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Avocet Mining shares jump as gold shipment sale will cover costs

Published: 12:51 07 Dec 2016 GMT

Gold mine
Avocet said, although 1,400 ounces of gold shipment remain under seizure, weekly shipments from the Inata mine have resumed

West Africa-focused gold miner Avocet Mining PLC (LON:AVM) saw its shares jump 7.5%  today after it said the sale of a shipment of the precious metal will cover its costs until a key disposal completes.

Avocet Mining confirmed that shipment #315, which consisted of over 6,000 ounces of gold, has been sold, and that management fees for November and December have now been received by Avocet from Société des Mines de Bélahouro (SMB), the group subsidiary which owns the Inata gold mine in Burkina Faso. 

Accordingly, the company added, it now has working capital to cover its corporate overheads through to the completion of the disposal of a stake in the Tri-K mine in Guinea, anticipated in early January 2017,

It added that although the 1,400 ounces of gold shipment #314 remain under seizure, the Inata mine is in production and weekly shipments have now been reinstated as normal.

The group said it is also hoped that a settlement will be reached with regards to the claims of the ex-workers in the coming weeks. Avocet owns 90% of the Inata Gold Mine.

In reaction, Avocet shares were up 3.875p at 55.0p at lunchtime.

In early October, Avocet revealed that that bailiffs acting on behalf of ex-workers of SMB, who had been laid off following an illegal strike in December 2014, had taken seizure of gold shipment #314 .

SMB had said that it was unable to provide funds for head office and corporate costs before receipt of the proceeds of the sale of a 40% stake in Tri-K to Moroccan firm Managem SA, announced on October 10.

Avocet had said that until the Tri-K disposal completes it would need to find alternative sources of funds, which were expected to be approximately US$1-200k per month.

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