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Issue of up to £5.0 million of Equity
Vast Resources plc, the AIM listed mining company with operations in Zimbabwe and Romania,has entered into an agreement with Crede CG III Ltdaccording to which it will subscribe for new ordinary shares of 0.1p each in the Company in order to raise up to £5.0 millionand associated warrants. 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, conditional on admission to AIM, at an issue price of 0.8 pence per new Ordinary Share. 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, with each tranche being equal to £1.25 million in quantum. 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.
– The Investor will also be issued with one (1) warrant for every one (1) Subscription Share issued. 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 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. 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.
