JOHANNESBURG (miningweekly.com) – The share price of LSE-listed Avocet Mining fell by 26% on Monday morning, after the company announced that it was considering filing for insolvency of its Société des Mines de Bélahouro (SMB) subsidiary, which operates the Inata gold mine, in Burkina Faso.
This follows after a standstill agreement between Avocet and some of SMB's financial and trade creditors expired.
“Given the status of discussions, it is unclear whether agreement on a restructuring of the balance sheet can be reached before SMB has exhausted all available sources of financing,” Avocet said in a statement.
The boards of both Avocet and SMB will convene on September 8 to assess the status of discussions with the major creditors, SMB's current liquidity position and its imminent liabilities.
“The boards will consider all available options, including the potential filing of an insolvency petition by SMB. No decision regarding whether or not to file for insolvency has been made at this time,” it noted.