Andrew Prelea, chief executive of Vast Resources PLC (LON:VAST), discusses with Proactive London’s Andrew Scott the decision to sell its 25% stake in the Pickstone Peerless gold mine in Zimbabwe.
The transaction will reduce other loan and liabilities on Vast’s balance sheet by nearly US$38mln to US$10.5 mln vs US$48.3mln. ”Post this restructuring the company’s probably in the best position it’s ever been”, Prelea says.
Letter to Shareholders
Notice of General Meeting
Disposal of an economic interest in 25.01% of Pickstone Peerless Gold Mine and associated assets
Change to accounting year end
Vast Resources plc, the AIM-listed mining company, announces that a letter from the Chairman of the Company (the ‘Letter’) including a Notice of General Meeting has been posted to Shareholders late on 5 April 2019. A copy of the Letter and the Notice of General Meeting will be available on the Company’s website at www.vastresourcesplc.com and the full text of the Letter follows in the appendix to this announcement below (the ’Appendix’).
The principal matter dealt with in the Letter is the proposed sale by the Company of its 50.01% interest in Ronquil Enterprises (pvt) Ltd through which the Company holds its Zimbabwe gold assets, being the remaining 25.01% economic interest in the Pickstone Peerless Gold Mine and associated assets (principally the Eureka Gold Mine) (the ‘Proposed Sale’). A sale contract has been concluded subject to the approval of Shareholders which approval is required as the Proposed Sale falls within Rule 15 of the AIM Rules relating to fundamental changes of business.
In the six months to 30 September 2018, the Pickstone Peerless Gold Mine and associated assets contributed a profit before taxation of US$3,128,000 on revenue of US$19,329,000 in the consolidated accounts of Vast. These figures relate to 100% of the results due to the Company’s historic controlling interest. Further details of the financial effects of the Proposed Sale are set out in the Appendix.
The Letter also asks Shareholders to approve an extension to the Company’s accounting period so that the next Accounts are made up to 30 April 2019, rather than 31 March 2019, and to extend the exercise period of the warrants granted through the 2016 open offer and related placings from 30 June 2019 to 31 December 2019.
The implementation of the proposals will enable the Company to focus its activities in Zimbabwe on the Heritage Diamond Concession. It will also result in a fundamentally less complex balance sheet with much reduced liabilities and which will assist with the future financing of the Company.
Andrew Prelea, Chief Executive Officer of Vast, commented,“I am delighted with the results that this transaction will achieve for the Company as it will allow management to focus its efforts on the two core focus assets in the Company, namely the Heritage Concession in Zimbabwe and Baita Plai in Romania.
“The Heritage Concession will require significant investment, not only financial but in human resource to enable near term positive cash flow for the business. The divesting of the gold assets in Zimbabwe allows us to focus all of our Zimbabwe finance and management on this key component of the Company’s growth.
“We have a responsibility not only to our Shareholders but to the Chiadzwa and Marange communities as well as the wider Manicaland community to ensure the success of this project as a representation that Zimbabwe is open for business and investor and community can work together in creating a profitable and beneficial project for all the stakeholders.
“The result of the transaction will also open up significant funding opportunities to the Company for the Romanian projects that have been delayed due to historic financial structures and arrangements that in turn hampered the Company’s ability to progress our near term goals.
“Due to the hard work and dedication of the management teams in the UK, Romania and Zimbabwe I can now look forward to the Company being able to unlock the value of the assets in our portfolio, bringing these two primary focus assets in to production in real time and, most importantly, creating shareholder value.”
For further information, visit www.vastresourcesplc.com
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