JOHANNESBURG (miningweekly.com) – LSE-listed Avocet Mining’s Société des Mines de Bélahouro (SMB) subsidiary, which operates the Inata gold mine, in Burkina Faso, has entered into a standstill agreement with its major trade and financial creditors – a key milestone in SMB's balance sheet restructuring process.
SMB and its major trade and financial creditors – together representing about 70% of SMB's debt – have agreed the terms of a standstill agreement for two months, while strategic options are explored in connection with the financial, debt and corporate restructuring of SMB.
Under the terms of the standstill agreement, SMB's major trade creditors and its bank shall refrain from exercising their rights and remedies, and taking any legal action to protect and preserve such rights and remedies, in relation to their outstanding debts.
In turn, SMB has agreed to a payment scheme for deliveries of services and goods during the standstill period that provides for payments thereof in sync with the receipt of the gold proceeds by SMB, once the mine has resumed its full operation.
Avocet earlier this month reported that most of the workers at the Inata mine had been placed on “technical unemployment” for three months amid production stoppages as a result of a shortage of critical mine supplies, which SMB could not fund owing to the knock-on effects of the suspension of operations late last year.