Update: Mineral Reserve & Macquarie Bank Facility

Update on Mineral Reserve and Macquarie Bank facility

As previously announced, the Company is in the process of re-estimating its Mineral Reserve at Inata. Test work completed to date has indicated that the orebody is more complex than had previously been believed. While further analysis continues, current indications are that the impact of fresh and transitional ore on recoveries and throughput, as well as higher cost levels, is such that the new Mineral Reserve is likely to be between 0.9 and 1.2 million ounces as at 31 December 2012, compared to the previous Mineral Reserve of 1.85 million ounces as at 31 December 2011. The 31 December 2012 reserve figure is net of depletion during 2012 of approximately 160,000 ounces. The lower end of the re-estimate range is based on pit shells run at a gold price of US$1,200 per ounce, while the higher end of the range is based on pit shells run at a gold price of US$1,400 per ounce. The previously reported Mineral Reserve of 1.85 million ounces was based on a gold price of US$1,400 per ounce. Following engineering work to optimise the various pits at Inata, the optimal Mineral Reserve will be selected based on factors including stripping ratios, capex, and the timing of cash flows. The re-estimation is expected to be completed by March 2013.

The Inata Mineral Reserve is based on the Mineral Resource within the Inata mining licence area. This does not include the Souma deposit, 20 kilometres east of Inata, where a Mineral Resource of over 500,000 ounces already exists. The Company has completed an infill drilling programme and will report an updated Mineral Resource shortly. Exploration in parallel with the drilling programme has defined several geochemical anomalies and geological structures that indicate potential for a significant resource increase in due course. Avocet will undertake a step out drilling programme at Souma aimed at evaluating the expanded resource potential and generating a new Mineral Reserve by the end of 2014. Of note, gold at Souma commonly occurs as free gold grains in quartz veins hosted by a sequence of volcaniclastic and intrusive rocks. Preliminary metallurgical test work at Souma indicates that high recoveries will be achievable through standard gravity recovery and carbon-in-leach circuits.

The Inata Mineral Reserve reduction is likely to result in a significant non-cash impairment, to be determined once the Mineral Reserve is finalised. Production in 2013 is now expected to be similar to that achieved in 2012 of approximately 135,000 ounces. Production in subsequent years, through to the end of the life of mine in about 2020, is likely to be in the order of 100,000 ounces per year, although this may change the following development of Souma. Cash costs in 2013, including royalty payments, are now expected to be in the range of US$1,050-1,100 per ounce. The revised life of mine plan does not assume any enhancements in recoveries and does not require any expansionary or plant improvement capex in order to be delivered. However further test work is continuing which may identify value adding opportunities.

As a consequence of these developments, the Company is engaged in discussions with Macquarie Bank Limited ("MBL") with regard to the hedge arrangements at Inata, including the restricted cash at Société des Mines de Bélahouro SA ("SMB"), the Company's trading subsidiary which holds Inata, which was disclosed in the Company's third quarter accounts as U$38.3 million at 30 September 2012. Avocet believes that in order to increase cash flow generation at Inata and maximise funds returned from SMB to finance corporate activities and support the Company's investment plans at other projects, it is necessary to reduce the hedge book substantially as soon as possible. MBL and the Company are in discussions regarding arrangements to ease near term liquidity constraints at the Company.

Avocet is exploring all options to fund the proposed hedge book reduction including raising equity.

The Company will make a further announcement as and when appropriate.

Management Conference Call

The Company will host an analyst conference call at 9:00am (UK) on Thursday 14 February 2013. Dial in details are as follows:

Participant dial-in numbers:

UK: 08444 933800

Norway: 21563013 / 21033055

Alternative number: +44 (0)1452 555 566

Conference ID # 11009034

A recording of the conference call will also be made available on the Avocet website later on the same day.

FOR FURTHER INFORMATION PLEASE CONTACT

NOTES TO EDITORS

Avocet Mining is a 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. The deposit at Inata currently comprises a Mineral Resource of 3.99 million ounces and a Mineral Reserve of 1.85 million ounces. The Inata Gold Mine poured its first gold in December 2009 and produced 135,189 ounces of gold in 2012.

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 are Souma, some 20 kilometres from the Inata Gold Mine, and Filio, adjacent to the mine licence area, where Mineral Resources of 0.56 million ounces and 0.14 million ounces respectively exist.

In Guinea, Avocet owns twelve exploration licences 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, Koulékoun has a Mineral Resource of 2.15 million ounces and Kodiéran of 0.87 million ounces.