March 7 West Africa-focused gold company Avocet Mining Plc said it was in talks with its financiers, including Macquarie Bank, to restructure its finances, after it found that reserves at its only producing mine were smaller than estimated.
The ore reserves at Avocet's Inata mine in Burkina Faso are now estimated to yield 920,000 ounces of gold, down from 1.85 million ounces estimated earlier.
Avocet said it had $8 million of funds at Dec. 31 outside Societe des Mines de Belahouro (SMB), the unit that owns the Inata mine.
That amount was insufficient to continue planned corporate and exploration activities, without some funds being transferred from SMB, the company said.
However, restrictions imposed by a hedging agreement with Macquarie Bank on surplus cash at SMB will not allow Avocet to access cash from SMB that it had expected to be available.
For the full year, core earnings fell 43 percent to $48.3 million.
Avocet shares closed at 25.5 pence on the London Stock Exchange on Wednesday. The stock has fallen more than 80 percent in the past 12 months.