Avocet Mining PLC 2015 first quarter production update (8139N)

TIDMAVM

RNS Number : 8139N

Avocet Mining PLC

21 May 2015

2015 first quarter production update

Avocet Mining PLC ("Avocet" or "the Company") today announces its production and cash costs for the first quarter of 2015, together with an update on other matters.

-- Total gold production for the quarter was 17,011 ounces at a cash cost of US$1,113 per ounce, compared with 19,503 ounces produced in the fourth quarter 2014 at a cash cost of US$1,052 per ounce

   --      Tri-K exploitation permit awarded - financing discussions ongoing 

-- Souma programme of drilling and metallurgical test work commenced on 1 April - initial results expected in June

Q1 production at Inata

Milling of ore resumed at Inata on 7 January 2015 following the interruption in operations caused by the strike in December. Mining recommenced in February, following the optimisation of revised manning structures. A complement of approximately 600 staff based on a three shift system has been configured, in contrast to the previous arrangements of four shifts with a complement of nearly 800. Total mining of 1.8 million tonnes was only 7% lower than the previous quarter.

The head grade of 2.50g/t reflected the working of some of the highest grade ore within the North pit in order to boost cash flow, following the loss of revenue during the disruption resulting from the strike.

The overall recovery at 52% was impacted by a failure of an agitator gearbox within the Carbon Blinding Circuit, which resulted in that section of the plant operating at half capacity for over 3 weeks. A failure towards the end of March of the crucible within the smelting apparatus also impacted gold production by delaying one gold pour into the second quarter.

Cash costs were $1,113 per ounce, lower than the full year for 2014 of $1,186 per ounce.

2015 full year gold production at Inata is expected to be similar to the 86,000 ounces achieved in 2014.

Souma

During the quarter, preparations were completed for a programme of drilling and metallurgical test work at Souma which commenced in April. A large number of artisanal miners were peacefully cleared from the site and two drill rigs were mobilised. The objectives of the programme are to confirm that Souma's metallurgy is oxide and non-carbonaceous, and to generate a maiden ore reserve, either as a standalone heap leach operation or as satellite feed for Inata. It is expected that drilling and assay results will become available during the second quarter.

Tri-K project

Having received the Exploitation Permit for the Tri-K project from the government at the end of March, the focus has been on re-engineering the project to reduce capital expenditure, and on financing discussions for the construction of the new mine.

FOR FURTHER INFORMATION PLEASE CONTACT

 
Avocet Mining PLC  Bell Pottinger             J.P. Morgan Cazenove 
                    Financial PR Consultants   Corporate Broker 
David Cather, CEO  Daniel Thöle          Michael Wentworth-Stanley 
 Mike Norris, FD 
[phone]   [phone]        [phone] 
 

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. The Inata Gold Mine poured its first gold in December 2009 and produced 86,037 ounces of gold in 2014. Other assets in Burkina Faso include a number of 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.

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 the CIL processing method. The Company announced on 2 April 2015 that an exploitation permit had been awarded for Tri-K.

Appendix 1

Inata Gold Mine quarterly production information 2014-15

 
                                            2014                     2015 
                               Q1      Q2      Q3      Q4    2014      Q1 
Ore mined (k tonnes)          621     818     591     499   2,529     393 
Waste mined (k tonnes)      4,351   3,583   2,116   1,445  11,495   1,420 
Total mined (k tonnes)      4,972   4,401   2,707   1,944  14,024   1,813 
Ore processed (k tonnes)      483     537     554     329   1,903     437 
Average head grade (g/t)     1.61    1.44    1.53    2.92    1.77    2.50 
Process recovery rate         86%     88%     85%     61%     79%     52% 
                           ------  ------  ------  ------  ------  ------ 
Gold Produced (oz)         23,148  21,650  21,736  19,503  86,037  17,011 
 
Cash costs (US$/oz)            Q1      Q2      Q3      Q4    2014      Q1 
Mining                        464     508     395     306     422     262 
Processing                    402     478     461     431     442     540 
Administration                223     242     239     232     234     236 
Royalties                      90      89      88      83      88      75 
                           ------  ------  ------  ------  ------  ------ 
                            1,179   1,317   1,183   1,052   1,186   1,113 
 

This information is provided by RNS

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