Vast Resources PLC (LON:VAST) shares soared higher on Thursday after the junior miner refinanced its debts.
The AIM-quoted company said it has received an off-take offer from Mercuria Energy Trading for 100% of the copper and zinc concentrate produced at Vast’s Manaila and Baita Plai polymetallic mines in Romania.
READ: New Vast Resources boss shares mission statement with investors
Should Vast accept the offer, Mercuria will make up to US$9.5mln available to the company which would be drawn down in two tranches: US$4mln to be drawn down before March 5 and up to US$5.5mln further down the line.
Vast said the offer was on “significantly more attractive” pricing terms than its previous off-take contract.
Early repayment of current loans
A memorandum of understanding has also been signed with current lender Sub-Sahara Goldia Investments for the early repayment of funding following the repayment of the US$1.68mln bridging loan on March 9 2018.
The charge over Vast’s Romanian assets – Baita Plai and Manaila – will be released on December 31 2018, perhaps even earlier, following the repayment of a further US$1.5mln to SSGI.
Those assets will then be re-charged to Mercuria, Vast said.
Mercuria cash will fund expansion of Manaila and production at Baita Plai
“I am delighted to present shareholders with our proposed financing strategy and off-take partner, which I believe could provide Vast with significantly improved borrowing and off-take terms,” said new chief executive Andrew Prelea.
“On finalisation of this facility, we anticipate that the funds will enable us to deliver all of our near-term goals in Romania, specifically the expansion and optimisation of our Manaila mine, and, subject to the grant of the licence, the landmark commencement of production at our Baita Plai mine with no equity dilution to shareholders on the basis that the Company complies with the terms of the facility.”
He added: “The proposed funds from Mercuria will also support the accelerated repayment schedule that has been agreed with our partners at SSGI providing significant cost savings to the company.”
In late afternoon trading, Vast shares were yo 11.9% at 14.3% to 0.66p.
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