29th Jan 2010 07:00
AVOCET MINING PLC
QUARTERLY GOLD PRODUCTION AND TRADING UPDATE
|
Period (1) |
|
3 months ended 31 Dec 2009 |
9 months ended 31 Dec 2009 |
9 months ended 31 Dec 2008 |
Year ended 31 Dec 2009 |
Year ended 31 Mar 2009 |
|
|
|
|
|
|
||
|
Gold production |
(Oz) |
25,877 |
82,174 |
82,544 |
109,548 |
109,919 |
|
Average realised gold price |
(US$/oz) |
1,103 |
995 |
855 |
975 |
870 |
|
Average cash cost |
(US$/oz) |
766 |
650 |
600 |
639 |
602 |
(1) On 28 October the Company announced that it would change its year end from March to December with effect from 31 December 2009
Gold production of 25,877 ounces in the quarter ended 31 December 2009
Production of 82,174 ounces for the nine months ended 31 December 2009, at a cash cost of US$650/oz
First gold pour at Inata on 20 December 2009
Inata production of approximately 3,200 ounces in January as start of ramp up - production expected to increase to over 10,000 ounces per month by July 2010
Jonathan Henry, Chief Executive Officer, commented:
"The Inata ramp up is progressing well and we remain focused on reaching design capacity in a timely and sustainable manner. The last quarter was challenging for Penjom and North Lanut but both continued to generate cash margins in excess of US$300/oz, helping to underpin commissioning costs of our new mine in West Africa and further work on our exploration and development portfolio in both regions."
Avocet Mining PLC ("Avocet" or "the Company") today provides a trading update in advance of its audited preliminary results for the nine months ended 31 December 2009, which will be released on 17 March 2010.
Trading overview
Gold production for the quarter was 25,877 ounces from the Company's operations at Penjom in Malaysia and North Lanut in Indonesia. All gold sales were into the spot market during the quarter with an average realised price of US$1,103/oz. Total cash costs in the quarter were US$766/oz compared with US$595/oz in the previous quarter, with the increase accounted for equally by lower production and higher costs.
For the nine months ended 31 December 2009, gold production totaled 82,174 ounces, in line with the guidance given in November at the time of the Company's interim results announcement. Total cash costs of US$650/oz were slightly above expectations as mining and plant costs were higher than expected at Penjom and North Lanut for the last quarter.
The appendix to this announcement sets out key operating statistics including production and cash costs by quarter for both Penjom and North Lanut.
Inata, Burkina Faso
Following the first gold pour at Inata on 20 December 2009, commissioning and ramp up of the plant has continued with progress currently ahead of schedule. The planned ramp up was for gold production of 2,500 ounces in February 2010, with increases averaging 1,500 per month thereafter, and production of over 10,000 ounces per month from July 2010. Steady increases are being achieved in mill throughput and preliminary estimates indicate gold recoveries are better than forecast. Further gold pours have occurred since the first pour and total gold production to date is approximately 3,200 ounces.
Penjom, Malaysia
Penjom produced approximately 5,300 ounces of gold in each of November and December and 3,900 ounces in October. The lower production in October was due to a scheduled SAG mill liner change previously announced. Ore grades dipped to 2.95 g/t as mining in the quarter took place in areas of lower grade than in the previous quarters. Total gold production of 14,512 ounces in the quarter was therefore 12 per cent below the previous quarter. Total cash costs in the quarter were US$11.8 million, nine per cent above the previous quarter of US$10.8 million, due to a rise in mobile fleet maintenance costs. Together with lower gold production, this resulted in an increase in cash costs to US$811/oz for the quarter.
For the nine months ended 31 December 2009, gold production totaled 46,577 ounces, slightly ahead of expectations. Excluding the impact of the SAG mill liner change shutdown, the quarter's production was broadly in line with the two previous quarters at a rate of approximately 5,000 ounces per month. The higher level of maintenance costs in the last quarter meant that cash costs for the nine month period were US$710/oz compared with US$586/oz in the corresponding period for 2008.
Gold production in 2010 is expected to continue at approximately 5,000 ounces per month.
North Lanut, Indonesia
North Lanut's gold production of 11,365 ounces in the quarter ended 31 December 2009 represented an eight per cent decrease from the previous quarter. Production was impacted by a dip in grades as the balance of mining in the quarter shifted from the Riska pit to the upper levels of the Rasik pit. Significant gains in ore tonnages from the upper benches of Rasik mean that mining of the deeper, higher grade material will now occur later in the second half of 2010.
Total cash costs in the quarter ended 31 December 2009 rose 29 per cent from the previous quarter to US$8.1 million. The increase partly reflected higher costs associated with mining the additional ore encountered at Rasik. Together with the lower gold production, higher expenditure resulted in an increase in cash cost to US$710/oz for the quarter.
For the nine months ended 31 December 2009, gold production totaled 35,597 ounces. Cash cost per ounce for the same period rose to US$569/oz, nine per cent lower than in the corresponding period for 2008.
The ore gains encountered at Rasik mean that North Lanut's mine life is expected to be extended by up to 12 months. Gold production is now expected to average 3,500 ounces per month in the first half of 2010, as mining occurs in the upper benches of Rasik, and then to increase to 4,500 ounces per month in the second half as higher grades at depth are reached in Rasik.
Exploration
An assessment of the enlarged West African and South East Asian exploration portfolio is close to being finalised, with a view to determining the next steps on each prospect, including Doup and Seruyung in Indonesia. In West Africa, the Belahouro licences in Burkina Faso, incorporating the Souma Trend, will be a priority in view of its prospectivity and proximity to Inata.
Group Results
The Company will announce its preliminary financial results on 17 March 2010.
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For further information please contact: |
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Avocet Mining PLC |
Buchanan Communications |
Ambrian Partners Limited |
J.P. Morgan Cazenove |
Arctic Securities |
First Securities |
|
Financial PR Consultants |
NOMAD and Joint Broker |
Lead Broker |
Financial Adviser |
Financial Adviser |
|
|
Jonathan Henry, CEO Mike Norris, FD Hans-Arne L'orange, EVP Business Development & Investor Relations |
Bobby Morse Katharine Sutton |
Richard Brown Richard Greenfield |
Michael Wentworth-Stanley Anish Patel |
Arne Wenger Kim Galtung Døsvik |
Stein Hansen Eirik Lilledahl |
|
+44 20 7766 7676 |
+44 20 7466 5000 +44 7802 875227 |
+44 20 7634 4700 |
+44 20 7588 2828 |
+47 21013100 |
+47 2323 8000 |
|
www.avocet.co.uk |
www.buchanan.uk.com |
www.ambrian.com |
www.jpmorgancazenove.com |
www.arcticsec.no |
www.first.no |
Notes to Editors
Avocet Mining PLC ("Avocet" or "the Company") is a mining company listed on the AIM market of the London Stock Exchange (Ticker: AVM). The Company's principal activities are gold mining and exploration in Malaysia (as 100 per cent owner of the Penjom gold mine, the country's largest gold producer), Indonesia (as 80 per cent owner of the North Lanut gold mine and Bakan project in North Sulawesi) and Burkina Faso (as 90 per cent owner of the Inata gold mine). The Company has a number of other advanced exploration projects in South East Asia and West Africa.
Background to operations
Penjom is Malaysia's largest gold producer and was developed by Avocet after applying modern technology to grass roots exploration in an area of historic alluvial mining. The mine is located in Pahang State, approximately 120 km north of the country's capital, Kuala Lumpur. The mine was commissioned in December 1996 with reserves of 223,000 ounces. Successful resource development means Penjom has produced over one million ounces of gold to date and still has nearly one million ounces of resource.
North Lanut in North Sulawesi, Indonesia, was developed by Avocet from the exploration stage and has produced over 270,000 ounces since it was commissioned in 2004. Avocet purchased an 80 per cent interest in PT Avocet Bolaang Mongondow, an Indonesian company holding a 6th generation Contract of Work ("CoW"), from Newmont Mining Corporation in 2002. North Lanut is located within the CoW, which includes exploration and mining rights over approximately 50,000 hectares in an area highly prospective for gold. An Indonesian company, PT Lebong Tandai, owns the remaining 20 per cent.
Inata in Burkina Faso, West Africa, has a resource of 1.7 million ounces and reserves of 944,000 ounces. Inata poured first gold in December 2009 and is currently commissioning to full production rates in excess of 10,000 ounces per month. Other assets include exploration licences in Burkina Faso, Guinea and Mali (the most advanced being the Tri-K gold exploration project in Guinea with a resource of 667,000 ounces).
Appendix - Key operating statistics by quarter
|
Quarters ended |
|
Quarters ended |
||||||||||
|
Jun '08 |
Sep '08 |
Dec '08 |
Mar '09 |
Total |
9 mths to Dec 08 |
Jun '09 |
Sep '09 |
Dec '09 |
Total |
|||
|
Penjom |
||||||||||||
|
Ore mined (tonnes) |
179,034 |
86,081 |
167,640 |
265,944 |
698,700 |
432,756 |
372,145 |
247,958 |
86,285 |
706,388 |
||
|
Waste mined (tonnes) |
4,146,508 |
4,113,678 |
4,123,096 |
4,556,004 |
16,939,285 |
12,383,281 |
4,396,358 |
4,165,516 |
4,124,764 |
12,686,638 |
||
|
Ore and waste mined (tonnes) |
4,325,542 |
4,199,759 |
4,290,736 |
4,821,948 |
17,637,985 |
12,816,037 |
4,768,503 |
4,413,474 |
4,211,049 |
13,393,026 |
||
|
Ore processed (tonnes) |
190,516 |
179,059 |
168,884 |
180,480 |
718,939 |
538,459 |
179,146 |
185,767 |
179,658 |
544,571 |
||
|
Average ore head grade (g/t) |
3.44 |
3.53 |
3.66 |
3.27 |
3.47 |
3.54 |
3.38 |
3.34 |
2.95 |
3.22 |
||
|
Process recovery rate |
89% |
88% |
82% |
85% |
86% |
86% |
80% |
82% |
85% |
83% |
||
|
Gold Produced (oz) |
18,729 |
17,793 |
16,303 |
16,077 |
68,902 |
52,825 |
15,664 |
16,401 |
14,512 |
46,577 |
||
|
Cash costs (US$/oz) |
||||||||||||
|
Mining |
329 |
313 |
351 |
409 |
349 |
330 |
395 |
390 |
476 |
419 |
||
|
Processing |
155 |
168 |
174 |
175 |
167 |
165 |
170 |
168 |
215 |
183 |
||
|
Royalties and overheads |
92 |
95 |
82 |
107 |
94 |
90 |
104 |
102 |
120 |
108 |
||
|
576 |
576 |
607 |
691 |
610 |
586 |
669 |
660 |
811 |
710 |
|||
|
Deferred stripping adjustment |
(95) |
(156) |
(94) |
28 |
(82) |
(116) |
307 |
75 |
- |
129 |
||
|
481 |
420 |
513 |
718 |
528 |
470 |
976 |
735 |
811 |
839 |
|||
|
Mining cost per tonne (US$) |
1.25 |
1.33 |
1.33 |
1.36 |
1.36 |
1.36 |
1.30 |
1.45 |
1.64 |
1.46 |
||
|
North Lanut |
||||||||||||
|
Ore mined (tonnes) |
383,787 |
357,627 |
257,940 |
310,628 |
1,309,982 |
999,354 |
300,837 |
422,528 |
396,136 |
1,119,501 |
||
|
Waste mined (tonnes) |
220,408 |
305,008 |
371,166 |
698,570 |
1,595,152 |
896,582 |
457,032 |
554,861 |
579,875 |
1,591,768 |
||
|
Ore and waste mined (tonnes) |
604,195 |
662,635 |
629,106 |
1,009,198 |
2,905,134 |
1,895,936 |
757,869 |
977,389 |
976,011 |
2,711,269 |
||
|
Ore processed (tonnes) |
380,181 |
437,917 |
257,308 |
262,810 |
1,338,216 |
1,075,406 |
319,399 |
333,346 |
366,692 |
1,019,437 |
||
|
Average ore head grade (g/t) |
1.96 |
2.30 |
2.24 |
1.86 |
2.10 |
2.16 |
2.04 |
1.54 |
1.41 |
1.65 |
||
|
Process recovery rate |
39% |
31% |
56% |
72% |
45% |
40% |
57% |
75% |
68% |
66% |
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|
Gold Produced (oz) |
9,293 |
9,963 |
10,463 |
11,297 |
41,017 |
29,719 |
11,899 |
12,333 |
11,365 |
35,597 |
||
|
Cash costs (US$/oz) |
||||||||||||
|
Mining |
251 |
295 |
279 |
263 |
272 |
276 |
275 |
271 |
350 |
297 |
||
|
Processing |
198 |
229 |
173 |
112 |
175 |
200 |
125 |
123 |
188 |
145 |
||
|
Royalties and overheads |
152 |
137 |
165 |
113 |
141 |
152 |
101 |
113 |
172 |
127 |
||
|
601 |
661 |
617 |
488 |
588 |
627 |
501 |
507 |
710 |
569 |
|||
|
Total |
||||||||||||
|
Gold Produced (oz) |
28,022 |
27,756 |
26,766 |
27,374 |
109,919 |
82,544 |
27,563 |
28,734 |
25,877 |
82,174 |
||
|
Cash costs (US$/oz) |
||||||||||||
|
Mining |
303 |
307 |
323 |
349 |
320 |
311 |
343 |
339 |
420 |
366 |
||
|
Processing |
169 |
190 |
174 |
149 |
170 |
178 |
151 |
149 |
203 |
167 |
||
|
Royalties and overheads |
112 |
110 |
114 |
110 |
112 |
112 |
103 |
107 |
143 |
117 |
||
|
584 |
607 |
611 |
608 |
602 |
600 |
597 |
595 |
766 |
650 |
|||
|
Deferred stripping adjustment |
(63) |
(101) |
(57) |
16 |
(51) |
(74) |
174 |
43 |
- |
73 |
||
|
521 |
506 |
554 |
624 |
551 |
526 |
771 |
638 |
766 |
723 |
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