A Christmas present for the kids, and goodwill from Avocet directors

The Government has announced that it will allow Child Trust Funds to be transferred to Junior ISAs. The investment returns and charges on Child Trust Funds compare poorly with those available in ISAs so this is a welcome move. The only reservation is that it may not be possible to implement this until April 2015.

Avocet Mining, a gold mining and exploration company, have also got into the spirit of the season by announcing that the fees paid to the Chairman and other non-executive directors are to be substantially reduced – down from £110,000 to £70,000 for the Chairman and down from £40,000 to £30,000 for other non-executives. This is “in response to the changed financial position and reduced market capitalisation of the Company” it says in their announcement.

EBITDA was negative in the last quarter to September, with gold production down on forecasts and the company has also been hit of course by the reduced market price of gold. The company may need to do some more fund raising before it runs out of cash. Bearing in mind the patchy financial history of this company, and recent events, no doubt shareholders will welcome this reduction from a level that was quite unreasonable. But shareholders may consider the Christmas spirit has not gone far enough when the market cap of the company is now only £18m. But let us not carp in this season of goodwill. Any reduction in the excessive pay of directors must be welcomed when so many small natural resource companies pay their directors too much.

Roger Lawson

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