UK 22:23 Sunday, 25 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
I am part disgusted and part amused by the shocking mess that the Vast Resources (VAST) management team has got itself into recently, all courtesy of a ridiculous funding arrangement that they agreed to in January this year with Crede Capital.
Already a member? Sign in
• All premium articles
• Tom Winnifrith’s Bearcast
• Access to all the entire nearly 13 year archive
• ShareProphets Daily Newsletter
Cancel any time
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments
D_Stone
For a novice that was very informative. I was wondering how the situation at VAST had deteriorated so quickly especially after the protestations by the CEO in his recent podcast.
Wow, if the management don’t understand the contract it beggars belief how they can be trusted as custodians of shareholder funds. Definite basket case now.
BernieBoy
I was wondering how long it would take for this story to be highlighted here, being as at one point these were tipped here as a potential 25 bagger in the good old AFCR days! Could well have done it as well had it not been for this disasterous deal. In all my years of investing this is the absolute worst one that I have had the misfortune to be involved in. I really had high hopes for VAST – they were one of my three shares for my pension fund along with ZOL and OPTI (which are both luckily faring much better). So I was heavily invested in them from all prices between 0.5 and 1.5p. So how do I feel now at a share price of 0.3 and with it only heading in one direction! Not happy indeed. Totally BoD incompetence which has cost private shareholders thousands of pounds. Is there any chance that VAST could renege on this deal? Surely it is the only way out. We have two producing mines FFS and soon to obtain the license for mining Baita Plai polymetric mine in Romania! We should be in advance of 2p per share! Beggars belief.
Cynical Bear
@ D Stone – thanks
@ Bernie – sorry that you’ve had a shocker here. Not sure how easy to renege unless they can prove they’re idiots who were missold a deal. However, the next tranche is conditional on the management contribution of £500k so they could refuse to pay that. First though the CEO needs to realise / acknowledge that doing whatever he can to get out of this deal is the right thing to do and I haven’t seen evidence of that yet.
S Foster
Amazed it’s taken so long for Shareprophets to write about this deal. Especially considering T Peizer and M Wachs involvement. Where is the Nomad ins all this?
Note Amur Minerals has the same deal.
Cynical Bear
@ S Foster – don’t spoil the fun! I’m writing about Amur’s deal at the moment and will be on the site tomorrow
Plenty to write about the guys behind it too as you say
Simple Moving Avarice
This is pure genius. Machiavellian genius – but genius for sure. The warrants are linked to two conditions, one of which would never be used but looks very reasonable and one of which is a free gift but is couched in enough technical verbiage to distract anyone checking.
At first blush it sounds as if they are pricing the warrants using the Black Scholes equation which would be vaguely sensible. But as you point out they are not. The BS value should be determining the price of the warrants, not how many you get.
I then thought that at least they were varying the number of freebie shares based on the “time value” – which would encourage early redemption but include an element of randomness. But as you point out, they are not even doing that. The BS Value is fixed at the “Investment Date” – in other words they are extracting and fixing the maximum time value they could get using this convoluted ruse. Not that the method is valid in any sense, but as described the value it produces is nicely fixed at its biggest value. The volatility is also fixed in a bizarre and arbitrary way in the equation.
The BS equation is used merely to pop out a suitable value. It is about as valid in this context as using the mean temperature in the UK in March. it just creates a number. Yes – a really contumelious way to treat your shareholders. (Obfuscating your meaning is fun once you get the hang of it!)
Eric the Viking
CYNICAL BEAR I agree with your assessment in general. I believe the BoD/Managers only took part in the first tranche and will not partake in the next three. The way this deal was presented was IMO (at least) misleading to the shareholder. The deal with Crede is absurd, but if the share price had risen above the initial placing price during the first tranche (which was entirely possible with the expected mining licence for Baita Plai) the deal would have been decent. AIM company’s need a decent entity to go to for funds to borrow at a reasonable rate it should be set up by PI’s if necessary as it’s obviously the best way to make money out of AIM – Crede cannot lose. Same old same old PI’s have been well and truly shafted.
Matt barnes
Just a note. The directors were asked to partake in a £500k placing at tranche 1 only. They have no option to partake in the further tranches.
Also, the black scholes value of .68p is the lower half of a division to the current share or id, not an exercise price. Ie at current levels one warrant = 1/.68p but only because the black scholars value was calculated at 0.8p for that tranche. The next tranche will have a black scholes value calculated at the bid of that tranche so works detrimentally to any slight price increase.
Ie if next tranche is at .29p as per current bid, the bsv is calculated off this. If price then goes to say .35p then 1 warrant = about .7 of a share.
Still not great funding on a share where price is falling, but on a share with any price rise in the future it reduces the shares gained from exercising warrants.
Good article but I believe some bits as explained above are not quite accurate, would appreciate your thoughts on this.
Thanks
Matt
Cynical Bear
@Eric, Matt – thanks, mea culpa, I had misinterpreted the relevant line in the original announcement. I have tweaked the article to remove the reference to the multiple mgt tranches. It’s a shame though as I thought this might be a get-out for them
Matt – on your other point re BSV. I agree with you and that is how I understood it although it may not have come across that way in the article but I was trying to make 3 points in relation to the 0.68p BSV value.
First, the value of 0.68p was known at the time of the initial tranche of investment so could have been stated as could have the fact that the warrant exchange was free in effect and the RNS could have done away with all the BSV jargon and definitions.
Second, as the number of shares exchanged is linked to a fixed number each time, then, in effect, the return for Crede is fixed too. Take the second tranche as an example. Assume the subscription is at 0.25p and the BSV is 0.2p, then Crede has 500m shares and 500m warrants. If the share price drops to 0.1p, Crede can exchange its warrants for 1bn shares worth £1m. If sp rises to 0.4p, warrants are exchanged for 250m shares worth £1m. There is no risk here.
Third, is just Simple Moving Avarice’s point above – this is just a made-up number shrouded in jargon to make Crede’s return seem opaque and risky – it’s nonsense!
Cynical Bear
One further thing from me. I have kept the reference to 10bn shares in despite the mgt tranches coming out and I have seen some comment that that is ridiculous.
I admit it is unlikely but some may find the maths behind it interesting.
The only restricting parameter is that Crede cannot go above 25% at any point and I have assumed an ongoing downward share price which isn’t that unlikely considering Crede have to sell 20-25% every 3 months. The liquidity may not make the below possible but here goes (using round numbers):
Starting point, 120m Crede and 50m mgt warrants with BSV of 0.68 remain at present
Tranche 2 subscription price of 0.25p (BSV of 0.2p) – 500m shares to Crede, 50m to other investors (and equal number of warrants) – total share capital of 2.6bn. All sold driving sp down to 0.1p
At 0.1p, Crede exercise remaining Tranche 1 warrants of 120m which convert to about 800m shares using the BSV of 0.68p, other investors convert their Tranche 2 warrants for 100m shares and Crede exercise 75m of their Tranche 2 warrants for 150m shares – total share capital of 3.65bn
Tranche 3 at 0.1p (BSV at 0.08p) – 1.25bn shares to Crede, 133m to other investors (and equal number of warrants) – total share capital of 5bn and Crede has 25%. All sold driving sp down to 0.05p
Crede exercise remaining 425m Tranche 2 warrants for 1.7bn shares. Other investors exercise all warrants for about 200m shares. Crede sells 250m of Tranche 3 warrants for about 400m shares – total share cap – 7.3bn
Tranche 4 at 0.05p (BSV at 0.04p) – Crede gets 2.5bn shares (25%) other investors get 266m shares. Total share cap – 10bn. All sold driving share price to 0.02p.
Crede exercises remaining 1bn of Tranche 3 warrants in exchange for 4bn shares. Investors exercise Tranche 4 warrants for 500m shares and Crede exercises Tranche 4 warrants for 5bn shares.
Also at 0.02p, mgts 50m warrants from Tranche 1 exchange for 1.5bn shares.
So there you go – over 20bn shares in issue.
I accept that it’s probably impossible for all shares and warrant shares when exercised to be sold in the timeframe but interesting maths nonetheless.
Matt barnes
Cheers for the feedback cynical bear. I agree the rns was confusing at best. Even the rns about the directors shares although mentioning “same deal as crede” then went on to only refer to warrants at 130% of previous bid and no reference to the bsv method.
Crede have got a great deal, directors will lose more and more of “their” company but shareholders have suffered the most.
The difficultly for investors now is how do you value a company with intangible future dilution.
The company has two mines that after only three months are generating positive cash flow, they are waiting for licence on the third mine which is massive and have funding for more mines. They are in a really strong position on a fundamental / cash generation point of view and you can use these numbers to generate a market cap but to work out a fair share price value is pretty much impossible as like you say shares in issue will be somewhere between 2bn and 10bn!
It’s rare to see an AIM company reach profitability and therefore even more a shame to see it hurt by a poor deal on financing.
I would like to think vast are trying to work out how they can get out of this deal but not sure Roy or the board have really understood what is to come!
Eyeguy
Yep. This IMO really is one of the most crazy deals I have ever seen and up there with when I sold a shiny 2p piece to my brother for 10p some 30 years ago.
The risk for crede is so little as they are just lending the initial profit on the first batch of warrants, and then it is recycled to the following tranches.
Madness
Matt barnes
One other note cynical bear.
The “investor” fund raising of £800k was 4 tranches of NOT equal sizes. £400k was tranche 1 with 50,000,000 warrants (already exercised). The remaining 3 tranches will be for £133.3k each so will have warrants of £133k divided by bid price not 50m
Eric the Viking
Cynical – I agree with your 10 billion shares + scenario if the Crede deal continues, and share Matt’s sentiment. VAST was/is still a good company, but his deal is making it impossible to invest in. The irony is that whilst Crede destroys shareholder value the company is fully funded and progressing well – The BoD needs to get out of this arrangement ASAP – regroup and place conventionally.
Cynical Bear
@Matt – agreed, I was calculating Tranche 2 for investors as £133k at 0.25p which is approx 50m shares
Matt barnes
Will be interesting to see what happens at tranche 2 as not sure crede can even get tranche 2 passed without going over 30% fully diluted at this price. Would be nice if that gave a get out clause!
BRITTA
Crede selling the shit out of VAST isn’t the direct reason for the spike in volume though – the overall volume has increased markedly too. About 800m shares were traded in a week, which is way in excess of the number of shares Crede can have sold.
Liquidity can breed liquidity on AIM, so it looks like Crede selling has triggered a change in market dynamics. The CEO seems as equally baffled by that as he is flummoxed by the BS warrants heist.
Cynical Bear
@Matt – think they’ll be ok as they have less than 3% at the moment as mentioned in recent warrant exercise (and doubt they still have them) and won’t get much more than say 500m shares In Tranche 2 which be under 20% of enlarged share capital
@Britta – totally agree. With the share price dropping and lots of liquidity, others are enticed in seeing a bargain and, of course, buying a couple of million shares is a lot cheaper now than it was a few months ago
Matt barnes
One more point cynical bear. Have you noticed patr18 of the agm circular where resolution 1 days vast will not issue more than £1m of shares and warrants at nominal value to crede. That’s a limit of 1billion shares, hence why rns says “up to £5m funding”
Would be good to hear your thoughts
Cynical Bear
Thanks Matt. Hadn’t noticed that originally although also note that Vast has to use all reasonable endeavours to get the necessary authorisations although not sure what they can do other than ask the shareholders.
Not sure how it plays out from here although it is clear from the volatility in the sp that no-one else does either.
I wouldn’t back against Crede though. I note Vast have just announced that Crede exercised another 38m warrants using a 0.22p sp to get to 120m shares under the BSV calc so they would have made a few quid selling those in recent days and particularly yesterday afternoon.
I will look out for Monday’s announcement with interest and reassess then.