Letter to shareholders relating to Proposed Capital Reorganisation & Notice of General Meeting

Vast Resources PLC
·17 min read

Vast Resources plc / Ticker: VAST / Index: AIM / Sector: Mining

20 April 2021

Vast Resources plc
(‘Vast’ or the ‘Company’)

Letter to shareholders relating to Proposed Capital Reorganisation
Notice of General Meeting

Vast Resources plc, the AIM listed mining company, is pleased to announce that a General Meeting of the Company will be held at 11.00 a.m. on Wednesday 5 May 2021. The purpose of the meeting will be to effect a reorganisation of the Company’s share capital.

Subject to shareholder approval, the overall effect of the capital reorganisation will be that the number of Ordinary Shares in issue will be reduced by a factor of 100, so that by way of example a holder of 100 existing ordinary shares of £0.001 (0.1p) each will hold 1 new Ordinary Share of £0.001 (0.1p) each.

As a consequence of the current measures implemented by the UK Government, shareholders will not be permitted to attend the General Meeting but are strongly encouraged to submit their votes by proxy as soon as possible. Voting at the General Meeting will be carried out by way of poll so that votes cast in advance, and the votes of all shareholders appointing the chairman of the General Meeting as their proxy, can be taken into account.

The letter from the Chairman and Notice of the General Meeting along with the Form of Proxy have been posted to shareholders today and will be made available on the Company’s website, accessible under the Constitutional Documents section of the Document Downloads page and using the following link:

https://www.vastplc.com/investor-information/document-downloads

The relevant text included in the letter from the Chairman is appended below.

**ENDS**

For further information, visit www.vastplc.com, follow the Company on Twitter @vast_resources and LinkedIn, or please contact:

Vast Resources plc
Andrew Prelea - CEO
Andrew Hall - CCO

www.vastplc.com
+44 (0) 20 7846 0974

Beaumont Cornish - Financial & Nominated Adviser
Roland Cornish
James Biddle

www.beaumontcornish.com
+44 (0) 020 7628 3396

SP Angel Corporate Finance LLP – Joint Broker
Richard Morrison
Caroline Rowe

www.spangel.co.uk
+44 (0) 20 3470 0470

Axis Capital Markets LimitedJoint Broker
Richard Hutchison

www.axcap247.com
+44 (0) 20 3206 0320

St Brides Partners Limted
Susie Geliher


www.stbridespartners.co.uk
+44 (0) 20 7236 1177

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 (“UK MAR”).

ABOUT VAST RESOURCES PLC

Vast Resources plc is a United Kingdom AIM listed mining company with mines and projects in Romania and Zimbabwe.

In Romania, the Company is focused on the rapid advancement of high-quality projects by recommencing production at previously producing mines.

The Company's Romanian portfolio includes 100% interest in the producing Baita Plai Polymetallic Mine, located in the Apuseni Mountains, Transylvania, an area which hosts Romania's largest polymetallic mines. The mine has a JORC compliant Reserve & Resource Report which underpins the initial mine production life of approximately 3-4 years with an in-situ total mineral resource of 15,695 tonnes copper equivalent with a further 1.8M-3M tonnes exploration target. The Company is now working on confirming an enlarged exploration target of up to 5.8M tonnes.

The Company also owns the Manaila Polymetallic Mine in Romania, which was commissioned in 2015, currently on care and maintenance. The Company has been granted the Manaila Carlibaba Extended Exploitation License that will allow the Company to re-examine the exploitation of the mineral resources within the larger Manaila Carlibaba licence area.

In Zimbabwe, the Company is focused on the commencement of the joint venture mining agreement on the Community Diamond Concession, Chiadzwa, in the Marange Diamond Fields.

APPENDIX

TEXT OF THE LETTER FROM THE CHAIRMAN OF THE COMPANY

Notice of General Meeting at 11.00 a.m. on 5 May 2021

1. Introduction


The purpose of the General Meeting is to consider and, if thought fit, approve the Resolution relating to the Capital Reorganisation as described below.

2. Reasons for the proposed Capital Reorganisation


At the date of this document the Company has in issue 21,300,489,402 ordinary shares of £0.001 (0.1p) each (“Existing Ordinary Shares”) which are publicly traded on AIM.

The proposal is to reduce the number of Existing Ordinary Shares by a factor of 100. This will be done by converting the 21,300,489,402 Existing Ordinary Shares into 213,004,895 New Ordinary Shares and 2,343,053,845 New Deferred Shares. The New Deferred Shares would rank pari passu with the Company’s existing Deferred Shares and would have no economic value so that each New Ordinary Share in principle has exactly 100 times the value of each Existing Ordinary Share.

The Capital Reorganisation comprises two distinct parts, firstly a consolidation of the Existing Ordinary Shares on a 1 for 100 basis, and then a subdivision of each resulting ordinary share of 10p into one New Ordinary Share and eleven New Deferred Shares.

The main reason for the consolidation is that the number of Ordinary Shares currently in issue is now considerably higher than that of other companies of a similar size on AIM. Combined with the current low share price, the Company has been advised that the share structure is inappropriate for an AIM company and needs to be rectified. The Board also anticipates that the higher price per New Ordinary Share should, in due course, improve the marketability of the Company’s shares to institutional investors.

The main reason for the subdivision is to ensure that the price at which the New Ordinary Shares are traded is well in excess of their nominal value. The subdivision will also pave the way for the Company to distribute dividends to shareholders as the Company becomes profitable, should it decide to do so. This arises from the creation of the block of economically valueless New Deferred Shares with, in aggregate, a relatively large nominal value and which, together with the Company’s Existing Deferred Shares and its share premium account, can be cancelled and set off against the existing deficit. This cancellation will require separate approval by shareholders at the appropriate time, as well as court approval.

3. Capital Reorganisation


3.1 The Consolidation and Subdivision of the Company’s shares


The Board is proposing to reduce the number of Ordinary Shares in issue by a factor of 100. In order to do this it is proposed that every 100 Existing Ordinary Shares of £0.001 (0.1p) each be consolidated into 1 Ordinary Share of £0.10 (10p) which are each then subdivided into 1 New Ordinary Share of £0.001 (0.1p) each and 11 New Deferred Shares of £0.009 (0.9p) each.

On the assumption that the issued share capital immediately prior to the General Meeting is 21,300,489,500 Existing Ordinary Shares (following the issue of 98 Existing Ordinary Shares as described in paragraph 3.2 below) there will be 213,004,895 New Ordinary Shares in issue immediately following the passing of the Resolution. The consolidation and subsequent subdivision of the Existing Ordinary Shares will not, of itself, affect the value of any shareholding as each New Ordinary Share held by each Shareholder will in principle be worth almost exactly 100 times the value of each Existing Ordinary Share held by each Shareholder immediately prior to the consolidation.

On the same assumption, the Resolution will also result in 2,343,053,845 New Deferred Shares of £0.009 (0.9p) each which shall rank pari passu with the 863,562,664 Existing Deferred Shares.

No share certificates will be issued in respect of the New Deferred Shares.

3.2 Fractional Entitlements

In anticipation of the Resolution being passed by the Shareholders, the Company will immediately prior to the General Meeting and Record Date, issue such number of additional Ordinary Shares as will result in the total number of Ordinary Shares in issue being exactly divisible by 100. On the assumption that no New Ordinary Shares are issued between the date of this document and immediately before the General Meeting, this will result in 98 additional Ordinary Shares being issued. These additional 98 Ordinary Shares will be issued to the Registrar and will only represent a fraction of a New Ordinary Share. This fraction will be sold pursuant to the arrangements for fractional entitlements detailed at paragraph 3.3 below.

No Shareholder will, pursuant to the Capital Reorganisation, be entitled to receive a fraction of a New Ordinary Share. In the event that the number of Existing Ordinary Shares attributed to a Shareholder is not exactly divisible by 100, the Consolidation will generate an entitlement to a fraction of a New Ordinary Share. Such fractional entitlements will be aggregated and sold on the open market (see further explanation regarding fractional entitlements at paragraph 3.3 below).

Accordingly, following the implementation of the Capital Reorganisation, any Shareholder who as a result of the Consolidation has a fractional entitlement to any New Ordinary Share, will not have a resultant proportionate shareholding of New Ordinary Shares exactly equal to their proportionate holding of Existing Ordinary Shares.

Furthermore, any Shareholder who holds fewer than 100 Existing Ordinary Shares as at the Record Date will cease to be a Shareholder. The minimum threshold to receive New Ordinary Shares will be 100 Existing Ordinary Shares.

3.3 Sale of Fractional Entitlements

As set out above, the Capital Reorganisation will give rise to fractional entitlements to a New Ordinary Share where any holding is not precisely divisible by 100. As regards the New Ordinary Shares, no certificates regarding fractional entitlements will be issued. Any New Ordinary Shares in respect of which there are fractional entitlements will be aggregated and sold in the market for the best price reasonably obtainable on behalf of Shareholders entitled to fractions (‘Fractional Shareholders’).

As the net proceeds of sale due to a Fractional Shareholder are expected to amount in aggregate to only a trivial sum, the Board is of the view that, as a result of the disproportionate costs, it would not be in the best interests of the Company to consolidate and distribute all such proceeds of sale, which instead shall be retained by the Company in accordance with the Articles of Association of the Company.

For the avoidance of doubt, the Company is only responsible for dealing with fractions arising on registered holdings. For Shareholders whose shares are held in the nominee accounts of UK stockbrokers, the effect of the Capital Reorganisation on their individual shareholdings will be administered by the stockbroker or nominee in whose account the relevant shares are held. The effect is expected to be the same as for shareholdings registered in beneficial names, however it is the stockbroker’s or nominee’s responsibility to deal with fractions arising within their customer accounts, and not the Company’s responsibility.

3.4 Effects of Capital Reorganisation

For purely illustrative purposes, examples of the effects of the Capital Reorganisation (should shareholders at the General Meeting approve the Resolution) are set out below:

Number of Existing
Ordinary Shares held

New Ordinary Shares
following the Capital Reorganisation

99

0

100

1

1,100

11

1,000,000

10,000

The example below shows a holding of Existing Ordinary Shares which will be subject to a fractional entitlement, the value of which will depend on the market value of the New Ordinary Shares at the time of sale.

Number of Existing Ordinary Shares held

New Ordinary Shares following the Capital Reorganisation

Fraction of New Ordinary Shares following the Capital Reorganisation

512,647

5,126

0.47

Application will be made for the New Ordinary Shares to be admitted to trading on AIM and dealings in the New Ordinary Shares are expected to commence on 6 May 2021.

The New Ordinary Shares will trade under a new ISIN: GB00BMD68046

3.5 Resulting Ordinary Share Capital

The issued ordinary share capital of the Company immediately following the Capital Reorganisation, assuming that it is approved by the Shareholders and that no further Existing Ordinary Shares are issued before the General Meeting, is expected to comprise 213,004,895 New Ordinary Shares.

3.6 Rights attaching to New Ordinary Shares

The New Ordinary Shares arising upon implementation of the Capital Reorganisation will have the same rights as the Existing Ordinary Shares including voting, dividend and other rights.

3.7 Effects on Options and other Instruments

The entitlements to Ordinary Shares of holders of securities or instruments convertible into Ordinary Shares (such as share options and warrants) will be adjusted to reflect the Capital Reorganisation. The Company will notify these holders of the Capital Reorganisation in due course.

3.8 United Kingdom Taxation in relation to the Capital Reorganisation

The following information is based on UK tax law and HM Revenue and Customs practice currently in force in the UK. Such law and practice (including, without limitation, rates of tax) is in principle subject to change at any time. The information that follows is for guidance purposes only. Any person who is in any doubt about his or her position should contact their professional advisor immediately.

For the purposes of UK taxation of chargeable gains, a Shareholder should not be treated as making a disposal of all or part of his holding of Existing Ordinary Shares by reason of the Consolidation. The New Ordinary Shares should be treated as the same asset, and as having been acquired at the same time and at the same aggregate cost as, the holding of Existing Ordinary Shares from which they derive. On a subsequent disposal of the whole or part of the New Ordinary Shares comprised in the new holding, a shareholder may, depending on his or her circumstances, be subject to tax on the amount of any chargeable gain realised.

4. Admission of the New Ordinary Shares

Application will be made for the New Ordinary Shares to be admitted to trading on AIM in place of the Existing Ordinary Shares. Subject to Shareholder approval of the Resolution, it is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on 6 May 2021.

Shareholders who hold Existing Ordinary Shares in uncertificated form will have such shares disabled in their CREST accounts on the Record Date, and their CREST accounts will be credited with the New Ordinary Shares following Admission, which is expected to take place on 6 May 2021.

FOLLOWING COMPLETION OF THE CAPITAL REORGANISATION, CERTIFICATES IN RESPECT OF EXISTING ORDINARY SHARES WILL CEASE TO BE VALID.

Share certificates in respect of holdings of New Ordinary Shares will be sent to the registered address of shareholders on the register at 6.00pm on the Record Date.

5. General Meeting

Set out at the end of the Circular sent to shareholders is the notice convening the General Meeting. Please note that given the continuing COVID-19 pandemic and the associated UK Government’s restrictions on public gatherings and non-essential travel, which remain in place at the time of issuing the Notice, the Company is adopting the following GM arrangements in order to ensure that the health and wellbeing of all of our shareholders and Directors is protected:

  • The GM will only address the formal matters contained in the Notice of Meeting.

  • Attendance by additional shareholders is not considered as ‘essential for work purposes’ and therefore shareholders are not allowed to attend the meeting.

  • All shareholders are urged to vote at the GM, using one of the methods set out in note 6 to the Notice as sent to shareholders, and appointing the Chairman of the meeting as their proxy.

  • Shareholders can raise any questions in relation to the business of the General Meeting via email to shareholderenquiries@stbridespartners.co.uk.

6. Action to be taken

Shareholders have been sent a Form of Proxy for use at the General Meeting. Shareholders are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon. To be valid, completed Forms of Proxy must be received by the Registrar as soon as possible, and in any event not later than 11.00 a.m. on 30 April 2021.

In light of the COVID-19 pandemic Shareholders are urged to exercise their votes by submitting their proxy and appoint the Chair of the General Meeting as his or her proxy. Given the continuing COVID-19 pandemic and the associated UK Government’s restrictions on public gatherings and non-essential travel, which remain in place at the time of issuing this Circular, shareholders and their proxies will not be allowed to attend the meeting in person. The General Meeting will be purely functional in format to comply with the relevant legal requirements. Accordingly, Shareholders are urged to exercise their votes using one of the methods set out in note 6 of the Notice, and appointing the Chair of the General Meeting as his or her proxy.

Shareholders are reminded that, if their Ordinary Shares are held in the name of a nominee, only that nominee or its duly appointed proxy can be counted in the quorum at the General Meeting.

If you are in any doubt as to what action you should take, you are recommended to seek your own personal financial advice from your broker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services & Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser, immediately.

The Board understands that the General Meeting also serves as a forum for Shareholders to raise questions and comments. If Shareholders do have any questions or comments relating to the business of the meeting that they would like to ask the Board, they are asked to submit those questions in writing via email to shareholderenquiries@stbridespartners.co.uk by no later than 9.00 a.m. on 4 May 2021. The Board will look to answer these questions in writing and will respond to shareholders directly or via the website at www.vastplc.com.

7. Recommendation

On the basis of the advice set out above, the Directors consider that the Capital Reorganisation is in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolution to be proposed at the General Meeting, as they intend to do in respect of their aggregate interests of 1,940,788,625 Existing Ordinary Shares (representing approximately 9.11% of the Existing Ordinary Shares of the Company).

Yours sincerely

Brian Moritz
Chairman
19 April 2021

EXPECTED TIMETABLE OF KEY EVENTS

Publication and posting to Shareholders of this
Document

19 April 2021

Latest time and date for receipt of Forms of Proxy

11.00 a.m. on 30 April 2021

Latest time for Shareholders to submit questions
by email to the Board

9.00 a.m. on 4 May 2021

General Meeting

11.00 a.m. on 5 May 2021

Latest time and date for dealings in Existing
Ordinary Shares

Close of business on 5 May 2021

Record Date

6.00pm on 5 May 2021

Admission effective and commencement of
dealings in the New Ordinary Shares

8.00am on 6 May 2021

CREST accounts credited with the New Ordinary
Shares in uncertificated form

6 May 2021

Despatch of definitive certificates for New Ordinary
Shares (in certificated form)

Week commencing 17 May 2021

Notes:

(1) References to times in this document are to London time (unless otherwise stated).
(2) The dates set out in the timetable above may be subject to change.
(3) If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement to an RNS.

STATISTICS RELATING TO THE CAPITAL REORGANISATION

Existing Ordinary Shares in issue at the date of the document

21,300,489,402

Expected Existing Ordinary Shares in issue immediately prior to
the General meeting

21,300,489,500

Conversion ratio of Existing Ordinary Shares to New Ordinary
Shares

100 Existing Ordinary Shares:
1 New Ordinary Share

Expected total number of New Ordinary Shares in issue following the Capital Reorganisation

213,004,895

New Ordinary Shares will trade under a new ISIN



GB00BMD68046

Existing Deferred Shares in issue at the date of this document

863,562,664

Total number of Deferred Shares in issue following the Capital Reorganisation

3,206,616,509