Avocet's golden third quarter

The rising price of gold continues to add lustre to the results of miner Avocet Mining.The company’s revenues from the sale of gold in the third quarter were up 7% on second quarter levels at $27.9m, and were 12% higher than in the third quarter of 2008.The average realised gold price in the third quarter was $966 an ounce, up from $925 in the preceding quarter and $870 a year earlier.The cost of digging the stuff out of the ground was $595 per ounce, before adjustment for deferred stripping at the company’s Penjom operations in Malaysia.With the stripping costs taken into account, the average unit cost from the company’s operations in Malaysia and Indonesia was 638 an ounce, compared with $771 an ounce in the previous quarter.Gold production in the third quarter was also up. The company dug out 28,734 ounces of the yellow stuff, up 4% on second quarter production of 27,563 ounces, and 3% higher than the 27.756 ounces produced in the third quarter of 2008.Production in the next two quarters is expected to continue at a rate of around 4,000 ounces per month.The company is making good progress on preparing its Inata asset in Burkina Faso for the first ‘gold pour’ in January 2010.In order to comply with loan agreements the company has been obliged to hedge an additional 50,000 ounces of gold at a fixed price of $1,056 per ounce, for delivery over a 45 month period commencing September 2010.The company has total cash of $62m and a net debt position of $28m. ‘The company's cash balances are in excess of the remaining requirement to bring the Inata project to positive cash flow, currently estimated at approximately $40m, prior to cash flow generated by Penjom and North Lanut,’ the company said.