Vast Resources PLC (LON:VAST) has entered into a US$3.0mln bridge facility with the Bergen Global Opportunity Fund to finance further working capital including for the Baita Plai Polymetallic Mine and other leading projects.
The AIM-listed mining company, with operations in Romania and Zimbabwe, said the facility will consist of two equal tranches of zero coupon convertible securities issued to the New York-based institutional investor.
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It added that each of the tranches will not be convertible into shares of the company for the initial 30 days from the date of the respective advance of funds, with the staged funding potentially minimising dilution to existing shareholders.
The company said the facility has become necessary due to the continued delay, but still expected receipt, of the previously announced US$5.5mln Tranche B of the Mercuria Prepayment facility.
Brian Moritz, Vast resources’ chairman of Vast, commented: “It is important that the Company is able to direct funds towards the Baita Plai Polymetallic Mine in Romania and other leading projects.
“However, we are cognizant 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.”
He added: “We have only undertaken this transaction as a short-term bridge of a limited size pending the receipt of the expected $5.5 million Tranche B pre-payment finance from Mercuria, which we are expecting to complete within the 30-day period prior to the conversion rights on the Convertible Securities becoming effective.”
Mortitz said should the conversion rights nevertheless be triggered, then the maximum dilution will be limited by our existing authorities, and any issues beyond that will require the approval of new authorities by shareholders.
In early morning trading, Vast Resources shares were 9.9% lower at 0.32p.