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Beskrivning

LandStorbritannien
ListaOB Standard
SektorRåvaror
IndustriGruvdrift & metaller
Avocet Mining är ett brittiskt guldgruvbolag. Företagets huvudsakliga verksamhet består av guldproduktion och gruvdrift i Afrika, främst koncentrerat till Burkina Faso och Guinea. Tidigare var produktionen belägen i Sydostasien, men sedan 2009 vid förvärvet av Wega Mining fick bolaget inträde på den afrikanska marknaden. Bolaget bildades 1995 och har sitt huvudkontor i London.
2017-12-18 14:00:01
18 December 2017

Avocet ("Avocet" or the "Company") announces today that it has entered into an
agreement to sell all of its assets in Burkina Faso, including the Inata gold
mine, together with certain receivables of the Company's group to the Balaji
Group of companies (the "Balaji Group") for a total consideration of USD 5
million (the "Sale"). Of this consideration, USD 2.5 million will be payable in
cash at completion and USD 2.5 million will be paid by way of deferred payments.


Completion of the transaction is expected to occur on 11 January 2018,
conditional upon the satisfaction of a condition as described below.

INTRODUCTION
Since Avocet began negotiations with the creditors of Société des Mines de
Bélahouro S.A. ("SMB") in April 2017, it has pursued a consensual restructuring.
The Company announced on 2 October 2017 that discussions with two potential
investors were ongoing, each proposing transactions contingent on a compromise
with SMB's creditors. 

As the disagreement among the creditors could not be resolved, one of the two
potential investors, the Balaji Group, agreed to acquire Avocet's Burkina Faso
assets without the prior restructuring of approximately USD 70 million of
overdue debt owed by SMB and Goldbelt Resources West Africa S.à.r.l.
("Goldbelt") to third party creditors, finance providers, personnel and
government, for a consideration that is independent of the outcome of these
discussions.	

The protracted restructuring process caused by continuing disagreement among the
creditors, the deteriorating security situation at the Inata mine, increasing
control issues and the exhaustion of all sources of funding has left the Company
with two options: either to accept the proposal from the Balaji Group for the
Sale or for SMB and Goldbelt to be placed into liquidation.
The sale of the Burkina Faso assets has been part of a larger restructuring and
discussions are ongoing with Avocet's sole creditor, Manchester Securities Corp.
("Elliott") regarding the restructuring of its overdue loans to the Company
which total USD 28.7 million (and which are secured, in part, over the shares in
Resolute (West Africa) Ltd ("Resolute"), SMB and Goldbelt). 

THE BALAJI GROUP
The Ghana-based Balaji Group (www.balajigroup.org) states an annual turnover of
USD 300 million. Its precious metal division recently acquired the Kalsaka
goldmine in Burkina Faso and it anticipates significant cost synergies following
the acquisition of the Inata mine.
Conditional upon a successful restructuring of the Burkina assets after
completion of the Sale, the Balaji Group has stated that it intends to invest
approximately USD 26 million to bring the Inata gold mine back into full
production and develop the Souma deposit.

TRANSACTION DETAILS
The transaction with the Balaji Group comprises a sale by Wega Mining AS ("Wega
Mining"), a wholly-owned subsidiary of Avocet, of the entire issued share
capital of Resolute to Greater Success Global Limited, a member of the Balaji
Group (the "Purchaser"), for USD 1 in cash, pursuant to a share purchase
agreement entered into on 18 December 2017 (the "Agreement"). As this is a sale
of a distressed company, the shares are being sold on an "as is/where is" basis,
i.e. no warranties (other than with regard to title and capacity) are being
given by Wega Mining in the Agreement.
Resolute is the sole shareholder of Goldbelt and the majority shareholder in
SMB, which holds the Inata mining licence. The sale of Resolute therefore
represents the disposal by the Company of all of its assets in Burkina Faso,
including the Inata goldmine. Completion of the Sale is conditional upon the
execution by Elliott of a deed of release to release its security over the
Company's assets, including the shares of Resolute, SMB and Goldbelt (the
"Condition").

In addition, the transaction involves the novation by Avocet and Wega Mining to
the Balaji Group of certain receivables owed to them by SMB and Goldbelt for
cash consideration of USD 2,499,999, to be paid at completion, and for a
consideration of USD 2.5 million to be satisfied by deferred payments over a
period of seven years. The obligation to pay the deferred consideration will be
guaranteed by the Purchaser and by the chairman of the Balaji Group personally.
In advance of the sale, and in consideration of Wega Mining signing the
Agreement, the Balaji Group has transferred USD 500,000 to its solicitors in
London as a deposit. This deposit will be paid to Avocet whether completion of
the Sale occurs (in which case it will form part of the cash consideration) or
if completion of the Sale does not occur for any reason other than the Condition
not being satisfied.

USE OF PROCEEDS
Given the Company's current circumstances and in order to enable the Company
finally to resolve its affairs, Elliott has agreed to the Sale and the payment
terms proposed by the Balaji Group and to release its security over the Burkina
assets, conditional upon being granted appropriate replacement security over the
net proceeds of the Sale.

Discussions with Elliott regarding the restructuring of Avocet's debts will
continue after completion of the Sale, including the use of the proceeds of the
Sale for the repayment of debt. In this context, Avocet will be taking all
practicable actions to minimise its costs and streamline its remaining
responsibilities, activities and group structure.
As the Sale involves the disposal of the only trading subsidiary of the Avocet
Group, a possible impact of the disposal could be that the remainder of the
Avocet Group is broken up further in an orderly manner and eventually wound up.
If this occurs, it is possible that, given the amount of debt owed by Avocet,
there will be very minimal or no returns to Avocet's shareholders.

APPROVAL OF TRANSACTION
Considering the above and the support of Elliott for the transaction, the board
of the Company believes that the transaction with the Balaji Group is the only
transaction capable of implementation, it is not unreasonable and it does not
disadvantage any other stakeholder of the Company given the high level of debt
in the Company. It has therefore entered into the Agreement with the Balaji
Group. 

The transaction does not require shareholder approval (1). 

- END -



FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining PLC	
Boudewijn Wentink, CEO
Yolanda Bolleurs, CFO

+44 20 3709 2570

Blytheweigh 
Financial PR 	
Tim Blythe
Camilla Horsfall
Megan Ray
+44 207 138 3204

J.P. Morgan Cazenove
Corporate Broker
Michael Wentworth-Stanley
+44 20 7742 4000


 (1).	At the extraordinary general meeting of the Company of 22 December 2016 a
resolution was passed to transfer the Company's listing on the London Stock
Exchange from the Premium listing segment to the Standard listing segment of the
Official List. See paragraph 6 of Part VII (Summary of the Key Differences
between the Standard and Premium Listing Categories) of the Shareholders'
Circular of 29 November 2016 on page 43: 'A Standard Listing does not require a
company to comply with the provisions of Listing Rule 10 which sets out
requirements for Shareholders to be notified of certain transactions and to have
the opportunity to vote on proposed significant transactions. Shareholders
should be aware that the Company would, following the transfer to a Standard
Listing, be able to undertake significant transactions without Shareholder
approval.'

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.