AVM.L Regulatory News (AVM)

20 Mar 2006 07:00

Avocet Mining PLC20 March 2006 Avocet Mining Plc 20 March 2006 ZGC RESOURCES INCREASE SUBSTANTIALLY AT JILAU PIT Avocet Mining PLC ("Avocet" or "the Company") is pleased to announce an increasein the gold resources at ZGC's Jilau operations in Tajikistan of 802,000 ouncesto over 2.7 million ounces of contained gold. This represents a 40% increase inthe resource base net of depletion. ZGC now has total resources of 5.6 millionounces of contained gold that meet the guidelines of the JORC code. These arecontained in the Jilau, Khirskhona, Taror and Chore deposits. The 3,000km2 jointventure area controlled by ZGC contains an additional 11.3 million ounces ofresources categorised by Soviet standards (C+P), but not to JORC compliantstandards. In November 2004, Avocet increased its equity interest in ZGC from 49% to 75%(the Government of the Republic of Tajikistan holds the remaining 25%). TheCompany then commenced an expansion and refurbishment of operations with themain objectives of increasing gold production and lowering unit costs. Part ofthat expansion plan was infill and definition drilling in and around the mainJilau open pit, known as Jilau Main. Drilling and ongoing waste stripping in thepit has now merged the Jilau Main and Jilau North open pits into the one JilauPit. Exploration results increased the resource base for the Jilau Pit by 389,000ounces using a 0.5 g/t Au cut off grade and net of depletion. However, with thesuccessful commencement of low-cost dump leach operations adjacent to the JilauPit and our ability to treat low-grade ore, the cut-off grade has now beenlowered to 0.3 g/t Au. This has contributed to an overall resource increase forthe Jilau Pit of 645,000 ounces to a total of 2,317,100 ounces gold. Additionaldrilling at the smaller Khirskhona open pit to the north has increased resourcesby 157,000 ounces to 421,700 ounces above a 0.3 g/t Au cut-off. All depositsremain open at depth and along strike. The Company is confident of futuresignificant increases in the resource base for Jilau's operations. The table below lists the revised resources in the Jilau district usinga 0.3 g/t cut-off: Measured + Indicated Inferred Total tonnes grade tonnes grade tonnes grade ounces ounces ounces Jilau Main 38,670,100 1.05 28,215,900 0.79 66,886,000 0.94 1,304,500 716,200 2,020,700 Jilau North 4,145,000 0.90 5,158,400 1.06 9,303,800 0.99 120,300 176,100 296,400 Khirskhona 9,449,000 0.73 6,835,000 0.91 16,284,000 0.81 222,400 199,300 421,700 Total Jilau 52,264,500 0.98 40,209,300 0.84 92,473,800 0.92Pits 1,647,200 1,091,600 2,738,800 ZGC will complete a new mine production schedule based on the expanded resourcesby May 2006. Given Jilau's resource potential, the Company is looking at optionsto increase substantially gold production above the 85,000 ounces per yearcurrently planned. Current operations at Jilau are concentrated on waste removal at the Jilau Pitwhere the Company expects to reach consistent high grade ore by the summer of2006. This should allow the operation to return to break even cash flow with asubstantial pick up in gold production from the current level of approximately3,000 ounces per month. 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. 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 and operator of the 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 29% of Dynasty Gold Corporation, a Canadian listedexploration company active in Western China. For further information please contact: Avocet Mining PLCJohn 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