Avocet reports higher gold production from N.Sulawesi mine

The following is an excerpt from Avocet Mining Plc?s third quarter ended Dec 31, 2008, which was released on Tuesday.

North Lanut, North Sulawesi
North Lanut?s gold production increased for the second consecutive quarter and at 10,463 ounces was 5% above Q2. Recovery in the quarter rose significantly from 31% to 56%. This reflected improvements made in segregation of ore types prior to treatment and the commencement of crushing of all Riska ore following commissioning of a new mobile crusher.

Ore mined in the Riska pit slowed due to low availability of oxide ore, with the decision taken to accelerate sulphide ore treatment only after commissioning of the new leach pad (HLP3A), which will further facilitate separate treatment of different ore types. In the interim changeover phase, ore treated was 41% lower than the previous quarter. Average grades of ore treated at 2.24g/t were in line with Q2.

North Lanut?s cash cost of US$617/oz was 7% below Q2, reflecting declining fuel prices and a more efficient use of lime which accounted for 5% of total cash costs during the quarter compared with 18% for the previous quarter.

Development of Effendi, which has now been re-designated into the Rasik and Effendi pits, continued throughout the quarter with mining of the oxide ore at Effendi forecast to commence at the end of the current financial year.

Outlook
North Lanut aims to sustain the recent much improved recoveries and production is expected to be maintained at current levels until the new leach pad is fully operational in the first quarter of the next financial year.

Jonathan Henry, Chief Executive Officer, commented:
?The quarter was mixed with better recoveries at North Lanut but lower production at Penjom (Malaysia) as we mine through the more carbonaceous ore in the shear zone. Despite production likely to be lower for the current year compared to last, we have made significant progress in reducing cash costs and increasing the efficiency of our mining operations. We are continuing to update our resource models, and remain confident of meeting current market expectations in terms of profitability. Together with the new 1 million ounce resource at Doup, also announced today, this is encouraging for our Company.? (end of excerpt)

NORTH LANUT	FY 2008					FY 2009
	Q1	Q2	Q3	Q4	Total	Q1	Q2	Q3
Ore mined (tonnes)	550,052	590,024	515,230	313,705	1,969,011	383,787	357,627	257,940
Waste mined (tonnes)	337,962	238,830	283,722	283,982	1,144,496	220,408	305,008	371,166
Ore and waste mined (tonnes)	888,014	828,854	798,952	597,687	3,113,507	604,195	662,635	629,106
Ore processed (tonnes)	469,191	573,719	451,665	188,013	1,682,588	383,787	437,917	257,308
Average ore head grade (g/t)	2.05	3.23	2.47	1.79	2.54	1.99	2.30	2.24
Process recovery rate	51%	39%	58%	136%	54%	38%	31%	56%
Gold Produced (oz)	15,733	23,133	20,995	14,322	74,183	9,293	9,963	10,463
Cash costs (US$/oz)
Mining	161	116	126	174	140	251	295	279
Processing	70	54	67	86	67	198	229	173
Royalties and overheads	83	62	83	147	89	152	137	165
?	314	232	276	407	296	601	661	617