Avocet Mining: Press Speculation

(March 8, 2011)--Avocet Mining PLC notes recent press coverage in the Indonesian media which speculates that PT Lebong Tandai, a subsidiary of PT Merukh Enterprises, intends to sue Avocet over the proposed sale of its South East Asian assets to J&Partners, a private company backed by Indonesian businessmen. The press coverage also speculates that PT Lebong Tandai will attempt to block the transaction, on the basis that Avocet allegedly agreed on 26 April 2010 to sell its South East Asian assets to PT Lebong Tandai.

Avocet would like to confirm that it has not received any law suit in respect of its South East Asian assets and is unaware of the Minister of Justice and Human Rights taking any action to block its transaction with J&Partners. As first stated on 10 May 2010, there has never been any agreement for the sale of Avocet's South East Asian assets to PT Lebong Tandai. PT Lebong Tandai holds a 20 per cent interest in PT Avocet Bolaang Mongondow (ABM), which holds the Contract of Work for the North Lanut mine and the Bakan exploration project only, and had a right of first refusal over Avocet's 80 per cent interest in ABM. Although this right was offered to PT Lebong Tandai it was not exercised and has therefore lapsed, in accordance with the terms of the ABM joint venture agreement, as was announced on 22 February 2011. PT Lebong Tandai has no right of first refusal over any of Avocet's other assets.

Avocet is confident that all actions it has taken in the past and will take in the future are in accordance with prevailing rules and regulations and there are no grounds for criminal or civil action. (ends)