21st Jan 2015 08:47
LONDON (Alliance News) - Avocet Mining PLC shares rose on Wednesday after the company said it has signed a new financing deal with Elliott Management, though it said it is still working on ramping production back up at the strike-hit Inata mine.
Avocet said Elliott, which owns a 27.7% stake in the company, has agreed to provide funding which will provide working capital for Avocet for around three months. The funding will allow the company to continue its business review and seek longer-term funding options.
Under the deal, Elliott will provide the company with an unsecured loan of USD1.5 million via its Manchester Securities Corp affiliate. The loan will carry an interest rate of 12.5%.
As part of the business review, Avocet will consider options on all of its assets, including the Inata mine and the Souma deposit in Burkina Faso, and the Tri-K development in Guinea.
The company also said that while limited operations have restarted at the processing plant at the Inata mine in Burkina Faso, the group is still in the process of planning regarding the full resumption of operations, including mining activities. In particular, Avocet is in the process of determining the best staffing options for the site, having sacked 300 employees following what the company said was an illegal strike in December.
Avocet shares were up 17% to 8.09 pence on Wednesday morning, one of the best performers in the London Main Market.
By Sam Unsted; [email protected]; @SamUAtAlliance
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