Vast Resources PLC (LON:VAST) has updated on financing discussions following an announcement in January that it would not receive Tranch B offtake financing from a prepayment agreement with Mercuria Energy Trading.
The mining firm said it remained in discussions with potential investors in two areas: replacement offtake finance to bring the Baita Plai project into production, and discussions with a potential “cornerstone” investor to cover the expenditure required to bring a proposed Zimbabwe diamond project into production as well as providing a possible alternative to new off-take finance.
The company stressed that these discussions remained at the diligence stage and were dependent on the signing of legal agreements.
Vast added that without the Tranch B funding from Mercuria, it had not been able to make payments due to Sub Sahara Goldia Investments (SSGI) pertaining to a security held over assets in Romania.
The company also said that Bergen Global Opportunities Fund LP (Bergen) had elected under the terms of their agreement to pause the funding of Tranche 2 pursuant to the US$3mln bridge facility announced on 20 December 2018 for at least 60 days as a result of the company’s share price having been less than 0.2p for a two-day period prior to Tuesday.
The prepayment off-take agreement reached between Vast and Mercuria last year was for 100% of the copper and zinc concentrate produced at Vast’s Manaila polymetallic mine and Baita Plai polymetallic mine.
Mercuria was to make up to US$9.5mln available to the company that would be drawn down in two tranches: US$4mln before March 5 and up to US$5.5mln further down the line.
But in a statement on 18 January, Vast said Mercuria has informed the group that it is not proceeding with the US$5.5mln tranche.
In mid-afternoon, Vast shares were down 9% at 0.15p.