Avocet reports lower production from N. Sulawesi gold mine

UK miner Avocet Mining PLC reported on Wednesday that April-September 2006 gold production from its North Lanut mine in North Sulawesi produced 23,480 ozs, a decrease of 9 percent from same period in the previous year.

The company said total cash costs increased to US$ 334 per ounce from $191 due to unusually heavy rainfall which forced the company to spend money to undertake re-engineering works on the waste dumps and storm water ponds in order to maintain full environmental compliance and increase in fuel costs as well as higher ore-stripping ratio.

The company said North Lanut is likely to produce at a similar level in the second half year.

Avocet has 80 percent stake in Mongondow CoW, where North Lanut mine is located.

The company said it would move into feasibility work on the development of a new mine at Bakan, which is also located in Mongondow CoW by year-end. The company has outlined an Inferred resource of 18.2 million tonnes averaging 0.9 g/t Au (533,000 ozs) at Bakan. The company said earlier it expected to bring Bakan into production in 2008.

The company also reported that exploration trenching continued at the its wholly owned prospect in South Sulawesi withf urther mineralisation has been intersected in continued trenching at the Mangkaluku prospect.

Drilling has also recommenced at the Idenberg property in West Papua and results should be available in the coming months. The Company is close to its expenditure of US$2.5 million for which it is entitled to earn a 51% interest in the Contract of Work company.(alex)