AVM.L Regulatory News (AVM)

1 Apr 2008 07:01

Avocet Mining PLC01 April 2008 AVOCET UPGRADES RESOURCES AT PENJOM, MALAYSIA WITH CONTINUED DRILLING SUCCESS Avocet Mining PLC ("Avocet" or "the Company") announces revised gold resourceand reserve estimates for the Company's wholly owned Penjom gold mine inMalaysia. The Company has now added nearly one million ounces of gold resourcesand close to 600,000 ounces of gold reserves at Penjom since 2002. Resources Recent geological modelling and grade estimation have resulted in total JORCclassified Measured, Indicated and Inferred Resources of 9.41 million tonneswith a grade of 3.16 g/t Au, above the economic cut-off of 0.8 g/t Au used atthe mine, for a total resource of 954,900 ounces including stockpiles. Thisincludes Inferred Resources of 3.16 million tonnes grading 3.35 g/t Au andcontaining 339,700 ounces of gold. The new resources, which are reported belowthe 31 January 2008 topographic surface, represent an addition of 47,400 ounces. The new resource follows the completion of 182 reverse circulation and diamonddrill holes (27,160 metres) to the end of November 2007. This drilling hasfocused on infill holes to ensure a high degree of confidence in the resourcemodel at depth. The addition of 47,400 ounces to resources before depletionsince 31 March 2007 reflects the Company's focus on this infill drilling. Aprogramme of step out drilling will recommence this year, assisted by a newlarger drill rig, capable of drilling to greater depth and extending theresource further. This rig is expected to be commissioned on site in May. Inaddition, a further rig is soon to be ordered; these two new drills will allowthe operation to carry out a major deep-drilling programme to investigate thepotential for a larger open pit and a focused underground operation. The Company has continued infill drilling in key areas since November 2007. Thereverse circulation drill rig has completed 80 holes (12,350 metres) to the endof February 2008. These holes have returned several significant intercepts thatare typically higher grade than the current resource model indicates. This isexpected to translate into production upside in the coming years. Table 1 at theend of this announcement summarises the better intercepts, which include 4m @62.3 g/t Au, 8m @ 21.5 g/t Au, 4m @ 42.4 g/t Au, 7m @ 22.8 g/t Au, 4m @ 33.3 g/tAu and 2m @ 50.6 g/t Au at Kalampong, as well as 5m @ 25.0 g/t Au and 3m @ 19.4g/t Au at Manik-Janik. All intercepts are reported using a top cut of 100 g/tAu. Many of the more significant intercepts include assays above 100 g/t Au witha highest grade of 1m @ 707 g/t Au in Kalampong. The table below summarises the distribution of resources by category. Tonnes Grade Attributable (millions) (g/t Au) Ounces (1) Measured 0.92 3.59 106,100Indicated 4.18 3.32 446,900Stockpiles 1.15 1.68 62,200Measured + Indicated 6.25 3.06 615,200Inferred 3.16 3.35 339,700Total (31 January 2008) 9.41 3.16 954,900Depletion (2) 0.48 4.79 74,100Resource (31 March 2007) 8.68 3.52 981,600Additions 1.21 (0.36) 47,400 (1) The Company owns 100% of Avocet Gold Limited, the owner of the Penjom mine (2) For the period 1st April 2007 to 31st January 2008 The resource has mainly grown in the area of the west wall of the Kalampong pitwhere the grades are lower than the deposit average, but the mineralisation iscloser to surface and requires a lower amount of waste stripping. Reserves The revised Proven and Probable Reserves at Penjom are 3.77 million tonnesgrading 3.27 g/t Au (396,600 ounces of gold). The open pit design includes 0.65million tonnes containing 77,900 ounces of gold (3.73 g/t Au average grade) ofInferred Resources, making a total Life of Mine forecast (including stockpiles)of 4.42 million tonnes grading 3.34 g/t Au and containing 474,500 ounces ofgold. The table below summarises the Life of Mine plan as at the end of January2008. Tonnes Grade Attributable (millions) (g/t Au) Ounces (1) Forecast at 31 March 2007 4.44 4.02 574,300Depleted during the year (0.48) 4.79 (74,100)Additions(2) 0.46 (25,700)Life of Mine Forecast at 4.42 3.34 474,500 31 January 2008IncludingProven & Probable Reserves(3) 3.77 3.27 396,600Inferred Resources 0.65 3.73 77,900 (1) The Company owns 100% of Avocet Gold Limited, the owner of the Penjom Mine (2) Additions to tonnes, however the lower grade of the revised life of mineforecast has meant a reduction in contained ounces (3) Proven and Probable Reserves based on gold prices of US$700/ oz The new Proven and Probable Reserves incorporate pit design changes based on aUS$700/oz gold price and higher consumable costs than last year. The mostsignificant changes in the Life of Mine plan are in the Inferred Resourcescontained within the new designed pit. Escalated drilling in 2008 will targetresource expansions that the Company is targeting to translate into increasedreserves during 2009. Jonathan Henry, Chief Executive Officer, commented: "Since Avocet built the Penjom mine in 1996 it has produced over one millionounces of gold, compared with an original five year mine life of 223,000 ouncesof gold. The drilling campaign last year indicates that Penjom has at leastanother five years of production to come at current production rates, with somevery encouraging intercepts from the last phase of drilling. We look forward tobringing new drilling capacity to site which should allow for further resourceexpansion and a better understanding of the long term future at Penjom,particularly with the potential of underground mining in the short to mediumterm as well as maintaining production from the highly successful open pitoperations." For further information, please contact: Avocet Mining PLC Buchanan CommunicationsJonathan Henry, Chief Executive Officer Financial PR ConsultantsMike Norris, Finance Director Bobby Morse020 7907 9000 Robin Haddrillwww.avocet.co.uk 020 7466 5000 www.buchanan.uk.com Ambrian Partners Limited JP Morgan CazenoveNOMAD and Joint Broker Lead BrokerRichard Brown Michael Wentworth-StanleyRichard Greenfield Sam Critchlow020 7634 4700 020 7588 2828www.ambrian.com www.jpmorgancazenove.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), and Indonesia (as 80% owner of the North Lanut gold mine andBakan project in North Sulawesi). The Company has a number of other advancedmining and exploration projects in South East Asia. 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. All references to reserves have been approved for release by Mr Eric Vesel, BSc(Hons) MAusIMM, Chief Operating Officer for Avocet, who has more than 20 yearsexperience in the field of activity concerned and is a Competent Person asdefined by the JORC Code (2004). He has consented to the inclusion of thematerial in the form and context in which it appears. All resources and reserves referred to above are classified according to thedefinitions outlined in the JORC Code of 2004 (Australasian Joint Ore ReservesCommittee). Table 1: Significant drillhole intercepts at Penjom, Malaysia Hole East North RL Azimuth Dip Depth From To Interval Grade CommentsID (m) (m) (m) (o) (o) (o) (m) (m) (m) (g/t Au) KEP639 29321.9 50307.0 887.6 90 -75 210 190 192 2 10.4 incl 1m @ 20.1 g/t Au from 190m 194 197 3 7.15 incl 1m @ 14.6 g/t Au from 195mKEP641 29302.6 50342.4 883.3 90 -70 180 113 116 3 3.81 144 147 3 5.16KEP644 29200.3 50356.5 870.4 270 -80 180 31 34 3 11.3 incl 1m @ 27.7 g/t Au from 31mKEP646 29249.9 50330.2 868.4 270 -80 140 97 100 3 2.84KEP648 29276.7 50349.7 880.7 -90 150 62 64 2 10.7 incl 1m @ 20.1 g/t Au from 62mKEP649 29325.0 50285.8 887.7 -90 180 97 106 9 9.41 incl 3m @ 20.2 g/t Au from 101mKEP652 29209.2 50137.7 804.2 90 -60 100 24 27 3 2.90 29 30 1 13.3 32 39 7 7.49 incl 1m @ 29.4 g/t Au from 32mKEP653 29193.8 50174.5 804.2 90 -60 100 5 6 1 59.2KEP653 29193.8 50174.5 804.2 90 -60 100 28 29 1 7.38KEP654 29207.1 50156.8 803.7 90 -60 100 8 10 2 4.87 16 20 4 2.98KEP655 29265.0 50170.7 834.0 -90 204 187 189 2 3.30KEP656 29181.8 50168.2 804.2 90 -80 120 24 26 2 3.22 64 66 2 50.6 incl 1m @ 707 g/t Au from 65m 67 70 3 5.21 91 95 4 33.3 incl 1m @ 149 g/t Au from 91mKEP657 29160.8 50201.8 804.7 90 -80 100 14 21 7 22.8 incl 1m @ 27.8 g/t Au from 15m; and 2m @ 56.0 g/t Au from 18m 22 26 4 1.68 39 40 1 22.7 47 55 8 11.2 incl 1m @ 31.9 g/t Au from 48 m; and 1m @ 24.2 g/t Au from 51m; and 1m @ 12.2 g/t Au from 53m 57 61 4 62.3 incl 1m @ 127 g/t Au from 57m; and 1m @ 91.5 g/t Au from 58m; and 1m @ 50.2 g/t Au from 59m 73 74 1 6.84KEP659 29172.2 50185.6 804.3 90 -75 95 17 18 1 6.24 25 26 1 9.48 28 36 8 21.5 incl 1m @ 257 g/t Au from 31m; and 1m @ 38.6 g/t Au from 33m 41 44 3 5.99 incl 1m @ 13.4 g/t Au from 41mKEP669 29277.8 50138.1 833.9 270 -75 150 80 82 2 3.65KEP670 29297.4 50120.3 834.5 90 -75 180 6 10 4 14.5 incl 1m @ 13.0 g/t Au from 7m; and 1m @ 34.1 g/t Au from 8mKEP671 29306.6 50101.0 838.9 -90 180 144 153 9 2.48KEP672 29290.2 50115.2 836.4 270 -65 204 91 93 2 4.13 149 150 1 18.6KEP674 29330.3 50000.3 843.2 270 -85 180 122 125 3 2.10 132 134 2 5.50KEP675 29340.7 49988.4 843.2 270 -70 180 101 102 1 9.06KEP676 29362.2 49944.8 843.1 270 -80 180 24 28 4 2.15KEP680 29375.9 49881.5 844.4 270 -80 180 79 81 2 4.60 111 113 2 6.63KEP681 29408.6 49866.3 847.1 -90 150 133 137 4 2.38KEP684 29352.4 50059.9 866.8 -90 210 190 193 3 7.34 incl 1m @ 16.3 g/t Au from 190mKEP687 29355.7 50038.4 864.7 270 -75 201 184 187 3 8.36 incl 1m @ 23.2 g/t Au from 184m 199 201 2 3.56KEP688 29379.0 49980.8 858.3 270 -75 200 151 153 2 7.85KEP693 29423.1 49891.6 849.9 360 -90 198 166 167 1 6.42KEP694 29298.7 50315.7 886.4 270 -70 180 61 70 9 8.00 incl 1m @ 10.7 g/t Au from 63m; and 1m @ 20.8 g/t Au from 64mKEP695 29309.4 50299.5 888.8 270 -75 180 70 75 5 11.9 incl 1m @ 48.2 g/t Au from 71mKEP696 29316.0 50278.7 887.8 270 -85 160 84 87 3 3.35 91 94 3 3.99 100 101 1 16.3KEP697 29324.9 50285.7 888.2 270 -80 180 107 108 1 13.9KEP698 29303.4 50318.0 885.6 270 -80 170 74 80 6 3.07KEP699 29307.9 50322.8 885.4 90 -80 204 96 101 5 5.80 incl 1m @ 15.8 g/t Au from 97m 189 194 5 2.69KEP703 29500.4 49578.7 934.3 -90 204 189 191 2 3.31KEP704 29485.5 49567.0 932.7 270 -80 180 114 115 1 6.90KEP706 29455.9 49595.1 910.4 -90 166 157 161 4 3.21KEP707 29452.1 49593.3 910.8 270 -65 140 62 66 4 8.62 incl 1m @ 24.3 g/t Au from 63m 107 108 1 16.0KEP708 29455.8 49644.1 906.5 270 -70 170 79 81 2 3.40 134 138 4 42.5 incl 1m @ 71.6 g/t Au from 134m; and 1m @ 91.1 g/t Au from 135mKEP711 29447.4 49785.3 898.0 -90 216 193 195 2 4.93MNP125 29401.8 48856.4 983.7 -90 80 27 33 6 2.09MNP135 29482.0 48783.8 980.3 270 -60 89 69 71 2 8.28MNP149 29702.4 49181.5 963.1 270 -60 162 103 108 5 25.0 incl 1m @ 159 g/t Au from 103m; and 1m @ 19.3 from 104mMNP150 29700.2 49203.0 962.6 270 -60 185 107 111 4 3.97 122 125 3 9.31 incl 1m @ 15.4 g/t Au from 122mMNP151 29718.6 49192.4 962.7 270 -60 193 120 123 3 8.19MNP152 29742.9 49160.0 963.4 270 -60 182 128 131 3 6.80 incl 1m @ 10.6 g/t Au from 129m 135 139 4 5.32 incl 1m @ 13.1 g/t Au from 136m 149 151 2 3.78 155 158 3 19.4 incl 1m @ 53.9 g/t Au from 155mMNP154 29650.1 49120.3 975.6 -90 198 98 103 5 4.30MNP155 29684.4 49027.3 972.7 270 -70 174 110 111 1 10.7 113 114 1 7.56MNP158 29766.2 49201.4 963.1 270 -60 209 171 172 1 7.44 Note: Individual gold assays have a top cut of 100 g/t Au and a lower cut of 0.8 g/tAu for intercept calculations. Maximum interval waste allowed is 0.5m and minimum mineralised interval is 0.5m. All holes are drilled from surface using conventional reverse circulationdrilling techniques. This information is provided by RNS The company news service from the London Stock Exchange