UK Avocet Mining says N. Sulawesi gold mine start-up below target

UK Miner Avocet Mining PLC is optimistic to be able to produce the targeted 50,000 ounces of gold from its North Sulawesi gold mining this fiscal year despite lower than expected production start up volume.

The company said in a statement released Wednesday that its North Lanut Mine, which commenced production last October only produced 8,900 ounces until March 31, 2005, compared to a projected 16,000 ounces.

The company blamed wet rainy seasons and inefficient mining fleet with multiple contractors.

Avocet has 80 percent stake in North Lanut mine.

?The mine has recovered after a difficult start and the new management team are confident of producing in excess of 50,000 ounces this year. The dump leach operation will be a low cost producer and we expect it to repay the Company?s investment in less than two years. We expect that the replacement of contractors with our own mining fleet will greatly improve the mine?s operations. North Lanut?s gold production for the first quarter of this year is estimated to be 10,800 ounces,? the company said.

Aise from North Lanut, the company is also involved in exploration venture in Idenburg contract area in Papua and South Sulawesi. The company also said in discussions with a number of parties regarding additional opportunities in Indonesia.

The company said for the current year, it had budgeted US$2.3 million for exploration in Indonesia, US$1.1 million of which will be spent within the Mongondow CoW where North Lanut is located. We have commenced drilling at the Idenburg Joint Venture in West Papua and expect to receive initial results from this programme shortly. We are also in discussions with a number of parties regarding additional opportunities in Indonesia. (alex)