TIDMAVM
RNS Number : 1404V
Avocet Mining PLC
26 January 2017
2016 Q4 and Full Year Production Results
and General Update
Avocet Mining PLC ("Avocet" or "the Company"), the West African
focused gold mining and exploration company with operations in
Burkina Faso and Guinea, today announces production and cash costs
for the fourth quarter of 2016.
Summary
-- Gold production in Q4 was 13,177 ounces at a cash cost of
US$1,156 per ounce, compared with 17,694 ounces at a cash cost of
US$1,047 per ounce in Q3
-- This fall in production was predominantly due to operations
at the mine being interrupted for a period of four weeks
-- The 1,392 ounces of gold which had been seized in October,
causing the interruption, have now been released and sold
-- Full year production totalled 72,485 ounces, slightly below
guidance, at a cash cost of US$991 per ounce
-- The Tri-K transaction with Managem was approved by shareholders on 22 December 2016
-- This transaction will allow Managem to commence a US$10 million work programme targeting a 1-million-ounce reserve and the completion of a bankable feasibility study for a Carbon-in-Leach ("CIL") operation.
Q4 2016 and Full Year production at Inata
Gold production in Q4 was 13,177 ounces at a cash cost of
US$1,156 per ounce compared with 17,694 ounces at a cash cost of
US$1,047 per ounce in Q3 2016.
This fall in production was predominantly due to operations at
the mine being interrupted for a period of four weeks between 27
October and 25 November 2016, following the seizure of the gold
shipment on 7 October 2016. The increase in cash costs in the
quarter reflected the fact that fixed costs were still incurred in
spite of there being no gold production during this period.
Full year production totaled 72,485 ounces at a cash cost of
US$991 per ounce, which was slightly below the guidance of
75-85,000 ounces notified prior to the stoppage in October.
Although production at Inata has returned to normal, the impact
of the disruption on the cash position of the mine continues to be
felt. Short term funding to allow for critical payments during the
stoppage was provided by the mine's bankers, Ecobank and Coris Bank
in Ouagadougou, and discussions are continuing with regard to the
timing of repayments of these facilities as well as overdue
balances with trade creditors.
The 1,392 ounces of gold which had been seized in October have
now been released and sold, however the majority of the proceeds
are to be used to settle agreed amounts in respect of the
ex-workers' claim for back pay. Negotiations towards finalising the
amount due in respect of this matter continue, however no further
gold seizures are now expected.
Avocet's management has been concerned by the increase in
security incidents in the Sahel region in the North of Burkina
Faso, including in the vicinity of the Inata mine. The Company is
treating the situation very seriously and is working with Burkinabe
military representatives and third party advisers to identify and
implement measures to mitigate these risks wherever possible.
The Company's full year financial results are due to be
published on 13 April 2017.
Update on Tri-K project
The Tri-K transaction with Managem was approved by shareholders
on 22 December 2016, and the only outstanding step ahead of
completing the initial stage of the deal (defined as 'First
Closing') is the ratification by the Guinean National Assembly of
the project's Mining Convention, which is now expected to take
place in February. The Mining Convention was signed by two
Government Ministers, by Avocet and by Managem on 19 December
2016.
Once First Closing has been completed, Avocet will receive US$4
million in funds (less approximately US$1.5 million of transaction
costs), and will transfer 40 per cent of its interest in the
project to Managem, who will commence a US$10 million work
programme targeting a 1 million ounce reserve and the completion of
a bankable feasibility study for a CIL operation.
FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining PLC Blytheweigh J.P. Morgan Cazenove
Financial PR Corporate Broker
David Cather, CEO Tim Blythe Michael Wentworth-Stanley
Jim Wynn, FD Camilla Horsfall
Megan Ray
+44 20 3709 2570 +44 207 138 3204 +44 20 7742 4000
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 per cent of the Inata Gold
Mine. The Inata Gold Mine poured its first gold in December 2009
and produced 72,485 ounces of gold in 2016. 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 kilometers from the Inata Gold Mine.
The Company also holds an interest in the Tri-K project in
Guinea. On 10 October 2016, the Company announced that it had
agreed to dispose of 40 per cent of the project to Managem, a
Moroccan group listed on the Casablanca stock exchange, which
remains subject to approval by the Guinean National Assembly, and
which will increase upon completion of a bankable feasibility study
for a CIL plant at the site, the incurring of expenditures of at
least US$10 million, and the enlarging of the ore reserve, to 70
per cent (in the event of an increase of the reserve to 1 million
ounce or more) or 60 per cent (if less than 1 million ounces).
Appendix 1
Inata Gold Mine quarterly production information 2015-16
2015 2016
Q1 Q2 Q3 Q4 2015 Q1 Q2 Q3 Q4 YTD
Ore mined (k tonnes) 393 397 233 290 1,313 310 397 214 420 1,341
Waste mined (k tonnes) 1,420 3,563 4,349 3,494 12,826 2,993 2,855 2,505 1,458 9,811
Total mined (k tonnes) 1,813 3,960 4,582 3,784 14,139 3,303 3,252 2,719 1,878 11,152
Ore processed (k tonnes) 437 471 448 509 1,865 544 537 478 284 1,843
Average head grade (g/t) 2.50 2.27 1.50 1.22 1.85 1.21 1.32 1.46 2.20 1.46
Process recovery rate 52% 67% 72% 89% 67% 91% 93% 79% 68% 84%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gold Produced (oz) 17,011 22,848 17,517 17,379 74,755 20,528 21,086 17,694 13,177 72,485
Cash costs (US$/oz) Q1 Q2 Q3 Q4 2015 Q1 Q2 Q3 Q4 YTD
Mining 262 313 362 335 318 291 298 346 333 314
Processing 540 408 486 430 462 375 347 417 483 397
Administration 236 155 188 251 203 183 163 182 270 193
Royalties 75 76 71 78 75 75 95 102 70 87
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
1,113 952 1,107 1,094 1,058 925 903 1,047 1,156 991
This information is provided by RNS
The company news service from the London Stock Exchange
END
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