AVM.L Regulatory News (AVM)

 Placing of Shares

Highlights

· £0.7 million (approximately US$1.2 million) to be raised by way of a Placing of 9,950,000 new ordinary shares ("Shares") with existing investors at a price of 7.13 pence per share

· The Issue Price of 7.13 pence per share represents a discount of 5 % to the closing price of 7.51 pence per share on 13 August 2014

· Elliott , as Avocet's largest shareholder, subscribed for 2,550,000 shares, representing approximately 26% of the total placing, resulting in a post-placing shareholding of 27.69% in the Company

· Prelas AS, as Avocet's second largest shareholder, subscribed for 4,950,000 shares, representing approximately 50% of the total placing, resulting in a post-placing shareholding of 6.87% in the Company

· The funds raised from the Placing to be used wholly for corporate activities, primarily in London and Guinea

David Cather, Chief Executive of Avocet, commented:

"As we announced last week, steps have been taken to address the funding requirements of Inata, where production is forecast to increase following commissioning of the carbon blinding circuit next month. The share placing announced today will provide funding for our head office activities while we continue to address the wider Group's funding situation, and while the business review continues. The placing ensures that cash flows at Inata can be used exclusively for key items of capex and operating expenditure during the lead up to the commissioning of the carbon blinding circuit. While the placing demonstrates the support of our largest investors we remain fully committed to resolving the ongoing financing issues of the Group, through further cost reduction measures, continued negotiations with existing and potential sources of finance, and the completion of our business review."

The placing

Avocet Mining PLC ("Avocet" or the "Company") announces that it has conditionally raised £0.7 million before expenses by the placing of 9,950,000 new ordinary shares in the Company (the "Placing Shares") at a price of 7.13 pence per Placing Share (the "Placing"). The Placing Shares being issued represent approximately 5% of the Company's issued ordinary share capital prior to the Placing.

The placing funds will be used for corporate activities. Following commissioning of Inata's new carbon blinding circuit, which is scheduled in September and is forecast to increase monthly production and improve cash generation, the Company will assess the extent to which this will enable Inata to contribute to funding these activities going forward. In the event that no funds were available from Inata for corporate purposes, it is estimated that the placing funds, together with existing corporate cash, would be sufficient for head office and Guinea purposes for approximately four months, while efforts continue to address the wider Group's funding situation, and while the business review continues.

Elliott, which had a shareholding of 27.80% in Avocet prior to the placing, subscribed for 2,550,000 Placing Shares for a total consideration of £181,815. As a result of its 27.80% shareholding in Avocet, the placing of shares with Elliott constitutes a related party transaction, under Chapter 11.1.5R of the UKLA Listing Rules ("LRs"). In particular, the placing of shares with Elliott is classified as a smaller related party transaction under LR 11.1.10 R.

The Placing Shares will, when issued, be issued credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 5 pence in the capital of Avocet, including the right to receive all dividends and other distributions declared after the date of the issue.

Application will be made for the Placing Shares to be admitted to the premium listing segment of the Official List of the Financial Conduct Authority and to be admitted to trading by the London Stock Exchange ("LSE") on its main market for listed securities (the "Admission"). It is expected that Admission will take place at 8.00 a.m. on 19 August 2014 (at which time the Placing will become unconditional) and that dealings in the Placing Shares on the LSE's main market and on Oslo Bors for listed securities will commence at the same time. Following Admission, there will be 209,496,710 Ordinary Shares in issue, including 442,009 treasury shares.

Beneficial interests in 7,400,000 of the Placing Shares (the "Norwegian Placing Shares") are expected to be issued and registered in the Norwegian Central Securities Depository ("VPS") with a view to being admitted to trading on the Oslo Stock Exchange on 19 August 2014. The Norwegian Placing Shares will not be tradable on the Oslo Stock Exchange until they have been issued and registered in VPS.

The Placing is conditional upon, inter alia, Admission becoming effective by 8.00 a.m. on 19 August 2014.

FOR FURTHER INFORMATION PLEASE CONTACT

NOTES TO EDITORS

Avocet Mining PLC ('Avocet' or the 'Company') is an unhedged gold mining and exploration company listed on the London Stock Exchange (ticker: AVM.L) and the Oslo Børs (ticker: AVM.OL). The Company's principal activities are gold mining and exploration in West Africa.

In Burkina Faso the Company owns 90% of the Inata Gold Mine. Across the Bélahouro district, which includes both Inata and Souma, there is a Mineral Resource of 6.1 million ounces and an Ore Reserve of 0.5 million ounces. The Inata Gold Mine poured its first gold in December 2009 and produced 118,443 ounces of gold in 2013. Other assets in Burkina Faso include eight exploration permits surrounding the Inata Gold Mine in the broader Bélahouro region. The most advanced of these projects is Souma, some 20 kilometres from the Inata Gold Mine, where there is a Mineral Resource estimate of 0.8 million ounces.

In Guinea, Avocet owns 100% of the Tri-K Project in the north east of the country. Drilling to date has outlined a Mineral Resource of 3.0 million ounces, and in October 2013 the Company announced a maiden Ore Reserve on the oxide portion of the orebody, which is suitable for heap leaching, of 0.5 million ounces. As an alternative, the potential exists to exploit the entire 3.0 million ounce Tri-K orebody via CIL processing method.