1st Oct 2018 10:11
LONDON (Alliance News) - Shares in Avocet Mining PLC dropped on Monday as it said despite a narrowed first half loss a unsustainable debt position may result in the company being wound up.
Shares in the West Africa-focused gold mining company were down 29% at 8.54 pence each on Monday.
For the six months to the end of June, pretax loss totaled USD1.9 million, narrowed from USD5.5 million the year before, due to a smaller loss on operations of USD665,000 versus USD2.2 million, and lower finance expense of USD1.2 million versus USD2.3 million.
Avocet made no revenue in the interim period, compared to USD26.4 million the year before, due to the sale of its assets in Burkina Faso and the Wega Mining Group, as part of its refinancing and restructuring strategy.
Currently, Avocet's only asset is its stake in the Tri-K development in Guinea. Also, the company is in discussions with sole creditor Elliott Management regarding the restructuring of its overdue loans.
Looking forward, a possible outcome of these discussions could be that Avocet itself is broken up further and the company wound up, however, due to the amount of debt owed, this would produce little to no value to shareholders.
Currently, Avocet has sufficient funds for at least the next twelve months, however, the company remains a going concern.
Related Shares:
AVM.L