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.
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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.
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