AVM.L Regulatory News (AVM)

18 Dec 2007 07:01

Avocet Mining PLC18 December 2007 AVOCET RECEIVES SIGNIFICANT DRILLING RESULTS FROM THE DOUP PROJECT AT KOTABUNAN, NORTH SULAWESI, INDONESIA Avocet Mining PLC ("Avocet" or "the Company") announces positive results fromrecent confirmation drilling at Doup located 25 kilometres northeast of theCompany's mine at North Lanut in Indonesia. The Doup project is held under theKotabunan KP, which was acquired as part of the Banda portfolio announced on 29June 2007. Avocet holds a beneficial 60 per cent interest in the Doup projectwith the Banda minority shareholders owning 25 per cent and the Company'spartners at North Lanut holding a 15 per cent back in right. The Doup project consists of two main prospects, Panang and Benteng, which weredrilled by Placer Dome ("Placer") in the 1980s as part of a joint venture withBHP and Aneka Tambang. Placer defined a resource of 17Mt @ 2.15 g/t Aucontaining 1.2 million ounces of gold based on this drilling. This resource isclassified by the Company as "non-JORC" compliant as the original drillcore isno longer available and the underlying data cannot be substantiated. Initial metallurgical test work by Placer suggested that the deepermineralisation contains sulphides and is refractory to direct cyanidationtechniques, although comprehensive test work was not carried out. Mineralisationin the upper 40 metres of the prospects is oxidised and gold is recoverableusing conventional carbon-in-leach technology. This was a target forsmall-scale artisanal mining in the 1980s and 1990s. Local mining activity hasdiminished over the last decade and does not appear to have depleted theresource significantly. Pacific Wildcat conducted further drilling in the 1990s,but this data is not available. Avocet has completed two holes to validate Placer's drilling results and collectsample for preliminary metallurgical test work. Both holes intersectedmineralisation over significant lengths and confirmed the previous drillingresults (Table 1). DPD001, drilled at Panang, returned a significant intersection of 88m @ 1.99 g/tAu from surface, including 2m @ 20.4 g/t Au and 2m @ 7.67 g/t Au, and severalother scattered mineralised intercepts at depth. Gold mineralisation is hostedin quartz-carbonate-base metal sulphide veins that form a pipe-like body thatextends to at least 200 metres depth and is 100-250 metres in diameter andelongated in a NW-SE direction. DPD001 intersected four underground workingsnear the top of the hole that correlate with four higher grade intercepts (> 10g/t Au) in the original Placer drill hole (KD02). The KD02 intercept is 88m @5.53 g/t Au from surface, which recalculates to 88m @ 2.16 g/t Au without thenarrow high grade zones. The second twin hole at Benteng (DPD002) returned an intercept of 114m @ 2.16 g/t Au from 138 metres depth, including 10m @ 6.46 g/t Au and 2m @ 8.12 g/t Au.Gold mineralisation is hosted in silica-pyrite replaced calcareous mudstone thatextends from surface to a depth of 300 metres in an EW-oriented zone that is50-100 metres wide and 300-metre long. These results compare well with thePlacer drill hole (BD113), which intersected a similar length of mineralisation(116m @ 3.44 g/t Au from 124m). The higher grade intercept is consistent withthe grade variability seen in the drillhole data at Benteng. Please refer to the release on the Company's web site (www.avocet.co.uk) forfigures showing drill hole locations. Doup is located in low rolling hills approximately 2.5 kilometres from thecoastal town of Kotabunan. A small port services the local community andprovides ready access for heavy equipment and supplies to site. The Company is now conducting preliminary metallurgical test work at itslaboratory at Penjom in Malaysia. This will address the character of thesulphide-hosted mineralisation and evaluate an economic process for recoveringgold. Avocet's experience with similar sulphide mineralisation has yieldedpositive results. Results from this test work are due in the first quarter of2008 and, if favourable, will justify an infill drilling programme designed toproduce JORC compliant resources and reserves by the end of 2008. Since acquiring the Banda portfolio, Avocet has implemented a focused drillingprogramme designed to evaluate the resource potential of the main projects.Scout drilling is currently in progress on the oxidised vein systems at Totopoand Tanoyan, also in North Sulawesi. Assays are expected by the end of thefinancial year. The results of these programmes will enable Avocet to focus itsdrilling resources on defining JORC-compliant resources on the most prospectivereserve target in 2008 with a goal of entering pre-feasibility on a new mineproject in 2009. Jonathan Henry, Chief Executive Officer, commented: "The receipt of positive drilling results from Doup soon after the resourceexpansion at North Lanut highlights the potential for continuing resource growthat our North Sulawesi projects. We anticipate further positive news from ourexisting pipeline of exploration projects over the coming months". For further information please contact: Avocet Mining PLC Buchanan Communication Grant Thornton Corporate FinanceJonathan Henry, Chief Executive Officer Bobby Morse, Partner Fiona KindnessMike Norris, Finance Director Ben Willey, Partner 020 7728 3414020 7907 9000 020 7466 5000 www.avocet.co.uk www.buchanan.uk.com www.grant-thornton.co.uk Notes to Editors Avocet is a mining company listed on the AIM market of the London Stock Exchange(Ticker: AVM). The Company's principal activities are gold mining andexploration in Malaysia (as 100% owner of the Penjom mine, the country's largestgold producer), and Indonesia (as 80% owner of the North Lanut gold mine andBakan project in North Sulawesi). The Company has a number of advanced miningand exploration projects in South East Asia and owns significant interests inDynasty Gold and Monument Mining, both Toronto Venture Exchange listed companieswith interests in Western China and Malaysia, respectively. All references to resources and exploration results have been approved forrelease by Mr Peter Flindell, BSc (Hons) MAusIMM, Chief Geologist for Avocet,who has more than 20 years experience in the field of activity concerned and isa Competent Person as defined by the JORC Code (2004). He has consented to theinclusion of the material in the form and context in which it appears. Table 1: Significant drillhole intercepts at Doup, Kotabunan Hole East North RL Azimuth Dip Depth From To Interval Grade CommentsID (m) (m) (m) (degrees) (degrees) (m) (m) (m) (m) (g/t Au) DPD001 682,839 91,376 96 45 -60 255.30 0 88 88 1.99 incl. 2m @ 20.4 g/t Au from 18m and 2m @ 7.67 g/t Au from 76m 92 94 2 0.97 108 110 2 0.56 170 172 2 1.29 200 202 2 7.26 206 208 2 0.80 232 234 2 1.14 DPD002 682,437 91,524 147 225 -50 267.80 138 252 114 2.16 incl.10m @ 6.46 g/t AU from 204m and 2m @ 8.12 g/t Au from 224m Note: Individual gold assays have a top cut of 100 g/t Au and a lower cut of 0.5g/t Au for intercept calculations. All holes are drilled from surface usingconventional triple-tube diamond drilling techniques. This information is provided by RNS The company news service from the London Stock Exchange