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Avocet reports financial and operational results for 1H18

Published by , Assistant Editor
Global Mining Review,

West African-focused gold mining and exploration company Avocet Mining PLC (Avocet) has released its unaudited interim results for the six months ended 30 June 2018.

In the first half of the year in 2018, Avocet’s management continued to refinance and restructure the Group.

The sale of Avocet’s subsidiaries in Burkina Faso on 8 February 2018, and the disposal of its wholly-owned Norwegian entity Wega Mining and its subsidiaries on 16 March 2018, played a role in this larger restructuring effort, and took place against the background of ongoing discussions between the company and its sole creditor Elliott Management (Elliott) regarding the restructuring of its overdue loans.

Following these transactions, the company’s stake in the Tri-K development is its only asset.

In light of these restructuring aims and its continued efforts to minimise costs, the size of the board was no longer considered appropriate and it was reduced from five to two members on 19 March 2018.

On 5 September 2018, the company reportedly transferred another 30% of its Tri-K gold project in Guinea to Managem SA (Managem), a Moroccan mining group listed on the Casablanca stock exchange, under the October 2016 agreement Avocet had entered into with Managem.

According to the company, the loans of US$29.9 million as of 30 June 2018 from Manchester Securities Corp. (an affiliate of Elliott and the company’s largest shareholder) remain an unsustainable debt burden. Elliott’s loans have been due since 2013. Discussions with Elliott regarding the restructuring of Avocet’s debts continue.

One potential outcome of these discussions could be that the Avocet Group is broken up further in an orderly manner and eventually wound up.

The company reportedly has sufficient funds for at least the next year as of the date of signing of the report, at the current and expected rate of spending, provided that the capital and interest on the Elliott’s loan will not have to be paid in that period. At the time of signing the report, the Directors of the company consider that the company is an ongoing concern.

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