Vector Resources Share Price Plunges by 20% despite Reinstatement

Over the last five days the value of Vector Resources Ltd [ASX:VEC] shares have been hit by a landslide, after its voluntary suspension of trading on 1 March, over quoted securities.

Today that suspension has been lifted.

Despite this, shares of Vector Resources are trading lower at $0.018, down 10% at the time of writing.

The reinstatement comes with the announcement of VEC’s financial settlement for Adidi-Kanga Gold project, located in the Democratic republic of Congo.

As with any commodity-based stock trading on the ASX, such announcements do make shares more sensitive to price shifts.

But knowing whether to add a gold stock to your portfolio takes more than just following whether a share, such as Vector Resources, is trading up or down ­— otherwise anyone could be a stock market expert.

That’s why Money Morning contributor, Greg Canavan, has put together a guide to help you decide whether gold has a place in your portfolio this year. Read more about it here for free.

Vector Resources gains 60% interest in gold project

VEC’s sale agreement entered into with Mongbwalu Goldfields Investment Ltd [ASX:MGI] has now provided the first tranche of the financial settlement required to purchase a 60% interest in the Adidi-Kanga Gold project.

With the commencement of the Adidi-Kanga Gold project development, VEC has appointed a ‘high calibre team’ to carry out the project’s Definitive Feasibility study (DFS).

VEC has also completed its share placement, raising $2.6 million in capital, through the issuing of 146.6 million shares, at $0.018 per share. All resulting earnings will be used for working capital, as well as to kickstart DFS at Adidi-Kanga.

Funding future underpins Vector Resources share price

In order for Vector Resources’ value to continue growing, further development of its gold mines is not just important, but required.

A way VEC has achieved this is through securing a US$4.75 million loan facility and equity placement, which helps with immediate funding flexibility to begin re-development of Adidi-Kanga.

Vector Resources holds a 90-day standstill on all discussion under the loan facility. A number of options, targeted at helping long-term funding, are also being assessed.

By Q4 2019, Vector Resources is hoping to complete its DFS, as well as its stage 1 underground 1.0 Mtpa.

But investors may want to watch this stock for a little longer, and see out the results of the feasibility studies. That will more likely determine whether we see shares start to head up more positively.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: If you’re unsure about which mining stocks are for you, check out this FREE report: 10 ASX Resource Stocks You Should Be Watching. Download now.


Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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