AVM.L Regulatory News (AVM)

20 Dec 2006 07:00

Avocet Mining PLC20 December 2006 Avocet Mining PLC AVOCET UPGRADES RESERVE AND EXPANDS LIFE OF MINE PLAN AT PENJOM, MALAYSIA Avocet Mining PLC ("Avocet" or "the Company") announced an updated resource forthe Penjom Gold Mine on 24 October 2006. This highlighted a 15% increase inresources net of depletion. The Company has since reviewed options for anoptimal pit design and is now pleased to announce an increase of 132,900 ouncesor 24% to the life of mine forecast. The revised Proven and Probable reserve at Penjom is 3.99 million tonnes grading3.78 g/t Au (484,100 ounces of gold). The latest open pit design includes 0.84million tonnes containing 135,600 ounces of gold (5.05 g/t Au average grade) ofInferred resources, making a total life of mine forecast of 4.82 million tonnesgrading 4.00 g/t Au and containing 619,700 ounces of gold. All reserves areclassified according to the definitions outlined in the JORC Code of 2004(Australasian Joint Ore Reserves Committee). The table below summarises thedistribution of resources by category. Tonnes Grade Attributable (g/t Au) Ounces (1) Forecast at 31 March 2006 3,511,000 4.95 558,300Depleted during the year 374,000 5.93 71,300Additions 1,684,000 2.45 132,900Life of Mine Forecast at 4,821,000 4.00 619,70030 November 2006 Including Proven Reserves 1,234,000 3.86 153,000Probable Reserves 1,562,000 5.02 252,000Stockpiles 1,190,000 2.07 79,100Inferred Resources 835,000 5.05 135,600 (1) The Company owns 100% of Avocet Gold Limited, the owner of the Penjom mine This revised mine plan has been produced from total Measured, Indicated andInferred resources of 9.02 million tonnes at a grade of 3.53 g/t, above theeconomic cut-off of 0.8 g/t Au used at the mine, for a total resource of1,024,400 ounces including stockpiles, as at the end of September 2006 andannounced on 24 October 2006. The open pit reserve has expanded in the Manik-Janik area south of the mainKalampong pit. This will result in the merging of the Kalampong and Manik pits.This will necessitate the diversion of the Jaleh Creek within the Penjom miningleases. The Company is in the process of obtaining the necessary permits. There is room for the reserve to expand further, especially to the north ofKalampong. Nevertheless, the underlying resource requires further definitiondrilling. This work will commence shortly and form the basis of next year'sresource and reserve expansion efforts. The new life of mine plan is lower grade than that reported in the 2006 AnnualReport. This is mainly due to the lower-grade of the stockpiles, which theCompany has been processing while it strips waste in the cutback along theeastern highwall. The stockpiles allow the mine to prioritise the highest gradeores from the pit to the mill. Future mining will continue to selecthigher-grades for processing, whilst retaining the low grade mineralisation forprocessing at a later date. Recent reconciliation reviews have confirmed that mine production continues tooutperform the resource model in terms of grade and ounces. This is a directfunction of the nuggetty nature of gold mineralisation in discontinuous quartzveins that form the Penjom ore body. Jonathan Henry, Chief Executive Officer, commented: "Since the Company embarked on a concentrated exploration programme some fouryears ago, Penjom has, year on year, expanded its resources and reserves. Onceagain we are reporting a revised life of mine plan containing more ounces thanever before. With the recent purchase of a fuel efficient truck fleet and aconcerted waste stripping programme over the course of 2006 and into 2007,Penjom cash costs will fall to levels below those currently being experienced.The future at Penjom continues to look bright." All references to reserves have been approved for release by Mr Eric Vesel,B.Eng. (Mining) MAusIMM, Chief Operating Officer for Avocet. All references toresources have been approved for release by Mr Peter Flindell, BSc (Hons)MAusIMM, Chief Geologist for Avocet. Both have 20 years experience in the fieldof activity concerned and are deemed Competent Persons as defined by the JORCCode (2004). Both have consented to the inclusion of the material in the formand context in which it appears. ________________________________________________________________________________ For further information please contact: Avocet Mining PLC Buchanan CommunicationsJonathan Henry (Chief Executive) Bobby Morse, Director020 7907 9000 Ben Willey, Associate Directorwww.avocet.co.uk Tel: 020 7466 5000 www.buchanan.uk.com 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), Tajikistan (as 75% owner and operator of ZGC, Tajikistan'sprincipal gold mine), and Indonesia (as 80% owner of the North Lanut gold minein North Sulawesi). The Company has a number of advanced mining and explorationprojects in Asia and owns 26% of Dynasty Gold Corporation, a Canadian listedexploration company active in Western China. This information is provided by RNS The company news service from the London Stock Exchange