Avocet Mining PLC Completion of hedge buy back (1035T)
November 15 2013 - 2:01AM
UK Regulatory
TIDMAVM
RNS Number : 1035T
Avocet Mining PLC
15 November 2013
Completion of hedge buy back
- Avocet now a fully unhedged gold producer
Avocet Mining PLC ('Avocet' or the 'Company') announces that it
has completed the buy back of its entire hedge position with
Macquarie Bank Limited ('Macquarie') and is now a fully unhedged
gold producer.
On 31 October 2013 the Company announced that it had closed, and
drawn down, a five year loan facility with Ecobank Burkina Faso
("Ecobank") which would enable it to remove all existing hedge
commitments. The loan amount is 30 billion Francs de la Communauté
Financière d'Afrique ("FCFA"), which is the legal currency of
Burkina Faso. The Ecobank loan, which has no hedge requirement, has
been provided to the Company's 90% subsidiary Société des Mines de
Bélahouro SA ('SMB'), which owns the Inata mine in Burkina
Faso.
The Company has utilised approximately US$29 million of the loan
proceeds, in addition to US$12 million of funds previously
restricted by Macquarie, to buy back the Company's entire
outstanding hedge commitment of 111,980 ounces at US$938 per ounce,
for a total consideration of approximately US$41 million. Following
the hedge buy back and the final debt repayment during Q3 2013, all
obligations under the Macquarie finance facility have now been
discharged. The Company is now an unhedged gold producer in respect
of the presently defined eight year mine life at Inata.
Ecobank Burkina Faso is an affliate of Ecobank Transnational
Inc., which has its headquarters in Lomé, Togo. Ecobank
Transnational Inc. is a Pan African bank with operations in 33
countries across the continent and a strategy to build a world
class African financial institution. Avocet has a long term
relationship with Ecobank, with the bank having provided various
banking services to meet SMB's needs since 2008.
The Ecobank facility has a five year term, bears an interest
rate of 8% per annum, has no hedge requirement, and is secured
against certain of the assets of SMB. The first repayment will be
made in November 2013 and equal monthly repayments of 631 million
FCFA (US$1.3 million), comprising interest and principal, will
continue for the 60 month duration of the loan. The facility
requires that an amount equal to two months' payments be held in a
debt service reserve account. Subject to the debt service reserve
account requirement, there are no restrictions on SMB's use of loan
proceeds or cash flow generated, including the transfer of funds
from SMB to Avocet for corporate purposes.
David Cather, Chief Executive Officer, commented:
"We are very pleased to have worked with Ecobank to secure such
an important facility. Avocet has had a successful relationship
with Ecobank in Burkina Faso over several years. The facility
brings significant advantages for our operations, at favourable
terms, and has allowed us to realise our goal of being an unhedged
gold producer; we look forward to continuing to work with Ecobank
as we develop our assets."
Cheikh Travaly, Managing Director of Ecobank Burkina Faso,
commented:
"We are delighted to provide this loan to SMB, our first such
move in support of Burkina Faso's growing mining industry. Avocet's
success is central to Burkina Faso's ongoing emergence as a gold
producer, and Ecobank is proud to be playing a role in this
regard."
FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining Pelham Bell J.P. Morgan Cazenove Arctic Securities SEB Enskilda
PLC Pottinger Corporate Broker Financial Adviser Financial
Financial Adviser
PR Consultants
David Cather, Daniel Thöle Michael Wentworth-Stanley Arne Wenger Fredrik Cappelen
CEO Petter Bakken
Mike Norris,
FD
Rob Simmons,
IR
+44 20 7766 +44 20 7861 +47 2100
7676 3232 +44 20 7742 4000 +472101 3100 8500
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
deposit at Inata currently comprises a Mineral Resource of 4.7
million ounces and an Ore Reserve of 0.9 million ounces. The Inata
Gold Mine poured its first gold in December 2009 and produced
135,189 ounces of gold in 2012.
Other assets in Burkina Faso include eight exploration permits
surrounding the Inata Gold Mine in the broader Bélahouro region.
The most advanced of these projects is Souma, some 20 kilometres
from the Inata Gold Mine, where there is an estimated Mineral
Resource of 0.8 million ounces.
In Guinea, Avocet owns 100% of the Tri-K Project in the north
east of the country. Drilling to date has outlined a Mineral
Resource of over 3.0 million ounces, and in October 2013 the
Company announced a maiden Ore Reserve on the oxide portion of the
orebody, which is suitable for heap leaching, of 0.5 million
ounces. Development of a CIL processing plant to exploit the
remaining 2.4 million ounces will be considered once the heap leach
feasibility study has been completed.
About Ecobank Group
Ecobank Transnational Corporation ('Ecobank'), a public limited
liability company, is a leading pan-African bank with operations in
33 countries across the continent, and was established as a bank
holding company in 1985 under a private sector initiative
spearheaded by the Federation of West African Chambers of Commerce
and Industry with the support of ECOWAS. The Group also has a
licenced operation in Paris and representative offices in Beijing,
Dubai, Johannesburg, London and Luanda. Ecobank's headquarters are
in Lomé, Togo. As at the end 2012, the bank had assets of US$20
billion and revenue of close to US$2 billion.
For more information, please visit www.ecobank.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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