Vendetta Mining Corp. is a Canadian junior exploration company which is currently focused on advancing its 100% owned Pegmont Lead Zinc project in Australia. Coverage was initiated on December 2019. Below is an update.
News Releases
Jan. 27 - Announces Share Subscription Agreement; Entered into a into a C$500,000 share subscription facility ("SSF") agreement with Scharfe Holdings Inc. ("Scharfe") for a term of 12 months. Such term can be renewed for an additional C$500,000 on the same terms as the original SSF for a period of 12 months at the sole discretion of Scharfe.
Under the terms of the SSF, Vendetta may at any time while this agreement is in effect, send a draw down notice to Scharfe specifying the number of units for which Scharfe will have an obligation to subscribe. Proceeds of the SSF will be used exclusively to make principle payments on the Nebari Loan previously announced on May 8, 2019
Scharfe will hold freely trading common shares of the Company through a share lending facility provided by Octavian Capital Corp. and Elysium Mining Ltd., private companies respectively controlled by Company directors Michael Williams and Peter Voulgaris
"We're very pleased with the agreement announced today as the first of a series of important steps we'll be taking in the coming weeks and months towards the re-payment of the Nebari loan and to achieve our other medium-term objectives at Pegmont", commented Michael Williams, President and CEO.
Feb. 10 - Announces Results of Pegmont Material Sorting Test Work. The purpose of the material sorting test work was to determine the suitability of the XRT sensors to differentiate potential mill feed from waste material at Pegmont.
Potential capital cost savings occurs through the reduced mill throughput while potential operating costs savings occur through reduced water and reagent usage, less pumped tails and lower energy requirements.
The conclusions of the XRT ore sorting preliminary test work on the three drill intervals are:
Successfully removed the external dilution from the samples; and
Successfully removed internal diluting material from within the higher-grade intervals;
Vendetta cautions that while these results are highly encouraging, they are preliminary, in order to apply material sorting results in an updated PEA study pilot scale test work is necessary.
Feb. 11 - Announces Non-Brokered Private Placement.-Up to 11M units at $0.05 per Unit for gross proceeds of $550,000. Each Unit will be comprised of one common share and one common share purchase warrant exercisable at $0.075 cents.
Apr. 20 - Announces Amendment of Warrants and Private Placement. For 2.88M shares at $0.13 cents vs. $0.18 cents.
Also announces that it has received approval from the TSX Venture Exchange to reduce the price of its previously announced non-brokered private placement (see NR #03, dated February 11, 2020) from $0.05 per Unit to $0.04 cents (Warrant; $0.06 cents). The Company will issue up to 13.75M Units at the new price for gross proceeds of up to $550,000.
The net proceeds of the financing will primarily be used to maintain the Issuer's existing operations, activities, and advance the development of the Pegmont Lead-Zinc project.
May 6 - Closes First Tranche of Its Non-Brokered Private Placement. Requested from the TSX Venture Exchange an increase of its previously announced non-brokered private placement (the "Private Placement") of up to 11,000,000 units (the "Units") to 20,000,000 Units for gross proceeds of $800,000.
The Company has closed the first tranche of the Private Placement with a total of 13,962,050 units being issued at a price of $0.04 per Unit for gross proceeds of $558,482. Each Unit comprises of one common share and one common share purchase warrant exercisable for three years at a price of $0.06.
Net proceeds from the financing will be used to advance the development of the Companies 100% owned Pegmont Lead-Zinc project and general working capital.
Company also announces certain directors, officers and consultants of the Company have agreed to cancel 9.9M incentive stock options, at strike prices of $0.15 and $0.30, previously issued. Company will have no stock options outstanding under its rolling 10% stock option plan and does not intend to or re-issue any options at these levels.
July 2 - Closes Final Tranche of Its Non-Brokered Private Placement and Resignation and Appointment of CFO. A total of 6,326,138 units being issued at a price of $0.04 per Unit for gross proceeds of $253,045.52. Together with the proceeds from the first tranche, the Company issued 20,288,188 units for a total of $811,527.52.
Resignation and Appointment of CFO:Jasmine Lau has resigned her position as Chief Financial Officer ("CFO"), Ms. Lau is an associate of Red Fern Consulting Ltd. ("Red Fern"), which provides the Company with accounting services. The Company has appointed Mr. Alastair Brownlow, a senior consultant with Red Fern as CFO, effective June 23, 2020.
Summary
In late January, a C$500,000 share subscription facility (SSF) agreement with Scharfe Holdings Inc. was announced. As indicated by the release, the SSF's proceeds are exclusively to make principle payments on the Nebari Loan.
In early February, VTT.V shared the result of Material Sorting Test Work using the XRT sensors. The objective was to differentiate potential mill feed from waste material at Pegmont. Initial results were successful representing an opportunity for potential capital cost savings. As noted by the company, these results are preliminary in nature.
Shortly thereafter, Vendetta announced a private placement for $0.55M at $0.05 cents; Warrant at $0.075 cents which it subsequently reduced in late April to $0.04 cents; Warrant at $0.06 cents for the same amount ($0.55M). Also disclosed were warrant amendments (2.88M shares) to $0.13 cents from the original $0.18 cents.
In early May, VTT.V communicated that it closed the first tranche of placement; 13.9M units at $0.04 for gross proceeds of $0.55M. Hence, in its first tranche VTT.V achieved the targeted amount. In response, VTT.V increase the placement from 11M to 18M unit to $0.80M. In addition, the company also cancelled 9.9M incentive stock options, at strike prices of $0.15 and $0.30, previously issued. Also worth noting is this statement: Company will have no stock options outstanding under its rolling 10% stock option plan and does not intend to or re-issue any options at these levels.
Are these an attempt to re-align management's objectives with shareholders?
Finally, in early July, VTT.V closed the final tranche for an additional $0.253M for a total 20M shares for $0.811M. Overall, VTT.V over-subscribed nearly 50% above the targeted amount. This is similar to the previous financing completed in many ways: a) it get reduced mid-way, 2) take a long time to complete (months), but 3) is oversubscribed.
As depicted by the chart, the stock jumped on the news and has been holding up since. However, so have Zinc prices.
As a result, VTT.V currently trades above the issued $0.06 cents warrants from the recently completed placement.
However, VTT.V is not thriving yet either, it has not made any announcements regarding a drilling campaign for 2020. For perspective, as per last MD&A: The Company’s minimum capital requirement for its resource properties for the upcoming fiscal year will be A$600,000 (C$533,940 at the April 29, 2020 exchange rate of 0.8899). In addition, the Company’s general and administrative expenses, excluding any share-based payments, will be approximately $720,000.
Though VTT.V has completed its PEA more than a year ago and eventually acquired 100% of Pegmont Project.
VTT.V will needs more funds for any additional activities such as optimization, metallurgy and drilling.
VTT.V has upcoming warrants at $0.13 cents (14M). So why bother? Again, as per Industrial Alliance Securities Inc.* * (http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1ctut1g-20171011 VTT Initiation Report.pdf)
"While it is more likely a takeout candidate, we model an open-pit, followed by underground, $155M mine producing 37Mlbs Zn and 121Mlbs Pb p.a. at a cash cost of $0.42/lb PbEq. The mine would have a four-year payback period".
Zinc and Lead Forecast are weak for 2020, but an open pit resource with a four year payback period on a ten year mine life might start to look attractive ahead of an eventual anticipated demand, especially at the current prices.
However, the challenge for VTT.V will be to increase valuation through resource expansion.
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