AIM-listed mining group, Vast Resources Plc has exited Zimbabwe gold sector after it agreed a transaction to sell its 25% stake in the Pickstone Peerless gold mine.
According to Vast, a contract of sale has been agreed for its 50.1% holding in Ronquil Enterprise, which houses the stakes in Pickstone Peerless stake and the Eureka Gold Mine.
In the six months to September, Pickstone Peerless made a profit of US$3.13 million on sales of US$19.3 million.
Vast said the transaction reduces other loan and liabilities on its balance sheet by nearly US$38 million to US$10.5 million from US$48.3 million.
Through the sale, a US$3.4mln loan to Sub-Sahara Goldia Investments (SSGI) is largely repaid and this gives it the ability to raise finance from other parties, said Vast.
Shareholders will be asked to extend its accounting period by a month to 30 April to allow the deal to complete.
The company however still retains interest in Zimbabwe’s mining sector, as it still hold Heritage, a diamond concession.
Management said it will now focus on the Heritage diamond concession in Zimbabwe as well as its Baita Plai mine in Romania.
I am delighted with the results that this transaction will achieve for the Company as it will allow management to focus its efforts on the two core focus assets in the Company, namely the Heritage Concession in Zimbabwe and Baita Plai in Romania.
The Heritage Concession will require significant investment, not only financial but in human resource to enable near term positive cash flow for the business. The divesting of the gold assets in Zimbabwe allows us to focus all of our Zimbabwe finance and management on this key component of the Companys growth.
We have a responsibility not only to our Shareholders but to the Chiadzwa and Marange communities as well as the wider Manicaland community to ensure the success of this project as a representation that Zimbabwe is open for business and investor and community can work together in creating a profitable and beneficial project for all the stakeholders.
The result of the transaction will also open up significant funding opportunities to the Company for the Romanian projects that have been delayed due to historic financial structures and arrangements that in turn hampered the Companys ability to progress our near term goals.
Due to the hard work and dedication of the management teams in the UK, Romania and Zimbabwe I can now look forward to the Company being able to unlock the value of the assets in our portfolio, bringing these two primary focus assets in to production in real time and, most importantly, creating shareholder value,” said Vast CEO Andrew Prelea.