AVM.L Regulatory News (AVM)

4 Jul 2006 07:00

Avocet Mining PLC04 July 2006 Avocet Mining PLC 4 July 2006 AVOCET SIGNS EARN-IN ON CHINESE GOLD PROJECT Avocet Mining PLC ("Avocet" or "the Company"), the Central and South East Asiangold production and exploration company, is pleased to announce that it hassigned a joint venture earn-in agreement ("JV Agreement") with Dynasty GoldCorporation of Canada ("Dynasty") to earn up to a 36% of Dynasty's interests inXinjiang Province in China. This formalises the terms of the Memorandum ofUnderstanding ("MOU") as announced by the Company on 3 March 2006. Avocet first invested in Dynasty in November 2005 and currently holds anundiluted interest of 26% in Dynasty with agreements in place to increase thisinterest to 31%. Dynasty is listed on the TSX Venture Exchange in Canada (stocksymbol DYG) and controls a large area of prospective ground in Western China.This includes 1,000km2 at Hatu in Xinjiang Province ("the Hatu JV"), 100km2 atRed Valley in Qinghai Province (within an Area of Mutual Interest of 1,000km2)and 2,000km2 at Wild Horse in Gansu Province (Area of Mutual Interest of13,000km2, where permitting is awaited). On 27 February 2006 Dynasty announced a9% undiluted equity investment by AngloGold Ashanti, the funds invested will beused to fund the Red Valley and Wild Horse projects. The terms of the JV Agreement are such that Avocet can invest up to US$1.8million, with a minimum commitment of US$800,000, in the Hatu JV by 31 March2007 in return for a maximum 36% interest in Dynasty's interest in the Hatu JV.The funds will be used to bring the existing resource up to a measured andindicated category, undertake step out drilling to expand the resources andfinalise metallurgical testwork, with a view to moving the project tofeasibility. Following the minimum commitment Avocet will also have the right tonegotiate further interests in the property until 30 September 2007. Theagreement also gives Avocet the right of first refusal on any new projects thatDynasty negotiates in Xinjiang Province. The Hatu deposit has an inferred resource of 16,855,400 tonnes at 1.68 g/t Au(912,600 ounces gold) using a cut-off grade of 1.0 g/t as independently verifiedby SRK Consulting in June 2005 to NI-43 101 standards, the Canadian standard forlisted companies. Dynasty can earn up to 80% of the Hatu tenement by spendingUS$12 million with no conditions on the timeframe in which this expenditure mustbe made. So far Dynasty has spent over US$3 million towards this commitment. The TSX Venture Exchange has approved the transaction with no further conditionsto be satisfied.________________________________________________________________________________ For further information please contact: Avocet Mining PLC Buchanan CommunicationsJohn Catchpole (Chief Executive) Bobby Morse, DirectorJonathan Henry (Finance Director) Ben Willey, Associate Director020 7907 9000 020 7466 5000www.avocet.co.uk www.buchanan.uk.com Notes to Editors Avocet is a mining company listed on the AIM market of the London StockExchange. The Company's principal activities are gold mining and exploration inMalaysia (as 100% owner of the Penjom mine, the country's largest goldproducer), Tajikistan (as 75% owner and operator of ZGC, Tajikistan's principalgold mine), and Indonesia (as 80% owner of the North Lanut gold mine in NorthSulawesi). The Company has a number of advanced mining and exploration projectsin Asia. This information is provided by RNS The company news service from the London Stock Exchange