TORONTO (miningweekly.com) – Embattled Vietnam-focused gold miner Besra has sold a majority stake to a Swiss investor for $14.25-million.

Besra has faced significant challenges in Vietnam, including a disputed export tax assessment at its Phuoc Son plant, and suspended operations at its Bong Mieu mine owing to severe weather conditions, which contributed to the company finding itself in a financial bind.

However, earlier this month, the gold miner reopened its Bong Mieu mine, marking the return to operation and at least some cash flow.

The TSX-, ASX- and Frankfurt-listed company on Friday announced that Victory Corporation Group of Switzerland (VCG) had agreed to buy 250-million Besra common shares at $0.057 apiece, sending its TSX-listed stock up 60% to C$0.04. After finder’s fees had been deducted, the company would pocket a net $13.97-million.

If the financing closes, it will result in VCG holding a 40% stake in Besra, making VCG the largest shareholder of the company. VCG is a consortium of companies representing interests that have a range of business involvements, including oil and oil production, shipping, leisure, aviation, retail and commodities.

The agreement also includes the sale at spot of up to 50 000 oz/y of Besra's gold through one of VCG's related companies. VCG will also have the right to appoint two individuals to the Besra board, subject to corporate law requirements and the TSX approving the VCG nominees.

Besra expects the two companies to ink the subscription agreement within the next five working days, with closing scheduled for July 10.

Besra said it would be seeking to rely on the financial hardship exemption from the shareholder approval requirement under the TSX rules.

The company also noted that there was no assurance that the agreement-in-principle would culminate in the closing of financing.

“We are very pleased to welcome Victory Corporation and its associated family offices to our company. They will bring the benefit of substantial international business acumen, experience and network to the table, in addition to an important injection of capital. We believe that VCG's investment in Besra will significantly benefit Besra and all of its stakeholders,” Besra CEO John Seton said.

Besra intended to use the net proceeds of the placement to pay outstanding interest under its convertible and gold-linked notes, spend the capital necessary to restore production at its two Vietnamese mines to normalised levels and for general corporate and working capital purposes.

The company will then approach holders of its convertible notes to negotiate an extension of their maturity date, so that there would be no deemed default under the terms of the notes after the financing and paying of overdue interest.

Besra expects to produce between 31 000 oz and 34 000 oz of gold during the full year.