Vast Resources PLC shares soared higher on Wednesday afternoon after the junior miner announced it was acquiring the remaining 49.9% of Sinarom Mining Group.
The deal means that Vast – which purchased the original 50.1% stake back in July 2015 – now owns 100% of the producing Manaila polymetallic mine in Romania.
“Having recently achieved a 44% increase in copper concentrate alongside a 371% increase in zinc concentrate produced, our Manaila mine continues to make excellent progress and strengthen its commercial value,” said chief executive Roy Pitchford.
“This simplified ownership structure will, we believe, be beneficial to the continued advancement of the mine, especially with regard to potential joint venture or debt financing opportunities being considered.”
AIM-listed Vast is to pay Mr Ni Jin Ming US$1.135mln to purchase the outstanding shares, with US$400,000 payable by the end of this month (31 March) and the remaining US$735,000 due by 30 April 2017.
The initial payment will be funded from existing cash resources, while the final instalment will be financed by Vast raising additional funding at the asset level which it expects to complete shortly.
Vast already owed Mr Ni Jin Ming US$646,000 as part of its acquisition of the Baita Plai polymetallic mine in Romania back in 2015, although this has now been released.
In the year to 31 March 2016, Sinarom reported revenue of US$1.8mln and a loss after tax of US$1.4mln.
Vast added it was looking at introducing a joint venture partner and/ or securing debt at the subsidiary company level in order to increase production at Manaila and to advance the recently-acquired Piciorul Zimbrului and Magura Neagra licences, which are located close to Manaila.
Both of those licences have demonstrated their prospectivity for polymetallic mineralisation, Vast said, adding that it is considering developing these assets as part of an enlarged Manaila metallurgical complex.
Shares were 16% to 0.56p on Wednesday afternoon.
Source: Proactive investors