2014 Third quarter results

 2014 Third quarter results

Avocet Mining PLC ("Avocet" or "the Company") today announces its production and cash costs for the third quarter of 2014.

· Total gold production for the quarter was 21,736 ounces at a cash cost of US$1,183 per ounce, compared with 21,650 ounces produced in the second quarter at a cash cost of US$1,317 per ounce

· The CBC was commissioned in September and has achieved improvement in recoveries compared with processing the carbonaceous ore without carbon blinding - performance testing continues in Q4

· Q3 production affected by lower than planned mill feed grades, reflecting a proportion of low grade oxide ore processed in early September

· Full year gold production guidance for 2014 reduced to approximately 95,000 ounces at a cash cost of approximately US$1,200 per ounce, including impact of lower than expected Q3 production

· Inata unaffected by recent unrest in Burkina Faso

Commissioning of the Carbon Blinding Circuit (CBC)

The CBC was commissioned during September and initial results show an improvement in recoveries compared with processing the carbonaceous ore without carbon blinding. For the period 11 September to 31 October 2014 an average recovery of approximately 70% was achieved. Work is ongoing to maximise recoveries, including further performance test work to optimise processing of each ore type. An additional CIL tank was commissioned in early October in order to increase residence time and recovery. Production in October was approximately 9,400 ounces, compared with average monthly production in the first nine months of 7,400 ounces.

Q3 production

Total material mined were reduced to 2.7 million tonnes in the quarter (compared with 4.4 million tonnes in Q2), in order to conserve cash. Until commissioning of the CBC in September, production was dependent on clean oxide ore, which had become increasingly scarce and lower grade. During July and August, mill head grades fell to below 1.3 g/t, compared with an average of 1.44 g/t in the previous quarter.

The commissioning and ramp-up of the CBC in September allowed higher grade carbonaceous materials to be processed, bringing the quarter average grade up to 1.52 g/t. Carbonaceous ore with a grade of 2.52 g/t was processed in the first weeks of CBC operation. Very heavy seasonal rainfall adversely impacted throughputs of ore off the Rompad during the commissioning period, and wet ore stockpiles are expected to cause further ore handling issues in early Q4.

Overall gold production of 21,736 ounces was in line with Q2 (21,650 ounces). The reduced mining rate, combined with a number of cost saving measures, led to a reduction in cash costs to US$1,183 per ounce (Q2: US$1,317 per ounce).

As a result of lower than planned Q3 production, and current expectations for Q4, full year production guidance has been revised from 105,000 ounces to approximately 95,000 ounces at a cash cost of approximately US$1,200 per ounce.

Nonetheless, over the coming months, further cost savings have been targeted and these, together with higher production levels from processing of higher grade ore, should lead to Inata's cost per ounce lowering further into 2015. In dollar terms, costs and cash flows will also benefit from lower prices for fuel, which represents approximately 25% of total cash costs, and from the strengthening of the US dollar against the FCFA, which is tied to the Euro.

Cash flow at Inata remains tight, especially in view of the recent fall in gold prices.

Development opportunities

A programme of in-fill drilling and metallurgical test work costing US$2-3 million has been prepared to examine the potential for heap leaching of material from Souma and other targets at Bélahouro, which would significantly increase the Inata life of mine and could reduce cash costs. Subject to available funds, the Company intends to conduct this work as soon as possible.

Inata operations unaffected by recent unrest in Burkina Faso

Avocet's operations at the Inata mine in the north of the country remain largely unaffected by the recent unrest, although the Company continues to take all necessary precautions to ensure the safety and security of its people and assets. The Company welcomes news that Burkina Faso's opposition has decided to suspend protests and hold talks with army chiefs regarding a transitional government, and that the army, which last week took power after President Blaise Compaoré's resignation, has agreed to end the suspension of constitutional rights.

Tri-K project

On 21 October the Ministry of Mines in Guinea advised the Company that its Tri-K feasibility study has been examined and approved by the Department of Mines and Geology. However, the Ministry of Mines has also advised that the processing of all licence applications has been suspended pending completion of a modernisation programme currently in progress for the management of mining titles. This accounts for the delay in granting the exploitation licence and means that the date when the exploitation licence will actually be granted remains uncertain. Nonetheless, Avocet remains confident the permit will be issued in due course.

Business review

Business review discussions continue with a number of parties about a range of potential transactions with a view to addressing the Elliott loan as well as providing additional working capital for Avocet and Inata. During August, a small equity placement of US$1.2 million was concluded for corporate purposes and included the participation of Elliott Management and Prelas AS, the Company's two largest shareholders.

David Cather, Chief Executive Officer, commented:

"The commissioning of the Carbon Blinding Circuit in the third quarter allows Inata to process higher grade ores with reduced gold losses due to preg-robbing. In addition to Inata operations, Avocet's focus is on Tri-K in Guinea and Souma in Burkina Faso, where we have begun to explore the potential for a heap leach operation."

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NOTES TO EDITORS

Avocet Mining PLC ('Avocet' or the 'Company') is an unhedged gold mining and exploration company listed on the London Stock Exchange (ticker: AVM.L) and the Oslo Børs (ticker: AVM.OL). The Company's principal activities are gold mining and exploration in West Africa.

In Burkina Faso the Company owns 90% of the Inata Gold Mine. Across the Bélahouro district, which includes both Inata and Souma, there is a Mineral Resource of 6.1 million ounces and an Ore Reserve of 0.5 million ounces. The Inata Gold Mine poured its first gold in December 2009 and produced 118,443 ounces of gold in 2013. Other assets in Burkina Faso include eight exploration permits surrounding the Inata Gold Mine in the broader Bélahouro region. The most advanced of these projects is Souma, some 20 kilometres from the Inata Gold Mine, where there is a Mineral Resource estimate of 0.8 million ounces.

In Guinea, Avocet owns 100% of the Tri-K Project in the north east of the country. Drilling to date has outlined a Mineral Resource of 3.0 million ounces, and in October 2013 the Company announced a maiden Ore Reserve on the oxide portion of the orebody, which is suitable for heap leaching, of 0.5 million ounces. As an alternative, the potential exists to exploit the entire 3.0 million ounce Tri-K orebody via CIL processing method.

Appendix 1

Inata Gold Mine quarterly production information 2013-14