At the time of writing, shares of Vector Resources Ltd [ASX:VEC] are up by 23.53%, to 2.1 cents per share.
Why did Vector Resources Ltd shares do this?
On Wednesday, Vector Resources settled a number of condition precedents for the 60% acquisition the world-class Adidi-Kanga gold project. The market reacted favourably to this announcement over the past two days.
What now for Vector Resources Ltd?
Here’s the share price action this week:
Vector Resources’ share price jumped from a low of 1.4 cents on Wednesday to a high of 2.1 cents today. That’s not a bad return for the week. The company expects to settle the remaining precedent conditions by 15 September, allowing it to proceed with the acquisition.
Vector Resources stated in the announcement (my emphasis added):
‘The Company is also pleased to confirm that it has successfully confirmed the financing terms upon which it is proposing to satisfy the condition precedent relating to the issue of a Standby Letter of Credit in respect to approx. US$20m of existing indebtedness at the Adidi-Kanga Gold Project that is due to a local DRC bank.
‘Over the past several weeks, the Company has received several financing proposals and is now proposing that this condition precedent will be met through the execution of a Committed Debt Facility with Medea Mining Fund L.P (“Medea”) (through its incorporated Master Fund and associated investment vehicles) for US$20m.’
The Adidi-Kanga gold project offers significant untapped potential. It has a JORC (2012) mineral resource estimate of roughly 3.2 million ounces of contained gold, grading roughly 6.6 grams per tonne.
The bottom line: the project looks attractive for shareholders. However, as the saying goes: ‘it’s not over until the fat lady sings’. This is a world-class project and other parties may want to get their hands on it. I’m following the company closely; however, don’t expect the share price to explode until the acquisition is finalised.
Resources Analyst, Markets & Money
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