AVM.L Regulatory News (AVM)

11 Jul 2005 07:00

Avocet Mining PLC11 July 2005 AVOCET MINING PLC EXPLORATION SUCCESSES IN INDONESIA HAVE POTENTIAL TO ADD SIGNIFICANTLY TO GOLD RESOURCES Avocet Mining is pleased to announce continued exploration success from a numberof projects in Indonesia. The activities of the Company's exploration team inIndonesia expanded during the year to 31 March 2005 following the commencementof mining at the Riska deposit at the North Lanut mine on the Mongondow Contractof Work (CoW) in North Sulawesi. Our exploration focus has been on developingand assessing new gold targets in this CoW and throughout the country. Many of the development programmes discussed below are relatively early stageand until further results are available the directors are unable to assess fullythe potential of these properties. Mongondow Contract of Work The main effort in the area of the North Lanut mine has been on in-fill drillingof the Effendi deposit in order to convert its resources to ore reserves. Theteam drilled 3,917 metres of diamond drilling at Effendi and increased itsestimated resource by 16,000 ounces to 118,000 ounces. Table 1 summarises thesignificant intersections, including 68m at 2.49 g/t Au, 18m at 9.03 g/t, 22m at3.72 g/t and 24.9m at 3.12 g/t Au. The resource model only used drillholes up toEFD167. Therefore the high-grade intercepts in later holes will result in anupgrade of the resource. Examples of these include 57m at 2.99 g/t Au, 65m at2.54 g/t Au, 15m at 7.70 g/t Au and 26m at 4.39 g/t Au. Elsewhere in the North Lanut area, the team has completed the evaluation of theTalugon vein deposit drilled earlier in 2004 and has identified an inferredresource of 50,000 ounces of gold. They also generated drill targets beneathpost-mineralisation pyroclastic cover to the north of Riska. The Company has targeted the Bakan district, approximately 25km from NorthLanut, as the main new initiative in the Mongondow CoW. This is a large highsulphidation epithermal system tested briefly by Newmont in the mid 1990s. Ourexploration team conducted additional mapping and IP dipole-dipole surveys in2004. This resulted in a reinterpreted geological model that suggests that thedistrict has the potential for two or three Riska-style and sized deposits. Theteam identified a large, 100-200 x 1,200 metre zone of low-grade intensesilica-alunite and massive to vuggy silica alteration covering several prospectson the Main Ridge. Three smaller, but higher-grade zones occur elsewhere in thedistrict at the Camp (80-100 x 250 metres), Durian (20-60 x 600 metres) andOsela (20-60 x 500 metres) prospects. The Company has completed 2,257 metres of diamond drilling at the Main Ridge,Camp and Durian prospects this year. Table 2 summarises the significant trenchand drillhole results. 200-metre spaced scout drillholes on the Main Ridge haveshown that the deposit is consistently altered to a depth of 150-250 metres. Itis much larger and more deeply oxidised than the system at North Lanut. However,drillhole intercepts to date have been disappointing (best intercept of 15.2m at1.32 g/t Au). Drilling results are more encouraging for the Camp and Durianprospects, including 102m at 1.63 g/t Au at Camp and 81m at 1.25 g/t Au atDurian. Trenching at Osela over the last few months has identified twoNE-striking silicified bodies over a strike length of 500 metres withsignificant results of 5.2m at 41.3 g/t Au, 24.5m at 4.23 g/t Au, 36m at 2.75 g/t Au and 16m at 4.31 g/t Au. We are currently drilling at Osela. Our district-scale programme continues to identify significant targets. Mostrecently, the team has identified a low sulphidation epithermal vein system atPusian. The main vein, Oboy, has been mapped over a strike length of 600 metresand there are indications that this will double. The vein varies from 10 to 25metres in width. Trenches have identified zones of 8.80m at 4.13 g/t, 16.1m at6.41 g/t (including 4.60m at 16.4 g/t), and 11.3m at 4.06 g/t Au (Table 3). Weare also currently drilling at Pusian. South Sulawesi SIPP Avocet is maintaining an active generative programme in Indonesia, which hasgenerated several potential acquisition targets. Earlier in 2005, the Companytargeted a prospective area in South Sulawesi to the north of the 1.5 millionounce Awak Mas deposit. Local district governments have approved explorationpermits under the SIPP system over an area of 115,000 hectares. The SouthSulawesi project includes three main grass roots projects, including aPenjom-like system at Mangkaluku. Previous explorers reported trench sections of23.8m at 6.56 g/t Au, 9m at 40.7 g/t Au, 18m at 8.99 g/t Au, and 7.9m at 10.5 g/t Au in an area of 150 x 500 metres. Scout drilling returned intersections of8.4m at 7.47 g/t Au and 2m at 11.2 g/t Au. Fieldwork commenced in April 2005. Idenburg Contract of Work A longer term initiative has been the evaluation and joint venture of the 6thgeneration Idenburg CoW in a highly prospective mineralised belt in eastern WestPapua Province (14 December 2004 press release). Avocet signed a joint ventureagreement in December that provides a mechanism to earn 51 per cent of the CoWCompany, PT Iriana Mutiara Idenburg, by expending US$2.5 million within a twoyear timeframe. The Company has spent over US$900,000 on due diligence andinitial exploration work to date. This will count towards the earn-inexpenditure. The Idenburg CoW covers an area of very complex geology in the low foothills tothe north of the Jayawijaya Range some 120 kilometres to the south of theprovincial capital of Jayapura, which is situated on the northern coast. Theproject area is accessible by road. Avocet's priority is on fast-tracking the property to the resource definitionstage. To this end, we have identified an area between Afley and Sua (reportedas Kali Sua Sinta in our 14 December 2004 release), as the main explorationtarget. The Company's due diligence programme in 2004 identified an area of 300x 350 metres of high grade gold mineralisation. Recent work has grown this byroughly 50 per cent to 350 x 500 metres through additional trenching resultsthat include 6m at 43.7 g/t Au, 2m at 83.9 g/t Au, 7m at 22.8 g/t Au and 8m at4.50 g/t Au. Scout drilling commenced in early June. Gold mineralisation is associated with proximal quartz-sericite-chlorite-pyritealteration in a sequence of shallow dipping and variably foliated dioriteintrusions and basalt dykes. Distal alteration is dominated by chlorite-pyrite.This rock crops out only rarely, which limits our ability to rapidly identifyadditional targets. Mapping traverses along the ridges and streams in theAfley-Sua District frequently identify float boulders that assay in excess of 10g/t Au and commonly over 100 g/t Au. Recent district-scale work has identifiedmineralisation at Sikrima Ridge (200 g/t Au, 174 g/t Au, 166 g/t Au and 102 g/tAu in float, 3m at 13.0 g/t Au in trench) and Silia Creek (260 g/t Au and 49.8 g/t Au in float). To date, we have visited less than 20 per cent of the Afley-Sua area andidentified four interesting new gold targets. This highlights the unexplored,but highly prospective nature of the Idenburg property; and the potential todiscover a multi-million ounce, high-grade (7-10 g/t Au) district. Importantly,preliminary metallurgical test work has shown that gold recoveries exceeding 95%can be achieved by conventional carbon-in-leach (CIL) processes. 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 of JV Zeravshan LLC, Tajikistan's principalgold mining company), and Indonesia (as 80% owner of the North Lanut mine inNorth Sulawesi). The Company will be announcing its preliminary results for theyear ended 31 March 2005 on 13 July 2005. __________________________________________________________________________________________________ For further information please contact: Avocet Mining PLC John Catchpole (Chief Executive) Jonathan Henry (Finance Director) 020 7907 9000 www.avocet.co.uk Table 1: Recent significant drillhole intersections from the new resource atEffendi Hole From To Length Grade ID (m) (m) (m) (g/t Au)EFD150 22.0 47.0 25.0 2.06incl 42.0 47.0 5.0 6.51EFD151 13.7 29.0 15.4 2.79incl 13.7 23.0 9.4 4.13EFD152 19.0 31.0 12.0 1.98EFD153 38.0 60.0 22.0 3.72incl 46.0 58.0 12.0 4.93EFD156 17.0 35.0 18.0 9.03EFD159 41.0 89.0 48.0 0.94EFD160 64.0 88.9 24.9 3.12incl 80.0 88.9 8.9 6.21EFD162 46.0 64.9 18.9 1.50EFD165 17.0 85.0 68.0 2.49incl 37.0 40.0 3.0 28.4EFD167 23.0 56.0 33.0 1.90incl 50.0 56.0 6.0 5.44EFD168 59.0 90.0 31.0 1.57EFD170 16.0 29.0 13.0 2.54incl 18.0 22.0 4.0 5.88and 39.0 73.0 34.0 0.82EFD172 81.0 100.6 19.6 2.36incl 93.0 97.0 4.0 5.05EFD175 48.0 79.0 31.0 1.05and 109.0 174.0 65.0 2.54EFD175 148.0 158.0 10.0 7.07EFD181 8.0 23.0 15.0 3.00incl 15.0 18.0 3.0 7.11EFD182 10.0 28.0 18.0 2.07EFD186 58.0 82.0 24.0 2.20incl 72.0 79.0 7.0 4.90EFD187 23.0 80.0 57.0 2.99incl 63.0 78.0 15.0 7.70EFD188 2.0 28.0 26.0 4.39incl 16.0 28.0 12.0 6.53EFD189 0.0 34.0 34.0 2.07incl 28.0 34.0 6.0 3.95EFD190 4.0 28.0 24.0 3.30incl 18.0 24.0 6.0 7.42EFD191 1.0 39.0 38.0 1.44 Table 2: Recent significant trench (BKT) and drillhole (BKD) intersections fromthe Bakan District Prospect Hole From To Length Grade ID (m) (m) (m) (g/t Au)Camp BKD018 38.0 140.0 102.0 1.63Camp incl 54.0 70.0 16.0 2.65Camp incl 122.0 130.0 8.0 2.84Durian BKD019 4.0 12.0 8.0 1.28Durian BKD020 42.0 92.0 50.0 1.00Durian BKD021 5.0 86.0 81.0 1.25Durian incl 17.0 35.0 18.0 2.68Durian incl 19.0 23.0 4.0 6.04Main Ridge BKD022 6.0 50.0 44.0 0.60Main Ridge BKD023 88.0 146.0 58.0 0.30Main Ridge BKD024 174.0 182.2 8.2 1.25Main Ridge BKD025 60.0 168.0 108.0 0.35Main Ridge incl 126.0 164.0 38.0 0.47Main Ridge BKD028 50.0 67.0 17.0 0.80Main Ridge BKD029 0.0 15.2 15.2 1.32Osela BKT038 0.0 16.0 16.0 4.31Osela BKT038A 0.0 14.0 14.0 3.87Osela BKT042 0.0 36.0 36.0 2.75Osela incl 15.0 26.0 11.0 4.41Osela BKT047 4.4 14.9 10.5 3.62Osela BKT053 11.5 16.7 5.2 41.3Osela BKT057 0.0 24.5 24.5 4.23Osela BKT058 5.1 15.5 10.4 7.27 Table 3: Recent significant trench intersections from Pusian Hole From To Length Grade ID (m) (m) (m) (g/t Au)PST004 0.0 8.8 8.8 4.13PST005 0.0 16.1 16.1 6.41incl 11.5 16.1 4.6 16.4PST012 0.0 11.3 11.3 4.06PST032 0.0 3.0 3.0 6.86 This information is provided by RNS The company news service from the London Stock Exchange