Vast Resources PLC (LON:VAST) has raised £1.68mln of new capital via a share placing and said it has made progress on project financing for the Baita Plai mine.
The company said it has sold 1.1bn new shares at a price of 0.15p each via the placing, arranged by broker Axis Capital Markets.
It said the proceeds will be used for working capital. The funds will support the company amid a temporary pause in production due to transport infrastructure problems - a safety concern over a railway bridge between the mine and the flotation plant - which as, previously announced, has delayed first concentrate sales by three to four weeks.
READ: Vast reveals production and cashflow forecasts
The funds will also support the advancement of some development work and construction costs, respectively helping Vast access higher-grade ore and progress a second production line to maintain the schedule.
Additionally, it will cover due diligence and legal costs associated with its debt financing process. The company noted that it has now received an indicative proposal with terms and conditions which marks important progress, with this bank in particular.
It noted that institutions typically provide indicative terms at the beginning of the process, but in this case, with this bank, such documentation follows a period of due diligence and additional approval from the bank’s credit committee.
Vast told investors that it will now enter into a formal agreement with the international bank to finalise terms and complete due diligence.
In a statement, Vast chief executive Andrew Prelea said: “We are of course disappointed that we have had to come back to the market for further funding to get Baita Plai to recommence production, but are confident that this is now the final stage.
“However, we are very pleased to have reached this stage in the process with this international banking institution. Part of the money being raised is to cover the expenses of this exercise.
“The finalisation of this process with the strategic long term debt provider will, once final due diligence is completed and final approval for the facility is received, mark a significant turning point in the way the company is financed moving forward.”