INVESTORS at the London Stock Exchange (LSE) listed mining outfit, Vast Resources, have been unsettled by a sudden fall in the firm’s share price since its protracted legal tussle with Zimbabwean authorities escalated, this newspaper can report.
Vast, a multi-resource operation with a footprint in Zimbabwe, has been battling to get back a 129 400 carats diamonds parcel that has been held at the Reserve Bank of Zimbabwe for over a decade.
The gems were surrendered as evidence that Vast had exploited diamonds on claims previously owned by De Beers, which left the diamond fields in 2006, claiming it had failed to find viable reserves, after a decade of exploration.
Following a legal deadlock, the Supreme Court ruled in favour of Vast.
Last month, the Zimbabwe Independent reported that Vast could be forced to escalate the battle to international courts, if authorities fail to comply with agreements with regards to the parcel, previously estimated at about £15 million (US$19 million).
A major shareholder, who spoke to the Independent on condition of anonymity, said the impasse had sent shockwaves across markets.
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“Most of the investors are worried about the challenges that Vast is facing with the authorities in Harare,” the shareholder said.
“The problem has had an impact on the share price. We are also worried that the information we are getting from management has not been clear. We are expecting more details from Zimbabwe,” the investor noted.
After the Independent ran the Vast article in August, the Vast share price plummeted by 6,67 % on August 14, 2023.
It traded at £0,31 (US$0,39) this Wednesday, after closing at £0,32 (US$0,41) on Tuesday. Vast Resources’ yesterday share price closed at £0,29 cents.
In July this year, Vast Resources wrote to Zimbabwe’s attorney general, through Titan Law, its Harare-based legal counsel, expressing misgivings about the government’s attitude over the deadlock.
Titan Law said under the settlement deal, Vast agreed to withdraw legal challenges, as it prepared to sign a new mining agreement with the Ministry of Mines and Mining Development.
“You may not have been privy to these discussions, which are documented and reported in the public media. But they are precisely the reason our client withdrew its appeal in September of 2019,”
Titan Law senior partner Gerald Mlotshwa said in the letter.
“Having withdrawn its appeal based on the government’s representations, the agreement was nonetheless not consummated at all.
“Whilst at all times looking promising, these settlement discussions have failed at the last hurdle, leaving our client with three options to pursue: Reinstating its appeal before the Supreme Court of Zimbabwe regarding Justice (Charles) Hungwe’s rescission judgment, simply seeking an order from the High Court regarding the return of its diamonds in the absence of a forfeiture order concerning the same,” he noted.
Mlotshwa said Vast was considering pursuing a damages claim in Zimbabwean or international courts.
“Given the refusal by the RBZ to obey an order of the High Court in circumstances where all parties agreed that there are no longer any appeals pending before the Supreme Court ... our client, a public listed company (may) pursue a more visible and aggressive approach in enforcing its rights whether at High Court or Supreme Court level,” he said.
Mlotshwa said Vast had instructed them that unless there were serious attempts to settle the matter, they will have no option but to take action against the government.
He said Vast could be forced to inform the investing public, as it is obliged to by LSE listing rules and regulations, that even though it is in possession of a High Court order, the RBZ was refusing to obey it.
“(Vast will) institute the necessary contempt of court processes against those persons in wilful contempt of the High Court order, take all such steps as shall be necessary to reinstate its appeal against Justice Hungwe’s rescission judgment in the Supreme Court, pursue such other legal action as shall be necessary for international tribunals as ancillary or in consequence of the foregoing,” Mlotshwa said.
Vast also holds interests in the Guruve-based Eureka Gold Mine.