Avocet announced it has entered into an agreement to sell all of its assets in Burkina Faso, including the Inata gold mine and certain receivables, to the Balaji Group of companies for a total consideration of US$5 million, with US$2.5 million payable in cash at completion and US$2.5 million paid in deferred payments. Completion of the transaction is expected to occur on January 11.

Avocet began negotiations with the creditors of Société des Mines de Bélahouro S.A. in April, and has pursued a consensual restructuring. The company announced on October 2 that discussions with two potential investors were ongoing, each proposing transactions that were contingent on a compromise with SMB’s creditors.

Since a disagreement among the creditors could not be resolved, the Balaji Group agreed to acquire Avocet’s Burkina Faso assets without the prior restructuring of approximately US$70 million of overdue debt owed by SMB and Goldbelt Resources to third-party creditors, finance providers, personnel and government, for a consideration that is independent of the outcome of these discussions.

The lengthy restructuring process caused by continuing disagreement among the creditors, the deteriorating security situation at the Inata mine, increasing control issues and the exhaustion of all sources of funding has left the company with two options: either to accept the proposal from the Balaji Group for the sale or for SMB and Goldbelt to be placed into liquidation, the company said.

The sale of the Burkina Faso assets has been part of a larger restructuring and discussions are ongoing with Avocet’s sole creditor, Manchester Securities Corp. regarding the restructuring of its overdue loans to the company, which total US$28.7 million. The transaction does not require shareholder approval.