The Sunday Mail
Michael Tome
AIM, listed diversified miner, Vast Resources, says it is happy with new arrangements at its Chiadzwa diamond project that will allow it to retain offshore proceeds not required in Zimbabwe from sale of diamonds, as the country continues to fine tune some regulations impeding foreign direct investment.
Andrew Prelea, CEO of Vast Resources, pointed that restraining laws in the previous era, including for diamonds, have now been eliminated thereby encouraging investment in Zimbabwe.
“Moreover, we understand that the diamond joint venture with our partners, Chiadzwa Community and ZCDC, will be subject to completion of all agreements, entitle the ZCDC joint venture company to retain sale proceeds from the diamonds, which are not required in Zimbabwe, offshore.
“This constitutes a significant advantage compared with the position for gold operations where all sales have to be made via the in-country refinery owned by the Reserve Bank, and where remission of proceeds are restricted by the Exchange Control laws,” he said.
He pointed that considerable effort has now resulted in a formal joint venture agreement with the Chiadzwa Community and ZCDC.
Meanwhile, Mr Prelea said the company is now “fully funded to production”at key projects including the Chiadzwa Community and state-owned Zimbabwe Consolidated Diamond Company (ZCDC) for a diamond project. Vast Resources raised £1,8 million through the subscription of 902 million shares at a price of 0,2p each per ordinary share. The Subscription Shares were issued under existing authorities available to the board relating to the Company’s Zimbabwe Projects. The cash raised from the subscription, which includes payment for expenditure already incurred, will be used for mobilisation and for general purposes necessary for the establishment of the operation in Zimbabwe.
The mining firm also announced that it expects to sign binding documentation for a finance facility of US$13,500,000 (net) later this week, a point at which a further announcement will be made including the material terms of the facility and the status of the existing funding and other initiatives as previously announced.
Prelea highlighted that uncertainty and gloomy political climate were the main hurdles that were hampering prospects of the Zimbabwean projects.
He opined that the new dispensation had brought hope in terms of policy and what government had done hitherto to attract FDI including the ability to take funds from the host country.
“Our strong belief is that once we open production on both of these, finance facilities will become more readily available, the biggest issue we had for Zimbabwe, was because of political climate and uncertainty.
“I’m confident in Zimbabwe, in the government and steps they have taken to attract foreign direct investment, this will be the first significant project, we will be opening up in Zimbabwe because of the changing government, changing policy environment and the ability to take money out,” said Mr Prelea in an interview with Proactive London.
He said dealing in the Subscription Shares will commence on or around 7 October, 2019 and the total issued share capital of the company will be 10 219 082 366.
The Chiadzwa Concession is in a general area, which had previously referred to as the Marange Diamond Fields.
With the $13,5 million debt facility and £1,8 million placing the company is fully funded for its Romanian and Zimbabwe projects. Historical debts have now been cleared and according to Andrew Prelea the company is in its healthiest ever position and does not expect to return to the market. This constitutes a significant advantage compared with the position for gold operations, where all sales have to be made via the in-country refinery owned by the Reserve Bank, and where remission of proceeds are restricted by the Exchange Control laws.
