Vast Resources sells off part of Zim gold mine ‘to deleverage bond notes risk’

Vast Resources sells off part of Zim gold mine ‘to deleverage bond notes risk’

HARARE, January 31 (The Source) – London-listed junior miner Vast Resources says it has agreed to sell nearly half of its shares in its Pickstone-Peerless gold mine in Zimbabwe to a Mauritian investment company for $4 million to minimise exposure to economic uncertainty in the country, including the possible impact of bond notes.

Vast, previously known as African Consolidated Resources (AFCR), owns 50 percent of the Chegutu mine, with the other half being controlled by Grayfox Investments, a consortium of Zimbabwean investors.

Vast chairman Brian Moritz said the introduction of bond notes — a quasi-Zimbawean currency that trades at par with the greenback, proposed new mining taxation and the required forfeiture of mining claims to the state had necessitated the exit from Zimbabwe.

SSCG Africa Holdings (SSA) will acquire a 49,99 percent non-controlling interest of Vast’s shareholding.

“We are deleveraging our exposure to Zimbabwe……I do believe however that retaining a foothold in Zimbabwe to ensure we are “on the ground” when conditions improve in the country is a sensible approach, particularly when there is little risk to do so, with limited obligations to provide further capital,” Moritz said in a statement.

Under the agreement with SSA, Vast will also receive a $4 million loan payable in four years at 12 percent interest rate from the Mauritian investment company.

Vast said it would use the $8 million raised to boast its operations in Romania and repay a Grayfox loan.