AVM.L Regulatory News (AVM)

11 Dec 2007 07:00

Avocet Mining PLC11 December 2007 AVOCET MINING PLC AVOCET UPGRADES RESOURCE AT NORTH LANUT, INDONESIA Avocet Mining PLC ("Avocet" or "the Company") announces continued growth of thegold resource at its North Lanut gold mine in North Sulawesi, Indonesia. Theincreased resource follows the completion, and inclusion in the resource model,of 34 reverse circulation infill drill holes (3,585 metres) at the operation'sRiska. This upgrade to the Riska model is the latest step in the Company's goalof extending the mine life at North Lanut. The revised Riska model has produced Measured, Indicated and Inferred Resourcesof 7.32 million tonnes with a grade of 1.44 g/t Au, above the economic cut-offof 0.3 g/t Au. This compares with the previous resource model dated 31 March2007 of 9.07 million tonnes at a grade of 1.21g/t Au. The total resource at Riska is now 337,900 ounces of gold with the updatedresource representing an addition of 99,000 ounces of gold or 28% net of minedounces depletion. This includes Inferred Resources of 1.87 million tonnesgrading 1.31 g/t Au and containing 78,800 ounces of gold. These resources areclassified according to the definitions outlined in the JORC Code of 2004(Australasian Joint Ore Reserves Committee). The resource model is cut to theopen pit topographic surface at the end of October 2007. The table belowsummarises the distribution of resources by category. Riska resource only(1) Metric Grade Gold Attributable tonnes (g/t Au) ounces ounces(2) Measured 1,033,000 1.43 47,400 37,920Indicated 4,418,000 1.49 211,700 169,360Measured + Indicated 5,451,000 1.48 259,100 207,280Inferred 1,867,000 1.31 78,800 63,040Total (31 October 2007) 7,318,000 1.44 337,900 270,320Depletion 1,320,000 2.70 114,700 91,760Resource (31 March 2007) 9,074,000 1.21 353,600 282,880Change (436,000) 0.23 99,000 79,200 (1) This does not include resources for the Effendi deposit adjacent to Riska, which also forms part of the North Lanut mine (2) The Company owns 80% of PT Avocet Bolaang Mongondow, owner of North Lanut The majority of the tonnes (74.5%) and ounces (76.7%) are Measured andIndicated. Most of the Inferred ounces occur at depth within the sulphideportion of the deposit or along the low grade periphery where the drill densityis lower and the impact on contained ounces is less significant. It should benoted that the depletion figure of 114,700 ounces includes ounces that are inthe process of leaching, a proportion of which are expected to report toproduction in the remainder of the financial year. Further drilling will be carried out to fully define the resource in the core ofthe deposit and this may result in further upgrades to the resource at Riska asthe current upward trending of the gold grade indicates that the resource modelcontinues to underestimate contained gold in high grade ore zones. This ispartly because of a sampling bias created by diamond drilling that does notadequately sample gold on fractures because of drill water flushing of the rockduring drilling and core sampling. This is further compounded by the fact thatthe modelled high grade supergene zone at the base of the transition zone ismuch larger and higher grade then previously thought. Avocet is currently conducting an open pit optimisation review at Riska usingcurrent costs and revenue parameters. The resulting optimal pit, which will befinalised shortly, will form the basis of a revised pit design and the reportingof Proven and Probable reserves. Following previous positive drilling at Effendi, located nearby to Riska, followup drilling is ongoing. This will allow the Company to refine the geologicalmodel for the Effendi deposit, and to produce a revised resource in the comingmonths. The current JORC-compliant resource at Effendi, as stated in theCompany's 2007 annual report, shows an Indicated Resource of 117,500 ounces ofgold and an Inferred Resource of 20,800 ounces. Jonathan Henry, Chief Executive Officer, commented: "The excellent drilling results previously announced have resulted in asignificant upgrade to the resource at Riska and will allow us to extend themine life at North Lanut. Further drilling at Riska will be carried out in duecourse to fully realise the upside potential of the deposit's high grade core.An upgraded resource at both Riska and Effendi, combined with the strongoperational performance at the mine, ensures North Lanut will remain our keyasset in Indonesia and further solidifies our strong position in the region." 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. This information is provided by RNS The company news service from the London Stock Exchange