The Reserve Bank of Zimbabwe has approved the sale of nearly 50 percent of Vast Resources shares in its Zimbabwe operations to a Mauritian investment company.
Vast Resources, which owns 50 percent of the Pickstone and Peerless gold mine in Chegutu, announced in January that it was selling 49.99 percent of its shares to SSCG Africa Holdings, for $4 million to minimise exposure to the economic uncertainty in the country, including the possible impact of bond notes.
Vast said the central bank has finally approved the deal, two months after the initial deadline of April 7, which will also complete a financing arrangement totalling $8 million.
Under the deal, Vast would also receive a $4 million loan, payable over four years at 12 percent interest rate from the Mauritian investment company.
Vast resources chief executive officer Roy Pitchford said the company intends to use the money to boast its operations in Romania and repay a Grayfox loan.
Grayfox Investments is a consortium of Zimbabwean investors who control the other 50 percent of Pickstone and Peerless mine.
“I am delighted to report the formal approval from RBZ for our disposal of a non-controlling interest in our Pickstone-Peerless Gold Mine and Giant Gold Project in Zimbabwe. This transaction, together with the possible further transactions with (SSCG), will provide us with the capital to move forward with our optimisation plans for our producing Manaila Polymetallic Mine and other interests in Romania. We believe this area will yield the best long term value opportunity for the Company without the need to dilute our shareholders,” said Pitchford in a statement.
“Importantly, we have also retained the controlling interest in our Zimbabwean projects and have exposure to the upside which these may deliver through our ongoing 25 percent economic interest.”-The Source