Back in October, Vast inked documentation for a financing arrangement which it said would cover the costs of reaching production at the both the Baita Plai mine in Romania and the Chiadzwa diamond project in Zimbabwe.
A UK based fund, Atlas Capital Markets, is to be issued US$15mln of secured convertible bonds issued at 90% of par and carrying 5% interest per year. The bonds mature two years after issuance.
“The company continues to progress towards drawdown of Tranche 1 with both parties working together with the intent to effect drawdown before 31 December 2019,” said the AIM-listed miner.
Proceeds are intended to be released in four tranches, tied to cashflow, with the first tranche comprising some US$7.1mln of bonds.
Included in the terms is a ‘non-conversion period’ giving protection from equity dilution following the date of the second tranche of bonds – it provides for six-months protection after the first tranche and potentially then 12-months after the second tranche of bonds.
"The bonds provide the required capital to enable the company to bring its two core assets, Baita Plai in Romania and the diamond concession in Zimbabwe, into production,” said Andrew Prelea, Vast's chief executive.
“The agreed non-conversion period, the early redemption and cash settlement options give us flexibility and enable us to limit dilution.”
Prelea added: “The Atlas facility will accelerate the start of production at Baita Plai while we continue to work on the establishment of a long term finance facility for Baita Plai and other assets in Romania, whether with the Swiss bank or otherwise.
In December, Vast announced the cold commissioning of Baita Plai polymetallic mine in Romania, with current capacity up to 7,000 tonnes per month (tpm) and the first saleable concentrate expected in the first half of next year.
Shares were down 0.7% at 0.26p in early trading on Wednesday.