AVM.L Regulatory News (AVM)

24 April 2015

Short term loan funding arrangement with Elliott Management

Avocet Mining PLC ("Avocet" or "the Company") announces that it has agreed terms with its largest shareholder, Elliott Management ("Elliott"), for, in total, US$2.1 million of loan funding repayable on demand (the "Loan").

The Loan, on the basis the Company is able to draw it down in full, is expected to meet the Company's corporate requirements through to the end of September 2015 and is intended to allow the Company to continue its business review, while exploring longer term funding options. As part of the business review, Avocet continues to consider options for maximising the value of its assets for the benefit of shareholders, including its Inata mine and the adjacent Souma deposit in Burkina Faso, and its Tri-K development project in Guinea. In the period to September, the Company expects to complete its plans for financing and developing the Tri-K project, which was recently granted its exploitation permit.

The Company has entered into a loan agreement (the "Loan Agreement") with Manchester Securities Corp. ("the Elliott Lender"), an affiliate of the Company's largest shareholder Elliott, which is the beneficial owner of approximately 28% of the Company's issued share capital.

The principal terms of the Loan are as follows:

· The Loan will comprise three facilities, being:

- an initial facility of US$1.5 million to be drawn down immediately;

- a second facility of US$1.5 million which, following receipt of shareholder approval (as detailed below), will be used to replace the initial facility; and

- a third facility of US$0.6 million;

· The initial facility, which is unsecured and will be drawn down immediately, is expected to provide sufficient funds to support the Company's corporate activities through to the end of June 2015;

· The details of the security to be provided in respect of the second and third facilities are yet to be finalised but, as set out below, the provision of such security is deemed a related party transaction and is accordingly subject to shareholder approval. Should shareholders not approve the security, the Company will not be able to draw down the second or third facilities and the Company will only receive the US$1.5m pursuant to the initial facility to be drawn down immediately;

· The third facility will be available in three equal tranches of US$0.2 million, to be drawn down on or about the first business day of July, August and September 2015;

· Availability and draw down of each tranche of the third facility is at the sole discretion of the Elliott Lender at the time of draw down request;

· All amounts under the Loan Agreement are repayable on demand; and

· Interest will apply at a rate of 12% on all amounts drawn under the facilities.

Pursuant to the terms of the Loan Agreement, US$1.5m will be drawn down immediately on an unsecured basis. However, under the terms of the Loan Agreement, the Company has agreed, subject to shareholder approval, to provide security over certain of its assets in respect of the second and third facilities. Accordingly, on the basis that Elliott is a related party of the Company as defined in the listing rules of the UK Listing Authority ("Listing Rules"), the granting of such security is a related party transaction under the Listing Rules and therefore shareholders must approve the terms of the Loan Agreement before such security can be provided. The Company therefore currently anticipates issuing a circular to shareholders during the course of May 2015, in respect of seeking approval for the granting of security in connection with the Loan Agreement at a separate general meeting of shareholders to be held immediately following the Company's annual general meeting expected to be held on 19 June 2015.

Shareholders should note that in the event that they do not approve the terms of the Loan Agreement, the Company will not be able to draw down the further US$0.6m available under the Loan Agreement. In addition, should the Elliott Lender not agree to the draw down of one or more of the tranches available pursuant to the third facility, the Company would not receive the required funds. Accordingly, the Company would need to seek to secure alternative sources of funds immediately to enable it to fund its corporate activities and there is no guarantee that new funds would be available to the Company or, that if they are available to the Company, they would be available on terms as favourable to the Company.

FOR FURTHER INFORMATION PLEASE CONTACT

NOTES TO EDITORS

Avocet Mining PLC ("Avocet" or the "Company") is an unhedged gold mining and exploration company listed on the London Stock Exchange (ticker: AVM.L) and the Oslo Børs (ticker: AVM.OL). The Company's principal activities are gold mining and exploration in West Africa.

In Burkina Faso the Company owns 90% of the Inata Gold Mine. The Inata Gold Mine poured its first gold in December 2009 and produced 86,037ounces of gold in 2014. Other assets in Burkina Faso include eight exploration permits surrounding the Inata Gold Mine in the broader Bélahouro region. The most advanced of these projects is Souma, some 20 kilometres from the Inata Gold Mine.

In Guinea, Avocet owns 100% of the Tri-K Project in the north east of the country. Drilling to date has outlined a Mineral Resource of 3.0 million ounces, and in October 2013 the Company announced a maiden Ore Reserve on the oxide portion of the orebody, which is suitable for heap leaching, of 0.5 million ounces. As an alternative, the potential exists to exploit the entire 3.0 million ounce Tri-K orebody via the CIL processing method. The Company announced on 2 April 2015 that an exploitation permit had been awarded for Tri-K.