Avocet Mining shares fall following Burkina Faso gold update

Shares in West Africa-focused Avocet Mining fell sharply after the company published an update of mining activities at its Inata mineral reserve in northern Burkina Faso.

Shares in West Africa-focused Avocet Mining fell sharply after the company published an update of mining activities at its Inata mineral reserve in northern Burkina Faso.

The company reported that test work indicated that the ore body at the facility was "more complex than had previously been believed".

While further analysis continues, the group said that current indications were that the impact of fresh and transitional ore on recoveries and throughput meant that the new Mineral Reserve would be likely to be between 0.9 and 1.2m ounces as of December 31st.

This compares to the previous mineral reserve of 1.85m ounces as of December 31st 2011.

The company added that the December 31st reserve figure was net of depletion during 2012 of approximately 160,000 ounces.

Mineral reserve reduction at Inata is "likely to result in a significant non-cash impairment, to be determined once the Mineral Reserve is finalised," the group further disclosed.

Hedge arrangements under discussionAs a consequence of the developments, the company stated that it was engaged in discussions with Macquarie Bank with regard to the hedge arrangements at Inata.

"Avocet believes that in order to increase cash flow generation at Inata and maximise funds returned from SMB to finance corporate activities and support the company's investment plans at other projects it is necessary to reduce the hedge book substantially as soon as possible."

Avocet's share price was down 43.69% to 29p at 10:38 on Thursday.

MF

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
What does the Coinbase listing mean for bitcoin and other cryptocurrencies?
Bitcoin

What does the Coinbase listing mean for bitcoin and other cryptocurrencies?

As the bitcoin price hit new highs, the world's biggest cryptocurrency exchange, Coinbase, listed on the stockmarket. John Stepek looks at what that m…
15 Apr 2021
Properties for sale for around £400,000
Houses for sale

Properties for sale for around £400,000

From a converted church in Banffshire with views towards the Cairngorms National Park, to a period property in the Georgian market town of Beverley, e…
2 Apr 2021