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Vast Resources (VAST) Shares Fell 26.1% on £656K Capital Raise

Simon Mugo trader
Updated 26 Sep 2022

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Key points:

  • Vast Resources (VAST) share price plunged 26.1% after raising £656,000.
  • The company sold over 164 million shares at a discount to raise capital.
  • However, delays in shipping its concentrate left the firm in a cash crunch.

The Vast Resources PLC (LON: VAST) share price plunged 26.1% after announcing a share placement to raise £656,000 by selling over 164 million common shares at 0.40p each, representing a significant discount to its closing price on Friday.

The mining company said that it intends to use the proceeds of the capital raise to support its operations after a delay in the shipment of its last concentrate due to a shortage of ships to transport the cargo.

Also read: How To Invest In Metal Stocks.

Vast Resources also highlighted that its underground production ramp-up was delayed and started much later in Q3 2022 than it had initially planned, triggering a cash crunch that forced the company to raise more working capital.

On a positive note, Vast Resources expects to ship its next concentrate in October. The company also expects to report a significant jump in its production capacity in Q3 compared to Q2 figures when it publishes its Q3 production report.

Vast Resources expects its sales volumes to increase from Q3 onwards as its underground production continues to rise. The company has already commenced the first Long Hole Stope blasting in September using the Mantis Jumbo Drilling Rigs that were already installed and operational.

The company expects the new shares issued to be admitted to trading on the AIM on 29 September 2022.

Andrew Prelea, Chief Executive Officer of Vast, commented: “Our progress at Baita Plai continues, and we are consistently improving our production volumes. This progress was achieved from the beginning of September, with the introduction of long-hole stope mining, and the benefits of this are being witnessed at the mine as our volumes increase. This is expected to feed through to our Q3 figures and continue over the remaining months of the year and into 2023.”

*This is not investment advice.

Vast Resources share price.

Vast Resources share price 26-09-2022
Source: IG

The Vast Resources share price plunged 26.1% to trade at 0.388p, falling from Friday’s closing price of 0.525p.

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