Avocet targets gold resources of more than 0.5m ounces at Kalimantan project

UK mining firm Avocet Mining PLC announced Tuesday positive results from initial scout drilling on the Seruyung project in northeast Kalimantan and is targeting a resource in excess of 500,000 ounces of gold.

Seruyung is a heap leachable high-sulphidation epithermal system similar to the Company's North Lanut gold mine in North Sulawesi. The property was previously drilled by Indochina Goldfields Limited (Ivanhoe Mines) who estimated a contained gold resource of 330,000 ounces in 1999.

The results from the six drill holes in the core of the system show that Seruyung hosts significant lengths of coherent low to medium grade gold mineralisation, the company said.

Avocet is earning an 80 per cent beneficial interest from PT Sago Prima Pratama (Sago) by funding the project through to a decision to mine. Sago is an Indonesian company that owns 100 per cent of Seruyung and the surrounding area through two national exploration licenses (KP), covering an area of 158 km2.

An infill drilling programme designed to develop Inferred Mineral Resources reportable under the JORC Code (2004) will commence should the results from ongoing metallurgical test work prove positive and suggest that the mineralisation responds well to the heap leaching process. The full results of the current test work will be known by the end of 2009.

The Company is also awaiting finalisation of the Implementing Rules and Regulations that will govern the new Indonesian Mining Law, which received government approval early in 2009. The new Mining Law provides a transparent mechanism for foreign companies to hold direct equity in mining and exploration projects. (alex)