AVM.L Regulatory News (AVM)

14 Nov 2005 07:02

Avocet Mining PLC14 November 2005 Avocet Mining PLC7th Floor 9 Berkeley StreetLondon W1J 8DWTel +44 (0) 20 7907 9000Fax +44 (0) 20 7907 9019E-mail avocetmining@avocet.co.ukwww.avocet.co.uk AVOCET TO ACQUIRE STRATEGIC INTEREST IN CHINESE GOLD COMPANY Avocet Mining PLC ("Avocet" or "the Company") is pleased to announce that it hasagreed to purchase shares and rights to shares of Dynasty Gold Corporation("Dynasty") for an undiluted interest in Dynasty of up to 35.6%. Dynasty islisted on the TSX Venture Exchange in Canada. Dynasty controls a large area of prospective ground in Western China. Thisincludes 1,000km2 at Hatu in Xinjiang Province, 100km2 at Red Valley in QinghaiProvince (within an Area of Mutual Interest of 1,000km2) and 2,000km2 at WildHorse in Gansu Province (Area of Mutual Interest of 13,000km2, where permittingis awaited). The Hatu property encompasses an ENE-trending basin approximately 1,200m abovesea level. The Qi-2 deposit on the tenement is the most advanced project and hasan independently verified inferred resource of 16,855,400 tonnes at 1.68 g/t Au(912,600 ounces gold) using a cut-off grade of 1.0 g/t. Dynasty can earn up to80% of the Hatu tenement by spending US$12 million with no conditions on thetimeframe in which this expenditure must be made. So far Dynasty has spentapproximately US$3 million towards this commitment. The Company believes thereis substantial opportunity to increase the resource at Qi-2. The deposit iscurrently at the stage where infill drilling will bring the resource up to ameasured and indicated category and we believe Dynasty could put the projectinto production within a relatively short period of time. Avocet views its investment in Dynasty as a strategic step towards expanding itspresence in Central Asia and as having synergies with its existing business. TheCompany's operations in Tajikistan, a country which borders western China, hasexisting supply arrangements in the region which could be beneficially extended.Avocet has proven experience in the development and operations of projectssimilar to the Hatu project. The transaction requires Avocet to pay certain shareholders of Dynasty cashconsideration of approximately US$1.35 million. Completion is expected by theend of November but is subject to TSX Venture Exchange approval in Canada.Additionally Dynasty has recently announced a Cdn$1.55 million private placementof units at Cdn$0.18. Each unit entitles the holder to one common share to beissued at Can$0.18 and one common share purchase warrant exercisable at Cdn$0.30and valid for one year. Avocet has agreed to take 2.75 million units in theplacement. Following completion of these transactions Avocet will own 21.4% ofDynasty. This interest will increase up to 35.6% if and when shares are issuedby Dynasty under purchase agreements which have been assigned to Avocet. 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).__________________________________________________________________________________________________________For further information please contact: Avocet Mining PLC John Catchpole (Chief Executive) Jonathan Henry (Finance Director)020 7907 9000 This information is provided by RNS The company news service from the London Stock Exchange