Shares in Avocet Mining (LON:AVM) plunged more than 30 percent on Monday morning, after the company issued an interim update.

The gold mining firm said that it still remains in talks with its largest shareholder, Elliot Management, to restructure its debts.

Whilst the company said it had sufficient funds providing capital and interest from the loan, Elliot Management does not need to be repaid during the period.

The company said that loans of $29.9 million as of 30 June from Manchester Securities Corp (an affiliate of Elliott) ultimately ‘remain an unsustainable debt burden’.

The statement added that a potential of these ongoing discussions could be that ‘the Avocet Group is broken up further in an orderly manner and eventually wound up.’

Should that occur, Avocet said given the amount of debt owed, there will be ‘very minimal or no return’s for company shareholders.’

Earlier this month, the mining firm announced that it had transferred 30 percent of its Tri-K gold project to the Moroccan mining group Managem SA.

Following the transfer, Managem SA will hold a majority 70 percent stake in the project.

Avocet is a gold mining and exploration company, which is primarily focused in West African Gold. It has operations in both Burkina Faso and Guinea.

The company has been listed on the London Stock Exchange as of 1996, as well as the Oslo Børs.

Shares in Avocet Mining are currently trading -38.08 percent as of 11.08AM (GMT).