Avocet reports N.Sulawesi gold production, exploration

The following is an excerpt from Avocet Mining Plc?s fourth quarter report, which was released on Monday.

North Lanut, North Sulawesi
During Q4 ore mining continued to focus on the Riska pit while development commenced at the new pits of Effendi and Rasik. Higher gold production reflected operational improvements, particularly more targeted leach pad management, with oxide, transitional and sulphidic ores segregated on the leach pads to improve their respective recoveries and optimise their differing leach times, as well as enabling more efficient usage of lime and other reagents. Recovery rates in Q4 rose to 72 per cent, compared with 56 per cent in Q3.

Cash costs in Q4 fell to US$488/oz, 21 per cent below the Q3 cost of US$617/oz. This included the benefit of increased gold production, but also reflected greater efficiency in the usage of reagents, notably lime, as well as reductions in input prices. The full year cash cost of US$588/oz was higher than the previous year, principally due to lower production but also reflecting higher prices for fuel and reagents, as well as higher cyanide and lime usage associated with the change to more sulphidic ore.

Mining operations are now focusing on development of, and ore mining from, the new Effendi and Rasik pits, which are expected to yield predominantly oxide ore to supplement ore from the more sulphidic Riska pit. Construction of the new leach pad, HLP3A, was completed in March and irrigation was commenced in April. The new leach pad will further facilitate separate treatment of different ore types.

Exploration
In February 2009 the Company announced a maiden Inferred Mineral Resource for the Doup project located 25 kilometres northeast of North Lanut in North Sulawesi. The Inferred Mineral Resource of 966,300 ounces of gold (579,800 ounces attributable to Avocet) is based on over 11,000 metres of diamond core and reverse circulation drilling, and increased Avocet's total Mineral Resources by 48 per cent (32 per cent on an attributable basis). Doup is located in an area that is free of restricted forest status, a factor which should facilitate faster permitting. Infill drilling is planned to deliver a Measured and Indicated Resource to support a feasibility study in 2010.

At the Seruyung project in East Kalimantan, a scout drilling programme of 14 holes (1,970 metres) has been completed and assays are pending. Seruyung is potentially a heap leachable gold resource in a favourable location for development of a mine, where the Company believes there is the potential for a resource of at least 500,000 ounces.

Avocet's Bakan project continues to await approval of a Pinjam Pakai licence by the Provincial Government; this requires a change to the forestry boundary north of the Osela deposit. The 2009 elections in Indonesia may delay the process further. (end of excerpt)

NORTH LANUT	FY 2008					FY 2009
	Q1	Q2	Q3	Q4	Total	Q1	Q2	Q3	Q4	Total
Ore mined (tonnes)	550,052	590,024	515,230	313,705	1,969,011	383,787	357,627	257,940	310,628	1,309,982
Waste mined (tonnes)	337,962	238,830	283,722	283,982	1,144,496	220,408	305,008	371,166	698,570	1,595,152
Ore and waste mined (tonnes)	888,014	828,854	798,952	597,687	3,113,507	604,195	662,635	629,106	1,009,198	2,905,134
Ore processed (tonnes)	469,191	573,719	451,665	188,013	1,682,588	383,787	437,917	257,308	262,810	1,338,216
Average ore head grade (g/t)	2.05	3.23	2.47	1.79	2.54	1.99	2.30	2.24	1.86	2.10
Process recovery rate	51%	39%	58%	136%	54%	38%	31%	56%	72%	45%
Gold Produced (oz)	15,733	23,133	20,995	14,322	74,183	9,293	9,963	10,463	11,297	41,017
Cash costs (US$/oz)
Mining	161	116	126	174	140	251	295	279	263	272
Processing	70	54	67	86	67	198	229	173	112	175
Royalties and overheads	83	62	83	147	89	152	137	165	113	141
Total	314	232	276	407	296	601	661	617	488	588