TIDMAVM
RNS Number : 2068E
Avocet Mining PLC
06 February 2015
6 February 2015
2014 fourth quarter and full year
production update
Avocet Mining PLC ("Avocet" or "the Company") today announces
its production and cash costs for the fourth quarter of 2014.
-- Total gold production for the quarter was 19,503 ounces at a
cash cost of US$1,052 per ounce, compared with 21,736 ounces
produced in the third quarter at a cash cost of US$1,183 per
ounce
-- Inata production in the quarter was affected by a strike that
commenced on 4 December 2014, with full plant throughput levels
only restored in late January 2015
-- Full year gold production for 2014 was 86,037 ounces, lower
than guidance of approximately 95,000 ounces primarily as a result
of a strike in early December
-- The lower cash costs achieved in the quarter were the result
of a reduction in waste mining and cost reduction initiatives to
lower Inata's cost base
-- Further cost reductions are anticipated in 2015 as a result
of a smaller labour complement, lower fuel and reagent prices, and
the strengthening of the US dollar against the West African
FCFA
Q4 production
The commissioning of the Carbon Blinding Circuit ("CBC") at the
end of the third quarter meant that higher grade carbonaceous
material could be treated. Head grades averaged 2.92 g/t in Q4,
compared with 1.53 g/t in the previous quarter. Processing of
carbonaceous ore meant that recoveries were lower at 61%, despite
the positive impact of the CBC, compared with 85% in Q3. During the
quarter, the CBC was being performance tested against various
combinations of ore grade and organic carbon contents together with
differing blends of blinding reagents. Although the CBC
outperformed expectations against laboratory test work, other
factors in the ore metallurgy negatively impacted overall
recoveries. Further work, for example introducing lead nitrate to
inhibit the influence of sulphur and sulphides, will be progressed
in Q1 2015.
On 4 December 2014, an illegal strike at Inata resulted in the
suspension of all mining activities. On 12 December, the Company
announced that the strike had been brought to a peaceful end, with
all strikers having been removed from site, together with the
majority of the workforce. In the subsequent days, a skeleton crew
of senior staff remained on site to inspect the mine's assets and
begin the process of returning to production.
An inspection of the assets showed that the production equipment
had suffered only minor damage but planning for a full resumption
of operations took several weeks. The plant circuit was restarted
on 6 January 2015, and stockpiled material has been processed since
then. Mining is expected to recommence in February, following
optimisation of revised manning structures. A complement of
approximately 600 based on a three shift system has been
configured. This is in contrast to the previous arrangements of
four shifts, which had a complement of nearly 800.
Inata outlook
The long term impact of the strike is still being assessed. The
strike disrupted ongoing work aimed at maximising recoveries,
including further performance test work to optimise processing of
each ore type, and future recoveries are therefore unclear. The
cash costs are being assessed in order to reduce costs below the
level achieved in 2014, taking into account cost reduction
initiatives, the recent fall in fuel prices, and weakness of the
local FCFA currency which reduces costs in US dollar terms.
The Company currently anticipates that gold production in 2015
will be approximately in line with 2014 and that Inata's life of
mine is likely to be 2-3 years. This does not include the upside
from Souma which has a resource of 800,000 ounces and is expected
to provide ore feed to Inata for one or more years, depending on
drilling and metallurgical testwork planned for the coming months.
This work is also designed to indicate Souma's potential to host a
standalone heap leach operation. As this work and Inata operations
progress over the coming months, bringing clarity on factors such
as costs, recoveries and gold prices, work will be carried out on
Inata's life of mine plan and updates will be provided
accordingly.
Updates with Inata's creditors were initiated during the period
in which Inata was preparing for the CBC commissioning. In light of
the strike and the uncertainty around the life of mine, these
discussions have continued in order to apprise them of the
situation and maintain their support.
FOR FURTHER INFORMATION PLEASE CONTACT
Avocet Mining PLC Bell Pottinger J.P. Morgan Cazenove
Financial PR Consultants Corporate Broker
David Cather, CEO Daniel Thöle Michael Wentworth-Stanley
Mike Norris, FD
+44 203 709 2570 +44 20 2772 2555 +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% of the Inata Gold Mine.
Across the Bélahouro district, which includes both Inata and the
Souma deposit. 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.
Appendix 1
Inata Gold Mine quarterly production information 2013-14
2013 2014
Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014
Ore mined (k tonnes) 817 971 591 735 3,114 621 818 591 499 2,529
Waste mined (k tonnes) 9,127 8,700 6,547 5,726 30,100 4,351 3,583 2,116 1,445 11,495
Total mined (k tonnes) 9,944 9,671 7,138 6,461 33,214 4,972 4,401 2,707 1,944 14,024
Ore processed (k tonnes) 616 620 620 497 2,353 483 537 554 329 1,903
Average head grade (g/t) 1.65 1.84 1.73 1.77 1.75 1.61 1.44 1.53 2.92 1.77
Process recovery rate 82% 87% 89% 86% 86% 86% 88% 85% 61% 79%
------ ------ ------ ------ ------- ------ ------ ------ ------ ------
Gold Produced (oz) 30,481 31,245 30,987 25,730 118,443 23,148 21,650 21,736 19,503 86,037
Cash costs (US$/oz) Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014
Mining 542 582 540 521 547 464 508 395 306 422
Processing 360 371 383 376 373 402 478 461 431 443
Administration 163 188 180 223 187 222 242 239 232 234
Royalties 104 97 92 89 96 90 89 88 83 88
------ ------ ------ ------ ------- ------ ------ ------ ------ ------
1,169 1,238 1,195 1,209 1,203 1,178 1,317 1,183 1,052 1,187
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCTAMFTMBAMBTA
Avocet Mining (LSE:AVM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Avocet Mining (LSE:AVM)
Historical Stock Chart
From Jul 2023 to Jul 2024