Vast Resources PLC shares sank on Tuesday, after announcing a £1.3 million placing to cover development expenses at its Romanian mine.

Shares were down 22% for the mine development company with interests in Romania, Tajikistan and Zimbabwe, currently trading at 0.10 pence each in London on Tuesday afternoon.

This came after the company announced that it had raised £1.3 million through the issue of 1.22 billion shares at 0.10 pence each. This represents a roughly 21% discount to its closing share price of 0.13 pence on Monday.

Application will be made for the new shares to be traded on the AIM market in two tranches. It is expected that the first 445.0 million shares will become effective around January 30, with the remaining 780 million shares becoming effective on or around February 6.

Vast said that proceeds from the placing, undertaken by the company’s joint broker Axis Capital Markets Ltd, will be used to finance further development of its Baita Plai polymetallic mine in the Apuseni Mountains, Romania.

The company said that funds will be focused on ‘the development of the decline to access the higher-grade ore’. Vast said that, following commencement of its drilling programme at Baita Plai in 2023, accelerating decline development will provide ‘a significant reduction in both underground fuel consumption and underground transportation times’.

In addition to improving the mine’s productivity, decline development will expedite its access to ‘high grades at depth’, while maximising the value of the concentrate by enhancing its grade.

In October, Vast undertook a similar placing to support Baita’s development, which raised £1.8 million through the issue of 933 million shares at 0.195 pence each.

Funds from the latest placing will also be used to cover Vast’s corporate obligations and working capital needs, as well as the increased overheads at its near-term revenue generating operations in Tajikistan. The proceeds will also ensure that the company has sufficient resources in respect of its ‘historic parcel’ of 129,400 carats of rough diamonds, and to finance the first shipment of platinum group metal concentrates following a distribution agreement with an unnamed Swiss investment company announced on Monday.

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