Avocet Mining PLC
2014 Full Year Results
2014 SUMMARY
· 86,037 ounces produced at Inata at cash cost of US$1,186 per ounce
· Safety and health standards maintained: over 5 million hours now worked since the last lost time injury
· New, lower cost organisational structure implemented at Inata
· Environmental and social baseline studies progressed at Souma
· Tri-K exploitation permit awarded following successful government liaison throughout the year
David Cather, Chief Executive Officer, commented:
'After a challenging year in 2014, the recent award in March of an exploitation permit for Tri-K was an important milestone for Avocet. It clears the way for what I am confident will be a new mine for the Company, and over the coming months our efforts will be focused on progressing Tri-K towards the start of construction of a heap leach operation as early as possible in 2016. I also look forward to the results of the drilling and metallurgical test work programme at Souma, which has potential either as a new standalone operation or as a source of additional ore feed for Inata. Meanwhile, we are fully committed to continuing the work begun last year at Inata to improve production and reduce costs, and to recover from the effects of the strike in December. I believe these developments will assist in our efforts to secure financing for our projects and for our corporate activities, and thus put the Company in a more robust financial position.'
FOR FURTHER INFORMATION PLEASE CONTACT
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Avocet Mining PLC
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Bell Pottinger
Financial PR Consultants
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J.P. Morgan Cazenove
Corporate Broker
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David Cather, CEO Mike Norris, FD
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Daniel Thöle
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Michael Wentworth-Stanley
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+44 203 709 2570
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+44 20 2772 2555
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+44 20 7742 4000
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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. The Inata Gold Mine poured its first gold in December 2009 and produced 86,037 ounces of gold in 2014. 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.
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 the CIL processing method. The Company announced on 2 April 2015 that an exploitation permit had been awarded for Tri-K.
CHAIRMAN'S STATEMENT
2014 was another challenging year for the mining industry and for Avocet. Our focus during the year was on recoveries and costs at Inata and on positioning Tri-K and Souma as sources of real value for shareholders. These objectives were made harder by a strike in December and by continuing weakness in the gold market.
At Inata a priority for the year was to build and commission the carbon blinding circuit (CBC) designed to allow high grade carbonaceous ore to be processed at high recoveries. Until commissioning of the CBC in September, production was dependent on clean oxide ore, which had become increasingly scarce and lower grade. Following its commissioning, work continued to maximise recoveries, including further performance test work to optimise processing of each ore type. Initial recoveries were lower than expected despite the positive impact of the CBC. However, the test work was disrupted by the strike and must continue in order to establish the ultimate level of recoveries achievable. Another ongoing priority was on reducing costs, notably through lower waste mining levels and reduced labour costs.
Disappointingly, gold production of 86,037 ounces was 27% lower than in 2013, as the period of processing low grade oxide ore was followed by lower than expected recoveries and the strike which cost four weeks lost production. Importantly, however, the mine's cost reduction efforts meant that total cash costs fell 28% from US$142.5 million in 2013 to US$102.0 million. Cash costs per ounce were therefore slightly lower at US$1,186 compared with US$1,203 in 2013.
In October the Ministry of Mines in Guinea advised the Company that its Tri-K feasibility study had been examined and approved by the Department of Mines and Geology. On 2 April 2015, the Company announced that it had been granted an exploitation permit for Tri-K, which is a considerable landmark for Avocet. In the meantime, work has been ongoing to optimise the project in the face of lower gold prices, including reductions in capital expenditure and operating costs.
At Souma, a programme of drilling and metallurgical test work has been prepared for the coming months and commenced in April 2015. The objectives are to confirm that Souma's metallurgy is oxide and non-carbonaceous, and to generate a maiden ore reserve, either as a standalone heap leach operation or as satellite feed for Inata.To continue reading this noodl, please get the original version here.