Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Dec 18 (Reuters) – Struggling miner Avocet Mining Plc said it would sell its assets in Burkina Faso for $5 million to Ghana-based Balaji Group, staving off potential a bankruptcy for its units in the West African country.
The sale, which includes the Inata gold mine and the Souma exploration project, is part of a larger restructuring involving Avocet’s overdue loans totaling $28.7 million to creditor Manchester Securities Corp.
Avocet was forced to halt production at its largest mine Inata, 90 percent owned by the company, from April when it started restructuring talks with creditors of its subsidiaries SMB and Goldbelt Resources.
The company, which also has operations in neighbouring Ghana, has been struggling to keep Inata operational after former workers seized a shipment of gold last year. Earlier this year, Avocet faced possible insolvency after the expiry of a freeze on loan repayments.
Balaji Group said it intends to invest about $26 million to bring the mine back into full production and develop the Souma deposit.
(Reporting By Justin George Varghese in Bengaluru; Editing by Saumyadeb Chakrabarty)
