Avocet Mining Plc said Dec. 18 that it decided to sell all of its assets in Burkina Faso, including the Inata gold mine, to Ghana-based Balaji Group for US$5 million as part of debt restructuring.
Following the sale, the rest of the cash-strapped company might be broken up further and eventually wound up, potentially without any returns to its shareholders.
Balaji Group unit Greater Success Global Ltd. will purchase Resolute (West Africa) Ltd. for US$2.5 million in cash and a further US$2.5 million in deferred payments over seven years.
The sale of the Burkina Faso assets is part of a larger restructuring discussions with Avocet's sole creditor, Manchester Securities Corp., for restructuring its overdue loans to the company, totaling US$28.7 million.
Avocet said the Balaji Group agreed to acquire the assets without prior restructuring of about US$70 million of overdue debt owed by Resolute-owned Goldbelt Resources West Africa SARL and Société des Mines de Bélahouro SA.
The company said it only had the option to either accept the proposal from the Balaji Group or place Goldbelt and SMB into liquidation, as it has exhausted all funding sources.
The Balaji Group intends to bring the Inata gold mine back into full production and develop the Souma deposit with a US$26 million investment.
The transaction is expected to complete Jan. 11, 2018.