Vast Resources enters into $3m bridge facility

The AIM-traded firm said the facility would consist of two funding tranches, each of which would not be convertible into shares of the company for the initial 30 days from the date of their respective advance.

It said the initial advance would be provided on issue of each convertible security.

Vast said the facility had become necessary due to the continued delay, but still expected receipt, of the previously-announced $5.5m second tranche of the Mercuria prepayment facility.

It said a total of up to $3.15m in zero coupon convertible securities in two equal tranches would allow it to fund further working capital including for the Baita Plai Polymetallic Mine, and other leading projects.

The funding would allow the projects to begin immediately prior to the receipt of the anticipated Mercuria funding, which had been delayed due to what the board called “local administrative reasons”, and was now expected early in the new year.

Funding was provided by the New York-based Bergen Global Opportunity Fund - an institutional investor.

The company said it could elect to repay each tranche in full within 90 days of the execution date, subject to prior conversion rights which arose after an initial period of 30 days from the date of each advance.

It claimed that the staged funding would potentially minimise dilution to existing shareholders.

“It is important that the company is able to direct funds towards the Baita Plai Polymetallic Mine in Romania and other leading projects,” said Vast Resources chairman Brian Moritz.

“However, we are cognisant of our previous statements that we would avoid raising finance through convertible securities with a conversion price linked to the share price at the date of conversion.”

Moritz said the board only undertook the transaction as a short-term bridge of a limited size, pending the receipt of the expected $5.5m tranche B pre-payment finance from Mercuria, which it was expecting to complete within the 30-day period prior to the conversion rights on the convertible securities becoming effective.

“Should conversion rights nevertheless be triggered, then the maximum dilution will be limited by our existing authorities, and any issues beyond that will require as stated above the approval of new authorities by shareholders.”