Vast Resources PLC (LON:VAST) has raised £1mln through a share placement to support its operations in Romania.
The mining company placed 190,476,190 ordinary shares of 0.1p each at a price of 0.525p.
Shareholders have also been invited to take part in an open offer to raise up to £1.24bn by the issue of up to 238,095,238 ordinary shares at the price of 0.525p.
This will aid towards an estimated strategic financing requirement for its operations of US$10mln.
The group said it believes it is in a good position to obtain substantial offtake debt finance from metal traders. It has started an offtake contract bidding process linked to pre-shipping finance.
"This limited placing and the subsequent open offer to shareholders on the same terms, will ensure the company is adequately funded through the process of securing longer-term, non-dilutionary offtake financing that will see both the Baita Plai polymetallic mine and the Manaila polymetallic mine reach their production objectives,” said chief executive Roy Pitchford.
“These objectives will see Vast generating sufficient cash flows to cover its operating and overhead funding requirements while the current Zimbabwe mining operations continue to be operationally self-financing. It is anticipated that any future capital raisings will be for specified acquisitions or expansions."
Manaila mine ramps up production
The company said it has made “significant progress” over the past 20 months at its operations.
Its Manaila polymetallic mine in Romania has a current JORC indicated and inferred mineral resource of 2.6mln tonnes open pit at 1.0% copper and 0.9% zinc at a cut-off grade of 0.25% copper, together with considerable exploration targets.
A licence extension has been granted, raising the total prospecting licence area by more than 20 times, while production at the mine has increased.
Vast plans to establish a second open pit mining operation at the Carlibaba prospect, located adjacent to the current Manaila open pit, after completing phase 1 and 2 drilling.
Association licence for Baita Plai 'imminent'
The Baita Plai Polymetallic Mine in Romania contains several veins in calcareous sediments in five distinct pipes. It has a reserve and resource under the Romanian reporting system of 1,800,000 tonnes copper-lead-zinc, gold and silver with uncategorised resources of molybdenum, tungsten and bismuth.
Following a “long and difficult” process due to the insolvency of the previous owner, Vast said directors think a grant of an association licence that provides the right to mine is “imminent”.
The mine is due to become operational within six months of the grant of the licence.
Budgeted expenditure before first revenue is US$1.5mln.
At the Pickstone Peerless gold mine in Zimbabwe, Vast has “significantly increased” production and revenues.
A new sulphide plant at Pickstone is nearing completion and is due for commissioning imminently.