23 November 2016
Further update on Inata gold seizure
Further to the announcement on 14 November, Avocet Mining PLC ("Avocet" or "the Company") announces that, in connection with the gold seizure at the Group's Inata gold mine in Burkina Faso, announced on 7 October 2016, the Company has received a further indication from the court that a verdict on whether the gold should be released is to be deferred until 19 December 2016. The initial seizure was lifted by the court on 7 November 2016, but as yet the gold has not been released. Accordingly, Société des Mines de Bélahouro SA ("SMB", the Group subsidiary which owns the Inata gold mine) applied to the court for clarification and to secure the release of the gold. In the meantime, the judge instructed both SMB and the former employees to work together to find a negotiated settlement.
Following initial discussions, the Company is optimistic that SMB will be able to agree a framework for allowing the mine to return to operation and to making gold shipments without the threat of further seizures, while the final settlement figure is being established, over the coming days.
The Company intends that once a resolution has been reached, and gold shipments resumed, the payment of management fees by SMB to the Company will also recommence, without which the Company would need to obtain third party funding in order to meet its head office and corporate costs falling due in December. If no funding were obtained either from Inata or a third party, as announced previously, it is likely that the Company will enter an insolvency process, in which circumstance it is highly unlikely that any value will remain for shareholders.
Further updates will be provided in due course.
FOR FURTHER INFORMATION PLEASE CONTACT
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Avocet Mining PLC
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Bell Pottinger
Financial PR Consultants
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J.P. Morgan Cazenove Corporate Broker
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David Cather, CEO Jim Wynn, FD
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Lorna Cobbett
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Michael Wentworth-Stanley
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+44 20 3709 2570
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+44 (0)20 3772 2555
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+44 20 7742 4000
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NOTES TO EDITORS
Avocet Mining PLC ("Avocet" or the "Company") is an unhedged gold mining and exploration company listed on the London Stock Exchange (ticker: AVM.L) and the Oslo Børs (ticker: AVM.OL). The Company's principal activities are gold mining and exploration in West Africa.
In Burkina Faso the Company owns 90% of the Inata Gold Mine. The Inata Gold Mine poured its first gold in December 2009 and produced 74,755 ounces of gold in 2015. Other assets in Burkina Faso include five exploration permits surrounding the Inata Gold Mine in the broader Bélahouro region. The most advanced of these projects is Souma, some 20 kilometers from the Inata Gold Mine.
The Company also holds an interest in the Tri-K project in Guinea. On 10 October 2016, the Company announced that it had agreed to dispose of 40% of the project to Managem, a Moroccan group listed on the Casablanca stock exchange, subject to, inter alia, shareholder approval, and which will increase upon completion of a bankable feasibility study for a CIL plant at the site, the incurring of expenditures of at least US$10 million, and the enlarging of the ore reserve, to 70% (in the event of an increase of the reserve to 1 million ounce or more) or 60% (if less than 1 million ounces).