VDM in $18m loan deal

VDM Group has finalised terms for an $18 million loan facility with its largest shareholder to fund an investment in a copper project located in the Republic of Angola.

VDM has received an initial $2 million advance from major shareholder Australia Kengkong Investments while a further $16 million will be provided as the company moves forward with plans to acquire a 65 per cent stake in the Cachoeiras do Binga copper project.

The Dongyi Hua-led company is acquiring the interest in the project from Seabank Resources in exchange for $4.8 million in cash and 650 million shares, leaving Seabank with a 5 per cent stake in the project.

Pebric Mining and Consulting will own the remaining 30 per cent slice in Cachoeiras.

VDM had planned to raise $18 million through a share subscription with an unnamed investor, however plans fell through last month when the investor announced it would be unable to proceed due to internal matters.

Under the conditions of the investment, Kengkong will have the right to appoint a majority number of directors to VDM’s board as long as they remain the company’s largest shareholder.

The loan bears a 6 per cent interest rate per annum.

VMD shares were down 20 per cent to 0.4 cents each ahead of the close of trade.