Avocet Mining PLC 2015 Full Year Results

2015 SUMMARY

• 74,755 ounces produced at Inata

• Costs at Inata reduced in spite of challenging production and cashflow environment

• Economics of Tri-K improved - capex estimates reduced from US$88 million to US$60 million

• No Lost Time Injury ('LTI') incidents in 2015 - nearly 7 million LTI-free man hours by 31 December 2015

KEY FINANCIAL METRICS

David Cather, Chief Executive Officer, commented:

"2015 was a difficult year for the mining sector as a whole, and Avocet was no exception. As well as lower gold prices, Inata faced a number of challenges throughout the year, and saw production fall to 74,755 ounces. In response, measures were taken to reduce production and support costs across the organisation, and capex was reduced to minimum levels in order to conserve cash. At Tri-K, the Company's efforts to raise finance were hampered by the bear market for mining finance, as well as the ebola crisis. Many challenges remain; however the outlook for 2016 is more positive, with an increase in the gold price during Q1 and M&A activity indicating that investor confidence may be returning. An updated Life of mine plan for Inata is being developed at the present time, and I hope to be able to provide more detail on our discussions regarding the financing of Tri-K and Souma in due course. "

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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 74,755 ounces of gold in 2015. Other assets in Burkina Faso include five 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

During 2015, the strategic focus was to optimise cashflow generation at the Inata gold mine, while looking to exploit the upside opportunities represented by the Souma deposit in Burkina Faso, and the Tri-K project in Guinea.

The fall in the gold price during the year, together with a series of operational challenges at the mine itself, meant that revenues from gold sales at Inata were lower than in 2014; however this was to some extent partly mitigated by continued hard-won cost reductions. Nevertheless, tight margins put pressure on plans to repay supplier credit balances and financial obligations, and at times required difficult negotiations with the mine's stakeholders.

The continued operation of the mine is testament to the flexibility and adaptability shown not only by Inata staff and management, but also by its creditors and wider stakeholders. It is likely that compromises will remain necessary on all sides for the remainder of the mine life, as it remains clear that the best way to maximise the repayment of the mine's debts is for it to be allowed to continue in operation.

One effect of this cashflow shortage was that the programme of drilling and test work undertaken in respect of the Souma deposit during the year was put on hold, and is now dependent on raising external finance in order to be completed. We believe that the funding required for this exercise, which should allow the completion of a Feasibility Study and application for a mining permit to be made before the end of 2016, is value-adding, and likely to be in the interests of all stakeholders.

The award of the mining permit at Tri-K on 27 March 2015 represented a key milestone in the development of that project. However, the exercise to raise the finance necessary for the construction of the mine, which is currently estimated to be approximately US$60 million, was affected by the downturn experienced by the mining sector globally, as well as by the ebola crisis in Guinea.

Many of the traditional sources of mining finance (bank debt and equity markets) have been particularly averse to financing junior mining projects in developing markets, with only those projects with the clearest and most certain returns being funded. Tri-K offers a unique opportunity for investors to participate in what we believe to be a far larger project than the initial heap leach outlined in the Feasibility Study, and we continue to target investors who have an appetite for growth combined with a tolerance of the specific project and jurisdictional risks.

We hope to be able to provide further details with regard to the financing of Tri-K, which remains an evolving situation, in due course.

At the corporate level, in September, Mike Norris stepped down as Finance Director after more than eight years, and was replaced by Jim Wynn, who had previously been Head of Finance and Company Secretary. In addition, at the AGM in May 2015, Mike Donoghue stood down as a Director, having joined the Board in 2006. I would like to thank both for their contributions to the Company.

2015 was undoubtedly another difficult year for Avocet Mining PLC, and many challenges remain. However the recent rise in the gold price, allied with some increase in financing and M&A activity in the sector, give cause for cautious optimism.

Russell Edey

Chairman

CHIEF EXECUTIVE'S STATEMENT

Inata Gold Mine, Burkina Faso

Operations at Inata during 2015 were marked by continuous cashflow pressures, and the need to ensure production levels were maintained in order to generate sufficient gold sales to meet payment obligations.

The mine produced 74,755 ounces at a cash cost of US$1,058 per ounce, compared with 86,037 ounces at US$1,186 per ounce in 2014. Realised gold prices fell from US$1,263 per ounce in 2014 to US$1,167 in 2015. Despite the fall in production, the mine was able to keep cash costs below spot prices.

In December 2014, an illegal strike took place which resulted in the mine being closed for several weeks. By January 2015, the plant returned to operation, using stockpiled ore until the mining crews were re-manned and mining operations returned to normal during February. This disruption affected gold production, and in particular mining in Q1 2015, resulting in the need to adapt the mine schedule to ensure adequate production was maintained to meet ongoing cashflow requirements.

Pressure on cashflows at the mine was further intensified by lower gold prices in the year. In particular, spot prices fell below US$1,100 per ounce in July and again in November.

In September 2015, an attempted military coup took place in Burkina Faso which meant the mine was unable to export gold shipments for three weeks. This put pressure on already strained relationships with key suppliers, and a short term loan of 5bn CFA (US$8 million) was negotiated with Coris Bank to ensure the continued delivery of critical supplies.

Cashflow shortages at the mine affected almost all aspects of operations: the mine schedule developed at the start of the year had to be revised in order to source cleaner oxide ore to meet short-term cash requirements; the lack of available funds for maintenance catalysed innovative, low-cost solutions, which were necessary in order to maintain mining volumes; managing gold recovery levels became difficult as ore types varied frequently from oxides to preg-robbing lithologies; and deliveries of critical supplies to site were at times delayed as a result of late payment of invoices.

In spite of these challenges, mining volumes of 14.1 million tonnes exceeded 2014 levels (14.0 million tonnes), while plant throughput of 1.9 million tonnes was in line with the previous year. Grades varied throughout the year - during the first half, higher grade carbonaceous materials were mined, while in later quarters, lower grade, cleaner ores were used for mill feed. Average grades in the year were 1.85 g/t compared to 1.77 g/t in 2014.

Recovery levels decreased from 79% to 67% year-on-year, due to the increase in metallurgically inferior carbonaceous ore treated in 2015.

Souma, Burkina Faso

Exploration activity in Souma during 2015 consisted of additional resource and metallurgical drilling, intended to increase the size and improve the understanding of the deposit, which lies 20km due east of the Inata mine.

The results that have been received to date have been encouraging, and once all assay results have been reported the mineralization models will be updated and new resource models generated.

The Company will then look to advance the project towards a Feasibility Study in 2016, with the target of submitting an application for a mining permit early in 2017.

Tri-K, Guinea

Following the award of a mining permit for the Tri-K project on 27 March 2015, the Company's focus has been to raise finance for construction. In spite of unfavourable market conditions, as well as the ebola crisis which affected travel to and from the region for much of the year, progress has been made with a number of parties who are interested in investing in the project.

The Government has been kept informed of our progress, and have indicated their ongoing support for the project. I hope to be able to provide a more substantive update shortly.