Avocet Rises Most in Four Years After Gold Buyback: London Mover
Avocet Mining Plc (AVM), a miner of gold in Burkina Faso, rose the most in more than four years in London trading after securing a loan from its biggest shareholder and buying back some of its hedged production of the precious metal.
Avocet climbed as much as 20 percent, the steepest intraday gain since November 2008. Elliott Management, with 27 percent of the company, agreed to a $15 million loan facility, Avocet said in a statement. The company bought back 29,020 ounces of hedged gold output and seeks to clear the remaining hedge book by 2016.
The mine operator said last month it planned to restructure its finances after cutting gold reserves at its Inata mine in Burkina Faso by half. It aimed to “substantially” reduce its hedge book and was exploring options including raising equity.
“The company has a lot of work to do to achieve growth going forwards, but this appears to be a positive step considering the company’s current situation,” Westhouse Securities wrote today in a note to investors.
The company has been dogged by operational setbacks at Inata. The stock tumbled 62 percent last year after Avocet cut its output target and is still down 68 percent this year. Avocet lowered its 2013 output guidance to 135,000 ounces last month. The stock rose 19 percent to 22.25 pence by 8:52 a.m. in London.
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