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Avocet Mining PLC (AVM)

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Tuesday 07 September, 2010

Avocet Mining PLC

Inata Resource Upgrade

RNS Number : 2386S
Avocet Mining PLC
07 September 2010
 



AVOCET MINING PLC

NEW INATA RESOURCE OF 1.84 MILLION OUNCES GOLD,

16% INCREASE AFTER ALLOWING FOR

MINING DEPLETION

Avocet Mining PLC ("Avocet" or "the Company") announces a new Mineral Resource of 1.84 million ounces at Inata.  The new Mineral Resource represents a 8% increase over the previously published Mineral Resource as at 31 December 2009, and an increase of 250,200 ounces or 16% in the global gold Mineral Resource at Inata, after allowing for mining depletion in the first half of 2010.

 

The new Mineral Resource is the result of relogging and remodelling of previous drilling. Further drilling of the deposit, which is planned to commence later in September, is targeted at growing the resource more significantly. The Company has a goal to double Inata Ore Reserves by mid-2011 through a major drilling campaign.

 

The new Mineral Resource represents an improvement in the distribution of gold throughout the Inata deposit, which is reflected in a slight increase in the average gold grade, as suggested by mining to date. This is also reflected in the increase in the amount of Measured Mineral Resources reported. This new Mineral Resource is expected to result in an increase to the Ore Reserves, which remain under review and will be reported in September. A positive effect is also anticipated in the new life of mine plan.

 

The table below reports the Mineral Resource above a cut off of 0.5 g/t Au and beneath the 30 June 2010 topographic surface. The Mineral Resource announced today is a rise of 143,000 ounces or 8% above the previously announced resource as at 31 December 2009 of 32.1Mt @ 1.64 g/t Au for 1.69 million ounces (1.52 million ounces attributable). When cut by the 30 June 2010 surface, the previous resource becomes 30.8Mt @ 1.60 g/t Au for 1.59 million ounces (1.43 million ounces attributable), compared with which the Mineral Resource reported today is 250,200 ounces or 16% higher. The Mineral Resource has been estimated and reported following the principles of the JORC Code (2004).

 

Measured

12,520,000

1.74

701,900

631,710

Indicated

12,820,000

1.48

608,800

547,920

Measured + Indicated

25,350,000

1.61

1,310,700

1,179,630

Inferred

8,820,000

1.86

527,100

474,390

Total

34,170,000

1.67

1,837,900

1,654,110

1 The Company owns 90% of Société des Mines de Bélahouro, owner of the Inata Gold Mine.

  Note: rounding errors may occur

 

The resource upgrade follows an extensive campaign of re-logging of historic drill holes, detailed geological modelling on site, and careful gold grade estimation in conjunction with CSA Global Pty Ltd (CSA Global) at their office in Perth, Australia.

 

The new Mineral Resource is constrained by several carefully constructed wireframes based on the geological controls on the deposit that have been generated from the results of the re-logging programme, grade control RC drilling and in-pit mapping. Gold grades have been estimated by Ordinary Kriging, while the previous Mineral Resource estimate carried out in 2007 used Multiple Indicator Kriging. Ordinary Kriging within the recently updated three dimensional geological boundaries was chosen as the preferred interpolation method by CSA Global because it appears to match well with the geostatistical behaviour of gold in the deposit, based on actual mining and the data distribution in drill holes.

 

The new model has highlighted several areas where further drilling has the potential to grow the Mineral Resource and Ore Reserve more significantly. Avocet is currently tendering for a 200,000-metre drilling programme that will evaluate immediate extensions to the Inata Mineral Resource, as well as satellite deposits within 5 kilometres of the Inata mill. This drilling programme will start in September and is expected to be completed by June 2011. It will form the basis for a resource upgrade that will be reported in the third quarter of 2011.

 

Commenting on the Mineral Resource upgrade at Inata, Brett Richards, Chief Executive Officer for Avocet, stated:

"Further to the recently announced exploration programme and mineralised drill intercepts at the Souma Trend, where a maiden resource is expected in October 2010, the increase in the Inata Mineral Resource announced today confirms our belief that the Wega Mining transaction would deliver more resource ounces than reported at the time of its acquisition in June 2009. It also shows the benefit of comprehensive geological and geostatistical modelling. We expect this to be the first in a series of major resource increases in the coming years, as we step up our drilling programmes."

 

The information in this announcement that relates to Exploration Results is based on information reviewed and audited by Mr Peter Flindel, (MAusIMM), Executive Vice President of Exploration for Avocet, and the information in this announcement that relates to Mineral Resources is based on information compiled by Mr David Williams (MAusIMM, MAIG), Principal Consultant, CSA Global. Both Mr Flindell and Mr Williams have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Persons as defined by the Australasian Code for the reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2004 Edition). Mr Williams and Mr Flindell consent to the inclusion of the technical information in this announcement in the form and context in which it appears.

For further information please contact:

Avocet Mining PLC
Buchanan Communications
Ambrian Partners Limited
J.P. Morgan Cazenove
Arctic Securities
First Securities
 
Financial PR Consultants
NOMAD and Joint Broker
Lead Broker
Financial Adviser
Financial Adviser
Brett Richards, CEO
Mike Norris, FD

 

Hans-Arne L'orange, EVP Business Development & Investor Relations

Bobby Morse

Katharine Sutton

Richard Brown

Richard Greenfield

Michael Wentworth-Stanley
Anish Patel

Arne Wenger

 

Stein Hansen

Eirik Lilledahl

 

+44 20 7766 7676

+44 20 7466 5000

+44 7802 875227

+44 20 7634 4700

+44 20 7588 2828

+47 21013100

+47 2323 8000

www.avocet.co.uk

www.buchanan.uk.com

www.ambrian.com

www.jpmorgancazenove.com

www.arcticsec.no

www.first.no

Notes to Editors

 

Avocet Mining PLC ("Avocet" or "the Company") is a gold mining company listed on the AIM market of 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 Burkina Faso (as 90 per cent owner of the Inata gold mine), Malaysia (as 100 per cent owner of the Penjom gold mine, the country's largest gold producer) and Indonesia (as 80 per cent owner of the North Lanut gold mine and Bakan project in North Sulawesi).

 

The Company announced in May 2010 that it had initiated exploration within the Inata Mining Licence area and in the surrounding Bélahouro district with the objective of significantly increasing Inata's resource and reserve base as well as investigating the highly prospective Souma Trend, located 20 km from the Inata mill.  The Company has a number of other advanced exploration projects in West Africa and South East Asia.

 

Background to operations

 

Inata poured first gold in December 2009 and has now reached a production rate in excess of 11,000 ounces per month. Other assets in West Africa include exploration licences in Burkina Faso, Guinea and Mali (the most advanced being the Tri-K gold exploration project in Guinea with a resource of 666,500 ounces).

 

Penjom is Malaysia's largest gold mine and was developed by Avocet in an area of historic alluvial mining. The mine is located in Pahang State, approximately 120 km north of the country's capital, Kuala Lumpur.

 

North Lanut in North Sulawesi, Indonesia, was developed by Avocet from the exploration stage and has produced over 270,000 ounces since it was commissioned in 2004.  North Lanut is located within a Contract of Work, which includes exploration and mining rights over approximately 50,000 hectares in an area highly prospective for gold.  Avocet holds an 80 per cent interest and an Indonesian company, PT Lebong Tandai, owns the remaining 20 per cent.

 

 


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