3rd Dec 2015 10:20
LONDON (Alliance News) - Vast Resources PLC on Thursday said a Romanian court has provided the company with a favourable legal opinion concerning the mining licence for the Baita Bihor polymetallic mine in following Vast's completion of a merger earlier this year.
Back in February, Vast struck a deal to merge Mineral Mining SA, in which it held an 80% stake, with its other wholly-owned subsidiary African Consolidated Resources SRL, which has now been completed.
Mineral Mining owned 100% of the Baita Plai mine in Romania, but was in administration which led to the mining licence being withdrawn by authorities and handed over to state-owned oil company Baita SA.
Vast Resources pursued the merger after being advised it was "the best way" of re-securing the right to mine at the Baita Plai mine after it was withdrawn.
Now that the merger is completed, Vast is in the process of transferring all the liabilities and assets of Mineral Mining to African Consolidated Resources, meaning the company in administration will cease to exist as a corporate entity.
That left Vast with full ownership of the mine but no licence to conduct operations.
Late last month, Vast struck a deal with Baita SA, whereby Baita would secure the mining licence for the mine to hand over to Vast's subsidiary.
On Thursday, Vast said the Appeal Court of Cluj has informed the company that its Romanian subsidiary has the legal right to obtain the right to mine at Baita Plai because it has taken control of the rights, assets and liabilities of Mineral Mining through the merger.
The court stated Vast should be able to acquire the mining sub-licence that would allow it to mine at Baita Plai "without any further legal argument by the holder of the head-licence, Baita SA," according to Vast, who added obtaining the licence should now "only be a matter of due process".
However, despite that opinion that the licence should be handed over, Vast will have to fulfil certain criteria in order for the Romanian National Mining Agency to approve the transfer of the licence from Baita SA to Vast's subsidiary.
Vast will have to show authorities proof that it owns the Baita Plai mine, demonstrate it is technically and financially competent, and ensure it is up to date with all tax and royalty payments.
Vast said its technical and financial competence has recently been proven through its application to extend its mining licence at Manaila, which was successful, and said the other two conditions will be satisfied once its Romanian subsidiary pays the creditors of Mineral Mining.
However, Vast said it will not pay those creditors, and therefore not gain approval from authorities, until Baita SA has supplied the mining licence to its subsidiary. Vast said the court has said Baita SA would be "liable to pay any damages" to Vast if it delays supplying that mining licence.
"The route that the company will now follow is to pursue vigorously its new contractual rights to obtain the mining sub-licence following the merger. This action is now in process," said the company in a statement.
Vast shares were down 2.6% to 1.12 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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