15th Nov 2013 12:35
LONDON (Alliance News) - Avocet Mining PLC Friday said it has completed the buy back of its entire hedge position with Macquarie Bank Ltd and is now a fully unhedged gold producer.
Earlier this year Avocet said it had drawn down a five year 30 billion Burkina Faso franc loan with Ecobank Burkina Faso, enabling it to remove all existing hedge commitments.
The loan was provided to Avocet subsidiary Société des Mines de Bélahouro SA (SMB), which owns the Inata mine in Burkina Faso.
Avocet had used around USD29 million of the loan proceeds, in addition to USD12 million of funds previously restricted by Macquarie, to buy back its entire outstanding hedge commitment for a total consideration of approximately USD41 million.
"Following the hedge buy back and the final debt repayment during the third quarter 2013, all obligations under the Macquarie finance facility have now been discharged. The company is now an unhedged gold producer in respect of the presently defined eight year mine life at Inata," it said.
The Ecobank facility had a five-year term, bearing an interest rate of 8% a year and was secured against certain assets of SMB. The first repayment would be made this month and equal repayments of USD1.3 million.
The facility required that an amount equal to two months' payments be held in a debt-service reserve account.
Avocet Mining shares were trading at 15.00 pence Friday morning, up 0.62 pence or 4.4%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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