Gold miner Avocet Mining, which has been plagued by a shortage of cash and feeble production, on Friday said its board has proposed voluntary liquidation and that remaining cash should be used to pay creditors.
The company had warned in October that it could be broken up as it continued talks with its largest shareholder, Elliott Management, to restructure its debt. In June, it said it would sell its interests in a mine in Guinea to restructure loans.
Avocet has relied primarily on loans from Elliott since 2014 due to cash flow shortages resulting from a fall in gold prices and lower production at its Inata mine in Burkina Faso.
On Friday, it said Elliot has released it from all obligations under their various loan agreements.
"Having considered all available options for the future of Avocet, the board has resolved that ... Avocet will be placed into a members' voluntary liquidation with residual assets, if any, returned to its shareholders," the company said in a statement.
Last October, Avocet said that it had sufficient funds to operate for the next 12 months provided that the capital and interest on Elliott's loan will not have to be paid in the period.
The company plans to put its proposal up for a shareholder vote at a general meeting on July 18.
Avocet, which debuted on the London Stock Exchange in 2007 at 1 200p a share, has lost nearly all of its value.