Avocet Mining PLC Short term loan funding arrangement (1988L)
April 24 2015 - 02:00AM
UK Regulatory
TIDMAVM
RNS Number : 1988L
Avocet Mining PLC
24 April 2015
24 April 2015
Short term loan funding arrangement with Elliott Management
Avocet Mining PLC ("Avocet" or "the Company") announces that it
has agreed terms with its largest shareholder, Elliott Management
("Elliott"), for, in total, US$2.1 million of loan funding
repayable on demand (the "Loan").
The Loan, on the basis the Company is able to draw it down in
full, is expected to meet the Company's corporate requirements
through to the end of September 2015 and is intended to allow the
Company to continue its business review, while exploring longer
term funding options. As part of the business review, Avocet
continues to consider options for maximising the value of its
assets for the benefit of shareholders, including its Inata mine
and the adjacent Souma deposit in Burkina Faso, and its Tri-K
development project in Guinea. In the period to September, the
Company expects to complete its plans for financing and developing
the Tri-K project, which was recently granted its exploitation
permit.
The Company has entered into a loan agreement (the "Loan
Agreement") with Manchester Securities Corp. ("the Elliott
Lender"), an affiliate of the Company's largest shareholder
Elliott, which is the beneficial owner of approximately 28% of the
Company's issued share capital.
The principal terms of the Loan are as follows:
-- The Loan will comprise three facilities, being:
- an initial facility of US$1.5 million to be drawn down immediately;
- a second facility of US$1.5 million which, following receipt
of shareholder approval (as detailed below), will be used to
replace the initial facility; and
- a third facility of US$0.6 million;
-- The initial facility, which is unsecured and will be drawn
down immediately, is expected to provide sufficient funds to
support the Company's corporate activities through to the end of
June 2015;
-- The details of the security to be provided in respect of the
second and third facilities are yet to be finalised but, as set out
below, the provision of such security is deemed a related party
transaction and is accordingly subject to shareholder approval.
Should shareholders not approve the security, the Company will not
be able to draw down the second or third facilities and the Company
will only receive the US$1.5m pursuant to the initial facility to
be drawn down immediately;
-- The third facility will be available in three equal tranches
of US$0.2 million, to be drawn down on or about the first business
day of July, August and September 2015;
-- Availability and draw down of each tranche of the third
facility is at the sole discretion of the Elliott Lender at the
time of draw down request;
-- All amounts under the Loan Agreement are repayable on demand; and
-- Interest will apply at a rate of 12% on all amounts drawn under the facilities.
Pursuant to the terms of the Loan Agreement, US$1.5m will be
drawn down immediately on an unsecured basis. However, under the
terms of the Loan Agreement, the Company has agreed, subject to
shareholder approval, to provide security over certain of its
assets in respect of the second and third facilities. Accordingly,
on the basis that Elliott is a related party of the Company as
defined in the listing rules of the UK Listing Authority ("Listing
Rules"), the granting of such security is a related party
transaction under the Listing Rules and therefore shareholders must
approve the terms of the Loan Agreement before such security can be
provided. The Company therefore currently anticipates issuing a
circular to shareholders during the course of May 2015, in respect
of seeking approval for the granting of security in connection with
the Loan Agreement at a separate general meeting of shareholders to
be held immediately following the Company's annual general meeting
expected to be held on 19 June 2015.
Shareholders should note that in the event that they do not
approve the terms of the Loan Agreement, the Company will not be
able to draw down the further US$0.6m available under the Loan
Agreement. In addition, should the Elliott Lender not agree to the
draw down of one or more of the tranches available pursuant to the
third facility, the Company would not receive the required funds.
Accordingly, the Company would need to seek to secure alternative
sources of funds immediately to enable it to fund its corporate
activities and there is no guarantee that new funds would be
available to the Company or, that if they are available to the
Company, they would be available on terms as favourable to the
Company.
FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining Bell Pottinger J.P. Morgan Cazenove Strand Hanson
PLC Financial PR Consultants Corporate Broker Limited
Sponsor
David Cather, Daniel Thöle Michael Wentworth-Stanley Richard Tulloch
CEO Andrew Emmott
Mike Norris,
FD
+44 203 709 2570 +44 20 2772 2555 +44 20 7742 4000 +44 20 7409 3494
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
86,037ounces of gold in 2014. 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.
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 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. As an
alternative, the potential exists to exploit the entire 3.0 million
ounce Tri-K orebody via the CIL processing method. The Company
announced on 2 April 2015 that an exploitation permit had been
awarded for Tri-K.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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