3rd Mar 2006 07:00
Avocet Mining PLC03 March 2006 Avocet Mining PLC 7th Floor 9 Berkeley Street London W1J 8DW Tel +44 (0) 20 7907 9000 Fax +44 (0) 20 7907 9019 E-mail [email protected] www.avocet.co.uk AVOCET AGREES EARN-IN ON CHINESE GOLD PROJECT Avocet Mining PLC ("Avocet" or "the Company") is pleased to announce that it hassigned a memorandum of understanding ("MOU") with Dynasty Gold Corporation ofCanada ("Dynasty") to earn up to a 36% of Dynasty's interests in XinjiangProvince in China. Avocet first invested in Dynasty in November 2005 and currently holds anundiluted interest of 29% in Dynasty. Dynasty is listed on the TSX VentureExchange in Canada and controls a large area of prospective ground in WesternChina. This includes 1,000km2 at Hatu in Xinjiang Province ("the Hatu JV"),100km2 at Red Valley in Qinghai Province (within an Area of Mutual Interest of1,000km2) and 2,000km2 at Wild Horse in Gansu Province (Area of Mutual Interestof 13,000km2, where permitting is awaited). Dynasty recently announced aninvestment by AngloGold Ashanti on the latter two properties. The Hatu property encompasses an ENE-trending basin approximately 1,200m abovesea level. The Qi-2 deposit on the tenement is the most advanced project and hasan independently verified inferred resource of 16,855,400 tonnes at 1.68 g/t Au(912,600 ounces gold) using a cut-off grade of 1.0 g/t. Dynasty can earn up to80% of the Hatu tenement by spending US$12 million with no conditions on thetimeframe in which this expenditure must be made. So far Dynasty has spent overUS$3 million towards this commitment. The Company believes there is substantialopportunity to increase the resource at Qi-2. The terms of the MOU are such that Avocet can invest up to US$1.8 million, witha minimum commitment of US$800,000, in the Hatu JV by 31 March 2007 in returnfor a maximum 36% interest in Dynasty's interest in the Hatu JV. The funds willbe used to bring the existing resource up to a measured and indicated category,undertake step out drilling to expand the resources and finalise metallurgicaltestwork, with a view to moving the project to feasibility. Following theminimum commitment Avocet will also have the right to negotiate furtherinterests in the property until 30 September 2007. On account of Avocet's current shareholding in Dynasty being greater than 20%,under TSX Venture Exchange rules the Company is seen to be a related party andtherefore the MOU is subject to TSX Venture Exchange approval and Dynastyminority shareholder approval. John Catchpole, Chief Executive Officer, commented: "China continues to be centre stage in the current strong market in thecommodities business. Our initial foothold in China, through an equityinvestment in Dynasty Gold of Canada, has now been strengthened with our deal toearn-in to the Hatu project. I am very excited at the Company's prospectsthroughout Asia and China will be an important part of the Company's growthplans. It is also pleasing to see the interest AngloGold Ashanti have shown inDynasty's other properties and we look forward to Dynasty's continued successalongside Anglo." Avocet is a mining company listed on the AIM market of the London StockExchange. The Company's principal activities are gold mining and exploration inMalaysia (as 100% owner of the Penjom mine, the country's largest goldproducer), Tajikistan (as 75% owner and operator of the ZGC, Tajikistan'sprincipal gold mine), and Indonesia (as 80% owner of the North Lanut gold minein North Sulawesi). Additionally the Company has a number of advanced mining andexploration projects in Asia.________________________________________________________________________________For further information please contact:Avocet Mining PLCJohn Catchpole (Chief Executive)Jonathan Henry (Finance Director)020 7907 9000www.avocet.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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