Gold miner Avocet struggles to pay back loan
London-based Avocet Mining (LON:AVM) has missed the payment date for its $15 million loan.
Avocet took the loan from an affiliate of the company's largest shareholder, Elliott Associates, but was unable to pay up as the maturity date passed on December 31, 2013.
The company has repaid the accrued interest – about $800,000 – and initiated a business review last month.
In a statement issued Thursday, Avocet said it "remains in discussions with the Elliott lender about repayment of the $15 million principal amount."
Avocet is an Africa-focused miner with operations in Burkina Faso and Guinea. The company has been struggling with low production and escalating costs and in December announced lower than expected production results, dropping from an anticipated 125,000-130,000 ounces of gold to about 115,000-120,000 ounces.
The deterioration in production was attributed largely to breakdowns in mobile and plant equipment.
In the December announcement, Avocet noted that group cash balances at year end are expected to come in at approximately $15 million – "less than the $16 million loan repayment," Avocet noted.
Avocet's share price plummeted in 2013, going from over 70p to just under 9p upon entering the new year.