Inata Gold Mine Expansion Update (2595B)

TIDMAVM

RNS Number : 2595B

Avocet Mining PLC

13 April 2012

Inata Gold Mine Expansion Update

Avocet Mining PLC ("Avocet" or "the Company"), the 90% owner and manager of the Inata Gold Mine in Burkina Faso, announces an update on the ongoing study to expand the Inata Gold Mine's production capacity.

At the time of the Company's annual results in February 2012, it was announced that further metallurgical test work was required in order to determine the optimal processing methods, configuration and location of a new processing facility, and that further updates on an expansion would be made in the second quarter.

The need for further test work followed the doubling of Inata's Mineral Reserves in January 2012 that, as a result of the deeper exploration drilling, added a significant volume of fresh ore at depth to the enlarged ore body. The study therefore aims to configure a processing facility capable of maximising gold production from ore of different types and metallurgy.

Preliminary findings from the current study indicate that the construction of a new process plant, operating in parallel with the existing plant, will provide more processing flexibility than extending the existing plant. These findings also indicate that a new processing plant is likely to be more appropriate than a heap leach. During the early stages of the scoping study, an initial evaluation of historic exploration drill samples was undertaken to determine the portion of the total ore body constituted by weathered oxide material suitable for heap leaching. As the recent expansion of the ore body at Inata was primarily at depth, this evaluation identified that oxide material constituted a relatively small portion of the total ore body, making heap leach less favorable than a new processing plant capable of treating transitional and fresh rock as well as oxide material.

Since November 2011, Avocet's geological department has been conducting an extensive programme of re-analysis of selected samples for a number of indicator elements including carbon, sulphur and leachable gold. This will enable the creation of various metallurgical models that will be factored into the life of mine plan to facilitate optimal mining of ores and maximised recoveries in both the old and new plants.

In view of the above, a detailed metallurgical test work programme for the transitional and fresh rock is being undertaken with ALS - Ammtec. The test work includes an evaluation of several treatment processes that would be appropriate for processing different ore types at a new plant, including bulk gravity recovery, de-sliming, carbon flotation, pre-oxidation and kerosene blanking.

Lycopodium Minerals, an engineering company with significant expertise in process plant construction, was engaged in January to oversee the metallurgical test programme and make proposals on the new plant's configuration, location and cost. The results from Lycopodium's work are expected in June 2012.

A further announcement including initial capital estimates and timelines will be made early in the third quarter. Subject to a satisfactory outcome to the above study, Avocet management anticipates entering construction in late 2012 and commissioning and first gold in late 2013.

For further information please contact:

 
 Avocet Mining     Buchanan          J.P. Morgan                 Arctic        SEB Enskilda 
  PLC               Financial         Cazenove                    Securities    Financial 
                    PR Consultants    Lead Broker                 Financial     Adviser & 
                                                                  Adviser       Market Maker 
                                                                  & Market 
                                                                  Maker 
================  ================  ==========================  ============  ================= 
 Brett Richards,   Bobby Morse       Michael Wentworth-Stanley   Arne Wenger   Fredrik Cappelen 
  CEO               James Strong      Neil Passmore               Petter 
  Mike Norris,                                                    Bakken 
  FD 
  Angela Parr, 
  IR 
================  ================  ==========================  ============  ================= 
 +44 20 7766       +44 20 7466       +44 20 7588                 +47 2101 
  7676              5000              2828                        3100         +47 2100 8500

Notes to Editors

Avocet Mining PLC is a leading West African gold mining and exploration company listed on the London Stock Exchange (AVM.L) and the Oslo Bors (AVM.OL).

In Burkina Faso the Company owns 90% of the Inata Gold Mine. The deposit at Inata currently comprises a Mineral Resource of 3.46 million ounces and a Mineral Reserve of 1.85 million ounces. The Inata Gold Mine poured its first gold in December 2009 and produced 167,000 ounces of gold in 2011.

Other assets in Burkina Faso include eight exploration permits in surrounding the Inata Gold Mine in the broader Belahouro region. The most advanced of these projects is at Souma, some 20 kilometres from the Inata Gold Mine, where a Mineral Resource of 0.56 million ounces exists.

In Guinea, Avocet owns twelve exploration licenses in the north east of the country. Mineral Resource development has been ongoing since 2005 and the project at Tri-K is the most advanced. Within the Tri-K project, Koulekoun has a Mineral Resource of 1.83 million ounces and Kodieran of 0.41 million ounces.

Avocet's Mineral Resources, which are inclusive of Mineral Reserves, are estimated in accordance with the principles of the Canadian NI 43-101 and Australian JORC Codes; and are reported in accordance with the Australian JORC Code.

This information is provided by RNS

The company news service from the London Stock Exchange

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