14th Aug 2014 08:24
LONDON (Alliance News) - Avocet Mining PLC saw its shares jump Thursday after the company said it plans to raise GBP0.7 million in a share placing with existing investors, funds it said it will use for corporate activities, primarily in London and Guinea.
The West African gold mining and exploration company said it will raise the funds by placing 9.95 million new shares, at a price of 7.13 pence per share.
Shares in the company were amongst the biggest gainers on London's main market Thursday morning, up 9.9% at 8.25 pence.
Avocet said its largest shareholder, Elliott Associates LP, has subscribed for 2.55 million shares, representing 26% of the total placing, and now will have a 27.69% shareholding in the company.
It said Prelas AS, its second largest shareholder, subscribed for 4.95 million shares, which will give it a 6.87% shareholding in the company.
"Steps have been taken to address the funding requirements of Inata, where production is forecast to increase following commissioning of the carbon blinding circuit next month. The share placing...will provide funding for our head office activities while we continue to address the wider group's funding situation, and while the business review continues," said Chief Executive David Cather in a statement.
In June, the company took steps to reduce costs and capital expenditure for its Inata gold mine operation in Burkina Faso. Earlier this month, it said the funding requirement for development at the site has now been reduced to USD15 million to USD20 million through a revised mine plan and additional cost reductions.
Avocet said Thursday that the funds raised in the placing will make sure it covers capital expenditure and operating expenditure at Inata during the lead up to the commissioning of the carbon blinding circuit.
"We remain fully committed to resolving the ongoing financing issues of the group, through further cost-reduction measures, continued negotiations with existing and potential sources of finance, and the completion of our business review," Cather said.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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