25 Nov 2016 14:30
Temporary agreement reached regarding gold seizure at Inata
Further to the announcement on 23 November, Avocet Mining PLC ("Avocet" or "the Company") announces that a temporary agreement has been reached in connection with the gold seizure at the Group's Inata gold mine in Burkina Faso, as a result of which the gold under seizure will be released, workers have returned to site and gold sales and production will recommence over the coming days.
Under the terms of this agreement, Société des Mines de Bélahouro SA ("SMB", the Group subsidiary which owns the Inata gold mine) will work with the ex-workers to agree a final settlement over the next 30 days.
If a settlement is not reached within the next 30 days, there remains a risk that production and gold sales will need to be suspended again if there was any risk of further gold seizures.
The Company intends that, with the resumption of gold sales, payment of management fees by SMB to the Company will also recommence, without which the Company would need to obtain third party funding in order to meet its head office and corporate costs falling due in December. If no funding were obtained either from Inata or a third party, as announced previously, it is likely that the Company will enter an insolvency process, in which circumstance it is highly unlikely that any value will remain for shareholders.
Further updates will be provided in due course.
FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining PLC | Bell Pottinger Financial PR Consultants | J.P. Morgan Cazenove Corporate Broker |
David Cather, CEOJim Wynn, FD | Lorna Cobbett | Michael Wentworth-Stanley |
+44 20 3709 2570 | +44 (0)20 3772 2500 | +44 20 7742 4000
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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 74,755 ounces of gold in 2015. Other assets in Burkina Faso include five exploration permits surrounding the Inata Gold Mine in the broader Bélahouro region. The most advanced of these projects is Souma, some 20 kilometers from the Inata Gold Mine.
The Company also holds an interest in the Tri-K project in Guinea. On 10 October 2016, the Company announced that it had agreed to dispose of 40% of the project to Managem, a Moroccan group listed on the Casablanca stock exchange, subject to, inter alia, shareholder approval, and which will increase upon completion of a bankable feasibility study for a CIL plant at the site, the incurring of expenditures of at least US$10 million, and the enlarging of the ore reserve, to 70% (in the event of an increase of the reserve to 1 million ounce or more) or 60% (if less than 1 million ounces).