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Vast Resources Shares Plunged 18.2% on a £1.47M Capital Raise

Simon Mugo trader
Updated 31 Oct 2022

Trade Vast Shares Your capital is at risk

Key points:

  • Vast Resources shares plunged 18.2% after raising £1.467 million.
  • The miner intends to use the proceeds for corporate purposes.
  • However, the company remains in a robust financial condition.

The Vast Resources PLC (LON: VAST) share price plunged 18.2% after revealing that it raised £1,467,000 via a share subscription where it issued 162 million new shares priced at 0.225p each, representing a discount to Friday’s closing price.

The PGM miner assured investors that it would use the proceeds of the capital raise to meet its corporate obligations and to fund the transaction costs of some of the opportunities it is currently investigating that could materialise into future deals.

Also read: The Best Lithium And Lithium Mining Stocks To Buy.

Furthermore, the company assured investors that production at its Baita Plai mine continues to increase, as detailed in previous releases and that it was planning to sell some of the concentrate mined this month with another shipment due in mid-November.

After receiving the proceeds of the capital raise, Vast Resources expects to have about £1,556,948 in cash, with short-term liabilities worth £933,020. Additionally, the company’s board expressed confidence that the firm has sufficient cash flow on hand and that it can quickly raise more funding if the need arises.

The decline witnessed in Vast shares was expected, given that the new shares were priced at a discount to Friday’s closing price and represent a significant dilution of existing shareholders. However, investor sentiment towards the company remains positive since the shares have recouped some of their earlier losses.

Vast Resources also released the final results for the financial year that ended on 30 April 202, which has a minimal impact on its share price since most investors are familiar with the results, having read the interim results released earlier.

So, would I buy VAST shares? The short answer is yes, but I would like to see the stock rise above 0.272p former support level now turned into a resistance level before buying.

*This is not investment advice.

Vast Resources share price.

Vast Resources share price 31-10-2022
Source: Tradingview

The Vast Resources share price plunged 18.15% to trade at 0.221p, falling from Friday’s closing price of 0.27p.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading