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Avocet Mining Sign JV Partner Agreement With Managold In Tri-K project

Mining News - Published on Thu, 20 Jun 2019

Image Source: Hegnar
Avocet Mining Pic announced that, pursuant to an agreement entered with its JV partner Managold Ltd, a subsidiary of Managem SA, it has sold its remaining interests in the Tri-K gold project in Guinea to Managold for an aggregate consideration of USD 21 million. Signing and completion of the Disposal took place simultaneously. The Disposal is part of the restructuring of Avocet's overdue loans to its secured creditor Manchester Securities Corp. These loans total around USD 32 million, and Elliott has released the Company from all amounts outstanding thereunder against, amongst other things, the payment of the majority of the proceeds of the Disposal. This payment, together with certain other third party debts, leaves the Company a minimal residual cash sum while it considers its future strategy.

Discussions have been ongoing between the Company and Elliott regarding the restructuring of its overdue loans to Elliott which total USD 32.2 million to date. In this context, the Company has sold its assets in Burkina Faso, including the Inata gold mine to the Balaji Group of companies in February 2018. Further, with a view to minimising its costs and streamlining its remaining responsibilities, activities and group structure, the Company sold one of its subsidiary companies, Wega Mining AS, to Natholmen AS in March 2018. The disposal by Avocet of its interests in the Tri-K Project and its related assets is also part of this restructuring effort.

The transaction comprises a sale by the Company to Managold of the 30 per cent stake it holds in the issued share capital of Manacet SA and the assignment by Avocet to Managold of all the intercompany receivables owed to the Company by Manacet's subsidiary Societe des Mines de Mandiana for an aggregate consideration of USD 21 million pursuant to a shares and loans purchase agreement entered into today.

Given the Company's current circumstances and in order to enable the Company to resolve its affairs, Elliott agreed, subject to the settlement of Avocet's overdue loans, to the Disposal and to the release of its rights under the various facility agreements.

Elliott has released Avocet from all amounts outstanding and all other obligations under these agreements against the payment of the majority of the proceeds of the Disposal, the assignment of all of Avocet's rights under the Agreement and the assignment of Avocet's rights under a loan agreement relating to the February 2018 transaction with Balaji.

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Posted By : Sanju Moirangthem on Thu, 20 Jun 2019
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