24th Sep 2014 07:55
LONDON (Alliance News) - Ovoca Gold PLC saw its shares rise strongly Wednesday after it announced that it wants to buy back up to 20% of its shares to cut the discount of its shares compared with its net asset value per share and give shareholders an exit mechanism if they want it.
In a statement, the gold explorer said it will ask shareholders for permission to buy back up to 17.7 million shares, or 20% of its issued share capital, at a meeting on October 17. It will ask its shareholders for permission to pay a final USD3 million for the acquisition of the Stakhanovsky Licence at the same meeting.
"It is intended that having the authority to purchase its own shares will enable the board to respond to volatile stock market conditions, help stimulate liquidity in the company's shares and provide shareholders with the flexibility, but without any compulsion, to realise value in respect of all or some of their shareholdings in a tax efficient method," it said.
Its shares were trading at a discount of about 70% to net asset value per share at the end of 2013.
Ovoca had net assets of EUR26.0 million at the end of 2013, including cash and cash equivalents of EUR14.1 million and available for sale financial assets of EUR10.8 million. Ovoca has no current outstanding debt, although it made a EUR4.9 million loan in February to Russian oil producer Taymura which hasn't been repaid. It has applied to the Moscow arbitration court to secure its interests and expects a hearing to take place at the end of this month.
Ovoca shares were up 41.5% at 9.20 pence early Wednesday, the stock's highest level since early October last year.
By Steve McGrath; [email protected]; @stevemcgrath1
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