Avocet reports higher gold production from N.Sulawesi mine
Monday, April 14 2008 - 07:22 AM WIB
North Lanut, North Sulawesi
Fourth quarter production at North Lanut was 6% above the prior year at 14,322 ounces despite longer leach times and lower ore irrigated, as a result of which recovery achieved was higher than in previous quarters.
For the full year, North Lanut achieved record gold production of 74,183 ounces, compared with 48,170 ounces in the previous year. Production in the year has benefited from the fact that the grade of ore mined has been approximately 50% higher than shown in the resource model, which is based on previous drilling. Analysis has indicated this was the result of gold in highly leachable rock being washed out during previous diamond drilling by high pressure water used to flush the drill holes. Recovery during the year was lower, reflecting an increasing proportion of transitional and sulphide ore; going forward, longer leach times and crushing are in progress to maintain recovery levels and maximise life of mine gold production Full year cash cost in FY2008 fell 17% from US$354/oz to US$295/oz. The reduction reflects operating efficiencies made during the year including improvements to drilling and blasting and greater productivity from the new Volvo ADT trucks which are capable of operating in wet conditions.
Re-scoping of Bakan project, North Sulawesi
Drilling at Bakan over the past several months has continued to indicate the potential for a larger resource than previously announced. In addition, the higher grades experienced this year at North Lanut are expected to have implications for the Bakan resource. Given the similar drilling method applied in previous resource definition drilling at Bakan, and with similar metallurgy as North Lanut, management believes that the grades at Bakan also have the potential to be understated.
The Company has taken the decision to re-scope the project to reflect these developments, with a view to enhancing the value of the new mine. The re-scoping will involve:
? reverse circulation drilling to reassess ore grades;
? further drilling to add resources, especially in the Durian area where prospects of adding resources are good with additional strike extensions, parallel structures and splays relatively untested;
? optimising the mine?s infrastructure, equipment and processes, including crushing to enhance recoveries;
? obtaining of all permitting approvals required for the re-scoped project.
This re-scoping means that the project?s feasibility study is now expected to be completed over the next 6-9 months. As a result, commissioning of the mine at Bakan is likely to occur during the course of calendar 2009.
Strong exploration pipeline
In February the Company announced the signing of a Memorandum of Understanding with a local party in Kalimantan in respect of the Seruyung property. This expanded Avocet?s exploration portfolio in Indonesia following the acquisition of nine new exploration projects in July 2007 as part of the Banda transaction. Drilling has taken place during the year on several of the Indonesian prospects and positive drilling results have so far been announced at Doup in North Sulawesi and at Mangkaluku in South Sulawesi. In addition, continued growth of resources has been achieved with the upgrading of resources at both Penjom and North Lanut. Taken together, these projects represent a strong pipeline for organic growth. (end of edited excerpt)