Avocet Mining PLC (LON:AVM) has closed the sale of several non-core exploration assets and investment interests.
The disposals comprise the sale of Avocet's residual equity interests in Merit Mining Corp (TSX-V:MEM), expected to complete in late October 2010, and Monument Mining Ltd (TSX-V:MMY).
The disposals are expected to result in cash proceeds of approximately US$10.1 million and a small exceptional pre-tax profit. In addition, Avocet has completed the sale of the Houndé Group of licences in exchange for 10.3 million shares in Avion Gold Corp (TSX-V:AVR), equivalent to approximately 2.8 percent of the issued equity, as first announced on 29 January 2010.
The disposals announced today are in addition to the disposal of debentures in Merit Mining and an unrelated disposal of Avocet's interest in Dynasty Gold Corp, which were announced on 28 July 2010 at the time of the company's interim results and resulted in an exceptional pre-tax profit of US$2 million.
As previously announced, Avocet is conducting a strategic review of its South East Asia assets and expects to announce the result of this review by the end of the year.
The divestment of the Houndé exploration permits in southwest Burkina Faso reflect Avocet's assessment that while Houndé has geological potential it does not adequately satisfy the company's criteria for development. Avocet's exploration efforts in Burkina Faso will instead be focused on the Belahouro district that surrounds the Inata mine, as this is highly prospective and considered to be better suited to yield large scale additional mineable resources within a short timeframe.
Avion is a Canada based gold mining company that holds 80 percent of the Tabakoto and Segala gold mines in Mali, which Avion expects to produce between 75,000 and 85,000 ounces of gold in 2010.
The shareholding in Avion gives Avocet additional exposure to gold production and exploration in Mali and Burkina Faso in West Africa.
Chief executive Brett Richards said: "The disposals announced today and in July signify important progress in the company's drive to simplify its asset base and focus on building a larger business in West Africa, where we have successfully implemented plans to exploit the significant potential of our production and exploration assets."