Due diligence in relation to the reverse takeover of Vast Resources (VAST ) is nearly complete.
Formal confirmation by the Government of Tajikistan of certain organisational changes in the Aprelevka project, intended to ensure a smooth transition post completion of the transaction, has now been received.
Subject to completion of the associated placing, Vast expects to be in a position to publish an admission document prior to the Extended Long-Stop Date.
Meanwhile, further drilling, trench sampling and metallurgical test work have recently been completed on the Soviet tailings facilities at Aprelevka.
The trench sampling programme comprised 41 trenches. Grades were determined by fire assay.
The gold grade from these samples varies from 0.03 grams per tonne to 5.33 grams, and the silver grade ranges from 14 grams to 1,163 grams.
The results increase the company’s confidence in the potential volumes and grades of ore included in the tailings.
As regards financing, Vast is in receipt of three non-binding term-sheets for debt and, in some cases, off-take facilities, and is working to progress such negotiations towards receipt of at least one binding term-sheet prior to the completion of the reverse takeover.
Therefore, the range of the required equity fundraise for completion of the transaction will be between £5 million and £12.5 million.
Vast is in continuing discussions with A&T Investments SARL and Mercuria Energy Trading SA to seek to agree to an extension of the terms of their respective loans until RTO completion, subject to continued progress being made on the transaction.
The company intends to use the revenue from diamond sales, together with proceeds from the placing and/or debt facilities in relation to the reverse takeover or the proceeds from new offtake finance agreements to repay the creditors in full.
Vast remains confident further loan extensions can be agreed.
View from Vox
There are a lot of moving parts in this transaction, but there’s little doubt that it will be transformative for Vast when it completes. The company will have a major footprint in Tajikistan, and will be able to look forward to cashflow in fairly short order.