Avocet Mining secures Morocco financing for Guinea mine
Updated : 12:28
Gold explorer Avocet Mining finally secured financing for its Guinea mine as it entered into a joint venture with Morocco's Managem SA.
Managem, which is listed on the Casablanca Stock Exchange, agreed conditionally to buy a minority interest in the Tri-K mine, which will increase to a majority interest of up to 70%, after an agreed work programme is finished and subject to certain milestones.
A total of $14m is to be invested by Managem, consisting of an initial payment of $4m, and the company agreed to undertake a $10m work programme in order carry out a bankable feasibility study within 24 months for a carbon-in-leach operation at the mine, for an ore reserve of at least 1m ounces.
However, if the ore reserve found in the study is less than 1m ounces, Managem's ownership will be limited to 60%.
AIM-listed Avocet will then have the option to re-buy the equity and loans from Managem for full ownership, if the work programme is not completed.
Avocent chief executive, David Cather, said: "The Managem proposition is particularly attractive for both parties, as the carbon-in-leach project it envisages will be considerably larger than the heap leach operation set out in the initial feasibility study.
In 2013, Avocet said the Tri-K mine, which has a gold mineral resource of 2m ounces and an inferred resource of 1m ounces, had a reserve of 480,000 ounces as part of a feasibility study which was followed in March 2015 with the Guinean government granting a mining permit.
Imad Toumi, chairman and chief executive of Managem, added that the company considers Tri-K project to be a “high quality and advanced gold opportunity” that will contribute to its strategic development objectives in Africa.
“Besides, Guinea is a friendly country, and together with Avocet, we have received strong support and encouragement from the Guinean government. Our ambition is to develop a large-scale gold mining operation in the Mandiana prefecture,” he said.
Shares in Avocet Mining were up 9.12% to 88.25p at 1105 BST.