subject to, inter alia, the receipt of
Shareholder approval of the necessary Resolutions to enable the issue of the
New Ordinary Shares. Accordingly, the Company is planning to convene a General
Meeting on Monday 6 June 2022 to seek Shareholder approval of relevant
authorities to allot shares in the Company ("Shareholder Approval"). These
authorities will enable the Directors to complete the Placing &
Subscription. A notice of General Meeting will be sent to Shareholders shortly
and a copy will also be made available on the Company's website in due course.

 

Shore Capital, the Company's Joint Broker, participated in the Subscription.
The Subscription was undertaken directly by the Company, and the Placing was
arranged by Axis Capital Markets, the Company's Joint Broker. A&T
Investments, the principals of & investors in Alpha Credit S.A. have also
made an advance payment of $1,090,000 in consideration for a new ordinary
share issuance as part of the Subscription subject to Shareholder Approval at
the General Meeting. The payment was made in advance of Shareholder Approval
at the General Meeting on the basis of certain guarantees provided by Andrew
Prelea and the wider Prelea family (the "Family") to ensure the required
upfront funding was secured against existing shares held by the Family in
order to close the Transaction.

 

USE OF SUBSCRIPTION & PLACING FUNDS

 

The funds raised from the Subscription and Placing will be used to settle the
balance of debt to Atlas over $4,000,000 and the agreed debt reduction
commitment to Mercuria, as well as to cover the costs relating to the
Transaction. The remaining funds raised through the Subscription and Placing
will be utilised to support the continued optimisation of the performance of
the Baita Plai Polymetallic Mine (Baita Plai) including the commissioning of
the second mill circuit and new molybdenum line, as well as for working
capital as the mine reaches production ramp-up from July 2022 onwards. Cash
will also be used for general working capital and to maintain a liquidity
buffer.

 

Andrew Prelea, Chief Executive Officer of Vast Resources, commented:

 

"The successful repayment  of Atlas marks a definitive turning point for the
Company that the Board believes should restore fair value in our share price.
 As explained in our operations update of 3 May 2022, the investment and
development work undertaken at Baita Plai over recent months together with the
new revenue streams being introduced as a result of our interests in
Tajikistan, are already reshaping our financial performance, and today's
refinancing will we believe  ensure these gains are translated into real
returns for shareholders.

 

"I would like to thank Mercuria for its continued support in the Company and
for its support in this transaction. In addition to this the participation of
both Shore Capital, A&T Invesment and the Alpha principals and investors
show further support in the Company. The oversubscribed Subscription and
Placing now gives the opportunity for the Company to accelerate the planned
initiatives to increase revenue and production levels at Baita Plai.

 

"Given that this refinancing is such a pivotal development for Vast,
particularly when coupled with the various operational developments which are
gaining pace at Baita Plai and elsewhere, the management intends to engage
with shareholders on a variety of channels over the coming weeks including
through a live presentation and Q&A session.  More details will be made
available over the coming days."

 

TRANSACTION DETAILS

 

Alpha has provided an asset backed debt facility with the following terms:

 

·    $4,000,000 asset backed debt with no convertibility

·    12 month term

·    20% interest per annum with ability to repay early at month nine.
Interest & principal to be repaid as a Bullet payment at the end of the
term on Monday 15 May 2023.

 

The following security has been granted by the Company in order to facilitate
the Transaction:

 

·           Alpha has been granted first lien security over a real
estate asset in Bucharest, Romania, in order to provide an enhanced security.
Alpha is predominately a real estate driven lender and as this transaction is
its first mining transaction, the real estate security component was key. The
real estate asset has an independent valuation of €9,199,769.

 

·           An existing shareholder of Vast Resources PLC, who is
not a Related party under the AIM Rules, has been granted a first ranking
security over Baita Plai in return for allowing the real estate asset owned by
him being used as enhanced collateral for the funding to be provided to Vast
by Alpha.  Alpha has been granted a second ranking security over Baita Plai.

 

As part of the debt transaction and in lieu of the enhanced security being
offered the Company has issued Warrants to both the real estate owner and
A&T Investments SARL. The amount issued is $800,000 based on the prior
agreement of giving warrants equal to 20% of the debt facility ($4,000,000).
The strike price will be set at a 20% premium to the closing share price on
Monday 16 May 2022 as referenced by Bloomberg.

 

The consent of Mercuria was required for the refinancing of Atlas in
accordance with the terms of the previous intercreditor agreement between
Vast, Mercuria and Atlas. The previous intercreditor agreement will now be
superseded by a new intercreditor agreement between Mercuria, Vast and Alpha
(together "the Parties"). The Parties have agreed a heads of terms on 12 May
2022 ("Heads of Terms") and have given their best efforts to enter into a
binding intercreditor agreement within the next thirty days (or by such later
date as may be agreed between the Parties). The Heads of Terms provide that:

 

·    Mercuria and Alpha shall each have its own security package for the
debt owed to it by Vast.

·    In addition to Mercuria's current individual debt security over the
Company's Manaila Polymetallic Mine in Romania, Vast shall grant third ranking
security to Mercuria over Baita Plai.

·    a cash payment to Mercuria to be made on 16 May 2022 of USD$500,000.

·    a further payment by Vast to Mercuria of USD$500,000 will be paid
from the proceeds of the Subscription subject to Shareholder Approval at the
General Meeting.

·    Various arrangements are being considered to repay Mercuria,
notwithstanding this the Company has undertaken to make further debt
reductions and if necessary these could be covered by the funds raised from
the placing and subscription subject to General Meeting Shareholder Approval.

·    The totality of the debt owed to Mercuria will be fully repaid on or
before Monday 15 May 2023.

·    The Company can repay Mercuria in full ahead of any debt owed by Vast
to Alpha.

·    The Company will provide a further update when the Parties have
executed the new intercreditor agreement.

Vast has agreed a long term equity option in the Company for Mercuria
unconnected to the existing debt or repayment thereof.

 

·    Up to £3,250,000 in full or in tranches

·    12 month option

·    Can exercise option at a 10% discount to the mid closing price on the
previous trading day to exercising the option.

·    Control mechanism to take no more than a 20% stake in the Company.

 

ADMISSION DETAILS AND TOTAL VOTING RIGHTS

 

Subject to Shareholder Approval, application will be made to the London Stock
Exchange for 463,332,161 new Ordinary Shares to be admitted to trading on the
AIM Market with admission expected to occur on or around 10 June 2022
('Admission Subject to Shareholder Approval').  The issued New Ordinary
Shares will rank pari passu in all respects with existing Ordinary Shares.

 

Subject to Shareholder Approval, following Admission of the New Ordinary
Shares the issued ordinary share capital of Vast will consist of 1,223,844,304
Ordinary Shares. There are no Ordinary Shares held in treasury. 1,223,844,304
represents the total number of voting rights in the Company and may be used by
shareholders as the denominator for the calculations by which they can
determine if they are required to notify their interest in, or a change in
their interest in, the Company under the Financial Conduct Authority's
Disclosure and Transparency Rules.

 

Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as nominated adviser to
the Company in relation to the matters referred herein. Beaumont Cornish
Limited is acting exclusively for the Company and for no one else in relation
to the matters described in this announcement and is not advising any other
person and accordingly will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Beaumont Cornish
Limited, or for providing advice in relation to the contents of this
announcement or any matter referred to in it.

 

**ENDS**

 

For further information, visit www.vastplc.com or please contact:

 

 Vast Resources plc                                    www.vastplc.com

Andrew Prelea (CEO)                                  +44 (0) 20 7846 0974

 Andrew Hall (CCO)

 Beaumont Cornish - Financial & Nominated Advisor      www.beaumontcornish.com (http://www.beaumontcornish.com)

 Roland Cornish                                        +44 (0) 20 7628 3396

 James Biddle

 Shore Capital Stockbrokers Limited  - Joint Broker    www.shorecapmarkets.co.uk

                                                      +44 (0) 20 7408 4050
 Toby Gibbs / James Thomas (Corporate Advisory)

 Axis Capital Markets Limited - Joint Broker           www.axcap247.com
 Kamran Hussain                                         +44 (0) 20 3206 0320

 St Brides Partners Limited                            www.stbridespartners.co.uk (http://www.stbridespartners.co.uk)

 Susie Geliher                                         +44 (0) 20 7236 1177

 Charlotte Page

 

ABOUT VAST RESOURCES PLC

 

Vast Resources plc is a United Kingdom AIM listed mining company with mines
and projects in Romania and Zimbabwe.

 

In Romania, the Company is focused on the rapid advancement of high-quality
projects by recommencing production at previously producing mines.

 

The Company's Romanian portfolio includes 100% interest in the producing Baita
Plai Polymetallic Mine, located in the Apuseni Mountains, Transylvania, an
area which hosts Romania's largest polymetallic mines. The mine has a JORC
compliant Reserve & Resource Report which underpins the initial mine
production life of approximately 3-4 years with an in-situ total mineral
resource of 15,695 tonnes copper equivalent with a further 1.8M-3M tonnes
exploration target. The Company is now working on confirming an enlarged
exploration target of up to 5.8M tonnes.

 

The Company also owns the Manaila Polymetallic Mine in Romania, which was
commissioned in 2015, currently on care and maintenance. The Company has been
granted the Manaila Carlibaba Extended Exploitation Licence that will allow
the Company to re-examine the exploitation of the mineral resources within the
larger Manaila Carlibaba licence area.

 

The Company has also acquired an interest in a joint venture company which
provides expsoure to a near term revenue opportunity from the Takob Mine
processing facility in Tajikistan.  The Takob Mine opportunity, which is 100%
financed, will provide Vast with a 12.25 percent royalty over all sales of
non-ferrous concentrate and any other metals produced.  Processing of
stockpiled ore on site is expected to commence in Q2 2022.

 

In Zimbabwe, the Company is focused on the commencement of the joint venture
mining agreement on the Community Diamond Concession, Chiadzwa, in the Marange
Diamond Fields.

 

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